Bill Aulet’s top ten tips for successful entrepreneurship in times of radical change
The condensed learnings from the opening keynote at the signals Founders’ Academy by MIT professor Bill Aulet.
Recently, we hosted our first remote conference, redesigning our annual signals Founders’ Academy for the digital sphere. One of the big perks of a virtual conference is the opportunity to have speakers from all over the globe. Joining us from a cabin in the woods of New Hampshire was MIT professor Bill Aulet, who shared with us his tips for entrepreneurs to use the current climate as an opportunity for change.
In this blog article, we are sharing the essence of his talk.
1. The definition of entrepreneurship has changed.
Previously, entrepreneurship was linked to startups. Today, it has evolved, referring to a mindset, a skillset, and a way of operating that is nowadays needed in all kinds of organizations, whether small or big. An entrepreneurial mindset is key in building what Aulet calls ‘anti-fragile’ organizations, teams and human beings: When these are hit by change, they don’t break — they get stronger. When the chess table is knocked over, an entrepreneur is at their best because they are capable of utilizing the chaos to come up with new opportunities and solutions.
2. Entrepreneurship has never been more important because the rate of change is accelerating exponentially.
General Electric’s Chief Innovation Officer Sue Siegel said: “The rate of change will never be slower than it is today”. Her point is that if we look back one year or a decade, we realize that the speed of developments has greatly increased — although we thought it was fast back then.
Decades ago, Moore’s Law was crucial for people’s understanding of innovation, stating that the power of a microchip doubles every 18 months. Now we’ve reached a moment in time where we see that the rate of change is accelerating exponentially. Siegel’s law is a very important mental model to grasp the conditions under which innovation takes place and create the right mindset: An entrepreneurial mindset is the only way to deal with this speed of change.
3. Traditional management creates fragile systems
The point of management is to optimize, predict and de-risk companies. However, management creates fragile systems because they are optimized for the highest results in a generally consistent environment. This is no longer the case, given the accelerating pace of change. So is it still worth it to go to management school? Yes, traditional management remains relevant, but already the entrepreneurial capacity of a company, in the sense of adapting to radical change, is becoming more important.
4. Successful entrepreneurship relies on key factors
- Diverse perspectives matter more than ever. Get input from many different fields outside your own discipline and bubble. Sometimes ideas and insights come from places you didn’t expect them to.
- Don’t fall into analysis paralysis, but act: When dealing with complexity, the only way to stay capable of acting is to make hypotheses and test. Avoid analysis paralysis because clock speed is even more important today than in the past.
- The role of leadership is to give teams hope, strength, guidance, and community. Although the world is incredibly complex, as a leader, you need to have a simplified and clear message that will motivate your team.
- In times of crises, execution is everything. In ‘peace times’, your priorities might be 1) strategy, 2) people, 3) execution. In ‘war times’, the order is inverted because you won’t be able to figure out a strategy. Execution matters even more.
5. There is a mental health crisis that needs to be addressed.
At the moment, we’re facing multiple crises: The COVID19 healthcare crisis led to an economic crisis, which in turn led to a humanitarian crisis. However, there is a fourth and overlooked crisis: the mental health crisis. Whether it is isolation, depression, drugs, domestic violence, we have to acknowledge and combat mental health before it spirals. Otherwise, we won’t stand a chance to solve the other crises, let alone create bold innovation.
6. We need to be people-first and future-focused
When confronted with crisis, it is important to start from a place of empathy with yourself and with other people. However, don’t let negative feelings and anxiety overcome you. Instead, pivot to: It is what it is. You can’t change the past, but you can learn from it and translate it into positive actions.
7. Principled Entrepreneurship: Find a purpose beyond money-making
A company needs a “raison d’être” — organizations have to have a purpose beyond making money. Purpose-driven companies are more stable and more economically successful in the long run. The COVID19 crisis has shown us that companies solely based on profiteering are getting crushed publicly. People want to work for companies that also contribute to making the world a better place.
8. The Stockdale Paradox: What survival psychology tells us about crisis leadership
Named after a US admiral and prisoner of war in Vietnam, the Stockdale paradox refers to coping mechanisms in times of crises. The soldiers that survived prolonged calamities weren’t the optimists that motivated themselves by believing the crisis would end by Christmas. Those that prevailed were the ones that confronted the realities, yet never lost faith in the end of the story. What does this mean for leadership? In times of crisis, we need to be determined that in the long-term, we’ll make it out, even if we don’t know how at the moment.
9. Geography matters much less than it did before
As we have seen from multiple Zoom calls, we are able to be in touch with people from all over at any time: Physical location simply isn’t as important as it used to be. It is true that we are missing out on serendipitous collisions, but for the most part, not being bound to a location has become a huge advantage.
10. We need to embrace radical change and crisis
A point alluded to several times: Most important in exceptional circumstances is a mindset of embracing crisis. Accept it for what it is, and see the opportunities that lay within. And remember: In times of crises, the circumstances tend to favor entrepreneurs who, due to their skillset and mindset, do have crucial advantages over bigger companies.
About Bill Aulet: Bill is an award-winning educator and author whose current work is built off the foundation of his 25-year business career first at IBM and then as a three-time serial entrepreneur. During this time, he directly raised over a hundred million dollars and created hundreds of millions of dollars of shareholder value through his companies. Bill is the Managing Director of the Martin Trust Center for MIT Entrepreneurship and Professor of the Practice at Massachusetts Institute of Technology. He speaks globally on the topic of entrepreneurship and innovation.
Many thanks to Bill Aulet for his inspiring insights on stage of the signals Founders’ Academy. We will continue to make all content from the event available here and on Vimeo, so make sure to check back regularly.
For a more elaborate look at Bill Aulet’s tips, also see MIT’s anti-fragility series, focusing on practical lessons from world experts, building off each other in a methodical fashion.
