The Entrepreneurial Mindset: Strategies for Continuously Creating Opportunity in an Age of Uncertainty [Hardcover]

Rita Gunther McGrath (Author), Ian MacMillan (Author)

Book Description

Publication Date: August 2000

This is a blueprint for building entrepreneurial organizations. Nobody needs to tell you that in the new economy, managers using conventional strategies are losing out to smart, fast, entrepreneurial competitors who move on ideas others overlook and who confidently act while others dither. Are the managers of leading companies simply doomed to let this happen? Not at all, argue Rita Gunther McGrath and Ian MacMillan. The fundamental problem is that the tools, training, and conceptual frameworks that work for business-as-usual can't, and don't, work when your main challenge is to bury old business models and aggressively create completely new ones. To succeed, today's strategists need the thought process and discipline that are second nature to successful entrepreneurs. "The Entrepreneurial Mindset" offers a refreshingly practical blueprint for thinking and acting in environments that are fast-paced, rapidly changing, and highly uncertain. It provides both a guide to energizing the organization to find tomorrow's opportunities and a set of entrepreneurial principles you can use personally to transform the arenas in which you compete. Using lessons drawn from leading entrepreneurs and entrepreneurial companies, "The Entrepreneurial Mindset" presents a set of practices for capitalizing on uncertainty and rapid change. Like McGrath and MacMillan's bestselling "Harvard Business Review" articles, such as 'Discovery-Driven Planning', this book provides simple but powerful ways to stop acting by the old rules and start thinking with the discipline of habitual entrepreneurs. "The Entrepreneurial Mindset" will show you how to: eliminate paralyzing uncertainty by creating an entrepreneurial frame that shapes a shared understanding of what is to be accomplished and what would be worthwhile; create a richly stocked opportunity register in which you mobilize great ideas for redesigning existing products, finding new sources of differentiation, resegmenting existing markets, reconfiguring market spaces, and seizing the huge upside potential of breakthroughs; build a dynamic portfolio of businesses and options that continuously move your organization toward the future; execute dynamically your ideas so that you can move fast, with confidence and without undue risk; and, develop your own way of leading with an entrepreneurial mindset to create a vibrant entrepreneurial climate within your organization. "The Entrepreneurial Mindset" is about succeeding in an unpredictable world. It will help everyone from independent entrepreneurs to managers of large corporations develop insights that others overlook and act on them to build the truly entrepreneurial organizations of the future.

Editorial Reviews

About the Author

Rita Gunther McGrath is an Associate Professor at the Columbia University Graduate School of Business.

Product Details

• Hardcover: 380 pages
• Publisher: Harvard Business Review Press (August 2000)
• Language: English
• ISBN-10: 0875848346
• ISBN-13: 978-0875848341
• Product Dimensions: 6.9 x 1.6 x 9.6 inches
• Shipping Weight: 1.7 pounds (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars  See all reviews (20 customer reviews)
• Amazon Best Sellers Rank: #81,904 in Books (See Top 100 in Books)

Most Helpful Customer Reviews

65 of 67 people found the following review helpful

5.0 out of 5 stars Superb Book About Cutting Edge Strategy Tools January 30, 2001

By Robert R. D. Nickels

Format:Hardcover

The Entrepreneurial Mindset is a truly remarkable book and, I believe, an extremely useful one. However, it is not the book that, in my opinion, the reviews that have been posted here imply it is.

For one thing, it is not about entrepreneurs. In fact, the cast of characters is dominated by managers in relatively large organizations. Nor is it about the kinds of coalition-building activities that Gifford Pinchot described in Intrapreneuring (although the topic of political obstacles is addressed). What it is about is strategic innovation. It is a detailed description of an elaborate and exhaustive process for rationally generating (and choosing among) strategic alternatives in the face of uncertainty. This is not a process that the authors have observed while studying entrepreneurs. It is, rather, a description of the tools the authors have developed to work with management teams in established firms to discern original responses to business challenges. Said another way, the book has to do with the process of discovering new things to do - things for which there are no precedents and about which there is very limited data/information - in established businesses.

In some respects, this book constitutes a synthesis (and an impressive one) of themes that have been at work in the strategy literature in recent years. The majority of these themes reflect concerns about how to respond to a business environment in which products rapidly become commodities and (therefore) in which new options are much more strategic hypotheses to be investigated than they are plans to be formalized and funded. Much of the authors' attention is devoted to unearthing new hypotheses from the available data and sorting through them to settle on future courses of action.

The Entrepreneurial Mindset, while easy to read, is not a light narrative by any means. It is, at base, a technical book about a specific approach to strategy development and implementation. It views strategy first as a creative activity and then as a resource allocation problem that terminates in resource allocation decisions first to classes of opportunities and then to specific projects. The search for options ("opportunities" in their terms) occurs at the product/market segment level, not at the business level. Areas considered in search of novel approaches include product features, delivering more value at specific stages of the so-called Consumption Chain, market resegmentation, and radical redesign of the value chain.

There are a few cases in which the authors' actual practice around a task or topic does not become clear until 20 pages or so after their initial presentation of it. Thus, it is hard to derive full value from this material without taking detailed notes and without giving it a second read. (The authors themselves seem to anticipate the need for a twice-through reading, advising us on several occasions that it is OK to skip the next section if this is the first time you've read the book.)

There are none of the traditional "soft" tools of strategy to be found here - no mission statements, value disciplines, driving forces, or what have you. While the book does deal with "Building Breakthrough Competences" in Chapter 8, the approach presented revolves around identifying how to excel on one or more core performance metrics rather than with respect to specific sorts of skills and activity groupings that Hamel & Prahalad adherents have grown used to. Therefore, people whose primary interest is in enunciating over-all themes and affecting corporate culture will not find wisdom on their principal needs here.

As mentioned above, the book incorporates the insights of other researchers - carefully documented in an extensive (and useful) bibliography. Happily, some of the most intriguing of MacMillan's own published ideas have found a place in the process. Other "connections" include:

Pascal, Managing on the Edge - Honda's Five Why's; Wheelwright & Clark, Revolutionizing Product Development - "Types" of development plans; Slywotsky, Profit Patterns - Business model redesign as a strategic response; Porter, "What is Strategy?" in On Competition - Model redesign and unique activities; Brown and Eisenhardt, Competing on the Edge - The idea of "probes."

The list could go on.

Finally, the strategy professional will be pleased with the checklists and questions (called "quizzes") that the authors provide. Some of the very best of these, in my opinion, are:

Sample Questions on Buyer Behavior (pp. 51-52); Is There Potential For Radical Reconfiguration of the Current Business Model? (p. 96); Assessing Market Uncertainty (p. 174); Assessing Technical Uncertainty (p.175); Sources of Competitive Insulation (p.190-191).

In addition, there are many templates to for "mapping" strategies that are quite useful. The notion of "leading indicators" of project progress is a marvelous idea - reminiscent of the principles that Norton and Kaplan have enunciated in their various writings on leading and lagging performance metrics and the Balanced Scorecard.

As a strategy professional, I must admit to one basic reservation about the process described in this book. I cannot imagine how to get a group of busy managers to take the time to do all of these steps in this quantity of detail. There is no doubt in my mind that The Entrepreneurial Mindset presents an ideal way of going about strategy development and selection at the business level. In fairness, the authors point out many cases in which one should modify the process to reflect local custom. Even then - in the absence of some extreme strategic crisis - maintaining interest in and motivation around so exhaustive and elaborate a process rates to be a huge challenge.

The bottom line - It's a relatively technical book aimed at those responsible for strategy development at any level. It does a wonderful job of laying out the details of an exciting process through project implementation. It's a "must read" book because it integrates many current ideas and techniques so well. It's a two-read book. (Actually, I'm on my third time through at the moment.) But it's well worth it.

Bob Nickels 01/15/01

13 of 14 people found the following review helpful

5.0 out of 5 stars Actionable advice for entrepreneurship October 11, 2002

By David Wachs

Format:Hardcover

MacMillan and McGrath put together one of the most actionable management books I have read in years. Each chapter is replete with how-to information: frameworks, tools and methodologies to implement their strategies and build-out new ventures.

The first 7 chapters provide tools to identify and define opportunities. Chapter 2, for example, details exactly how to set up a database to capture new business opportunities, with fields that describe the product/service and forces that affect its success, such as competition and company position. Chapters 3 through 6 provide usable frameworks which will fill your database with opportunities. The frameworks cover everything from redesigning products and services and redifferentiating for customers to resegmenting and restructuring markets and creating new competencies. The rest of the book covers execution: developing and timing entry strategies, managing uncertainty through discovery driven planning, and creating an entrepreneurial culture.

As a consultant, I have been able to use many of MacMillan's and McGrath's frameworks with my clients. Specifically, chapter 8's opportunity options frameworks have been invaluable to categorize new venture opportunities for our clients in the high-tech and financial services industries, and have aided in determining "go" and "no-go" decisions for further investment. Additionally, as I am an aspiring entreprenuer, I personally use their tools for opportunity assessment to inventory and rate my own business ideas.

I highly recommend The Entrepreneurial Mindset to corporate venturers and entrepreneurs alike. While the book covers a lot of ground, it is able to do so in an easy to read fashion. The tools and frameworks throughout the book keep the reader engaged and turn the theoretical into the applicable. The Entreprenuerial Mindset is an essential desk reference for new venturing and a highly worthwhile read.

16 of 18 people found the following review helpful

5.0 out of 5 stars Essential Reading February 14, 2002

By Sean Nevins

Format:Hardcover

Bottom line first: Buy this book. Not only can you immediately implement the tools described, but it will also serve as an excellent reference tool. It is well worth the time invested to read it. Consider it an option on your career with limitless upside.

The Entrepreneurial Mindset illustrates the process for rationally generating, choosing among, executing, and monitoring strategic opportunities in the face of uncertainty. Starting from the premise that no market is so mature that you cannot further differentiate your offerings, the authors offer action-oriented, simple tools that help to assess opportunities for launching new products and entering new markets. And those tools aren't just simple, they're also smart and unconventional, providing insight into the minds of habitual entrepreneurs who have honed their skill in creating value time and again.

McGrath and MacMillan publish the checklists, questions, quizzes, and models it took them years to develop while working with management teams in established firms to discern original responses to business challenges. You can start applying the principles and tools in each chapter immediately, getting some good quick hits even before finishing the book. For example, Chapter 11 alone contains 8 tools for developing leading indicators of the business to help tell if a project is heading in the right direction, long before the results become available. Chapter 10 is a gem too. It is based on one of Harvard Business Review's most popular articles, "Discovery Driven Planning" (written by the authors of this book), which was then developed into a course at Wharton's Executive Education Programs for several years.

Anyone who reads and implements the principles, strategies, and tools outlined in this book is sure create value, regardless of their corporate title, and it is a must-read for any strategy professional or executive manager. If you think your industry or business is too mature to benefit from this book, consider one of McGrath and MacMillan's many case studies that are fresh and actually worth studying: Blyth Industries boosted sales from $3 million in 1982 to nearly $500 million in 1996 by exploiting a mature industry. How mature? More than 5,000 years old: Blyth Industries sells candles.

Creating and nurturing an Entrepreneurial Mindset is a lot of fun and carries a lot of rewards, both professionally and personally. To quote the authors at the end of their first chapter: "If nobody knows what the future will hold, your vision of how to navigate it is as good as anyone's. The future may well belong to you."

-Sean Nevins, The Zermatt Group