Two Harvard Experts Provide Perspective On Building Entrepreneurial Businesses In Troubled Economic Times
Two leading Harvard University entrepreneurial specialists provide some interesting insight into building entrepreneurial business during these troubled economic times.
Lynda Applegate, head of Harvard’s Entrepreneurial Management Unit, believes smart management is a key to helping small companies position themselves to survive – and thrive – in turbulent times. “Never let a crisis go to waste,” she writes quoting a Harvard motto.
“We can’t fix our current economic problems by simply spending more money to buy bad debts,” she writes in Building Business in Turbulent Times. In Harvard Business School Working Knowledge, April 27, 2009. “Rather we need real innovation that creates jobs and drive productive economic growth. Companies that survive the financial crisis by identifying and exploiting innovation will serve as economic growth engines in the future – and will be the industry leaders of tomorrow.”
Applegate believes that downsizing can be a quick fix but not a permanent solution. “Cutting back and hunkering down may get you through the short-term crisis but will not position you to be a leader in the future,” she writes. “That’s why you need a mindset that says: ‘I’m not just going to survive – I am going to thrive.’ ”
Espousing the same general theme Bhaskar Chakravorti, a senior Harvard lecturer and consultant with McKinsey & Company, points out many successful products, services and pivotal ideas have launched during an economic lull, in a Working Knowledge article (Feb. 23, 2009) entitled Creative Entrepreneurship in a Downtown.
“If history is any guide, we can expect some significant industry shapers to emerge from the current crisis,” he adds. “During the 1930s alone – the period to which we often compare our situation today -there were entrepreneurial start-ups that went on to become household names: Motorola, Hewlett-Packard, Texas Instruments and many others. He adds that other major players today such as Southwest Airlines and Revlon cosmetics were launched during economic downturns.
Chakravorti prefers to take a more positive approach to the current economy. He says, “I have high hopes tempered with great caution. The entrepreneurs who can capture the limited resources have the potential to do well. Shortage and adversity are powerful stimuli for focusing the mind. All of this is ‘private stimulus’ and in addition to any new opportunities likely to be created by the ‘public stimulus’ being orchestrated by the Obama Administration.”
Applegate reiterates this thought. “Companies must work aggressively to innovate and make the kinds of changes that are critical to success today and in the years to come….In a sense, every business – large or small -needs to think of itself as a ‘new venture’ right now. This is a time of unprecedented opportunity to rethink offerings, markets, business processes and organizational structure – and to improve them to achieve growth.”