Entrepreneurs often misdirect their efforts on building their abilities and traits

I met Lara last month. She is a second generation entrepreneur. She manages a unit started by her father. Whenever i talk to her, i find that she is attending one or other 'Positive psychology' seminars which have titles like " Discover your freedom", " Ask the Universe what you want", " Believe in yourself" and so on. She believes that she can do anything in her company, only if she can 'remove' all her bottlenecks, She belongs to a large joint family ( uncles, cousins) where most of the members are in the business. Surprisingly, all of them are attending one or other of such programs either to discover their true self, or 'manage his time well' or 'learn the art to delegate'. Later i discovered, that most of the attendees of such 'Positive psychology' programs are entrepreneurs, free lancers like consultants or doctors, or lone performers like actors who put all their efforts on developing their 'abilities' or honing their skills.

I asked Lara last month, " Will this fisherman catch more fish, if he fishes for more time?' Or ' Will he catch more fish, if he fishes with longer rod, or better fishing equipments?'. Lara was very quick in replying to me "That is ridiculous'. In fishing, the number of fishes you catch do not depend on how much time you fish, or with what equipments you fish. It depends on the 'surveying the terrain of fishing, assessing the nature of fishes available, and then getting the appropriate equipments and then putting on the right 'time and effort' to hook the fishes. Input abilities have to be aligned with the output 'requirements' to succeed in achieving one's goals.

If you understand the 'Enlight framework of Career Success', you will realise the futility of such misdirected efforts. Inputs or abilities are just one of the elements of success. Entrepreneurs will achieve their goals far more easily if they focus their efforts on producing the ' right outputs' instead of bettering their 'inputs' (abilities). Only when they determine their ' right outputs', they can focus on mobilising the 'abilities' that are required to produce the desired effort. If you read any story of a successful entrepreneur like Richard Branson or Jeff Bezos, you will find that their efforts are mainly directed on 'determining the output' they want to produce. 

On the other hand, most of the entrepreneurs are like Milind, who believe 24 by 7 effort will automatically produce desired result. It is like man trying to fish by constantly splashing the rod in the water and hoping that some fish will take the bait now or later. So why do entrepreneurs focus on 'abilities' instead of 'output'? I guess there are four reasons: 

1. Entrepreneurs believe that some action is more important than no action: When i told Lara about the importance of  determining the right output in her company, she said that 'it will take lot of desk-time to work it out'. Lara, like many entrepreneurs, is action-oriented individual. She believes that concerted action ( right or wrong), consistently taken over long period of time, will produce some result. Lara also had a word to justify her action-orientation. She believes that ' Analysis causes paralysis'. Due to this belief, she does not want to spend time on 'what to do'. 

2. Entrepreneurs wrongly believe that extraordinary abilities ( traits and skills) can automatically help them produce extraordinary results: If you have read biographies of any successful person who has produced bigger and huge outputs, you will realise the fallacy of this belief. For instance, if you read these stories of Narayan Murthy and Manmohan Singh,  you will realise that they produced huge outputs despite their weaknesses. Despite the evidence that perfect traits and skills do not produce extraordinary results, many entrepreneurs continue to strive in developing their abilities. 

3. Entrepreneurs are not aware of their 'key input ability', because they are not aware of the input framework. Input framework of success proposes that we need 3 key abilities to achieve our goals. Unable to assess the key inputs required to achieve desired goals, entrepreneurs cannot focus on important but invisible ability like conative trait and miss the opportunity to leverage their efforts.

4. Entrepreneurs lack the skill and patience of determining the right output: Everyone knows that pushing the right levers can result in big benefit. In a closed system, it is easier to identify these levers because correlation of one element with another element can be easily seen. For instance, 'Wrong material' leads to 'defects' in a production of an item. However, in an 'open industry system of competitors and suppliers' (system with more transparent boundaries) , it is very difficult to decipher cause-effect correlation. In an open system, it takes patience to set up experiments to understand the influence of identified 'variables'. It requires data to justify one's hypothesis. It requires 'ego-less' state to accept that one's hypothesis was wrong. Most of the entrepreneurs make the mistake of Rohit Sharma. Because they cannot figure out the 'right output' they prefer to take any action instead of finding the right action.

If you are a smart entrepreneur, do not spend your effort and time barking on wrong tree. Instead spend time on determining the right output.

How entrepreneurs are misguided due to lack of Output framework

See this case of an entrepreneur, Milind.

Milind is a computer science graduate. He worked in a software industry for about 5 years. He was earning a pretty decent salary and had a job where he was moving in different countries. He was successful but unhappy with the job because he felt that there are too many 'constraints' in the job. 

So he resigned from the job to start his own unit in education. He started teaching maths and science to HSC students. That did not work. After one year, he found another idea: teaching engineering students to undertake difficult projects. This idea worked, but the idea was not sustainable because getting the job done was the primary responsibility of college professors. So colleges did not encourage outsiders to help their students. The idea was sound but did not possess easy marketing channel. Second year finished. His debts had increased over a period of 2 years. 

So he moved to selling workshops to schools after 2 years. He started working with schools on training of scientific concepts through workshops. This worked well. But he met another problem: he needed investment to make the new business model work. Debts had increased now. Milind himself is unsure of the returns of new investment. He does not know what to do. 

What would you advice Milind now?

Seeing through the lens of Enlight output framework

To succeed in life, we have to produce outputs. In an existing organisation, as we saw in the earlier case of Adi, the output system is designed by the organisation. When we work in an organisation, we have to 'fit' in the existing output system and ensure that we produce the desired performance within the 'constraints' of the system. Unable to negotiate these constraints, many individuals are tempted to think, "What if I design my own output system so that i do not face any constraints." Many entrepreneur stories are born with this desire.

As human beings, we dislike the constraints of an output system. Our dislike is understandable, but we are also ignorant of the knowledge of designing an output system. Infact, most of the budding entrepreneurs are not even aware of the concept of 'output system'. They think like Milind. They believe if they do x, y will get produced. And if y can be sold at a price higher than cost, they will earn profit. For them producing output is a very sequential process of tasks and activities.

Unfortunately, in the output system the efforts and its consequences are circular. For instance, if i teach a student better, i get new students because he talks to other students. Then new students help me to teach better. Consequences becomes the new cause in a circular system. But these relations also have time lag. If i teach a student this year in a class, i will get new students next year. Plus system is moving with irreversible time arrow. This means, that time is flowing in one direction. Until I get a new student next year, i have to 'sustain my efforts and investments' during that intervening time, so that i can take advantage of the new students next year. If Milind cannot sustain, he cannot benefit of the time cycle.

And more importantly, every system also has 'constraints'. The constraints of Milind's output systems are infact more 'deeper' and difficult to negotiate than Adi's organisational output system. For instance, Milind will find it more difficult to convince his customer than convincing his Boss. Now, if he sits back, he will appreciate that negotiating the constraints of his organisational output system was much easier than negotiating an entrepreneurial output system !

Output may not get converted to outcome - Big lesson of framework

Look at the Enlight framework diagram again. You will find that output and outcome is produced in two different systems. In an organisation, because salary is fixed, one will at least fetch some money (i.e. gain some outcome) whether one contributes reasonably to the 'output' in that month or not. But, for an entrepreneur, outcome is clearly delinked from output. Even when Milind delivers his training well to his students ( i.e he produces desired output), he may not earn enough 'money' until he finds enough number of students. Outcome is not guaranteed even after producing desired output. 

Until the entrepreneur aligns customer acquisition flow with delivery flow, he cannot earn money (produce outcome) from the business. This is called alignment of business model. Please check this example to understand why alignment is required to produce income. After three years of entrepreneurship, Milind is now realising that effort is not directly related with outcome. That is why he is unsure about making the new investment. Three years back, he would have invested money without blinking his eye.

Every output system has its own constraints - Another lesson of framework 

I hope you will now appreciate the art of designing output system. I hope you will also appreciate that every output system has its own constraints. You will also appreciate that an 'open system' of an entrepreneur has more constraints than a 'bounded system' in an organisation. Although starting your own unit may give you a feeling of 'constraint-free' work ( work without a boss), you are infact going into a system where constraints are even more powerful and deeper. So when a professional is leaving an organisation to start his own entrepreneurial unit, i coach him to negotiate ' larger number of constraints' !!

Infact the entrepreneur must learn the basic rule of an output system : If the constraints are more in the output system, the probability of earning money from that system increases, because systems with more constraints have less competitors. You will appreciate this only if you understand Second law of Success, which is Enlight framework.

An entrepreneur, in other words, must understand and use the Output framework even better than a corporate professional has.

If you want to become an entrepreneur, are you ready to understand the Output framework of Enlight?