Thoughts, reflections, and first-hand encounters in finance, operations, human behavior, and the economics of sports.
Author: bnwokedi
I have over a decade of different experience in finance, retail and operations management. My retail career started at Target.com working in digital profitability and supporting the merchandise group in the Electronics area of business. After this Target experience, I moved to Belk.com where I shaped the financial direction, reporting, and strategic growth initiatives for Handbags, Accessories, Shoes, and Cosmetics business units. My big win here was the total optimization of inventory flows that drove turnover gains and profitability increases. After my Belk experience, I moved to Harris Teeter where I drove process improvements through the creation of a variety of tools. My biggest win was the management of the item level profit model that allowed my merchant counterparts the ability to make more timely and accurate assortment decisions with profit in mind. I worked closely with distribution and store operations to gain efficiency in spoilage and waste rates which drove overall profitability of Harris Teeter above industry averages. Currently, I serve as the COO for Elements Brands, which is an online first retail brand acquisition company focused on consumables and personal care products.
I have a plethora of different experiences in all facets of retail from discount and big box, to department store, and back to grocery. I have duel experience on the brick and mortar traditional side as well as the dot.com eCommerce digital side of retail, and is uniquely positioned to help clients understand the importance of a duel strategy across both channels.
From an educational and professional certification experience, I received my Bachelor's Degree from Claremont McKenna College, my MBA from the University of Virginia, Darden School of Business, and my CPA from the State of California.
Venus Williams and Serena Williams Formed a Strong Mentorship CEO-COO Relationship During Their past 25 years on the court
Venus Williams stands as one of the most compelling examples of mentorship in the world of tennis. Serena Williams herself acknowledges that her journey would not have been possible without Venus, but I believe the impact goes even further. The influence of Venus extends to players like Coco Gauff, Naomi Osaka, Sloane Stephens, and Madison Keys, who have all been inspired by her trailblazing presence.
Venus brought a new era to tennis with her remarkable speed, distinctive style, and unapologetic confidence. However, her role as a Big Sister went beyond her on-court achievements. She served as a mentor, shielding Serena from the resistance of the tennis establishment and the pervasive racism that often accompanied their rise to stardom.
This mentoring dynamic can be likened to the role of a Chief Operating Officer (COO) in the business world. In both cases, the mentor figure provides guidance, support, and protection, empowering their mentee to navigate obstacles and reach their full potential. Venus’s mentorship not only elevated Serena’s career but also paved the way for future generations of tennis players, exemplifying the transformative impact of a dedicated mentor, both on an individual and broader scale.
Alex Smith and Patrick Mahomes Formed a Strong Heir-Apparent CEO-COO Relationship During the 2017 Season with the Kansas City Chiefs
During his tenure from 2013 to 2017, Alex Smith served as the starting quarterback for the Chiefs, leading the team to the playoffs on four occasions and securing their first playoff victory in over two decades. However, in 2017, the Chiefs made a strategic decision to trade up and select Patrick Mahomes as Smith’s long-term successor. Coach Andy Reid demonstrated transparency with Smith, providing the reassurance he needed to embrace the role of mentoring Mahomes. Just a year later, Smith was traded, paving the way for Mahomes to step in as the new starting quarterback. This scenario exemplifies the Heir-Apparent CEO-COO structure, which can be instrumental in ensuring successful succession planning.
In this context, the COO plays the role of the Heir Apparent. Similar to the quarterback transition, the COO is identified and groomed as the successor to the CEO. By implementing a well-executed Heir-Apparent CEO-COO structure, organizations can facilitate a seamless transition of leadership. The COO, under the mentorship and guidance of the CEO, gains valuable experience, insights, and knowledge necessary to assume the top role when the time comes. This strategic approach allows for continuity in leadership and ensures that the organization can thrive even during leadership changes.
Ray Lewis and Ed Reed Formed a Strong Co-Leader Partnership During Their 11-Year Run with the Baltimore Ravens
During their Super Bowl XLVII-winning campaign in 2013, the Baltimore Ravens showcased their defensive prowess, despite being ranked 12th in total defense. What set them apart was the remarkable partnership between Ray Lewis and Ed Reed. Their collaboration as Co-Leaders began in 2002 and spanned an impressive 11 years, solidifying their status as one of the most formidable linebacker/safety tandems in NFL history. Together, they anchored a consistently outstanding defense that stood among the league’s best.
Ray Lewis and Ed Reed epitomize the essence of a Trusted Partner relationship. Their deep bond and understanding on the field allowed them to anticipate each other’s moves, offering unwavering support and collaboration. With Lewis’s commanding presence and Reed’s exceptional playmaking skills, they formed an unbreakable foundation for the Ravens’ defense. Their synchronized efforts and remarkable synergy elevated their team to new heights.
This Trusted Partner dynamic in football can be likened to the role of a Chief Operating Officer (COO) in the business world. Just as Lewis and Reed established a reliable and cohesive unit, a COO serves as a Trusted Partner to the CEO, fostering a strong partnership at the top. This collaboration ensures a harmonious and effective leadership team, capable of driving the organization towards success. The impact of a Trusted Partner, both in football and business, cannot be understated, and Lewis and Reed’s legacy as an exceptional tandem serves as a testament to the power of such a partnership.
“Riding Shotgun: The Role of the COO” by Nathan Bennett and Stephan A. Miles is an insightful exploration of the multifaceted responsibilities and significance of the Chief Operating Officer (COO) position within organizations. The book delves into the challenges and opportunities faced by COOs, shedding light on their pivotal role in driving operational excellence, strategic execution, and organizational change.
Drawing from extensive research and real-world examples, the authors provide valuable insights into the qualities, skills, and strategies that make COOs effective leaders and trusted partners to CEOs.
In their analysis, Bennett and Miles identify seven distinct types of COO jobs, each with its own unique focus and purpose. These include the Executor, responsible for daily leadership in operationally intensive businesses; the Change Agent, leading strategic initiatives in response to dynamic environments; the Mentor, guiding and supporting young or inexperienced CEOs; the Co-Leader (Two-In-a-Box), working collaboratively alongside the CEO to balance strengths; the Trusted Partner (Other Half), fostering a strong and cohesive leadership team; the Heir Apparent, preparing future CEOs by imparting business knowledge; and the MVP, retaining executive talent without a specific business imperative.
Recognizing the parallels between sports and business, I aim to leverage various sporting partnerships to delve deeper into the diverse roles of the COO. By drawing connections between the dynamics of sports teams, I hope to help you gain deeper insight into the multifaceted nature of this critical executive role.
Ed Reed, The Trusted Partner
Ray Lewis and Ed Reed Formed a Strong Co-Leader Partnership During Their 11-Year Run with the Baltimore Ravens
During their Super Bowl XLVII-winning campaign in 2013, the Baltimore Ravens showcased their defensive prowess, despite being ranked 12th in total defense. What set them apart was the remarkable partnership between Ray Lewis and Ed Reed. Their collaboration as Co-Leaders began in 2002 and spanned an impressive 11 years, solidifying their status as one of the most formidable linebacker/safety tandems in NFL history. Together, they anchored a consistently outstanding defense that stood among the league’s best.
Ray Lewis and Ed Reed epitomize the essence of a Trusted Partner relationship. Their deep bond and understanding on the field allowed them to anticipate each other’s moves, offering unwavering support and collaboration. With Lewis’s commanding presence and Reed’s exceptional playmaking skills, they formed an unbreakable foundation for the Ravens’ defense. Their synchronized efforts and remarkable synergy elevated their team to new heights.
This Trusted Partner dynamic in football can be likened to the role of a Chief Operating Officer (COO) in the business world. Just as Lewis and Reed established a reliable and cohesive unit, a COO serves as a Trusted Partner to the CEO, fostering a strong partnership at the top. This collaboration ensures a harmonious and effective leadership team, capable of driving the organization towards success. The impact of a Trusted Partner, both in football and business, cannot be understated, and Lewis and Reed’s legacy as an exceptional tandem serves as a testament to the power of such a partnership.
Patrick Mahomes, The Heir Apparent
Alex Smith and Patrick Mahomes Formed a Strong Heir-Apparent CEO-COO Relationship During the 2017 Season with the Kansas City Chiefs
During his tenure from 2013 to 2017, Alex Smith served as the starting quarterback for the Chiefs, leading the team to the playoffs on four occasions and securing their first playoff victory in over two decades. However, in 2017, the Chiefs made a strategic decision to trade up and select Patrick Mahomes as Smith’s long-term successor. Coach Andy Reid demonstrated transparency with Smith, providing the reassurance he needed to embrace the role of mentoring Mahomes. Just a year later, Smith was traded, paving the way for Mahomes to step in as the new starting quarterback. This scenario exemplifies the Heir-Apparent CEO-COO structure, which can be instrumental in ensuring successful succession planning.
In this context, the COO plays the role of the Heir Apparent. Similar to the quarterback transition, the COO is identified and groomed as the successor to the CEO. By implementing a well-executed Heir-Apparent CEO-COO structure, organizations can facilitate a seamless transition of leadership. The COO, under the mentorship and guidance of the CEO, gains valuable experience, insights, and knowledge necessary to assume the top role when the time comes. This strategic approach allows for continuity in leadership and ensures that the organization can thrive even during leadership changes.
Venus Williams, The Mentor
Venus Williams and Serena Williams Formed a Strong Mentorship CEO-COO Relationship During Their past 25 years on the court
Venus Williams stands as one of the most compelling examples of mentorship in the world of tennis. Serena Williams herself acknowledges that her journey would not have been possible without Venus, but I believe the impact goes even further. The influence of Venus extends to players like Coco Gauff, Naomi Osaka, Sloane Stephens, and Madison Keys, who have all been inspired by her trailblazing presence.
Venus brought a new era to tennis with her remarkable speed, distinctive style, and unapologetic confidence. However, her role as a Big Sister went beyond her on-court achievements. She served as a mentor, shielding Serena from the resistance of the tennis establishment and the pervasive racism that often accompanied their rise to stardom.
This mentoring dynamic can be likened to the role of a Chief Operating Officer (COO) in the business world. In both cases, the mentor figure provides guidance, support, and protection, empowering their mentee to navigate obstacles and reach their full potential. Venus’s mentorship not only elevated Serena’s career but also paved the way for future generations of tennis players, exemplifying the transformative impact of a dedicated mentor, both on an individual and broader scale.
Scottie Pippen, The Co-Leader
Michael Jordan and Scottie Pippen Formed a Strong Two-In-A-Box Partnership During Their 10-Year Run at the Top of the NBA
Michael Jordan and Scottie Pippen established an extraordinary and cohesive Co-Leader partnership during their dominant ten-year reign atop the NBA that ended in historic double three-peats. Throughout their intertwined careers, Jordan and Pippen exemplified the essence of a Two-In-a-Box partnership. Their collaboration on and off the court showcased remarkable synergy, mutual understanding, and shared goals. Pippen’s exceptional abilities, combined with Jordan’s unparalleled talent, propelled the Chicago Bulls to unprecedented success, and Pippen flawlessly assumed the role of Michael Jordan’s Co-Leader.
Their dynamic duo not only achieved individual greatness but also fostered a collective strength that elevated the entire team. Together, they formed one of the most electrifying and potent duos ever witnessed in the NBA. In drawing parallels to the COO’s role, Jordan and Pippen’s Co-Leader partnership exemplifies the power of a collaborative approach. By working together, leveraging their respective strengths, and nurturing a harmonious relationship, they propelled the Bulls to the pinnacle of the NBA. The impact of such a Co-Leader dynamic extends beyond basketball, highlighting the significance of a strong and complementary partnership in driving organizational success.
Luis Figo, The Change Agent
Luis Figo Served as Real Madrid’s Change Agent During the First Era of the Galácticos
In 2002, Luis Figo emerged as the winner of the prestigious Ballon d’Or, recognizing him as the top football player in Europe. This accolade came shortly after his controversial transfer from Barcelona to their arch-rivals, Real Madrid.
Figo’s move to Real Madrid marked him as the chosen Change Agent by Florentino Pérez, who aimed to usher in an era of high-profile, world-class superstars. The 62 million euro transfer fee was just the beginning of a series of extravagant signings from 2000 to 2006, during which Madrid spent well over 290 million euros.
Over his five-year tenure with Real Madrid, Figo made a significant impact, with over 200 appearances and notable triumphs, including two league titles and the 2002 Champions League. His arrival injected new vitality into Los Blancos, albeit at the expense of his former club in Catalonia. Organizations often require a COO to serve as a Change Agent, focusing on implementing specific organizational changes. In this role, the COO spearheads initiatives such as turnarounds, major organizational transformations, or planned rapid expansions, while the CEO maintains the day-to-day operations. When executed effectively and in balance, this approach can lead to remarkable progress and success.
Conclusion and Final Thoughts
Real-world examples, such as Venus Williams’ mentorship and the dynamic partnership of Michael Jordan and Scottie Pippen, underscored the pivotal role COOs play. Their ability to nurture talent, forge collaborative partnerships, and spearhead transformative change has been demonstrated time and again.
The COO acts as a catalyst for success, blending leadership, strategic acumen, and operational expertise. Their role as mentors propels organizations forward, paving the way for the development of future leaders. As trusted partners, they foster a harmonious and effective leadership team, while their role as change agents propels organizations toward new heights. By recognizing and embracing the multifaceted nature of the COO’s role, organizations can unlock their full potential and confidently navigate complex challenges. The power of the COO lies in their ability to lead, mentor, collaborate, and drive transformative change. Through harnessing this power, organizations lay the foundation for thriving and sustainable growth.
In 1992, Dr. John Gottman started his groundbreaking research on divorce that led to the discovery of what he termed the “Four Horsemen of the Apocalypse” which ruins most marriages. Through a series of landmark studies focused on four simple behaviors, Dr. Gottman could predict with 94% accuracy, whether or not the couples he studied would get divorced within six years.
The Four Horsemen of the Apocalypse are behaviors that, when unchecked, are predictors of divorce. Each of these behaviors represents unpleasant strategies that partners often employ with one another within conflict. Understanding their impact and limiting their existence within your relationships will do you wonders.
The Four Horsemen Are …
Dr. Gottman defined the top four behaviors that predicted divorce as the following:
Criticism: attacking your partner’s personality or character, usually with the intent of making someone right and someone wrong.
Contempt: attacking your partner’s sense of self with the intention to insult or psychologically abuse him/her
Defensiveness:seeing self as the victim, warding off a perceived attack
Stonewalling: withdrawing from the relationship as a way to avoid conflict. Partners may think they are trying to be “neutral” but stonewalling conveys disapproval, icy distance, separation, disconnection, and/or smugness
A Drawing of John Gottman’s Four Horsemen by Brian Nwokedi inspired by the 1887 Viktor Vasnetsov painting
The Four Horsemen and How To Stop Them With Their Antidotes
Criticism targets a person’s characteror personality and its antidote is a gentle start-up
Contempt targets a person’s sense of self and its antidote is to build a culture of appreciation and respect
Defensiveness targets you as a victim and its antidote is to take responsibility
Stonewalling targets your relationship and its antidote is physiological self-soothing
Final Thoughts
I once heard that in order for a marriage to survive, the ratio of positive to negative emotions in a given encounter must be at least 5:1. This is because negative interactions often outweigh positive ones.
Successful relationships must have a balance between positive and negative feelings/actions between partners. Conflict in relationships is unavoidable, but successful relationships are those that are able to manage conflict in healthy ways.
The Four Horseman framework translates not just to personal relationships but work relationships as well. It can sometimes be easy to forget how much relationship advice actually translates into the business world because ultimately we are just a collection of people working together ?.
Going forward for me when I see criticism and defensiveness galloping in (the two horsemen that show up the most in my relationships), I will remember this framework and use the appropriate antidote.
“Tranquility is worth pursuing as it is a psychological state in which we experience few negative emotions, such as anxiety, grief, and fear, but an abundance of positive emotions, especially joy”
--- William B. Irvine, A Guide to the Good Life: The Ancient Art of Stoic Joy (2008)
Introduction
We 21st-century humans are a bunch of spoiled brats that don’t realize how good we actually have it. We have climate-controlled buses, that take us to climate-controlled airports, where we board climate-controlled airplanes, that take us anywhere we want in the world. And somewhere in our modern existence, we have lost our ability to remain resilient.
The overarching goal of Stoicism is not to banish emotion or remind calm while suffering a setback. Rather, the goal of Stoicism is to minimize the number of negative emotions one experiences in their life and to suffer setbacks without thereby actually suffering.
Stoics are not unfeeling human beings. Rather they are humans that have mastered their responses to life’s trials, tribulations, and setbacks. In fact, Stoics often see setbacks as an opportunity to thrive. When faced with a setback, Stoics treat it as a test of their resilience and resourcefulness. They turn the setback into a sort of game (Stoic test) devised and administered by the “Stoic gods. Similar to the concept of framing, the Stoic test relies on the fact that how we mentally characterize a situation has a profound impact on how we respond to it emotionally.
I now understand that a Stoic’s primary goal is to attain and maintain tranquility. That ultimately means striving to avoid experiencing negative emotions while continuing to enjoy positive emotions, especially in the face of setbacks.
What Will I Do Differently As a Result of This Book?
Change my perspective and mindset in such a way as to not experience negative emotions in the first place
Remember the quote by Charles R. Swindoll “Life is 10% what happens to you and 90% how you react to it.”
Remember that the highest cost by far is the emotional distress a setback triggers i.e. how you react to what happens to you
Review my raw notes on this subject matter continuously and often
Reminder from the Stoic Gods…
God (think Jupiter) sets us back not to punish us but to give us an opportunity to do something courageous and thereby increase our chances of attaining “the highest possible excellence
God, says Senecca, knows that “a man needs to be put to the test if he is to gain self-knowledge” and that “only by trying does he learn what his capacities are.”
This fatherly God wants his children to “know the pain of toil, of suffering, of loss, so that they may acquire true strength.”
Whatever type of God you assume, understand that he is testing you to make you stronger, to develop your character, and to make you more appreciative of the life you are living
Downloadable Content
The goal, under life’s circumstances, should be to make sure that no matter when your editor publishes your novel (your death), it will stand as a complete work – or as complete as is humanly possible. William B. Irvine has written two very good books on Stoicism, and the following book notes have been created to help you with your understanding of William B. Irvine’s work!
“There are two systems of thought: The Intuitive System 1, which does the fast thinking, and the effortful and slower System 2 which does the slow thinking, monitors System 1, and maintains control as best it can within its limited resources.”
--- Daniel Kahneman, Thinking Fast and Slow (2011)
Introduction
The fact remains whether we like to admit it or not, our minds are susceptible to systematic errors in thinking and judgment. And when we are under pressure or lacking total information, our minds are strongly biased toward causal explanations. To wrap our minds around all the ways we make mistakes in our thinking and judgment, Daniel Kahneman simplified the mind into two systems:
The Intuitive System 1 thinks VERY FAST
The effortful and controlled System 2 thinks VERY SLOWLY
The point Kahneman drives home in his book is by learning to recognize these patterns of thinking in yourself, you can minimize the mistakes when the stakes are highest.
System One … The Hare … All Gas No Brakes!
To put it quite simply: System 1 thinking is impulsive and intuitive and is designed to jump to conclusions from very little evidence. What’s worse, System 1 isn’t designed to know the size of the jumps it is making in its thinking. With System 1, WHAT YOU SEE IS ALL THERE IS (WYSIATI), and because of this, only the evidence at hand counts. In the absence of an explicit context, System 1 will generate its own context, and it really excels at constructing the best possible story … Are you scared yet? If not you should be!
System 1 is highly adept in one form of thinking … Automatic and Effortless. It identifies causal connections between events, sometimes even when the connection itself is spurious.
System Two … The Tortoise … All Brakes No Gas!
Like most things in life, there is a yin-and-yang or balance to things. Your brain’s method of thinking is no different. If System 1 is your default, fast, and reflexive method of thinking, System 2 is the opposite of this. To be specific, System 2 controls thoughts and behaviors, and it is the only system that can follow rules, compare objects on several attributes, and make deliberate choices between options.
Okay… Now What?
Here is the thing… Regardless of Systems 1 and 2, our brains are pattern-matching machines subject to a plethora of cognitive biases. Here are a couple of my favorites:
Anchoring Effect
Availability Heuristic
Halo Effect
Hindsight Bias
Representativeness Heuristic
We often ignore relevant statistical facts and we rely almost exclusively on rules of thumb. When you factor in that System 1 is our default fast way of thinking, and the deep, deliberate, and controlled System 2 way of thinking is lazy and hard to consistently deploy, it’s not surprising that we humans make a ton of decision-making errors. Often, we are inconsistent in our evaluations, and we often make errors in summary judgments. Kahneman found in his research that humans when asked to evaluate the same information twice frequently give different answers.
Reading through Daniel Kahneman’s work convinces me of a couple of solutions to human decision-making shortcomings that a lot of us humans are not going to like to hear… Humans need help to make good decisions, and there are informed and unobtrusive ways to provide this help:
Whenever we can replace human judgment with a formula, we should at least consider it.
Since machines are more likely than human judges to detect weakly valid cues, we should consider complementing or augmenting human-only judgments with human + machine judgments
Maximize predictive accuracy by using machine logic, especially in low-validity environments
Conclusion and Final Thoughts
In Thinking Fast and Slow, Daniel Kahneman set out to improve the ability in all of us to identify and understand errors of judgment, and choice in others, and ultimately in ourselves! He wanted to provide his readers with a richer and more precise language to discuss decision-making and thinking within the brain. Because our System 1 method of thinking is our default and intuitive way of thinking, it’s easy for us to ignore relevant statistical facts that don’t fit the patterns we want. By nature, our slower and more methodical way of thinking (System 2) takes more time than we want and is lazy by nature. Humans need help to make good decisions because there is overwhelming evidence that we Humans can’t think rationally 100% of the time.
What Will I Do Differently As a Result of This Book?
Learn to recognize situations in which mistakes are likely and try harder to avoid making significant decision-making mistakes when the stakes are high
Understand that even when I think that I am being rational there is a good chance my default System 1 way of thinking has quickly pattern-matched and downplayed disconfirming information.
Understand how deep the halo effect goes in clouding/painting my judgment of a person with a favorable first impression versus not.
The major source of error in forecasting is our prevalent tendency to underweight or ignore distributional information. We forecast based on information in front of us (WYSIATI).
Consequently, I will therefore make every effort to frame the forecasting problem so as to facilitate utilizing all the distributional information that is available
Here is the thing … We are pattern seekers, believers in a coherent world in which regularities appear not by accident but as a result of mechanical causality or of someone’s intention.
This fact means that we humans often misclassify random events as systematic and we are far too willing to reject the belief that much of what we see in life is random.
This means for me, as I continue to plan I MUST EMBRACE THE RANDOMNESS OF LIFE!
Lastly, beware when I am in a good mood and I have had limited sleep … My System 2 will be weaker than usual and I should pay extra attention to my default System 1.
Downloadable Content
Thinking Fast, and Slow is a must-read for anyone interested in gaining insights into the Human mind and the manner in which decisions are made. The following book notes have been created to help you with your understanding of Daniel Kahneman’s concepts within Thinking Fast, and Slow.
"A business that wants to be able to innovate, wants to have a chance to succeed and prosper in a time of rapid change, must build entrepreneurial management into its own system!"
--- Peter F. Drucker, Innovation and Entrepreneurship (1985)
Introduction
The book on Innovation and Entrepreneurship by Peter F. Drucker was written in 1985 and is still very relevant in 2023. At the heart of his argument lies two very simple beliefs:
Management is the new technology (rather than any specific new science or invention) that is making the American economy into an entrepreneurial economy.
Innovation and Entrepreneurship are capable of being presented as a discipline, capable of being learned, and capable of being practiced.
Drucker posits that innovation and entrepreneurship are “risky” mainly because so few of the so-called entrepreneurs know what they are doing. In order to reduce the risk of innovation and entrepreneurship and increase your likelihood of success, you need to establish purposeful innovation across the following 7 sources of innovative opportunity:
The unexpected – the unexpected success, the unexpected failure, the unexpected outside event.
The incongruity – between reality as it actually is and reality as it is assumed to be or as it “ought to be”
Innovation based on process need
Changes in industry structure or market structure – that catch everyone unawares
Demographics (population changes)
Changes in perception, mood, and meaning
New knowledge, both scientific and nonscientific
Therefore, innovation should be systematic and consist of a purposeful and organized search for changes. It should also consist of a systematic analysis of the opportunities such changes might offer for economic or social innovation.
TheSystem: Establish Entrepreneurial Management
Peter F. Drucker is the father of modern business management and in this book, he puts forth a pathway for entrepreneurs to follow. Successful entrepreneurship and innovation are based on luck or genius. It’s based on the systematic and purposeful search for opportunities within the seven sources discussed in this book.
The System of Success is establishing Entrepreneurial Management!
Entrepreneurial management of most new ventures has 4 main requirements:
It requires, first, a focus on the market
It requires, second, financial foresight, and especially planning for cash flow and capital needs ahead
It requires, third, building a top management team long before the new venture actually needs one and long before it can actually afford one
Finally, it requires the founding entrepreneur a decision with respect to his or her own role, area of work, and relationships
If you can establish this framework in your organization or new venture, you will get purposeful innovation at low risk. Drucker makes sure to state unequivocally that innovation and entrepreneurship should not take unnecessary risks. Successful innovators and entrepreneurs are not “risk-takers.” They try to define the risks they have to take and minimize them as much as possible, and entrepreneurial management helps them do that.
What I Will Do Differently?
Invest more time employing “Creative Imitation” and “Entrepreneurial Judo.” As Chapter 17 discusses, the Japanese made the deliberate decision 100 years ago to concentrate their resources on social innovations, and to imitate, import, and adapt technical innovations with fantastic success. Using entrepreneurial judo, one first secures a beachhead in the market leader’s backyard. Once the beachhead is secured with adequate market and revenue streams, you then move in on the rest of the beach.
Pay more attention to the changes in Global Demographics. In Chapter 7, Drucker discusses how Demographics are doing some funky but predictable things right now. The developed countries are seeing a rise in the
aging population as birth rates fall and people live longer, while Third World Counties are seeing a tidal wave of young adults. Aging populations historically have caused labor shortages in places like Japan and put outsized pressure on government pension plans like in Italy. Consequently, there are huge innovation and entrepreneurial opportunities.
It’s cliche but Keep It Simple Stupid. In Chapter 11, Drucker discusses his principles for innovation. In order for an innovation to be effective, it must be simple and focused. It should do only one thing and that one thing well. Throughout the history of mankind, all effective innovations are breathtakingly simple!
Downloadable Content
The book on Innovation and Entrepreneurship was written by Peter F. Drucker in 1985. The year is 2023 and his principles are still relevant. As stated above, a business that wants to be able to innovate, wants to have a chance to succeed and prosper in a time of rapid change, must build entrepreneurial management into its own system. The following raw notes were created by me to help streamline a deeper understanding of Peter F. Drucker’s concepts in Innovation and Entrepreneurship. Hope you enjoy it!
