For most of my professional career, I have been a Project Manager, responsible for planning and then delivering various new projects. I have also spent the past few years as a business founder and entrepreneur, co-founding Aspira, the Consulting and Enterprise IT specialist company
At first glance, the mix of entrepreneur and Project Manager does not seem like a good fit. One role is about taking risk, making bets, converting a vision into a reality. The other role is about managing risk, minimizing the opportunity for loss, and proceeding only when there is a detailed step by step plan from start to finish.
Is it possible for these two mindsets to co-exist? Or is that only possible in a Jekyll & Hyde type scenario, where I spend daylight hours as a PM and only satisfy my entrepreneurial urges at night-time and on weekends?
— Digital Week (@DigitalWeekIRL) November 11, 2016
Because high risk often corresponds to high reward, many would-be entrepreneurs tend to adopt a fatalistic approach to risk, as the price they may have to pay for success.
Elon Musk is an entrepreneur who has made big bets with Tesla cars and with SpaceX, and famously almost lost his shirt along his way to becoming one of the world’s wealthiest individuals.
Musk has this to say about risk: “If something is important enough, even if the odds are against you, you should still do it.”
What many people take from this advice is that, if they just ‘never give in’, they will be successful. And so, they plough through, ignoring all the risks along the way. That is all well and good – when it works out – but, in my experience, this attitude is risk ignorance rather than risk management.
The reasoning behind managing risk is not just to prevent bad things happening -it’s also to make good things happen. There is such a thing as positive risk – but it’s better known as opportunity. A good project manager will use his/her skills to evaluate all the risks – positive and negative – and then take calculated risks, meaning those where the likely benefits outweigh the possible cost.
What I note in Musk’s advice is that he did not ignore risk – he evaluated it and took whatever steps he could to minimise and mitigate that risk.
An entrepreneur needs to take a pragmatic approach to risk management to identify the most likely problems that may arise, and then put their entrepreneurial creativity and innovative thinking to work, to find a way to avoid or minimise those risks.
The good news is that there are a number of tried and trusted tools used by project managers use to manage risk and improve the likelihood of success. These tools can be used by new business founders with great success.
Manage the Scope
The first thing is to manage the scope of the new venture. Be really focused in what the business does – and what it does not do. If your business tries to do everything, it will fail – nobody can ‘boil the ocean’. By listing down what is within your scope and what is outside, you make it clear to your market and to yourself what you need to achieve.
Manage the Schedule
As a new venture, it is up to the founder to set the timelines. Too often, tasks build up and get pushed out – the snowplough effect. Then there is a panic to complete them and the delivery date gets missed. To avoid this problem, build a schedule in advance, with milestones. Ensure that the status of those milestones is checked weekly, and action taken if tasks are not completed. Manage the milestones, and you manage the delivery.
— Aspira (@AspiraHQ) November 11, 2016
Manage the Cost
An ever-present complaint from business founders is that it costs a lot more to establish than they originally thought. A very useful tool to employ here is a three-point-estimate. Simply put, before taking on a piece of work, estimate how much it should cost, then estimate the optimistic number (best case) and the pessimistic number (worst case). Plan your finances so that you can support the worst case. If you cannot afford the worst case, don’t take on the work.
As a new venture, quality is synonymous with customer experience. There is a risk for a new business that once it has won a customer, it will focus on winning the next customer. In my experience, it is more important that once a customer has been won, the team should focus on the execution – ensuring that what has been promised to that customer will be delivered. A satisfied customer will be your greatest asset in finding new customers.
So the mix of entrepreneur and Project Manager mindsets can not only co-exist, those mindsets can complement each other very well. The left brain identifies and manages risk, while the right brain makes decisions based on risk and initiates new ventures.
Less Jekyll & Hyde, more Hewlett and Packard.
there is no single formula for success. Pat Lucey to share insights at National Digital Week