July 10th, 2011

Owner Aptitude

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 Featured Video for 2011: This 16 minutes will totally change your visionary perspective.

GenerationX (Xers) small business owners such as Ben Lerer of Thrillist, Mark Coker of Smashwords and Reid Hoffman and Michelle Yee of LinkedIn have transformed into nimble sky-walkers with an array of leadership styles and expansive knowledge of managing ambiguities, personal preferences and case by case scenarios.

You have the same capabilities. It’s just a matter of harnessing your tremendous energy and re-directing it in a more strategic, disciplined manner.

 

The Ability to Manage Ambiguity

 

 

Ambiguity is that fuzzy gray area between black and white, characterized by uncertainty and lack of order and/or structure, often leading to chaos and failure. It is counter-intuitive to our search for linear solutions, and quite often, pushes us into the area of polarity management. We’ve already discussed the extent to which most mangers are uncomfortable abandoning their tried-and-true, preconceived solutions in favor of unorthodox forays into the unknown. After all, how do you manage the unknown? How much of the company’s money should be devoted to “string theory”? I can’t see them. I don’t know what the little devils do. Yet, some old grumpy Caltech scientist with an oversized head is asking me to invest millions into a research project with no visible return in sight.

How do you think the managers at NASA felt trying to get to the moon, or CNN executives felt leaving correspondents inside of Iraq in 2003 as the bombs fell all around them? There was no playbook to follow, no way to fully measure the impact of each precarious decision.

From a parallel business perspective, how would you manage the unknown in terms of both the creative and implementation stages? If you worked for Levi Strauss in 1986, how would you respond to some young dreadlock fashion designer who came in and told you to invest your entire budget into pre-faded, stone-washed ripped-up jeans?

“Let me get this straight. We’re going to take a perfectly good pair of designer jeans, spot-fade the color like zebra stains and then cut nasty little jagged slits into the legs so tattered strings hang out. Then, we’re going to sell them as brand new jeans for twice the normal price? Is that what you’re telling me?”

As a small business owner, there will be times when innovation reaches your desk wrapped in a troublesome package of ambiguity. You can’t fully measure all of the potential outcomes. In fact, you can’t even identify the process that will lead to these outcomes. How do you manage these unknowns?

The answer is not simple. But basically you manage the known’s surrounding the unknowns.

So I can’t know whether the jeans will sell. But I can look at the research that suggests they have the potential to sell. And if the research is not compelling, then I can look at the person who presented the idea. That person has a “known” track record. Like the bookies in Las Vegas, I can place some statistical odds on his or her potential for success.

What if a Hollywood director came to you and said, “I’m giving you first dibs on a film, the likes of which has never been made before. I’m pretty sure I’m going to run over budget, but since I’m using a new type of technology, I can’t say exactly how much, nor can I say exactly when the film will be complete. And, you’re going to have to pay me $350 million to direct it. Are you interested or not?”

If you’re familiar with the business, your first inclination will be to tell the director to take a hike. Most anyone can hire an A-list Hollywood director with tons of credits for $5 – $20 million a picture. Three hundred and fifty million is ridiculous … Unless you’re able to look into the future to understand that this is James Francis Cameron offering you Avatar, the top-selling movie of all times, which will gross $2.7 billion worldwide.

You don’t know what this new thing will do. What you do know is this is the same director who made The Terminator, Aliens, and the Titanic. He’s the same guy who co-developed the digital 3-D Fusion Camera System and offered to give back his own money to Fox Studios during production to keep them from panicking about his budget overruns.

The ambiguities surrounding the project are huge. But you can manage them by determine the probability that, in the end, Cameron will deliver. If, in your evaluation, the probability is high enough, you will most likely take the deal. This is the kind of progressive thinking you want from your team and potential hires.