Simon is a Visiting Professor at Ulster University and an author of several books on enterprise and entrepreneurship.
In this episode we discuss:
- Simon’s background and how he got into working and studying enterprise.
- How governments support new business and does that actually work?
- What are the ideas and assumptions that support enterprise policy?
- Is research impartial and independent?
- The history of government interventions into enterprise and entrepreneurship
- What George Washington’s death and Greek doctors can teach you about government policy to support enterprise.
- Why clever people believe things can be damaging.
- Are small businesses just small big businesses and why enterprise shouldn’t be studied in business schools.
- Should every business set out to grow? And why big business thinking can be damaging to small businesses.
- Why you should stop trying to predict the future.
- Planning v preparing for uncertainty
- Anti-fragile and what it means for your business
- Ready, aim, fire v ready, fire, aim
- Why people aren’t as rational as economists think
- What changes Simon would make if he was in charge of government policy
- Two different ways to look at failure
Adapt: Why Success Always Starts With Failure by Tim Harford
Antifragile: Things that Gain from Disorder by Nassim Nicholas Taleb
The Black Swan by Nassim Nicholas Taleb
Effectuation: Elements of Entrepreneurial Expertise by Saras Sarasvathy
Herd: How to Change Mass Behaviour by Mark Earls
Seed to Seed: The Secret Life of Plants by Nicholas Harberd
Other Stuff we talked about on the Podcast
Hand dryers v paper towels: a Guardian long read
After gaining a degree in Engineering (at Cambridge) Simon worked briefly as a post-graduate trainee at Rolls-Royce (aero-engines in Bristol) before a period in the Army (Royal Engineers). Then, after gaining a business degree at the London Business School, he worked in Harland & Wolff (shipbuilders in Belfast) and then spent nine years as the Enterprise Development Director of the Northern Ireland government’s Local Enterprise Development Unit (LEDU*). During this time he also chaired the Enterprise taskforce of the Northern Ireland Department of Economic Development’s Pathfinder initiative.
In 1993 Simon left LEDU to set up his own business as a consultant and a facilitator of enterprise and voluntary/community sector development. His clients included government departments, education establishments, district councils, local enterprise agencies, private businesses and voluntary and community sector bodies. He also undertook assignments in Bulgaria, Lithuania, Mozambique, Romania, Russia, Slovakia and the Ukraine.
After leaving LEDU Simon continued to explore enterprise and probe the knowledge shared about it. As well as delivering conference papers, academic articles and lectures he has written or co-written several books about aspects of enterprise. Since 2008 he has also been a Visiting Professor at the Ulster University Business School.
* NB LEDU was wound up in 2002 when Invest NI was created.
Find Simon here: email@example.com
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Andi Jarvis, Eximo Marketing.
This transcript has been done automagically using Happy Scribe and hasn’t been checked by a real person, so there may be some hilarious mistakes where the AI can’t work out our accents – I’m sure they’re trained on just the American accent.
Simon Bridge. Welcome to the strategy sessions.
So Simon is on the shore today because we met probably six or seven years ago. Now I was studying for my MSC in marketing, so I’ve got an undergrad degree, which was three years, a part time MSC, which was a couple of years. And I’ve just finished a mini MBA in marketing Andi can honestly say that in all those periods of study, probably six years of study in total, there was one lecture I remember, and that lecture was delivered by Simon Bridge. I was at all the University.
And Simon, you explain why were you as the Ulster University that day delivering a lecture?
Well, thank you very much for saying that. Andi I suppose it’s a slightly long story. But back at the beginning of the 19, 819 84, I was asked if I was interested in a new job. I was working in the shipyard at the time Andi not getting very far and it wasn’t going anywhere. And the job came up in the vacancy that then existed. It was called Led You local Enterprise Development Unit. It doesn’t exist now. It was wound up when Invest Andi was created, but they wanted a new programme directly Andi was asked if I was interested in applying for it Andi thought, Well, I haven’t been working for businesses, but I did do a small business option of business school Andi need new job.
So I said yes. So I found myself in this government funded agency supporting small businesses in Northern Ireland. From that, after a short while, the then Department of Economic Development was revising its strategy. Sos and one of the things that looking at a number of issues in Northern, it had about six of them. And there’s a task force for each one. One of the issues they said was enterprise. They’re saying we need more of it, whatever that meant. But I was asked if I’d share that task force.
So I was in a sense started to think, what is what do we mean by enterprise? And how do we get more of it? And we didn’t know. So we asked around. We came up from initial ideas. We started to experiment. Some of the things were introduced into policy, but I suppose what happened is personal. Top of the organisation changed. Let us focus became slightly more production oriented. You maximise and small business who were helping through grants Andi the jobs they promised. Some of the expiration of enterprise wasn’t as interesting for them.
I left the agency. I was still interested in that. But again, I felt that I wasn’t going that direction then. So I became self employed working in this area continue to be interested in it. I’d known some people at University of Aster, two others there myself. We wrote a book about enterprise. We said, look, in those days, this is 1990s. By then, if you ask for a book about small business you’ll get a book about how to start a small business. You’ll struggle to find a book that tells you about them.
So we thought we could write one like that. So we produced this book we called Understand the Enterprise Andi actually said, Understand the Enterprise, Entrepreneurship Andi Small Business to explain what it was about. It sold quite well, and the publishers came back to us quite quickly, said it’s selling as a textbook. Could you do a new addition and make it more of a textbook? So we did that cut that long story short. The last edition we produced with the fifth edition, and we made some significant changes, partly because through my work, through trying to write about it Andi things like that, I was still in attending academic conferences because I’m still interested.
I come to think about some of the things I thought I’d picked up early on weren’t really correct. Andi for instance, in the book in the last edition, we had a section. The beginning about this is what people are saying about enterprise and sport business. Then we had a section about where we think that’s wrong. And finally, fun enough, we had a section about why government is interested, what government does to support it, and a chapter on does that government support work. Andi each of the five editions consistently we have said we can’t find the evidence that the government action works, which says something about the ideas on which is based at confirmed, at least in my mind, we need to look at those ideas.
So as I said, I’ve been working with people in the University of Ulster. I’ve been doing some work, for instance, on the initiative they had called Nice, and as a result they made me a visiting professor and ask me close to give a lecture. Hence I was lecturing to the marketing Ms. Andi there we were now I remember Andi I’ve told you this before.
So this isn’t new to remember if you don’t know, Bel fast. If you’re listening from outside of Northern Island, you might not know Belfast is a real tech. Hope. Dublin is probably the biggest tech hub on the island of island. But Belfast is a real, thriving, vibrant tech centre, a lot of people wearing T shirts, hoodies and trainers, raising venture capital from San Francisco, bringing it into Northern Island Andi think when I looked down the module list and entrepreneurship, I was expecting somebody from one of these tech firms to be coming and telling.
And Simon walked in and my first lesson was Don’t Judge a book by its cover, Judge Simon by what comes out of his mouth, which was just mind blowing at the time. Andi think what Simon talks about that then, and what will dive into a little bit more is this element of government policy, because currently you just finished a PhD looking at this as well Andi think it started. What kind of got me to sit to the end of May was you started off by explaining government policy and then pulled it apart piece by piece to explain why it wasn’t working or what misconceptions it was built on Andi also just the fact that it was built on sort of received wisdom, as opposed to actual fact.
So you want to dive into that a little bit. And where are the areas and problems that you see with government policy on entrepreneurship?
Yes, there’s a number of things fall of that, I suppose people might say, look, if Gomes have been working at this for quite a while, why is it? And a lot of people are doing academic research on it. Why isn’t the two have come together? And policy is now much better Andi think unless you really study how policy is made in these circumstances and actually get involved in it, you don’t really appreciate there’s actually a big gap between the two. There are are lots of reasons for this, actually.
Often. For instance, if you’ve read the book again, North Down book burned about the recent Renewable Heat Initiative scandal, makes clear it talks about that particular bit of a government Department responsible of that initiative in the space about six months. Most of the people of that had changed. People move in and out and get promoted. No one stays long enough, really to build up an expertise in an area. So you get people who are there for short term picking up, suddenly being asked or we need new policy, don’t have time to research it.
They’ve got to run with what they know about. Often you get strange influences. Particular people are lobbying, got the ministers here or something that could be very influential and Funnily enough. Researchers probably are trying to learn about small businesses, how they operate. What they like was policy wants to know how to influence them. Andi that’s a slightly different thing in a different field. I was reading one person who he explained it. He said it’s a little bit. His analogy was cows and butter. He said, you don’t blame the cow for not using butter.
Cows are very useful for producing the milk. But producing the butter then requires a different process. You need both. Andi you don’t blame the cow for not going the whole way. So I think policy makers haven’t been prepared to take what policy can tell them, which is exactly what they’re not, what they want to know and turn it into her. So in a sense, it’s not actually strange that policy keeps going. And again, in the government system, there are periodic reviews of find things that are going wrong, and if they find something that’s going wrong, the personal responsible is questioned heavily about why are you doing this?
So the incentive is not to be found to do something wrong. Andi the way to avoid that is to keep doing the same thing or to copy recognise best Practise elsewhere. It’s not to do something new because you don’t really get praised or getting something right. But you will be criticised for getting something wrong. And so first of all, you try and do more of the same. And Secondly, you try and control what’s said about it. Any stories that from your side are released about it are positive.
You can manage not to know it’s going wrong. Donald Rumsfeld very famously talked about the known unknowns. The things we know we don’t know. What he didn’t mention is the other way around the unknown known the things we could know if he wanted to, but we’ve managed to avoid knowing because it don’t want to know them.
That sounds like a great description of government.
So I think that inevitably that’s what happens there. So I think it’s not surprising that policy is there not being able to correct itself. It’s a few people from outside. And as I say, all programmes are evaluated. Clear policy. You must evaluate a programme. But if you pay someone to do the evaluation for you, they are going to want to produce a positive report so they can get invited to do it again. So there’s a big incentive to produce positive reports in that situation. It’s only when you’ve got people from outside, in part, you’re looking at it, which is very rare.
Then you start to say, Hang on. Where is the real evidence of success?
I find it. Then people assume research is always impartial, which is often far from the truth. And I’ll put the link in the show to an article I read about Andries that you find in toilets. And there’s two schools of research. One school of research tells you that Andres are the least hygienic thing in the world ever. Andi all they do is blow faecal matter around the toilet and other things will tell you they are infinitely more hygienic and better for the environment than using paper towels.
Amazingly, all the things that Sandra is a terrible are funded by the Paper Towel Association of America or Scott and people who make paper towels and all the studies that show how terrible the vice versa. That’s amazing, isn’t it? Studies keep showing different things. So research isn’t always impartial, is it?
I think that’s a key thing because even academic researchers, ultimately, a lot of the funding for that comes from government. So there is an understandable incentive to try and please the person who ultimately providing the funding. I’m afraid that’s inevitable.
So where we started in the 50, Sixties and Seventies with almost full employment, unemployment started to grow in mid Seventies. That’s where we push for entrepreneurial Andi people starting businesses and things like that came from it. Is that right?
And how to forward the history of this? Commentators said the first course University course in entrepreneurship, possibly was just very late night in thirties in Japan. But the second mention is about 90 48 90, 49, and Harvard in 1940 does seem in America, some academic interest has been given to this area. But I also saw a report that even by the it was a minority interest, although another comment said it was starting to grow in the Nt. But the Andi said in many countries, unemployment for whatever reason, started rise in 1970s Andi was by the end of that decade it became obvious to a number of governments.
Look, the economy is performing the way it has been doing for about 30 years Andi get worried about where they’re going to find new jobs. Andi was 90 and 79. That American researcher called David Birch released the results of his studies, which said, well, you get net new jobs, a net increase in jobs. It’s from small businesses. People have thought big businesses the main state of economy. And he was saying no. In his study, big businesses lost as many jobs they created where you’ve got the increase in jobs.
It was some small businesses. Now some people queried that at the time funny how people are still questioning whether he was absolutely right. Some people, for instance, say it was new businesses rather than small businesses. But at the time, I think governments work to look at gift of the mouth. It looks at small businesses drive jobs. They wanted to know about small businesses and how to get more of them. And when governments get interested like that, there are budget. So you had money available for governments to support businesses and learn about Andi other people to learn about.
So I think you’ve got an industry which I use the word enterprises encompassing entrepreneurs, small businesses of enterprise industry growing up Andi a largely government funded. So that’s when interest suddenly started and another result of that is because the interest was suddenly there. The government didn’t say in 20 years time we’d like to know this. They said, we want to know now. So people were putting together very quickly what they thought they knew they didn’t have time to do lots of new research about it. So you got a number of assumptions made people trying to note what they knew, and that was then passed on to next generation, as you say, almost as fact, not as as yet untested assumptions.
But as this is what we know about this. And people received it as fact and that, I think became passed on so hurriedly assembled. Funny enough, as in almost any field of study, it starts with some guesses Andi some assumptions. It ought to be tested. But in this case, I don’t think it was.
So there’s a story told which connects to this, which is how George Washington died. He’s kind of connected dude Andi rolls back a couple of thousand years from that explain.
Let me explain that. Yes. I’ve used an analogy from mentioned, because it seems to me if we look at another subject, you can be slightly more impartial about it. Andi what we know about George Washington’s death. I think it was 19, 799 in December. I think it was he’d been out on his horse in some very nasty weather. He got a very sore throat and then developed a feeler. Andi those days, the pure for fever was bleeding Andi is recorded that his doctors bled him. Andi the first time they bled him, it didn’t work.
He still have the fever. So they bled him again and again. The record is that over a period of about 10 hours, they must have taken about half his blood out of him. Andi two days after on set to people, he was dead. Modern medical opinion, I think, would say, had an information, the epiglottis. But they also say that beating certainly didn’t help. And probably that was what killed him.
And these would have been the smartest doctors in America at the time. We.
This idea of bleeding people. It comes apparently from a a theory developed by the hypocritic doctors in ancient Greece who had deliberately said, We’re not going to rely on which doctors and priests medicine, as a lot of people had done. We’re going to observe patients and try and learn from them. And from their observation of people, they put together a theory that said, in the human body, there are four humours. These are liquids. There’s a clear humour which comes out of spit or sweat or something. There’s a red human blood.
There’s a black bile and there’s a yellow bile. For instance. They observed that people soldiers injured in battle lost a lot of blood. They got cold and they got dry. So they thought all the humans have different properties. Blood has a met property of making a hot and wet. Andi they also developed the idea that when you get ill, it’s because the humours are not in balance. So you need to restore the balance and then you’ll get better. Andi blood makes you hot and wet. And with a fever, you’re too hot and wet.
You must have too much blood so you can restore the balance by removing blood. And that’s what I was teaching was rediscovered from Arabic sources, actually. And that’s what men in George Washington time. That’s what medical schools were teaching. That’s what doctors were being taught. That’s what patients expected. Andi funny enough, a lot of them got better. Now. Modern medical opinion would say a lot of them were going to get better anyhow. Andi you’ve got the placebo effect in there. Of course, if you think the treatment is to you good, it can.
That in effect can have a positive benefit. But modern mental opinion says the bleeding was the wrong theory, but it’s interesting. A lot of sensible people believed it because it had a good pedigree Andi was only I believe that one of the starting people start to question it. Once we had microscopes Andi could observe the capillarie which joined the after is the veins. People could observe that blood circulated. Andi once blood start to see its circulation, then people ask why, and then it is a different sort of human doesn’t just sit in one place Andi started to see I was doing other things.
And once they start to see this, then they start to realise it’s not Andi something we want to lose like that. Even George Washington does appear for being killed because of theory based on a false assumption.
And those are taking that then and jumping back to enterprises in the modern day, what are some of the false assumptions that are used help inverted commerce to help business to new businesses grow?
What my suggestion is, we’ve built a nest of assumptions. I don’t think we did it consciously, but I think these explain how we’ve come to think about this area. Andi we’re talking about the area of entrepreneurs and small businesses. I think almost the starting assumption. We’ve treated enterprise as if it was a subset of the field of business. Not I think surprising people have made that assumption because they were interested. It because they were talking about small businesses and their operation. So you’ve got the word business in there, the evidence that they thought about this, where we put this when we say it, we put it in business schools Andi we are promoted through business agencies.
But I think when that happened, what we did said, okay, business schools, you’ll do enterprise is part of business. You deal with it. But if you think about it, what business schools fundamentally teach and what most business professionals learn by business fresh. I mean, academics, consultants, accountants, manages big businesses. Essentially, I learned from a big business model. They’re not conscious that small business are different. They’re not conscious. We’ve learnt a model which is really only applicable to businesses. They’ve learned that’s how businesses work. So now we put small businesses alongside this Andi we think they are small big businesses instead of realising they’re not.
So we start to apply. I think fundamentally, big business thinking Andi think three things I would suggest come from that. I think a lot of big businesses because that’s what their shareholders want. They’re trying to maximise their profits Andi nor to do that. They want to grow as big as they can to make money shareholders. So we sort of assume that applies to all businesses. The second thing, I think we’ve assumed that in this world of business, we understand it well. So we can sort of with appropriate market research, predict how things are going to happen.
Funny or a way of thinking, which you promised in the west almost on time of Newton that if we’re clever enough, we can work out the mechanism behind things Andi then see how it’s going to work in the future. So we can believe that we can with the right on research. A market research is an economist determine what’s going to happen Andi plan on that basis. So we’ve got big business planning as the essential for directing your business. And the third thing I think we’ve assumed and it’s they’re written down in the textbook in economic textbooks, assumptions of traditional economics, that human beings in these areas are at rationally to maximise their benefits.
So we’ve assumed that decisions we’ve made on logic, which means we have not allowed for social influence on how people at in this area. So I think those are a set of assumptions which you can see. Why do I made, but I can go through each one who wants Andi say why I think they’re wrong. Yeah, certainly.
I mean, the first one you mentioned about that big business thinking is something I come across on a regular basis when I look at marketing strategy with organisation. So a lot of strategy is driven from it’s a military term. And what will maybe talk about that later Andi was kind of codified Andi written down post First World War, when a lot of the US military de Mobed and went to work at places like Ford, General Motors and things like that. I’ve never worked with a company directly.
Anyway, that is the size or scope of Ford or General Motors. Yet they all have been fed that they have to plan in a very deliberate strategic way the same way up Ford. And noI’m working with a company with maybe 150 employees with a turnover of 25 million. And you think, well, why do you need to plan that way? Because it worked for them. So that’s an assumption that is fairly regularly. So let’s look at the first one. I suppose that is that the profit assumption that everybody’s business is designed to make the most profit possible for shareholder return.
And that is true or not true.
The small businesses in a shade of grey Andi think probably if people really think about it, they might realise it’s not true. But I think because we assume it’s true, we don’t bother to think about it. In the book I referred to earlier, we did talk about two different views of business. We talk about contrasting the professional view and the owner view Andi think the professional, therefore saying, if the business is not maximises profit potential, it’s not doing very well. But if you look at a particular, we talk about small businesses often run by the owner.
What is the business doing for them? Often it supports your lifestyle. Yes, the business could grow bigger, but do they want to incur the bother of a bigger business? We used to talk about BMW syndrome, that it was noticeable that a number of businesses you can see, you can really see if we look for it. The owner wanted the business to sufficiently well. You could drive a prestigious car like a BMW. But once the business were doing well enough for him to afford the BMW, he didn’t want to be its size and have two BMWs because you couldn’t drive two of them.
And once you were there, you’ve got what you wanted. You didn’t need to go further. And then that’s just one aspect. There are lots of other things people want out of businesses, but often the person who run small businesses, it’s to fit in with the local community. It’s possibly to employ a group of maybe from the local community or other people. It’s to support your lifestyle. It’s not to really grow the business as fast to grow. Andi funny enough book called by Geoffrey West called Scale, which I recommend to people.
One of the things I look at is how things in life. He used the word scale because you say it actually the wrong word. What happens when they try to get bigger? He looks at organisations like animals. He looks at cities Andi looks at businesses, and he actually says the bigger they get, the more they limit their life. The very few very large businesses last for more than maximum hundred years. But he says in a number of places, Japan, for instance, Western Europe, etc. You can identify quite a few businesses that have lasted several hundred years which don’t fit the normal pattern.
And what they have in common seems to be they didn’t try and grow big. They found a niche and Satis Andi delivered against that niche. Very well, well, content to do that. So actually growing and just trying to maximise profits, it limits the life of the business and not necessarily what the owners want if you really look at that. But a lot of people don’t. And I suspect if you ask a number of owners, if you’re doing it an official basis, they probably think I ought to want to make profit.
So they probably try and repeat that to who I was asking them as the expected answer.
But if you dive a little bit deeper, maybe there’s other reasons why they’re doing that business.
Yeah, I think. But you often it’s one of those things. You can’t get that to the direct question.
Because asking the question shapes how people going to raid their answer.
A very, very good field research. Almost don’t you for that in focus groups, and they like to have to dive into. And I’m interested, really interested in the next one about determinism and the ability to predict the future based on great planning, because it kind of it hurts my head when I meet people who think in this way that you can you can deliver perfect input. So then we can we can predict exactly what the outputs are going to be next year. How do we know what our competitors are going to spend?
How do we know it? How do we know all these things?
We don’t Andi think determinism has been criticised. People thought physics was a clear example of science. Believe in this, but commented interesting point out, actually, physics has moved away from it. Heisenberg’s uncertainty principle says that whereas we thought if we could look at every atom Andi where it was, we could work out what was going to happen. And Heisenberg says, you can’t know where they are and where they’re going. You can know one or the other. So this comedy said physics has abandoned the idea. But the social Sciences haven’t.
We’Re always behind the curve out with some scientists.
Most predictions are based on extrapolations from current trends Andi history shows us current trends don’t last very long, sooner or later, Andi usually sooner something happens to upset them. So I suggest instead of this belief Andi determinism. And funny enough, again, I’ve seen advertising that says if you’re starting a business, you need a business plan. Andi ve seen business plans described as road maps to the future. But think about it now. Have a roadmap. Someone has to be in the territory and explore it. They have to have surveyed it.
They have to have been there and built roads through it, and they have to have map the roads that you can have a roadmap. The future is unknown. We haven’t done any of that. How can we have a roadmap for it? So instead, I think these areas we should learn how to deal with the uncertainty unpredictable. But we’re taught as a plan, not how to prepare for uncertainty Andi think if we want to do that, there are a number of useful pointers. Again, if you want me to go into that.
Yeah, absolutely. Because I think this is to be really fascinating for people about preparing from certainty is something that I’m not aware of. Anyone teaching that. How do you prepare for uncertainty when we’re supposed to plan Andi know exactly what’s happening there by day by day?
Well, I think the starting point for that is a book from my two half wood called Adapt. And you see what that was. Almost everything works well in this world has been the result of trial and error. At least that’s the word we use for it really is not error. It’s trial. Observe the reaction, feedback on what’s not working well improve. Andi anyone really wants to carry around the first mobile phone or drive the first car off line, the first aeroplane. I don’t think they’d find it very a comfortable experience.
All those things got better through, if essentially through trial and error. So essentially trial and error is saying no, you can’t work out exactly the reaction to something. The only way to find out the reaction is to test, suck it and see test it. So you test it as early in cheap as you can. You don’t try to perfect it and then test it. The lean startup technique is about as soon as you’ve got something reasonably working prototype, test it on the market because you will be surprised at which bits the market likes in which it doesn’t like.
There’s a couple of our techniques and talk about at least all these concepts. There’s a book by Nassim Taleb, who is more famous for writing a book called The Black Swan. Black Swan. For him were the unexpected. Things are upset predictions because he said, we in Europe now for certainty that all Swans were white until someone went to Australia Andi came back with black one. To him, the black one is the thing that upsets your certain knowledge. But he wrote another book called Anti Fragile, Andi he invented that word because he said, I want our other.
A lot of people say the opposite of Fried Cart is your bust. But if you think about it, if you handle something fragile and you handle it roughly, it’s able to be damaged. If you have something robust and you handle it roughly, it’s liable to be unchanged. He wanted a word for when you handle it roughly, it gets stronger as a result. And you don’t do that by insulating yourself and what’s going on. It’s like trial and error. You expose it to this and improve it because of the feedback Gaglianone little expression.
To summarise all that, possibly I chemicals is expression ready fire aim. Because most people have heard the expression ready aim fire, which is when you’re shooting rifle, you get ready, you line the rifles up exactly the one where you need to be, because once you squeeze the trigger, you have no further control over the bullet. But life isn’t like a rifle bullet. Life is like a guided missile where it’s ready, fire, aim, get ready, get going and then steer it onto the target. So planning is all about ready aim fire.
Life is ready for an brilliant.
Andi if we had more of that in enterprise culture Andi business support that might lead to more successful and healthier businesses.
And another writer about this has been Sarah Sarah Palsy, a book effectuation. I mean, one of the things they said there is a successful entrepreneur he started when they sought a new venture, how much money where they’re going to put into it? They didn’t do a business plan to find out how much investment they needed. They worked out how much they could afford to lose. They didn’t want to lose it. They said it may not work that much. I can survive, so that’s as far as I’m going to go and put investing in it.
So again, that’s a way of exploring. I suggest a lot of new small ventures have much more in common with explorers Andi big businesses. They don’t know exactly what’s going to happen. Any way is to get out there and see what you try and do it in a safe way. So if it doesn’t work, you can get back. Yeah.
So that’s I think you talked for that before in terms of having to make a small jump for thing for some of the best enterprises to get up the ground. You have to make a small jump, but not a jump that might lose you your house or bet too much. But that always is a jump. There’s a gap that you have to cover at some point.
And she talked about them. One of the way to do it is to find partners. You might find a supplier or cast who’s very interested in this. I might do it with you in one way, but she felt that these people, she looked at her taken businesses to a stock market flotation, and that’s how they tend to think about it.
Yeah, fascinating stuff. So last week tell us a little bit more about economists believing that everybody behaves rationally when hopefully more social scientists by now a fully away that we are completely irrational but predictably irrational, I think, is the name of the Bob.
Well, it was interesting. Daniel comment, I have got a Nobel Prize for economics, really? For behaviour economics. He was a psychologist and he said as a psychologist, he once saw a list of the assumptions made by traditional economists. He says, as I got, I was trained to disbelieve all of them Andi think what we’ve done is assumed rational thought all time. We’ve ignored social influence. But if you really think about it and people who studied human behaviour says we are such a social species, we don’t realise how much we are subject to social influence, but most of the things we do we do because other people around us are doing it or encouraging.
Markle wrote a book about this called her as in the Herd Instinct. It’s again, a very interesting book, which I read because I heard him interviewed on the radio and the one quote I took from the radio into him. He says independent thinking is to humans as swimming is to catscan do it if they have to Andi usually ask my audiences how many of people have seen a cat swim and very people put their had not.
We don’t realise how much what we do is actually social influence. Why do we buy that particular car? Because other people are buying it? Not because it’s logically the best car for us, for instance.
Fascinating. I go to a lot of business events I did pre covered and hopefully will in the next few weeks and months as well. And when you go into the car park of these business events, every businessman Andi businesswoman drives exactly the same car. You know, it’s a sea of deer for BMW, three and five series. Andi occasionally you see something a little bit different, but it’s just a sea of sameness. And you think, how does everybody think differently when they all dress Andi look and believe behaved?
I think it was mares in book. At one point he said, You’ve been hard to do some market on the owners of Series three BMWs Andi said three sort of comments he made in his interviews with them, he said they all dressed the same. It’s as if the book came with the Style Handbook Carsaid. This is how he drowned, had to dress. Secondly, he asked them why, and they all emphasised the superb engineering, why. It was a logical decision to buy secution car, which he put down to the power advertise BMWs to persuade them it was better than the run of the mill German car.
And the third question he asked, what do they think about how do they view other drivers of seriously BMWs? And he said invariably they admired the other drivers for the independence of their thought.
We’d like to cat swimming again.
We don’t realise just how much interest. So if you want, you can see some areas of life where this has started, for instance, does strike me that comment for some time been trying to stop people drinking and driving. So we had advertising about that. But the advertising we had used to, I think, emphasised the chance to get in court and the penalties if you are caught so logically, don’t do it. Advertising now, I think, says doing it is socially unacceptable. Now, it hasn’t stopped it completely. But what I think it has stopped is people boasting about doing it.
I think if you do do it, get away with it. You wouldn’t necessarily confess that to other people. Whereas I think of the part you might have. I think the messages got in. That’s a socially unacceptable activity. Yeah.
No, it’s interesting how that changes over time. And there’s probably study somewhere of drink driving campaigns over the years and how they’ve changed and evolved. That would be worth.
I think they realised they had to change because they weren’t working.
So speaking of changes because things aren’t working. If we install you ten Downing Street Andi put you in charge of government policy for entrepreneurship at the two or three, the main changes or new things you would introduce. So what would you stop immediately to try and improve things?
I think various different levels of that at the top level. We would promoting small business because we wanted more jobs, we wanted more small businesses. I think we need to stand back a bit. Actually, we’re doing that because of people. It isn’t that the fundamental thing was to have a stronger economy. We want a stronger economy to help people. Now, helping people in the future is not necessarily always about growth. Were increasingly realise we’re living in a finite world with finite resources. So we’ve got to be clever about how we doesn’t mean we can’t do more with what we’ve got.
But it isn’t just we can burn more coal to get it or something. So we have got to look at sustainability. I think more. So we’ve got a question about what we really want to do for people Andi think we were saying people needed jobs. So we need people to create jobs on. People need a life now. They engage in work in order to generate resources for life. But they can do that in a variety of ways. So maybe we want to help them to be more enterprising in how they go about that.
Andi enterprise doesn’t mean you automatically start a thing we call a business, but partly if we want people to be enterprise, you to behave in that way. I think we need to make it the social acceptable thing to do instead of possibly a number of people feeling through school, etc. They’re being driven to do well at school in order to go to University, to get a good degree and to enter a good profession, such as the law, medicine, something like that. That’s what gets you a good salary and respectability.
So that’s what’s socially you’re encouraged to do instead of saying no. We want people to think well widely, but it will only come if they’re comfortable within their social circles in doing that, rather than just because government makes it easier for to do it, making it easier to do it doesn’t mean people want to do it.
The big difference between the two, isn’t that that for it did. What do you make of the an American guy told me this one. He lived in the UK for a long time Andi one of his recommendations to me. So he’s telling the wrong person, obviously. But one of his recommendations was about the bankruptcy system. Andi he said in America in the UK that people view bankruptcy as a failure and you get whacked with I think it’s a seven year ban from being a director and quite a draconian system, which makes sense if you look back at the history of it in America, I think it’s a one year ban, maybe two, Andi it’s a lot more light touch than it is here.
And it’s not seen as a complete failure. It’s very much. I tried this. It didn’t work, but now I know some more things Andi can try again. Do you think do you see that cultural issue? Do you think there’s some things that could be changed there to improve?
I have no real results. There’s almost really two parts. And think about that. First of all, yes, I do want to raise the word failure. I think one way putting it, we’re using it for two different things. I think there are some things in life which are fairly predictable. The sequence of the season 24 hours cycle of the day is fairly predictable. If, for instance, you went out into a busy road without looking either way of tracking is coming and you were hit by a car. You are to blame for not observing Andi predicting what’s going to happen.
You were at fault there. That clearly it was a failure. But there are some things we said when look at the future. We don’t know what’s going to happen. The only way to find out is to experiment Andi the experiment doesn’t work that we call that a failure. Actually, it’s a successful experiment because we now know that doesn’t work. But we said the experiment failed. So we got a failure when it was your thought because you should have thought properly and then we got the failure because you’ve tried something Andi it didn’t work.
We call them both failure and we failed to distinguish between the two. So when we get a failure, we automatically assume it’s a first salt, which is blameworthy instead of recognising. No experiment is often the trial and are is often the only way to work out what’s going to happen. And we shouldn’t call that the same failure as the first time, but we’ve got the same word of both things, so we confuse. Yeah, I think what he’s saying is in America a business that didn’t work.
We should see that as an experiment which unfortunately didn’t work, but we now learn from it and we can do something different next time. However, if you’ve failed to manage that business properly and I’m using the fat in Teversal, you should have watched the money and you didn’t rise. It was going so badly wrong that you were going bankrupt, then that is blameworthy. So I think again, it’s distinguishing the two sorts of failure. So I think I’m not saying if we change the bankrupted law here would make a lot of difference.
I think if we could change the word failure for one of those, it would make a difference. So people realised trial and error is not the wrong way to proceed. Yes, we want to avoid the failure. We ought to be able to foresee, but we ought to engage in the experiment when we need to, but we do it in a safe way rather than ruin the business and going bankrupt and only go so far as you invested what you can afford to lose exact business bankrupt is going beyond that.
Sorry, I think bankruptcy possibly has an element of tight warn failure, but also and then I’m the type to we distinguish the during the two types as we both sat here in Northern Island.
I’m thinking of an analogy with the rain. I feel always feels like a miss that we’ve only got one word for rain when actually there’s probably about 30 or 40 different types and I want the same failure. There’s different types and different reasons for it. We probably should have a different word for each one Andi just want to jump back right to the beginning of your career because I think there was something you said a few minutes to go about having different thought and independent thought Andi think one of the things that maybe get us into his diversity, not just diversity in terms of gender or race, but diversity thought and actions and people who come from different backgrounds.
So you mentioned you, you moved into the entrepreneurial field from working as an engineer. But before that, you had a fascinating job as well, even though I think he said it maybe wasn’t for you. You’re in the Royal Engineers?
Yeah. Well, it was to be for seven years. But again, that’s when I was being a bit of an engineer. I sort of haven’t practised at much engineering since then. Yeah. No, I thought it was very useful, gave them a number of very helpful experiences and some very helpful training. I think the military approach is often its value is not recognised. People there have studied how people work in some very trying situations Andi trying equipment to make proper judgments in those situations Andi think that has a lot of validity as well.
And you said about those judgments in external pressures Andi think we’ve talked previously about the impact of external pressures on business creation. Is it an external issue? Are an internal issue that stopping people starting businesses. And you have some interesting thoughts. I think on what might stop people from starting a business.
Again, I suspect it’s social pressure. Unless you’ve got the right encouragement, you may not even think that start your business is for you, I think possibly possibly less so now that’s a lot of emphasis on you could start a business, but certainly not that long. I think a lot of people there were two possibilities. They were lucky enough to have a job or they were unlucky and unemployed. The concept that you did it for yourself didn’t, I think, occurred to a number of people because they were so used to people being in employment.
Although historically that has been a very short period of history. The contract employment. A lot of people realised they were either self sufficient or they were jobbing labourers. They had to find the necessity was to find someone would if your a off somehow. But we then got the idea unemployment benefit. It was a job or unemployment benefit, not on your own initiative going off learning. So I think a lot of people don’t see the possibility or if they do, don’t see it as being for them.
Possibly because what’s a matter? Couldn’t you get a proper job? It’s not people they know are doing.
Yeah, that impacts of social pressure. I talk about the story. You have to be able to tell yourself as well as the story you can tell others, you know, does it have that social credibility to say I’ve started a business or this is my business. So this is the size of my business. And there’s a book by I actually think he’s called Jarvis Paul Jarvis. I think about Solopreneurs, which is a word I hit, but about championing the value in one person businesses. Not every business wants to scale to talk 2000 hundred thousand people.
Andi there’s a lot about being able to tell that story confidently Andi not being apologetic for it’s. Just me in the business. The social pressures can be huge for people, not just an entrepreneurship, lost in all walks of life.
Yeah, very much. Yeah.
So we’ve talked about a number of books because we’re coming up to the hour Mark. So we’re nearly there, unfortunately. But we’ve talked about a number of books that you’ve mentioned burned Andi Scale Adapt, Antifragile Black One, and a few others linked to all of these books are in the show notes. If you want to go buy them, just click on them. It’ll take you off to somewhere so you can go buy them and have a read. But are there any other books that you would recommend to people if they’re interested in more on this subject?
Well, a lot, actually, but don’t remember one because because we were talking about it earlier, I happen to have with me. It’s called seed to seed. This goes back to my asked about businesses want to grow all the time. This book is about a researcher who looked at a very small weed Andi looking at the DNA of the weed. Andi almost a starting assumption we had with plants as the seeds germinate, it tries to grow Andi it’s not growing very well. It must be because there’s some lack of something external, like a lack of sunlight, a lack of water, a lack of nutrients.
Andi it’s got all those it will grow. But in researching the DNA of this little weed, he identified in its DNA several places where there was an inbuilt growth inhibitor.
Also discovered that and circumstances the plant used to hormone, which turned off the growth inhibitors. So when it turns off that use the hormone, the growth inhibitor turned off Andi grows. But he wondered, why is it otherwise inhibiting its growth? But he said, Andi this is why I like the book. He talks about the work he is doing in the laboratory. But he also talks about his walking from the oratory to home and serving the weed growing in the wild Andi struck him. If the seed of this wield, this weed had landed in a piece of good Earth.
It grew quite large, us lots of flowers with lots of seeds. If it landed, someone said, like a middle of path, it didn’t grow large. It still matured. It still used some flowers and some seeds, but it stayed small and he realised what it’s doing. The part is normally very dry. If sudden you had a range or lots of water. It suddenly grew. Then when things dried up, it would die off. So it was limiting its size to what was sustainable where it was. So is just the plant with mild adjustment not to grow too big for its situation, as opposed to just growing as much as they can.
And he talks about that as something we ought to have for life. We shouldn’t be brash Andi always try to grow. We should be it’s much more beneficial to life, to limit what we’re doing for the situation. So I think again, for businesses, those very long lasting businesses had not tried to go big for their need, too big for their niche. I’m going to live a very long time as a result.
So that’s the asserted to seed.
I rather like that story because it upsets the assumption that implants growth is inevitable Andi think we’ve almost applied the same thing in the businesses.
So we’re back to where we started, which is test every assumption received wisdom, things that we know that we think we know we should test everything. I mean, that is kind of an unwritten motto of XMA marketing is question everything, which I think might be in a Henry Ford line. I don’t know somebody, somebody, but not me. But I think it’s a really important place to finish into London. So that’s an important one. Thank you. So I’ve got my last question for you. The same one I ask every, is there anything that you expected me to ask that I haven’t.
Well, one way you’ve just asked it Andi thought was wondering if you’re going to ask about that. I think we’ve actually I’m afraid I think we’ve covered all the go through quickly and generally and quickly. Think about how do I summarise what I’ve been very shortly Andi think I’ve covered the main areas? Yes. It’s just been my experience that I think we have built a conventional wisdom about this area, which is now quite widely shared. But we really ought to question because I identified social influence is important.
The future is uncertain. We ought to do much more to repair people, how to live in conditions Andi enjoy conditions of uncertainty. And we ought to realise that a lot of people can be enterprising Andi not start business be enterprising different ways and some of the things they do, it’s almost. If we label it as a business, we treat it differently. I mean, a selfemployed artist. We don’t say they’ve got a business, but actually, in all respects they have. But because we don’t call a business, we don’t expect him to react the same way.
But if you can say I’m a self employed artists, that’s respectable. If you say I’m a one person business, people say, oh, why is the story you have to tell, isn’t it? That so I think we need to look at this a different area from the purpose of the human being. Andi again, just to go back to business, it did seem to be one electrode and talk about said described an enterprise as a goal. Realise the ancient device. In other words, having a business is not the goal.
Having a business helps you to achieve your goal. What is your goal? Andi it just money or is it satisfaction? Is it helping other people? So your enterprise doesn’t have to be just about money? Yeah.
Brilliant. The brilliant. I love that an enterprise goal. Realisation device. I’m going to take that and clip it open and use it in the promotion of this podcast. Simon, that’s the bit I’m taking right from the end. Wonderful stuff. Well, thank you very much for your time. So it’s been fascinating. We’ve covered the policy. We’ve covered research, some interesting book recommendations, which is probably a wider reading list and most of the guests I’ve had on which is fantastic and a few I’m going to go off and buy now as well.
So thank you very for your time Andi your details.
If anybody wants to get in touch, are also in the show notes and spot your happy to hear from people if they’re interested in wonderful stuff, no problem at all.