Dr. Saras Sarasvathy, of the Darden school of Business, conducted a study in 1997 with 27 expert multi-millionaire entrepreneurs from around the world. Instead of simply asking them their approach to business, she had each talk out solutions to a 17-page problem set containing 10 decision problems relevant to introducing a new product. The patterns she identified became “effectuation theory.”
In a nutshell, this theory notes that we’re used to thinking about problems by identifying a goal (e.g. sell 10 shoes) and then attempt to identify the optimal path to accomplishing this goal given our current resources. However, these entrepreneurs didn’t start with a final goal in mind. Instead, they began with what they had in mind (e.g. I have leather and a manufacturing plant) and allowed goals to emerge contingently over time (e.g. I could sell shoes or handbags or belts. I choose..).
This focus on the approach and process ensures that the entrepreneurs are open to changes in the environment around them and are optimizing for success given what they have rather than being stuck to a goal.
Source and thanks to: www.EBSketchin.com
‘Through their actions, the effectual entrepreneurs’ set of means and consequently the set of possible effects change and get reconfigured. Eventually, certain of the emerging effects coalesce into clearly achievable and desirable goals — landmarks that point to a discernible path beginning to emerge in the wilderness.’ | Dr Sarasvathy