Have
you ever thought where do our ideas come from? How do we develop
entrepreneurial ideas from random concepts in our mind?
At the cognitive level our mind is full of mental imagery and
other forms of information stored in our memory in the form of
schemata. Our schema play a paramount role in our beliefs,
values, and how we make sense of the world, influencing the way
we think about things and make decisions[1].
Schemata provide a cognitive structure where algorithm-like
sequences assist the individual understand events and situations[2].
Schemata also enable an individual construct scenes or vignettes
in our mind[3],
which manifest our thoughts, desires, and fantasies. Generally
our schemata maintain the rigidity of our belief systems[4],
which enables the individual to maintain their inspirational and
behavioral trajectories forming the informational basis of our
thinking and decision making[5][6].
Our schemata forms the basis of what could be called our
dominant logic (or what the author likes to call dominant
narrative), that encapsulates our identity[7].
When new information is perceived out in the environment, it may
conflict with our existing dominant narrative. This could arise
from any number of displacements like the unexpected dropping of
a set of keys onto the ground, or a much more drastic event like
the loss of a job or death in the family. Shocks or
displacements bring attention to a state of disequilibrium where
the dominant narrative we hold is challenged. If these
challenges are not suppressed or denied by our defense
mechanisms, an individual may be able to think of and develop
solutions to these discontinuities to bring back stability[8]
and view alternative courses of action[9].
These shocks will be accompanied with either positive or
negative emotions which may generally influence the trajectories
we take[10].
Shock or displacement may lead to a situation where the
individual doesn’t know how to respond and begins to use
effectuation (or trial and error) to handle the
situation, thereby making connections and constructions out of
different pieces of information the person has available within
their memory at the time. Existing schemata will integrate the
person’s knowledge into the new thought vectors which brings
congruency in thoughts and judgment[11].
After a period of confusion these thoughts after some
re-assessment begin to form a catharsis, which may lead to
seeing new ideas.
Concepts are the building blocks of ideas, very general abstract
notions that can be built into specific ideas. Concepts are
built upon images and perceptions. They tend to have vague and
descriptive meanings, rather than actionable notions. Concepts
are descriptive views of something in the environment that
exist, or something from the imagination that exists only in
fantasy. These may not necessarily be in the form of language,
but may be images, symbols, spatial visages, or musical themes,
etc. One or more conceptualizations will usually be combined
together to form an idea, which can be refined, developed,
enlarged, and elaborated upon to form something that can be
acted upon.
For example, a description of a restaurant is a concept that
provides a list of characteristics with little actionable
meaning. Mexican food is another concept that is also
descriptive of something, but when they are combined together
they become a Mexican restaurant which becomes an idea that can
be elaborated upon, expanded, refined, developed, and action
taken. Likewise the concept of a theatre company and the concept
of a restaurant can be combined together to form a theatre
restaurant. In Melbourne, Australia, the concept of a tram
running around the city was combined with the concept of a
restaurant to form the Colonial Tramway Restaurant[12].
The first airplane, the Wright Flyer 1 was invented from a
number of concepts including the basic concepts of aerodynamics
(thrust, drag, lift, and gravity), the box kite, and a petrol
engine powering a propeller to create thrust, balance, and
stability. In each case individual concepts were observed,
considered, assembled, synergized, and tested, to make a
complete form.
These emerging concepts must develop a critical mass of thought
that connects snippets of information that merge into meaning
that both the thinker and society can share. Entrepreneurial
opportunities may be developed through effectuative imagination
(something like thought experiments), or an invention by
experimental engineering.
Concepts can be formed from information where ideas can be
developed by fusing the different pieces together. For example:
Information (1): the population in many developed countries is
aging.
Information (2): As there are less people at study age,
universities are developing excess capacity.
Information (3): Universities are subject to funding cuts.
Information (4): Many developing countries have young
populations at study age who wish to gain an education.
These threads of information can be developed into the idea of
taking foreign fee paying students into developed country
universities that have excess capacity.
Similarly,
Information (1): the costs of running a service department in a
firm within a developed country are very high. Information (2):
Operational costs in countries like India are much lower.
Information (3): Countries like India have abundant and highly
educated people, who speak English very well. Information (4):
Voice over internet protocol (VOIP) allows direct and cheap
communication around the world.
Therefore this information can be developed into the idea of a
customer service centre located in Mumbai to service customers
over the phone in the United States.
Each concept is situational to a particular time and place, as
words, images, objects, signs and symbols. The individual
concepts must be arranged in a manner that creates some form of
shared and valued meaning. Narrative is a store and carrier of
knowledge, particularly within social contexts. An idea becomes
a narrative of meaning which members of the community can
embrace and benefit from the revelation of another’s imagination[13].
Narrative conveys ideas through conversation, action, and
symbols to others who in turn become able to share experiences
and perceptions through the same stories. The new narrative must
trigger peoples’ memory[14]
and transplant an appreciation them into the story[15]
that inserts emotion which plays a major role in creating these
associations[16].
The process of developing a narrative is critical to creating a
new idea and the identity of the idea is critical to the
legitimacy it receives from stakeholders[17].
Narrative, symbols, and images of successful ideas become
embedded within our social knowledge structure. Social change
can be seen as new themes running through the community that
binds people through common perceptions and tacit agreement.
Developing concepts into ideas is very much a learning process
that creates a linkage or nexus between real world experiences
and the conceptual world of how we see the world ought to be.
The first step of this process is to identify concepts. An idea
that can’t be physically tested may be developed through the
socio-cognitive process of ‘talking through’ the issues
as a means of thinking and articulating them to create clarity[18]-
developing an idea as a narrative. An invention can be tested in
the real world, crafting concrete experiences and then
reflecting upon the outcomes. Unsatisfactory results will
trigger further reflection and another round of experimentation,
refining the idea further. This process may continue a number of
times until ideas are refined. If after continued
experimentation the results are still not satisfactory, then a
complete evaluation seeking further information may be required
before further testing and experimentation. Eventually new
divergent knowledge is created. This process of trial and error
is how Orville and Wilbur Wright learned how to build a powered
airplane and fly it. This learning process is seen on the left
hand side of figure 1. This is also the way many entrepreneurial
ideas are constructed.
Concepts can be extracted and synergized from unrelated
locations, objects and other business models. For example, a
person may secure a particular location and wish to create some
form of business model that would serve potential customers
within that location. Potential young customers around the
precinct of a university like to gather at near campus
restaurants or coffee lounges for snacks and social gatherings.
The general characteristics of a generic fast-food business is
that it is cheap, has a good standard of hygiene, good service,
fast and efficient, specializing in a particular food, people
know what to expect and a meeting place for people. After study
of the situation some of the characteristics of a generic
fast-food business can be extracted according to what the
potential entrepreneur feels are most important to the potential
clientele of the potential location and a new concept
constructed. A hypothetical result might be a charcoal BBQ
Burger Grill which is conveniently located, cheap and
affordable, has good service, a unique and tasty charcoal grill,
and is a convenient meeting place with WiFi, etc. This is called
concept extraction where the potentially successful elements of
a concept are synergized together to create a new idea. This is
shown pictorially in Figure 2.
Individuals develop ideas and refine them through a learning
process[19].
Some people will learn better through actively testing their
ideas in the real world, while others learn better through
reflection upon the different attributes of their experience and
ideas. Some people’s learning styles may be more suited to
different challenges through the entrepreneurial process during
venture development[20].
According to Ward people have their own preferred ways of
learning where each cognitive approach to learning will utilize
emphasize different types of information in developing idea
constructs[21].
Figure 1. The opportunity creation process
Some people may prefer the method of assimilation and grasp
experience by thinking and theorizing, then transforming the
information by watching and reflecting. Assimilators
conceptualize in abstract and undertake reflective observation.
People with assimilative learning preferences will tend to stew
over potential solutions to problems and directions to take[22].
Assimilators are excellent at pulling together disparate
observations and building these separate information strands
into coherent ideas[23].
In their ideas, assimilators will tend to be logically precise
putting more emphasis on the theory behind the concept than the
practical side.
The converger grasps by thinking and theorizing and then
transforming the information by doing and applying. Convergers
rely on abstract conceptualization and experimentation. While
convergers may not be doing something all the time, they never
stop thinking about problems and their solutions[24].
They will build up their technical knowledge and platform, ready
to utilize it on developing solution and products once they
understand all the issues involved[25].
They tend to be more technical rather than socially orientated[26].
The diverger grasps by feeling and doing and then transforms the
information by watching and reflecting. Divergers have the
opposite strengths to convergers. They have a strong imagination
and ability to read people and situations through their social
awareness abilities. They are able to look at situations from
many perspectives and organize many interrelationships into a
meaningful gestalt. They are strong at evaluating concepts
through the market, financial, and operational issues, etc.,
through rich personal networks they build up[27].
The accommodator grasps experience by feeling and doing and then
transforms the information by doing and applying. Accommodators
tend to have the opposite strengths to assimilators.
Accommodators prefer concrete experiences and active
experimentation. They prefer to do rather than to theorize. They
are opportunity seeking and like to act rather than spend a long
period of time evaluating the opportunity. They are able to
implement plans extremely well and their strength is towards
opportunity exploitation.
Robinson and Rose postulated that we tend to learn from personal
disturbances which bring chaos and then allow us let go of
existing knowledge to replace it with new knowledge[28].
This is consistent with the entrepreneurial process where a
trigger like losing a job or seeing a shop vacant for rent may
launch a person onto taking new trajectories like pursuing an
opportunity[29].
Robinson and Rose postulated that emotional awareness will
facilitate the transition from disturbance to chaos in order to
begin critical reflection to facilitate the transition to ‘letting
go’ of past beliefs, to enable the learning of new
knowledge. This process involves synthesis in thinking rather
than linear thinking and is a deep emotional experience[30].
Learning can be hindered or distorted by a number of cognitive
mechanisms[31].
For example many entrepreneurs are flawed in their thinking due
to the use of small samples, and display overconfidence in their
abilities when evaluating opportunities. Other cognitive biases
such as ‘obstacle thinking’ leads an individual to focus
on the negative aspects of an opportunity, providing reasons for
giving up and abandoning an idea[32].
People have cognitive structures that limit their field of
vision allowing only selective perception and interpretation[33].
This plays an important role in what people become interested in
and what they see in the environment and behave in response[34].
Individuals are steered by their dominant logic which acts as a
lens through which they view the environment and see emerging
opportunities[35].These
interpretive schemata act as mindsets or mental maps that create
a particular world view for any individual[36].
Thus dominant logic makes a person’s perception and responses
unique. According to March the commitment brought through a
person’s dominant logic is more important in action than a
person’s thoughtfulness[37],
thus motivation, drive, and passion are central to the
development of ideas.
Evolving ideas become a personal narrative of the entrepreneur,
a conceptual framework with a motivated objective. The idea is
attached to excitement and a set of other emotions becoming the
individual’s gestalt, ‘a theory of success,’ or a new
mantra for the future. Narrative becomes absorbed within the
person becoming a source of drive and momentum[38].
New narratives call the present into question, replacing it with
an alternative future. Through narrative, ambiguity is
eliminated and replaced with a clear and guiding path of action,
a new trajectory which becomes the new meaning for the
entrepreneur and venture, exerting influence on those involved
to accomplish it[39].
New narratives are introduced into society where they are tried,
some rejected, and some accepted, emerging as a shared meaning
to all. As we see, many narratives are archetypal with common
structures, allusions, and metaphors to convey to society
through public discourse by our corporations today. We can see
common themes of responsibility, transparency, sustainability,
accountability, and caring, etc.
Entrepreneurs develop their ideas from personal rather than
abstract perspectives where possibilities are explored within
their own personal constructs and constraints[40].
With a map of the future by which to navigate, the vision is set
out so the idea can take on a framework where structure can be
added by assembling skills, competencies, organizational
capabilities, and resources together, and identifying which
parts of the entrepreneur’s networks are required, or what new
networks need to be created, and what action is required within
the competitive environment through a formulated strategy. Once
an idea has structure the process of action can commence.
The assembly of various components to enact an idea into action
and reality requires retrospective reasoning to assemble all the
components through our strategic imagination. This process may
take a long period of time to develop into something that action
can be taken upon and may even continue after the
entrepreneurial start-up is in operation. This is not any
predictable staged or linear process and it is haphazard and
something unique to each individual.
The narrative that the entrepreneur develops about any
opportunity provides insight into his or her future
effectiveness[41].
How the opportunity is described, what histories, analogies, and
metaphors used will provide insight into the meaning and
commitment towards the opportunity. There is nothing mysterious
about creating ideas, it is a ‘mind-flow’ of thought that
eventually reaches a critical mass and through rearrangement and
recombination the resulting narrative becomes the basis for
action. Some ideas drift away while others continue to be built
upon like Darwin’s concept of ‘natural selection’ and the
Orville and Wilbur Wright’s quest for powered flight. There is
rarely any eureka moment, although insights are gained
along the way, as most ideas travel along a slow path of
development, which on the whole maybe mundane and boring to most[42].This
eventually leads to the construction of new knowledge that
develops into the narrative of a new invention, idea,
opportunity, or venture. Within the process of effectuation,
some narratives are picked up and others dropped as ideas
develop and are refined.
From the entrepreneurship perspective, an opportunity can be
constructed from the imagination where products, themes, and
brands create a story of new experience. Alternately there maybe
the discovery of a potential incongruence where perceived latent
demand exists in which case the primary narrative will be aimed
at satisfying these perceived needs[43].
As this process emerges our ideas manifest as stories, new
opportunities and ideas are very much a socially constructed
process where the outcomes develop new knowledge which provides
new shared meanings[44].
The narrative of new ideas, entrepreneurial opportunity, and
invention is about ‘what might be’ and ‘how the world
might look and act’ as they are created and developed[45].
Imagination and the resulting stories are turned from fantasy
and fiction into reality.
Figure 2. A constructed conceptual concept of a charcoal BBQ
Burger Grill.
Notes and References
[1]
Gioia, D.A. & Poole, P.P. (1984), “Scripts in Organizational
Behavior,” The Academy of Management Review 9(3):
449-459.
[2]
. Lord, R.G. & Kernan, M.C. (1987), “Scripts as Determinants of
Purposeful Behavior in Organizations,” The Academy of
Management Review 12(2): 265-277.
[3]
Wyer, R.S. & Carlston, D.E. (1979), Social cognition,
Inference, and Attribution. New York: Lawrence Erlbaum
Associates.
[4]Abelson,
R.P. (1981), “Psychological Status of the Script Concept,”
American Psychologist 36(7): 715-729, and Beach, L.R. &
Connolly, T. (2005), The Psychology of Decision Making:
People in Organizations, 2nd Edition. Thousand Oaks, CA:
Sage Publications.
[5]
Mitchell et al. (2000) define a number of scripts that
influence individual’s reasoning. Those relevant to opportunity
include arrangement scripts that are knowledge structures about
the specific arrangements that that support performance and
expert level mastery within an organization, willingness scripts
that are knowledge structures that underlie commitment to new
venture creation, and ability scripts that contain knowledge
about a person’s skills, competencies, norms, and attitudes. See
Mitchell, R., Smith, B., Seawright, K., & Morse, E. (2000).
“Cross-cultural Cognitions and the Venture Creation Process,”
Academy Management Journal 43(5): 974-993.
[6]
Beach, L.R. & Mitchell, T.R. (1987), “Image Theory: Principals,
Goals, and Plans in Decision Making,” Acta Psychologica
66: 201-220; Beach, L.R. (1993), “Broadening the Definition of
Decision Making: The Role of Prochoice Screening Options,”
Psychological Science 4(4): 215-220; and Beach, L.R. &
Connolly, T. (2005), op. cit.
[7]
Dominant logic is a term that was first used in the field of
strategic management by C.K. Prahalad and Richard Bettis to
describe the way managers deal with the diversity of strategic
decisions based on their cognitive orientations or what was to
be called mental maps by Peter Senge almost a decade later. The
author describes the dominant logic as a person’s worldview
which manifests into a person’s underlying assumptions, beliefs,
values, and desires. The dominant logic also carries a person’s
likes, dislikes interests and aspirations, thus influencing
cognitive attention, focus and concentration. The dominant logic
evolves out of a person’s experiences, knowledge, and long term
emotional orientations, forming a major part of identity.
Therefore dominant logic governs what a person perceives, thinks
about, and how they behave. Dominant logic is socially and
culturally embedded, linking the person to the outside
environment, and operates sub-consciously within the individual.
Prahalad, C.K. & Bettis, R.A. (1986), “The Dominant Logic: A New
Linkage between Diversity and Performance,” Strategic
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[8]
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[11]
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[12]
See:
http://www.tramrestaurant.com.au/en/
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[21]
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[28]
Robinson, G., & Rose, M. (2006), A Leadership Paradox:
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Samsara and the
Organization - Murray Hunter
