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Despite its relative youth, a story we covered in our first episode, the world of entrepreneurship research has grown vast and wide.
With the currents of economics, cognitive science, psychology, and various fields of business streaming in; entrepreneurship has been able to incorporate a whole host of frameworks and perspectives, to forge its own identity.
In part two of our series on entrepreneurship research, we discover more about the expertise and study interests of our Ivey faculty team, including some of the surprising findings they have come across in their work.
To find out more about our Ivey faculty members, visit:
https://www.ivey.uwo.ca/faculty/disciplines/entrepreneurship/
The Entrepreneur Podcast is sponsored by Connie Clerici, QS ’08, and Closing the Gap Healthcare Group, Inc.
Transcript
Melissa Firth
Despite its relative youth, a story we covered in our first episode, the world of entrepreneurship research has grown vast and wide. With the currents of economics, cognitive science, psychology, and various fields of business streaming in entrepreneurship has been able to incorporate a whole host of frameworks and perspectives to forge its own identity. In part two of our series on entrepreneurship research, we discover more about the expertise and study interests of our Ivey faculty team, including some of the surprising findings they have come across in their work. Perhaps one of the most important areas in entrepreneurship research is the field of cognition, which covers amongst other things, the way we think, acquire knowledge and make decisions. Ivey faculty have actually been involved in two important special issues on the topic with the entrepreneurship Theory and Practice Journal, in 2002, and 2007. This is also the area that really gets Dr. Daniel Clark's mind ticking.
Daniel Clark
Oddly enough, I've read Daniel Kahneman 's book, Thinking Fast and Slow, right before I entered into my PhD. And it was the ideas from that really just understanding the different ways that humans conceptualize problems and use different types of cognition and thought process to address those problems. That just stayed with me when I was doing my PhD. And, you know, they say, to a hammer, every problem is a nail. As I was reading so much stuff about entrepreneurship in my PhD, that was what kept coming up. I was the hammer as i "Okay, how would the entrepreneur be thinking about this? Which thought process would they be using? How would they press?" And my second year of my PhD, I took an international business course. And that it just exploded my mind, how is the entrepreneur thinking about foreign markets? How are they thinking about, you know, working abroad, living abroad, selling their products to people from vastly different cultures, vastly different market. And as somebody who's traveled a lot in his life, those problems were very salient. And they made a lot of sense to me. And so that's where my PhD evolved into, it's, you know, taking that book, taking that problem in that context and understanding the entrepreneurs perspective on it. And while my research has certainly evolved, since then, into a much broader perspective on how entrepreneurs think, and different types of cognition and different cognition structures, beyond the Thinking Fast and Slow idea, that really is still the impetus of what I do. It is . You take a problem, you take, okay, what's the entrepreneur thinking and seeing and feeling while they look at that problem? And how are they structuring their brains to break it down into something that they can solve? The vast majority of research on problem solving is about very, very simple transactional problems, right? You know, what should I choose A or B? The problems entrepreneurs generally face that simple is how do I grow? It's, should I take on this risk? Should I invest in this? Should I develop a new product? Should I do partnerships? Should I sell my business? Those are really complex problems. They involve very detailed and structured cognitive pathways. That's what I'm interested in.
Melissa Firth
And those complex problems are compounded by the fact that many entrepreneurs feel they have to make these decisions alone. But that doesn't have to be the case.
Daniel Clark
Think about your average large multinational corporation, right? If there is a problem that is too big for you, you're surrounded by people who can help you with it. If you can get past your own ego, which is I will freely acknowledge a big problem in big corporations where a CEO doesn't want to admit that he needs help, or a senior manager doesn't want to admit that he needs help or she needs help. So they often do take on too much. But if you do get past that, and you say hey, I need help with this. There's no shortage of people who can help. That is not so much the case and entrepreneurs. They are in resource constrained environments. They the people they have around them might be very well intentioned, but they probably have very functional skill sets that allow them to assist on specific tasks, whereas the bigger, larger questions are... might be beyond what they can contribute to, especially beyond their own self interest. Like, I don't want you to take a big risk. I like my job, thank you very much, I don't want you to risk the company. So for the entrepreneur, finding help, finding people they can talk to, building a network of advisers and, and consiliare, and people who can just give them a knowledgeable, Outsider's, trustworthy perspective, beyond where people tend to go, which is friends and family. If you can go to somebody who is another entrepreneur, somebody who is maybe an experienced business person, go to a business school professor, somebody who has both the position of "this is not my problem so I can give you an objective advice," who has a certain degree of knowledge and ability to help with this problem, and give unique advice, right, not something that's constrained by the exact same perspective. That is really helpful for entrepreneurs, and you see stuff like, you know, entrepreneur, networking organizations that help with stuff like that. You see, entrepreneurs who have, you know, who come to entrepreneurship later in life, who can go back to their, their business days, and they're working for larger corporations to ask for assistance, if they can get past their ego. And this is one of the real advantages of having an outside investor. Everybody thinks about the money and the the connections that a VC or an angel investor can bring. Actually, I think their greatest input is to say, Listen, this is the challenge we're facing. This is what we want to accomplish. These are the constraints, can you guys provide me some perspective, some thought process to help me address them, I have never met an investor who wouldn't just stand up and start applauding at that moment, and say, I want to help. This is the sort of thing I live for. This is the this is sort of where I can make a positive impact on the firm beyond just giving you cash. And so I think that's the the challenge most, a lot of entrepreneurs face is they don't go looking for help early enough, because their own ego, their own belief that they have clarity of purpose gets in the way. Human beings are fundamentally cognitively constrained. There's only so much we can take on, there's only so much we can process that we are constrained by the limits of our knowledge and experience. There's a world of people out there who can provide good perspective, good thought processes, who can just backstop us and provide either a confirmation or a dis confirmation of what we've done so far. Hugely valuable.
Melissa Firth
But the way we think is often shaped by the environment around us, sometimes, quite literally, as Dr. Larry Plummer notes:
Larry Plummer
We often think of entrepreneurship as a process in which you have individuals, they recognize an opportunity. So there's a cognitive component. So a lot of the research, a large chunk of the research broadly in our field, is on cognition. It's about the psychology of entrepreneurs, how they recognize opportunities, why do they see opportunities that others don't? So we think of them as going through a process of they recognize an opportunity, they evaluate the opportunity, they evaluate the opportunity in a personal level. So is not only is this a good opportunity, is this a good idea for business, but is this a good idea for me. And then they go on to pursue that idea, and they start amassing the resources, and they build the stakeholders, and they hire their first sets of employees. And, you know, so we think they go through all this process. And what's interesting is that all three phases of that process are clearly being influenced by the location of the entrepreneur. So for example, if you were in a place dominated by particularly industry, so if you're in the Detroit area, which is of course known as being the automotive part of the world, or if you're in Nashville, which is known as being the music/entertainment capital, one of those capitals in the US, or you're in Silicon Valley, or in Boston's, you know, route 128 area, the types of opportunities you're going to see are going to be highly related to what's already there. So if you're in an area dominated by the automotive industry, you're going to be seeing opportunities in that industry. If you're going to be in Silicon Valley, you're likely to be looking for opportunities and seeing opportunities in that particular you know, information technology and software and so on. Then how you evaluate the opportunity whether or not you think the opportunity is good idea or not, when how you actually go on to pursue that idea. All of those phases of the entrepreneurial process are absolutely influenced by what's going on around you what's available in the immediate environment. And so you get this whole idea of that location; where an entrepreneur is located, will determine the type of business, they're going to start whether or not they actually start the business. And then ultimately whether or not they succeed with that startup.
Melissa Firth
And this idea of place influencing entrepreneurship is itself expansive. Whether we are looking at different cities, indigenous communities, or startup ecosystems in other parts of the world, operating in different cultural contexts. Here are examples from Dr. Laurel Steinfield's work across Africa.
Laurel Steinfield
So one of the findings that I found really interesting and insightful was with work I did with Walmart, in which they were looking to bring women owned enterprises into their system through an incubator program in which he tried to support these women owned enterprises. By enabling a way they could sell their product to North American consumers. Now these women owned enterprises, however, a lot of them had a social mandate. And as part of that social mandate, it was to help it was to try and empower their employees or the communities in which they work. And so what you ended up having was these women owned enterprises who were trying to train these employees to create products that could then be sold to Walmart. But what really struggled there to make this happen was not only financial barriers, but also cultural barriers in which the women owned enterprises struggled to have their employees understand the cultural tastes and aesthetics that would appeal to a North American market. And because there was this challenge, you had a whole lot of problems with product quality, etc. And so even though the idea was really good, the execution really struggled and actually did more harm to these women owned enterprises. And so often, what I say is like, when you try and do something like like a program or incubator program, or try and help entrepreneurs, you have to really think about the unintended consequences. But also understand that there's more than just the obvious barriers there, there's more than just the financial barriers, or even the social network barriers, there are cultural legitimacy, and aesthetic and taste barriers that could potentially prove product problematic. So that was one really interesting finding. The other research area of research that I do a lot of work in is actually social innovations. And there, we found that, you know, in order for social innovations to be implemented in a way that is actually equitable in a way that ensures that there is not an increase in divisions of those who have and those who have not. People that go into implement these programs for social innovations really have to ensure that they are targeting the consumers who are the most vulnerable, who have, perhaps have multiple oppressions, or modes, or discrimination, or challenges that they face as an example, in Africa, we were looking at social innovation, such as water ponds and we found that, you know, unless you take into account that the oldest person cannot dig the water pond and really struggles with money to buy a liner for the water pond, you'll have a water pond potentially there, but it will not get used, and it will not be well built. And so it's like there's these unintended consequences of really good intentions. So I think bottom line is, good intentions are one thing, but you have to really think carefully about your execution. And always do follow up and understand if there's unintended consequences, and then step in to understand how you can then level the playing field and try and ensure that more equitable solutions can be achieved.
Melissa Firth
And the issue of who has access to a career in entrepreneurship is a vital question. While entrepreneurs do come from all walks of life, there are historical and structural issues that elevate particular types and groups of individuals. What role does gender play? What about race or ethnicity? This is a major part of Dr. Janice Byrne's research.
Janice Byrne
There's two main themes, I think that underpin most of my research projects. Because one would, one would be the you know, equality, diversity and inclusion, that's a big thing for me, and the other would be entrepreneurial support. So in terms of equality, diversity, and inclusion in an entrepreneurial context, for example, I'm interested in looking at the experiences of disadvantaged and marginalized groups in entrepreneurship. I've largely focused on issues of gender but I'm also interested in the intersection of gender with other social categories like age and race, class, etc. So my interest in gender it's it's not just about men and women entrepreneurs, it's bigger than that. Mmm, gender, gender is everywhere and conceptions of masculinity and femininity, they're built into ideas into decisions, into behaviors. So for example, one of my research papers looked at a national campaign in France to encourage more women entrepreneurs. It was a combination of a social media campaign, and it involved publicizing the role. These role models, these women are role models. And our research looked at the ways it looked at the messages that were being sent out via these role models. And an actual fact to some of them serve to reinforce existing gender stereotypes, and didn't really speak to our diversity of experiences - a real diversity, real genuine diversity of experiences of different women that were involved in entrepreneurship. So that's one, that's one big interest for me. Also, I guess, I'm interested in entrepreneurial support. And so that encompasses the education and training that we offer. So research that's looking at different aspects of entrepreneurship programming, but also the support that we offer via accelerators and incubators, the networks that exist, that entire support framework that is there. And it overlaps, I guess, with my first interest in marginalized or disadvantaged communities, the way in which this entrepreneurial support that we provide changes or needs to be changed to accommodate a wider and more inclusive community of people.
Melissa Firth
And Byrne's work also opens up some other difficult questions.
Janice Byrne
Another interesting, I think, realization that I had along the way was a question that I had was really like, okay, so you know, entrepreneurship can be empowering for disadvantaged individuals, or can be in, you know, a way to kind of level the playing field and people can take control, and they can do all these great things. And I think I was like, startled by a minor kind of thread in the literature or researchers saying, well, actually, maybe entrepreneurship is not always good for women, maybe it's not always good for immigrants, maybe it's not always, maybe it actually just reinforces a lot of the inequality that's already there in society. And maybe it's just actually just, you know, for example, when women, you know, decide to opt out of the organization and work on their own, well, maybe just now, their struggles are individualized, and we don't see that they're grappling with maybe childcare. But then we're also grappling with fatigue and exhaustion, and they're doing double jobbing. And now, we just don't see it, they're just doing it at night, and they're just doing it at a different time. Or they're not making as much money because guess what, they've actually just scaled back on what they're doing and now they're trying to juggle, maybe childcare with also a business. And obviously, they can't devote all their time to the business. So the business is not making as much money. So basically, I think the question is over 'is entrepreneurship a good thing for people' and particularly for disadvantaged or marginalized individuals? That was kind of a bit of a Oh, okay, is it because initially, it was really like, Oh, this is empowerment. And this is, you know, what I said earlier about entrepreneurship being about a way to disrupt the status quo and to change and, and the freedom of it that you could do this. But the reality is that, well, there's limits to that freedom, and there's limits to the empowerment that it can offer.
Melissa Firth
As the field continues to expand and incorporate contemporary ideas stemming from the social sciences, some scholars are starting to rethink, or hold intention, what we've always thought about the impact of entrepreneurship. We will definitely explore this topic further in our final episode. One of the most significant areas of growth in the field of entrepreneurship is the study of social enterprises. In 2017, the Ivey Business School played a major role in a two part special issue with the Journal of Business Venturing. Dr. Simon Parker was one of the editors.
Simon Parker
I've been interested in social enterprises for a long time, again, as an economics perspective, why do these things exist? It's a fundamental question really about how a venture that has, to put it crudely, a distraction from making profits. It also wants to satisfy other objectives of fulfilling a social mission, for instance, how these could possibly survive intense competition in a market with purely for-profit firms. And this is an old question. It goes back to Milton Friedman and before. So I came at it as an economist with that curiosity. And this is actually an example where the case writing helped me understand better this phenomenon that I've always been bothered and stimulated by this puzzle of what's different about social entrepreneurs. What's different about well, less social entrepreneurs actually more about social enterprises, how these firms can survive and compete and actually thrive against for-profit competitors. And writing a couple of cases, in particular one on Tentree International, which is a Canadian apparel startup, from out of the prairies, which I did in the previous decade, really began to clarify for me exactly what the the, the engine of competitive advantage was for these firms. And then as I wrote a second case study on Free Geek Toronto, which is a nonprofit enterprise with a triple bottom line of social, environmental and financial objectives that further clarified what was really intriguing and different about managing and operating enterprises like these. And that sort of what we would think of as common sense and inverted commas, prescriptions for managers were turned on their head for a lot of these sorts of ventures. And I found that super interesting. And so it's not really been a topic that I, I've done something on and then moved away from, it's been an enduring area of interest for a long time for me. And I keep coming back to it. And it's taken various different forms, for example, the special the double special issue for JBV that, that I did with some co authors, just before COVID work on benefit corporations, including case studies on these as well as published academic articles. And so I find myself returning to social enterprise repeatedly. And I think that will probably continue as the decade wears on.
Melissa Firth
Today, social enterprises are a key driver in attracting students to entrepreneurship Many of you it as a way to use the tools within business to shape and even change the world and the way the global economy operates. But whatever the type of entrepreneur, resilience, and adaptability seems to be a common thread. Dr. Dominic Lim's PhD work had covered a number of high-growth companies and how they manage the financial crisis of 2008. A decade later, as the COVID 19 pandemic shuttered doors and impacted every industry and sector of Business. Dr. Lim's research was back in the spotlight:
Dominic Lim
When I first started my research for my dissertation, and then the shirk funded program for sustainable high growth. I didn't get to think too much about it but the data collection happened between actually 2006-2010 I believe, rightish. So it was actually right through the financial crisis that we had, right? Back then a financial crisis was not the focus of my research, right. But with the pandemic, and the closed down and economic crisis, and we were going through as a result of the COVID-19 pandemic, it gave me an opportunity to look back to the data that I had, right. And, and what we realized, and and notice was that, how positive, those high-growth entrepreneurs had been throughout those years, through the financial crisis, right, not that everything was so great, but they were talking a lot about the opportunities presented by the economic crisis. For example, there's a very interesting company that made some chips that you can add to your barbecue or the smoker, and then it gives you the flavor and kind of aroma to your food, and how they actually found the financial crisis was a great opportunity, because more and more people were cooking from home, instead of going out for dinner in restaurants, right? So and you can't eat the same food just everyday, right? So people were experimenting with different flavors and different ways of cooking, etc, etc, etc. So their sales were just growing like crazy, right? This is a very interesting example of how the good value proposition that you originally had right, became even better fit to the market demand, right because of the crisis, right? And other examples included simple things like you know, Because so many businesses failing, this is a great opportunity to acquire resources, including people and equipment and Salesforce at a much cheaper price, and then further fuel your growth. Right. So, like, you know how the seemingly very negative situation can be actually the driver and the like opportunity for high-growth for many firms. There was a kind of like, very interesting take. And actually, that's how we produce the recent paper for managing growth through crisis, right? I believe there is published in international Small Business Journal. And actually, the citation numbers are kind of like, you know, ramping up very rapidly.
Melissa Firth
For Ivey faculty, journal articles aren't the only avenues to express their research. Case, writing is hugely encouraged, and allows faculty to interact with entrepreneurs and their problems in a more immediate sense. Ivey, of course, uses the case study method of teaching, and is one of the leading producers of business cases in the world.
Simon Parker
Over the years, there's been some well justified criticism in my view of business schools as ivory towers that are divorced from real practical issues, that there's a lot of thinking that's going on in, say, entrepreneurship groups, papers that have been written that are really have very little practical use or interest, or even scholarly interest for that matter, in many cases. And I think case, writing keeps us honest. It exposes us to entrepreneurs, who are wrestling with difficult and important issues. And these are ones where researchers can bring their own unique skill set to bear. And think about these sorts of problems and solutions, and make sense of them. And hopefully, develop frameworks that are not only interesting to other academics, but possibly also might be useful to practicing entrepreneurs or people who advise entrepreneurs, or people who finance entrepreneurs, for instance, or people who create policy, that entrepreneurs are influenced by public policy, for instance. And certainly, as an economist, a lot of my early work focused heavily on policy implications of insights that come out of my research, for example, entry and exit regulation, or grants and subsidies or taxes of entrepreneurs, a lot of work on that in the 90s. As I've moved more in my personal journey into general management, naturally, the implications, the practical implications of the work has changed focus a little bit. And I think, now, to the extent, any findings I've produced are of interest of practical interest. They might be of more practical interest to practicing entrepreneurs now, and less so to policymakers as a rule.
Melissa Firth
In our final episode of this series, we will look at some interesting questions floating about in the world of entrepreneurship, academia, and get a sense of what the future holds for the field. Thank you for joining us on the entrepreneur podcast. This has been Melissa Firth from the Morissette Institute for Entrepreneurship, Powered by Ivey.
Eric Morse
The Entrepreneur Podcast is sponsored by QuantumshiftTM 2008 alum Connie Clerici and Closing the Gap Healthcare Group. To ensure you never miss an episode subscribe to the show on your favorite podcast player or visit entrepreneurship.uwo.ca/podcast Thank you so much for listening. Until next time.