Case Study 161 SYNTHESIS 166 LIFE’s Work 172

Should a job Analyzing our Prolific author

candidate divulge obsession with James Patterson on
that she’s pregnant? innovation problem solving and
productivity

Experience Managing Your Professional Growth hbr.org

W e all know how new projects

happen in a predictable world:
A team is assembled, a market
analyzed, a forecast created, and a busi-
ness plan written. Resources are then
gathered, and the plan is set in motion.
But how do you launch new projects in
an unpredictable environment? What’s the
best way to do it in an age when the pro-
liferation of data and opinion makes truly
decisive analysis impossible; when far-
away events have immediate, unexpected
impact; and when economic malaise has
made companies reluctant to take big bets
on unproven ideas?
Take a page from the playbook of those
who are experts in navigating extreme
uncertainty while minimizing risk: serial
entrepreneurs.
Managing Yourself We and others in the academic and

New Project? consulting communities have spent years

studying these leaders and the logic they
use to create new products, services,

Don’t Analyze—Act and business models in situations where

the old methods of analyzing, forecast-
Illustration: tomasz walenta

ing, modeling, planning, and allocating

Entrepreneurs take small, quick steps to get don’t work.
Some of the most surprising research
initiatives off the ground. You can do the same comes from Saras D. Sarasvathy, an associ-
in your organization. by Leonard A. Schlesinger, ate professor of business administration at
Charles F. Kiefer, and Paul B. Brown the University of Virginia’s Darden School

154 Harvard Business Review March 2012

 hbr.org

of Business, whose in-depth study of 27 moving forward carefully, eyes wide open. have—whatever tangible and reputational
serial entrepreneurs revealed a number You’re alert to any looming danger—or resources you can muster by picking up
of common behaviors. Instead of starting opportunity. the phone, sending an e-mail, or reaching
with a predetermined goal, these entre- We acknowledge that action before out to a social media contact.
preneurs allow opportunities to emerge; analysis, learning instead of predicting, 2. Stay within your acceptable loss.
instead of focusing on optimal returns, can be, well, unpredictable—and messy. The act-learn-build model is inherently
they spend more time considering their And we concede that it’s antithetical to the low risk, but that doesn’t mean it’s risk free.
acceptable loss; and instead of searching way most organizations work. However, in So, with each step, consider how much
for perfect solutions, they look for good- the long term, taking lots of small steps ac- time and money (your own and your com-
enough ones. tually reduces risk, which makes such an pany’s) you can afford to lose should the
The point is that successful entrepre- approach ideal for tackling challenges and step result in failure. Also think about the
neurs don’t just “think different.” They getting fledgling initiatives off the ground, cost of not pursuing other opportunities at
translate that thinking into immediate ac- particularly in today’s skittish corporate work in order to focus on your project, and
tion, often eschewing or ignoring analysis. environment. And such innovation is criti- the resulting impact on your professional
Rather than predict the future, they try cally important not only for companies reputation and the firm’s image. Make sure
to create it. We have seen this firsthand that want to stay competitive but also for that whatever is at risk could be safely lost.
in clients and former students who have enterprising employees who want to feel 3. Secure only the commitment you
launched businesses in a variety of indus- fulfilled in their jobs. need for the next step. Through the pro-
tries. And look at Starbucks CEO Howard cess we’re discussing, you’ll run into four
Schultz: Coffee sales had been steadily First Steps types of people: those who want to make
declining for two decades before he came Research shows that entrepreneurs your project happen, those who will help
up with the café concept that would grow forecast, plan, and model only when they it happen, those who will let it happen,
into a multibillion-dollar business. have to. A 2008 survey of the found- and those who will keep it from happening.
This logic shouldn’t be limited to ers of companies listed in the Inc. 500 Don’t waste time trying to get buy-in
entrepreneurs working outside the bounds showed that only 12% did formal market from the last two types. Instead of asking,
of traditional organizations. (After all, research before they launched, while “How do I get everyone committed to
Schultz first tested his café idea when only 40% wrote formal business plans.
Starbucks was a small retailer of coffee In Sarasvathy’s study, not one subject
How Managers Can Encourage
beans, teas, and spices, and he was its tried to gather specific information about
Entrepreneurial Thinking
director of marketing.) We believe that potential returns or predict an ideal level
any manager can—and should—follow of investment before getting started. But
the same process when confronting the these weren’t reckless leaps of faith. No, Challenge one or two members of
unknown, because it is an extremely low- these entrepreneurs and others like them your team to quietly try the act-learn-
risk way to launch new projects. It also tend to move in a safe, low-risk way by build method on real projects, and
involves only a few simple steps: taking a series of quick, small, inexpensive then protect them from your organiza-
Act: Take a smart step toward a goal. steps that follow certain rules. Adapted for tion’s tendency to shove them back
Learn: Evaluate the evidence you’ve managers working within organizations, in line.
created. the rules are:
Build: Repeat steps 1 and 2 until you 1. Use the means at hand. Suc- Share the results of these experi-
accomplish your goal, realize you can’t, or cessful entrepreneurs, of course, gather ments with other thought leaders in
opt to change direction on the basis of new resources before embarking on a new your company, and encourage them to
information. venture. For the first few exploratory steps, become early adopters, too.
Reading that list, you might think, This however, most simply draw on their own
is common sense. And it is. Any two-year- skills, education, experience, and exper- Throughout the process, ensure
old understands the concept of learning tise, along with anything helpful their that the real and opportunity costs
through action. So do artists and scientists. personal and professional contacts might never exceed your organization’s—or
Even if you don’t know exactly where have to offer, quickly and at no, or very your innovators’—acceptable loss.
you’re going, you get started. You make little, cost. So instead of jumping through
right turns and wrong turns, learning hoops to get multiple approvals and
more about what the right direction is formal funding at your company, simply
as you go. You’re not flying blind; you’re use the people you know, the budget you

March 2012 Harvard Business Review 155

eXPerienCe

why Desire matters

It doesn’t make sense in a market, product, or can link them to what you
to venture into the service—an itch they need care about. If you have
unknown unless it’s to scratch—and pursue it just been handed a new
for something you because it feels satisfying company initiative, look nities. The company hadn’t launched a
or because they think it for something in it that major new brand in 20 years—much less
care about.
might lead to something excites you—even if it’s just tried to break into a small, new market
Desire motivates you to that does. the project’s potential to with high barriers to entry. Still, Cook
act, enables you to persist, Very few of us work at boost your career. If you and Sengelmann suspected the category
and makes you more cre- places like google, where can’t find that connection, could be a fruitful one and had a strong
ative when confronted with the business model is consider stepping aside. personal desire to investigate it. (See the
obstacles. that doesn’t open, and pet projects while it’s certainly possible sidebar “Why Desire Matters.”) So, even
mean you have to have a are expected to take up to try the act-learn-build as they worked on extensions of Clorox’s
big idea or a grand pas- 20% of employees’ time. strategy when desire isn’t established, chemical-based products to
sion, at least not at first. Consider the goals of your present, it won’t be much satisfy the requirements of their job, they
most entrepreneurs company, your division, fun, and your chance of gave themselves a new, under-the-radar
begin with a and your boss, and then success will be significantly mandate—develop an effective, market-
simple interest figure out whether you compromised. able, green cleaner—and began to pursue
it with smart steps.
At first they simply “played around
at home” with products already on the
market, and then traded notes on how
effective the products were. They also
reached out to working-mom colleagues,
including Sumi Cate in research and
development, whose team was already
my idea?” ask, “What’s the happen” category—especially your boss. experimenting with biodegradable plant-
least amount of commitment Show how even your first step could make and mineral-derived formulas. She was
I need to act?” Aim for just a difference in the world immediately their first “volunteer.”
enough freedom to act in around you, and build out from there. If At the time, many people at Clorox
an organization designed your boss thinks it won’t work, find out were worried that a green line would
to push you back into why, and see if you agree. If she’s hesitant diminish the brand’s reputation for ef-
predictive thinking. because your proposed step exceeds her fectiveness, generate paltry profits, and,
4. Bring along only volunteers. If acceptable loss, or her boss’s, suggest a worse, draw unwelcome attention to the
you’ve decided to move forward, make less significant move. toxic ingredients used in its other offer-
sure to invest in the “make it happen” and 6. Manage expectations. Don’t ings. So Cook and Sengelmann kept their
“help it happen” people. The former should overpromise. Don’t make any big launch interest relatively quiet. But it eventually
be made up of only volunteers—people announcements. Explain that you’re just caught the attention of the company’s
who share your desire. You can’t compel taking an exploratory step to generate new-ventures group, which asked them
others to innovate; if you try, the first evidence that will inform the direction of to evaluate an existing European cleaner
setback will send them running to their the next one. the group had scouted. The two women
“real jobs.” After identifying these trusted To see how this process works in prac- and the few volunteers they had by then
colleagues, make sure they’re committed tice, consider the experience of Mary Jo recruited tried it in their own homes,
to the process. “Enrollment” happens Cook and Suzanne Sengelmann, job-share while Cate’s team tested the formulation.
when you show your own engagement partners and vice presidents in Clorox’s Unfortunately, the results were disap-
(inspiring your volunteers), act honestly laundry and home care division. As com- pointing; the cleaner didn’t work well
(giving them a complete picture of your mitted environmentalists and mothers enough to be a Clorox product. But Cook
plan and presenting both good news and of small children, Cook and Sengelmann and Sengelmann now had a stronger link
bad), and demonstrate a willingness to liked natural products and wanted their to a business imperative—namely that a
collaborate (immediately offering them employer to start producing them. But in broader set of managers thought a green
real work to do). 2005, when “green” offerings accounted line could be part of the company’s in-
5. Link your move to a business im- for only 1% of their industry’s $12 billion in novation efforts. The trick would be to find
perative, and produce early results. sales, it was a hard case to make with the an effective one.
This is essential to creating momentum predictive analysis that Clorox typically They told their bosses about their
and winning over those in the “help it used to identify new business opportu- ambition and explained why it might be a

156 Harvard Business review March 2012

 hbr.org

innovation@ work
TM

good business for Clorox, but in an infor-

mational way that didn’t require any sign-
offs. That gave them just enough commit-
ment to progress. They also made sure May 15 –16
, 2012
their potential loss during this start-up 31 Sunday

stage was acceptably low: some time and 14 Monday

15
a small percentage of an existing budget, Drop off Ki
Tuesday
16 Wednesda
ds y
17
with no threat of diminished reputation 9 am Thursday
18 Friday
Review Q1
because they had made no promises about Reports
Understand
Drop off Ki
ds
Drop off Ki
in
the green research and they continued to 10 00 and Solvin g Understandin Weekly St
Complex
g and Solvin g affing
g Meeting
work on other product extensions in the Business Complex
Problems Business
traditional Clorox mold. 11 00
@MIT Exec Problems
Doctor Ed @MIT Exec
In the summer of 2006, the R&D team Appointme Discuss
nt Ed Q2 Financia Interviews
ls for open
finally found a formula that was 99% free 12 pm
position

of petrochemicals and that worked as well Conference

Move your organization

Call with We
as the company’s chemical-based prod- 1 00 Developer
b
Meeting wi
th Boss

ucts. But Cook and Sengelmann still had

work to do. At that point they could have
reverted to extensive market study, mod- forward without setting 2 00
Working

your schedule back

Lunch
els, and financial projections to figure out 3 00 Marketing
Review

how to package and sell the new line. But Contracto

r
4 00 Check-In

Show how even your Gain cutting-edge5 00business insights in two- and five-day
Offsite Cl
ient
Kids Socc
Game
er

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they decided that the market was still too
new for the customary in-depth analysis April 29–May 3 Clean Energy Ventures: Creating Innovative New
and that internal concerns about the riski- Businesses Through Entrepreneurial Management
ness of green offerings were still too great
to be overcome without more evidence. May 7–11 Corporate Strategy
So they stuck with small, smart steps. May 15–16 Understanding and Solving Complex Business Problems
They added another “volunteer”:
their colleague Jessica Buttimer, who was May 17–18 Creating High Velocity Organizations
not only a marketing specialist but also May 20–25 Leading Change in Complex Organizations
another young mother and a health en-
thusiast. And they began to test prototype June 4–8 Business Dynamics: MIT’s Approach to Diagnosing and
products with a small group of consumers
Solving Complex Business Problems
in California’s Bay Area, where Clorox is
based, again using their existing budget
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and simply keeping their bosses informed.
The company learned a lot from this
low-risk research: Most users rated the
products as highly effective, and all were http://executive.mit.edu/hbr
excited to see the Clorox brand on a green
 EXPERIENCE hbr.org

MANAGEMENT line. It didn’t change their opinion of the seal of approval for the new line. Sample
TIP OF THE DAY company’s other offerings—they already products and packaging were placed on
HARVARD BUSINESS REVIEW knew those contained chemicals—but it store shelves. Low-cost, grassroots, social
did change their views on the efficacy of media–driven marketing initiatives were
THE MANAGEMENT TIP FROM natural products: If Clorox was behind an tried. The result was Green Works, now a
HARVARD BUSINESS REVIEW OFFERS environmentally friendly brand, it must $60 million brand for Clorox.
QUICK, PRACTICAL MANAGEMENT ADVICE
FOR TODAY’S EMERGING LEADERS work. Cook and Sengelmann now had We’ve heard similar success stories
early results on which to build. from managers in other traditional orga-
nizations. One example cited by Harvard
Putting the “I” Back Build Momentum Business School professor Rosabeth
in Alliances When it comes to learning from and build- Moss Kanter is the triumph of a group
Strategic partnerships yield great ing on our actions, serial entrepreneurs of tech enthusiasts at cookware retailer
benefits for those involved but they are do a better job than the rest of us in four Williams-Sonoma, who countered their
also fragile entities. To ensure success, ways: First, they move quickly in the face CEO’s lack of interest in e-commerce by
remember these eight I’s when forging of positive results. If one step works, they launching a low-risk pilot site that has
alliances with other organizations: immediately execute the next using the since grown into an industry-leading web
■ Individual excellence: Both sides rules we’ve laid out. presence. Another, smaller-scale case
bring strengths and neither can be Second, they embrace even negative study comes from a Whole Foods Market
expected to prop up the other. results. They are grateful for surprises, buyer we know whose interest in nutri-
■ Importance: The relationship must obstacles, and disappointments because tion prompted him to pitch to his manager
matter strategically to both sides. unwelcome news often provides the impe- the idea of an in-store bar for vitamin-
■ Interdependence: You need to need tus to make a product, service, or business enhanced smoothies. He now personally
each other. better, or it points to an entirely different staffs it once a week, and it’s a big sales
■ Investment: Have a stake in the opportunity—before too many resources driver for the store. Each of us has also had
partner’s success. are invested. recent firsthand experience with entrepre-
■ Information: Transparency Third, they understand when and how neurial action at work. Here’s one quick
strengthens the partnership; hiding to use prediction, even as they’re learning example from Len: Instead of spending
information impedes trust. by acting. As your initiative progresses and significant time and money to research
■ Integration: Create several points of requires more organizational resources, whether Babson should create a West
contact across the organizations. you’ll need to forecast where you can Coast outpost, his dean simply opened
■ Institutionalization: A formal structure forecast, plan where you can plan, and up admissions and discovered enough
can aid in objectivity and ensure that model where you can model—but using demand to start one six months later.
the partnership works for both sides. the evidence you have created (and hope- This anecdotal evidence suggests
■ Integrity: Trust is critical and ethics fully are still creating) through your smart that the act-learn-build strategy can and
are a must. action steps. This new way of thinking should be espoused not only by entre-
should augment, not replace, the way you preneurs but also by employees working
Adapted from “How to Strike Effective
currently solve problems. within traditional organizations. It takes
Alliances and Partnerships” by Rosabeth
Moss Kanter. Fourth, entrepreneurs know when just one smart step to get started.
to cut their losses and walk away. They
Brought to you by The authors note that a more detailed look at the
recognize when their idea is impossible to Clorox venture is found in The New Entrepreneur-
execute, that they’re incapable of execut- ial Leader: Developing Leaders Who Shape Social
ing it, or that the risks involved in pursuing & Economic Opportunity, by Danna Greenberg,
Kate McKone-Sweet, and H. James Wilson
it exceed their acceptable loss. (Berrett-Koehler, 2011).
Fortunately, in Cook and Sengelmann’s
case, the smart steps paid off handsomely. HBR Reprint R1203R
They continued to act their way into
Management Tips are Leonard A. Schlesinger is the president
the future while simultaneously plan- of Babson College. Charles F. Kiefer is
available online and in
MANAGEMENT mobile app, eNewsletter, ning Clorox’s classic big-product launch. the president of Innovation Associates. Paul B.
TIP OF THE DAY
HARVARD BUSINESS REVIEW and book formats. Another “volunteer” supplied connec- Brown is a longtime contributor to the New York
Times. They are the authors of Just Start: Take
tions at the Sierra Club to secure the San Action, Embrace Uncertainty, Create the Future
hbr.org/mgmttips Francisco–based environmental group’s (Harvard Business Review Press, March 2012).
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