Entrepreneurial Operating System Quotes

A third entrepreneurial contribution is risk. While labor gets paid its fixed wage, the entrepreneurs take all the risk. Entrepreneurs might do well, but they might also lose money, ending up worse than they were before they started. The worker’s risk is much lower: at worst, he’s out of a job and doesn’t get additional wages. No one, however, asks the worker to receive wages only if the company does well, or to give back wages to help the company meet its obligations. So these distinctive entrepreneurial contributions—ideas, organization, and risk—are very different from “labor,” indeed they involve the establishing of a system that then enables labor to function. If labor gets paid “wages” in return for its contributions, entrepreneurs get paid “profits” in return for theirs. There is nothing inherently unfair about that, even when the profits are substantial, since without entrepreneurs, the workers would not have their jobs. Moreover, the parking lot guy seems to be suffering from an optical illusion. He thinks that he is doing the work of parking the car, but he is merely the last man in a chain of employees who are getting this particular job done. The parking lot guy wonders, “All I got paid was $100. Where did the rest of the money go?” Well, it went to all the other people who created and designed, and continue to maintain and manage a resort property in which it is feasible to charge $25 per day to park a car. Instead of wallowing in his grievances, and voting for Obama, the parking lot guy would do better for himself if he asked, “How can I become one of the managers?” or “How can I start a company that builds and operates parking lots?

This model, which Kotter calls a dual operating system, restores the speed and innovation of the entrepreneurial network while leveraging the benefits and stability of the hierarchical system.

a good goal, or good objective, flows out of a process of problem solving. A good objective has the form of a task—set up operations in Australia, work with a particular customer to solve a product quality problem, create a breakaway team to focus on developing a better waterproof coating, and so on. Starting with unsupported goals—like gain market share—lacks entrepreneurial insight and tries to get performance by flogging the system.

In all, the next big things of the early nineteenth century—enabling man to travel through and over nature in new ways, with steamboats, canals, and railroads—began as intricate public/private partnerships. The government activities of setting in place the infrastructure, reconciling federal and state laws, permitting limited liability, and defining and balancing the conflicts of property rights, evolved into the operating system of its economy, upon which was placed the dynamic layer of free-market creativity and the vibrant applications of entrepreneurial activity.