New Venture Thinking – From Concept to Reality

As Nick Herbert noted in the preface to his excellent book “Quantum Reality — Beyond the New Physics and the Meaning of Reality”:

For better or worse, humans have tended to pattern their domestic, social, and political arrangements according to the dominant vision of physical reality. In the Middle Ages, when virtually everyone believed the world to be the personal creation of a divine being, society mirrored the hierarchy that supposedly existed in the heavens. […] Coincident with the rise of Newtonian physics was the ascent of the modern democracy which stresses a ‘rule of laws rather than men’ and which posits a theoretical equality between the parts of the social machinery. The Declaration of Independence, for example, ‘We hold these truths to be self-evident’ reads more like a mathematical theorem than a political document. For better or worse, we live today in a largely mechanistic world.

This Newtonian-inspired take on reality certainly manifests itself in (especially neoclassical) economic theory and teachings of it — to no surprise, as this dominant worldview on human action and interaction was thought up in an attempt to develop a model of the same, one that would mirror the determinism (read: predictability) of Newtonian physics. William Stanley Jevons, one of the ‘founding fathers’ of neoclassical theory, wrote on this matter in “The Principles of Science: A Treatise on Logic and Scientific Method”:

Life seems to be nothing but a special form of energy which is manifested in heat and electricity and mechanical force. […] Must not the same inexorable reign of law which is apparent in the motions of brute matter be extended to the subtle feelings of the human heart? […] If so, our boasted free will becomes a delusion, moral responsibility a fiction, spirit a mere name for the more curious manifestations of material energy.

In the course of the Industrial Revolution and the century thereafter, we came to not only accept but internalise this deterministic view of an objective reality of what is effectively an abstraction of the social construct of productive action and interaction (i.e. trade) of the individual and humankind: Economics and Business. However, with the venturing into quantum physics and the emergence of concepts such as wave-particle duality, physicists are coming to the realisation that ‘the world is not a deterministic mechanism’ (Herbert 1985). To quote physicist and pioneer of quantum physics, Niels Bohr, on this matter:

Everything we call real is made of things that cannot be regarded as real. [Thus] The opposite of a correct statement is a false statement, but the opposite of a profound truth may very well be another profound truth.

But what then, is reality? And what are the implications of an altered physical worldview on the way we act and interact productively? Immanuel Kant set out to explain reality by differentiating between three aspects of it:

• phenomenon — which describes the way reality appears to us through our sensory experiences,
• theory, and
• the ‘thing-in-itself’ (‘das Ding an sich’) — which describes the reality underlying all phenomenon (link).

Kant believed that all phenomena are deeply conditioned by our sensory and intellectual capacities and that we are thus limited to experiencing reality through our human goggles, that is subjectively. In our attempt to make sense of phenomenon and reality, we thus develop theories — or concepts — that aim to mirror both and allow us to cope and interact with the world around us. It is therefore through concepts which determine our worldview that we see and experience the world. And, consequently, it is also through those very concepts and worldview that we explore, question and construct our world — key activities of the entrepreneur.

To rephrase: It is on the basis of the worldview and the concepts which we carry, that we formulate and explore questions, which in turn drive the direction (and, dare we say, quality) of our thinking, planning, and — ultimately — actions. Thus, for an entrepreneur it would be wise to conceptualise the world in a way which allows for open-ended questions that appreciate the instability (and hence malleability) of reality within the social construct of human action and interaction.

Yet, it is the Newtonian, deterministic worldview to business reality in all of its alleged objectivity which is to this day dominant in the entrepreneurship teaching in business schools around the world, and which in effect can represent a significant barrier to creative entrepreneurial activity, the reasons for this being twofold: For one, the worldview which underwrites the dominant business reality has three qualities that qualify its ‘scientific relevance’ but at the same time inhibit its capacity for explorative, constructive thinking. Namely:

• Its concepts are reductionistic
• Its logic is linear
• Its relationships are static (basic cause-and-effect, predictable)

All three points lend themselves to ‘conceptual stability’ and are forces that defy change or unpredictability. A worldview with these three qualities hence, will inevitably have a degree of certainty to it. Why is this bad for an entrepreneur? Well, to put it in the words of Jeff McMullen, Assistant Professor for Entrepreneurship at Indiana University (link):

Thus it seems that one cannot have opportunity without uncertainty.

Second, emerging from this linear, reductionist model is a duality between the individual (in our case the entrepreneur) and ‘the Market’, whereby the market is an abstract entity with predetermined (but unknown) behavioural patterns. The relationship between the entrepreneur and this market in this construct is linear and static in the sense that the entrepreneur can offer products or services to the market but effectively cannot impact on the market’s values and behavioural patterns which determine its reaction to an offering and thus, an entrepreneur’s success.

The effect of this static dual relationship on the definition of entrepreneurial opportunity is significant (as implied above), as well as on the way of how to best discover, develop and execute an entrepreneurial opportunity. Furthermore the reductionistic, linear model of human action and interactions impacts (what we believe to be adversely) on the definition of the nature of value, value creation, and the possibilities for value appreciation by a market.

What we aim to do through NVT [New Venture Thinking – a course taught at Cass Business School], is to deliver a worldview which will free the entrepreneur from the ‘box’ of deterministic thinking and — based on the dynamic, non-linear and holistic concepts of systems thinking and an appreciation of the dynamism between the individual and society propagated by social psychology — emancipate the entrepreneur’s questions and thinking.

For that it is precisely here where we see the most powerful lever for a real impact towards a more open, explorative, playful and creative mode of productive activity among our entrepreneurial communities. After all, to quote a former teacher of mine,

the quality of our questions determines the quality of our lives.

In the spirit of the philosophical touch of this post (Spinoza’s mechanical causality springs to mind), I can see a new “HOW?” question arise in the mind of the critical, pragmatic reader:

But HOW do you go about emancipating the questions and thinking of the entrepreneur?”

A question which we shall tackle in future texts and videos.