Interpreting Entrepreneurs: The Science of Business
By Jenny Maloney
Thomas Duening, El Pomar chair in Business & Entrepreneurship and Director of the Center for Entrepreneurship at UCCS, understands what it takes to be successful in building a new business venture. With nearly 30 years of entrepreneurial experience under his belt, and two graduate degrees from the University of Minnesota Duening brings real-world knowledge and analytical skill to bear on today's understanding of business and entrepreneurship.
He has ridden the ups and downs of the entrepreneurial lifestyle. "My most successful venture I launched after a dot-com I was involved in went bust in 2001. I was out of academe and I needed to find a new source of income. So I launched a project to study business process outsourcing, which was becoming an important new way of doing business."
While writing a book on outsourcing for John Wiley & Sons, he met an executive in India. Together they launched InfoLabs, an outsourcing venture based in Bangalore, India. The venture provides services to major international publishing houses. InfoLabs was acquired in 2008 by Dallas, TX-based ANSRSource. "Today, the company has nearly 400 employees and continues to grow in a very niche market space."
Duening's experience and passion for entrepreneurship led him to his current research. "We are currently working on three research streams. The first one concerns the notion of entrepreneurial expertise and how expert entrepreneurs achieve success."
Duening points out that corporate leaders and managers "tend to view business and business problems through what is called causal logic. That is, business leaders and managers are trained to set specific goals and then aggregate the resources needed to pursue those goals. They are evaluated and rewarded by their ability to reach those goals."
Duening goes on to explain, "On the other hand, expert entrepreneurs use what is called effectual logic. They begin their interaction with the world by assessing the resources they currently control and then act creatively to pursue economic opportunity through those resources. Expert entrepreneurs don't set specific goals, but act in a way such that any one of a number of outcomes could be counted as successful. They judge and evaluate themselves by virtue of the value they are able to create in the market place with the resources at their disposal."
But the difference between corporate management and entrepreneurial expertise is not the only thing Duening and his colleague Matt Metzger, an assistant professor in the College of Business, are exploring. Their second stream of research "concerns the notion of the entrepreneurial method. It has been suggested that, just as expert scientists must demonstrate competence in the scientific method, expert entrepreneurs must demonstrate competence in the entrepreneurial method."
Delving into the entrepreneurial research and taking a philosophically pragmatic view, Duening and Metzger are comparing the way expert entrepreneurs develop their skills and competencies to the way expert scientists develop their skills and competencies. As Duening explains it, "our research has led us to believe that expert scientists practicing the scientific method adhere to certain moral virtues. "
They further believe that these key moral virtues are obtained via acculturation to the profession. In other words scientists are "acculturated through their training to behave according to certain moral values." For example, when scientists conduct an experiment, they expect certain results within certain perimeters. But, "If the experiment creates results they don't expect, they are more inclined to believe that the experiment was flawed rather than the theory." The expert scientist is just trained to react this way.
Expert entrepreneurs, according to Duening, should be developed via a similar acculturation process specific to moral virtues associated with the entrepreneurial method. So far, Duening and his colleagues have found four moral virtues that expert entrepreneurs tend to exhibit. In a recent article, Duening and his colleagues have proposed that expert entrepreneurs believe it virtuous:
- To believe that the primary purpose of business is to create value for others
- To rebound personally and professionally from failure
- To respect private property and to uphold contractual obligations
- To respect the judgment of the marketplace
In a third research stream, Duening and his business school colleague Andrew Czaplewski believe the concepts of effectual logic and the entrepreneurial method can be applied to specific situations in today's corporations. One of the key real-world concepts that Duening and his team have developed is "value mining".
Warehouses across the country contain thousands upon thousands of products that fell flat, were not marketed appropriately, or just hit the marketplace at the wrong time. Value mining is designed to deal with these products.
"The notion is that a Value Mining Team comprised of people who are adept at effectual logic and the entrepreneurial method is best equipped to mine the latent value of products that have been relegated to the discarded products warehouse. Such a team would not be subject to the same constraints of typical product development professionals," Duening says.
It's easy to see where such a team would be useful. The team goes in, examines the product and its history - using the methods described by Duening's team - and determines its value for others and how the marketplace can be re-approached.
"We believe there are billions of dollars worth of latent value in products that companies failed to commercialize and put on a shelf in the discarded products warehouse."
Duening and Czaplewski's research has caught some attention. In June 2013 he was invited to present his work at a specialized conference in Lyon, France. The International Journal of Innovation Science has already published one article (with Morgan Shepherd). Two more articles are slated for publication later this year.
"In addition, I am building these concepts into a new book that I'm writing with Robert Hisrich and Michael Lechter." Elsevier will publish Technology Entrepreneurship: Taking Innovation to Global Markets in 2014. This book is the second edition of a previous book with these authors, but will be substantially better based on this new research.
Now, after teaching entrepreneurship for 20 years, Duening is certain that his research provides value to his students. "I take my teaching very seriously and want to be sure that what I do in the classroom prepares students for a lifetime of entrepreneurship."
He knows firsthand that students can pursue entrepreneurial opportunities right now. "My first venture I started with a partner during my time in graduate school at the University of Minnesota. I needed additional money because I had one child and another on the way and met a guy who became my business partner. We ran the venture for the entire time I was in graduate school and it paid my bills very nicely."
And what is the best way to start?
"Trust yourself and go for it."
You can read more about Tom Duening at his website.