A new business is like a new kid in the block, it needs to insert itself in the play while respecting the position of others… to then later even have a chance at directing the game.
Is easier in kids play than in real business life to know whom commands and how to get oneself in the game, because with kids, usually, one more player is always welcome, and everybody is just doing it for the fun. But, in business there is always more at stake than just a few hours of playing alone because you couldn’t insert yourself in the “game”. Time, money, becoming part of a group that people depend on, and leaving a legacy are higher things at stake when business is the conduit.
Is interesting how in social situations we pay close attention to the group dynamics, sensing the right action or word so to feel part of a collective, trying to find a balance between demonstrating you own individuality while keeping the cohesion of the group. However, in business, and with many times more money and time at stake, founders forget to understand the wider group of businesses they will be trading with, the people behind them, the dynamics of their social interactions (beyond the money), and critically the people who depend on them for a product or service. Sometimes, entrepreneurs operate in an almost autistic mode, or younger sibling mechanism where they don’t expect a peer group businesses to operate and understand strategically the choices that made them start their venture in the first place, almost assuming the group has not ever thought of the same idea and have tried it before. Is almost bordering on the irrational is to think people will not be seeing as far ahead as we are — probably this kind of irrationality, or foolishness is required for entrepreneurship to happen in the first place.
Jon Elster explain the mechanism is his seminal book, Explaining Social Behavior:
“A French philosopher, Maurice Merleau-Ponty, said that our spontaneous tendency is to view other people as “younger siblings”…“We do not easily impute to others the same capacity for deliberation and reflection that introspection tells us that we posses ourselves, nor for that matter our inner turmoil, doubts, and anguishes”
And yet, most people tried to understand the environment they operate in, after the have started, and when money and effort into breaking in a wider industry or trade, have been already vested, with a significant amount of resources to lose.
When looking at business literature about this issue, 99% of it will only talk about companies behaving in a ‘rational economic way’. Using the reductionism economists like to simplify human behavior and to fit their mathematical equations. Almost none will mention to just simply understand the people who depend on current business for products or services, the people behind them (owners, founders, managers), the people who regulate or supervise them, and the intricate web of social relationships between them. Like a kid looking to participate in a new game, the first step is to watch the rules of engagement and mentally place you inside, if there is more for you to gain and for the group to benefit on.
For most business people, a customer is more than just a deposit in a bank account, and a supplier is much more than an invoice and a dispatch on Tuesday morning. The relationships that they create on a human basis cannot be explained by a profit motive only. Most want to be respected and depended on by others, and they want to be recognized that they are best at what they do. All of it coming from people to people relationships and furthering them out in a tighter and tighter group.
In this basis, is further ahead however knows and is able to build long-lasting relationships than the one lacking this skill but with a HBS MBA — HBS: Harvard Business School. The social web behind the surface of an industry and the influence it has in the way the businesses in them are conducted, is something only a few understand as one the main aspects to pay attention when starting a new venture, or keeping ahead in your current one. Choosing partners, suppliers — even customers — aligned to your way of social interaction becomes critical if one pays attention to the long-term with an aim at maybe some day dictating the rules of the industry. This social view of business doesn’t guarantee success, but opens the door for a deeper understanding of the players and their needs and motives, that will sometimes lead for a breaking in space that a new startup can capitalize on in the form of new products and services.
The starting point of something new in business is closer to anyone that most believe. Like in the playground, you will be ahead by just trying and respecting others…much more than just a younger sibling.