Entrepreneurial decision making: lessons from democracies

Democracies enable individuals to make decisions for an entire country using a very simple process: you write down on a sheet – or punch into a machine – who you like and who you don’t like. No matter how much you know about a subject you say “yes” or “no” – and, all of us together will determine what happens. It’s amazingly simple, and unbelievably powerful! Would this be a good process to be creative? One might ask, just poll a bunch of people and let them decide.

 

I grew up in Switzerland, one of the oldest and most passionate democracies in the world. One Sunday morning each month, the entire village converges upon the school and answers questions that 100,000 or more Swiss cares about. It’s about everything: immigration, schools, protection of forests, and the health care system. Once I went to the voting booth in my officer’s uniform and voted against getting rid of the Swiss military. Thankfully, most Swiss agreed with me. I always wondered what I would have done on Monday if the result was different…

 

As imperfect and as ugly as the democratic process is – I love it. I am a very proud US citizen. I feel the most proud when I cast a vote – and I will do so in November.

 

There is, however, one aspect of democracies I have never liked – they are very, very slow and hate change. The more direct the democracy is the slower the change. I still feel shame to remember that in 1989, the last Swiss canton (or, state) was forced by the government to give its women voting rights. I am sad to say that I even remember the federal vote in Switzerland on women’s voting rights in 1971 – I was barely four. My entire family and most of my mountain village voted against it. I specifically remember asking my mother what her opinion was on the issue and how surprised I was when she told me that she is against it. I know exactly where I sat in the kitchen when she told me and that I did not understand why.

 

I don’t think that the Swiss are generally more disrespectful of women. I think the key lessons learned from the Swiss women’s voting rights embarrassment are that democracies, especially direct democracies, are slow, slow to change. It thus appears that change-agents or innovators are not democratic. I think that’s a very profound piece of knowledge.  

 

I have often done an experiment in my classroom that makes the key point of this post. I split the class up in teams of different size and I challenged the teams to solve a difficult and open-ended engineering problem. I then collected solutions and had the class decide two key characteristics of each solution: 1) its level of innovation, and 2) its level of technical accuracy. The result was basically the same every time I did this: small teams win the innovation category, and don’t score well on the technical category. However, big teams are very good on the technical metric but almost never score high on innovation. I have done this experiment on multiple occasions and I rarely see deviations from this general ordering.

 

I have therefore become increasingly convinced that the game of imagination and innovation are disciplines that are more like tennis and less like football. You may have one or two people on your side of the net, not a team of forty players. That does not mean that it’s impossible to generate great ideas with a group of forty – but it is a heck of a lot more difficult! In fact, there are many stories of successful entrepreneurs that were actively discouraged by many before their idea took off.

 

One of the most important challenges to creative minds or innovators is often the voice of many who don’t believe, especially in the early stages. Entrepreneurship takes leadership and tremendous resilience.  As important as it is to listen to customers and friends, don’t think of creativity or innovation as a beauty contest! This is not a problem where votes count. It’s all you and your idea, and where you are going to bring it. It takes a lot of personality to stand your ground in the face of adversity and challenges, especially for young people. But, it’s a wonderful feeling to prove naysayers wrong. Try it.

Comments (1)
  • Judy

    October 14, 2008

    Very interesting perspective of the Swiss voting system and history. You are right that large groups tend to dampen innovation because they are risk adverse. It takes a small number of innovators with bold ideas to change the status quo.

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