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Published 23 June 2011 05:02, Updated 23 June 2011 05:03
Malcolm Gladwell of Tipping Point fame recently threw some light on what distinguishes good entrepreneurs from mainstream business people – essentially it was that while they refuse to take big operational risks, they’ll often take huge social risks. Speaking at the Australian Chamber of Commerce’s inaugural national Business Congress on the Gold Coast, Gladwell told the story of Emil J Freireich, a young scientist who discovered the cure for childhood leukaemia some 50 years ago. At the time there were four different drugs available offering only temporary relief but, despite the use of any of these, death within weeks remained inevitable. In addition, each drug’s side effects were horrific. Freireich’s research discovered that two of these drugs worked in different ways and that their side effects too were very different. He hypothesised that they may be an effective cure if given together and that the side effects might not be cumulative. Freireich’s more senior colleagues at the US National Cancer Institute derided the thought, given the “risk”.
But Freireich took on the huge risk to his social professional reputation and began experimenting on dying children with the seemingly lethal combination. It worked and literally millions of lives have been saved as a result. Gladwell argues Freireich’s clear separation of his social reputational risk from operational risk is mirrored in successful business entrepreneurs – they’ll limit their operational business risk but know they must go out on a reputational limb if they are going to change the world. He cites entrepreneur Steve Jobs of Apple as a classic example, a “follower-innovator” who limits operational risk by waiting until a basic concept is proven, rather than inventing entirely new ones. Xerox proved the computer mouse but when Jobs saw it, he completely changed direction and one year later launched the Macintosh. Others proved mobile music players and mobile phones as concepts but Jobs grabbed the hearts and wallets of their customers with game-changing innovations. With fast-moving, internet-boosted global competition demanding ever shorter innovation cycles, Gladwell says that every organisation needs the courage to recruit divergent thinkers with no social attachment to current ways – an organisational social risk in itself. He claims social risk taking is easier when people are younger and have less reputation to lose.
John Lyons is an independent company director and a co-author with Edward de Bono.