Thinking Styles of Entrepreneurs and their Business

Entrepreneurs come across the challenge of making different types of decisions in everyday life. They have to choose between the alternatives to arrive at right decisions. Generating alternatives is a superhuman task, only then they will be able to carry out a comparative analysis. This is one of the most difficult of all in their life. The brain keeps on searching for alternatives to overcome a situation. It is the thinking style that makes a difference in their life.

What are the different thinking styles?

There are two types of thinking applicable to business owners

· Causal Thinking and

· Effectual Thinking

Causal Thinking Style – Causal thinkers start with a goal. They do a goal-setting process and sets a goal for themselves or their business. That is keeping the end in mind they create the means using available resources.

Effectual Thinking Style – This is more of a creative nature, where the entrepreneur is not clear about the goal, instead produces something out of what is available at present with them. Innovation works out mostly in this style.

Both thinking styles have its own pros and cons. However, as an entrepreneur they need to adopt both styles depending up on the situations. It is advised to go for causal thinking when external situations are predictable and certain. Whereas effectual thinking helps entrepreneurs to come out of difficult situations when they feel they are stuck and need to move forward or evolve out of uncertainties.

During situations like pandemic an effectuation approach helps them if they could focus on the means at hand and arrive at a goal that is not predefined but materialized out of what is available.

A simple example could be a mother who keeps track of kitchen inventory well at home to prepare dishes for her family members on a daily basis and cook planned food using right ingredients necessary to make what you call a sambar with its original taste. This is causation.

During a flood, the same mother is unable to buy necessary ingredients to make sambar at home nor is in a position to get it delivered. Here she creates something tasty but out of what is available in stock.

The same way does entrepreneurs think, due to pandemic, many are stuck as their production is not happening due to the non-availability of right mix of materials or resources. Business cannot stop even for a single day. They put their brain to think of various alternatives that will help them overcome the situation and here the goal is to survive and sustain.

Similarly in service industry people are upskilling themselves or is sharpening their capabilities to find new possibilities or means of achieving their dreams.

Causal characteristics are usually seen in managers and effectual characteristics are seen in entrepreneurs. They try and test all possible means to arrive at something meaningful keeping a pre-defined goal aside for time being. Entrepreneurs do take risk in choosing a new means. There is nothing like which is better, it depends on situations and circumstances. Managers with effectual characteristics is what entrepreneurs look for to support them in their path towards achievements.

Decision-making in a complex and uncertain world is a test. Those who pass the test survive, so it is time to revisit our brain and understand what type of thinking do we have and how we make decisions. An exercise of validating our thought process clears clutter in our system and strengthen it for processing fresh ideas and concepts.