A startup guide to entrepreneurial 'psyche and flow'

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Co-founder of the MIT Innovation Lab and global thought leader, Dr Dave Richards, shares his a startup guide to 'entrepreneurial spirit'.

Let’s start by defining entrepreneurial spirit, or psyche. I like using the ancient Greek word for spirit – psyche, because it also links to the realm of psychology – mindset, attitudes – all the 'stuff' that defines us as human beings, shaping our behaviour, and what we achieve in life.

A key point to make up front is that, in my view, entrepreneurial psyche is at the very core of what it means to be human. So what is it? I accept the great Peter Drucker’s definition of an 'entrepreneur' as someone working to create value through innovation. In my view, it’s human nature to want to create value – to live a life of meaningful contribution – and to seek to make the world a better place. With this definition in place, let’s consider another concept.

Mihály Csíkszentmihályi came up with the psychological concept of 'flow', initially to explain the phenomenon of athletes getting into the peak performance 'zone' whereby they would 'become the game', forgetting they’re 'playing' a game. I borrowed this concept, along with many others, to use in my efforts to develop a mathematical model to explain why some entrepreneurs and enterprises are extremely successful, while most fail – or at least fail to rise above mediocrity.

The model identifies seven core aspects of psychology that directly relate to the seven essential elements of organisational strategy. Another concept I borrowed, after tripping over it and finding it amazingly useful, comes from ancient Indian Ayurvedic philosophy. Chakras are viewed as energy centres within the body that either enable 'flow' of vital psychic energy, or block it. The reason I found the concept of chakras useful is that in the struggle to understand and relate it, I had to rethink and refine some of my thinking about psychology and strategy, and their interrelationship. So here’s the model:

The chakras are, in a sense, the connecting bits of DNA that sit in the midst of the dance between strategy (planning and implementation) and psychology as it plays out in individuals and groups. I would argue that the philosophical or spiritual meaning of each chakra is unimportant. What is very important and useful is the notion that each chakra 'energy centre' can either be totally open, allowing perfect flow, or blocked, to various degrees.

Here’s how it works in organisations. First, consider a hypothetical example of perfect flow:

Now, consider another hypothetical example – perfect in six, but totally blocked in one:

1 x 1 x 1 x 0 x 1 x 1 x 1 = 0

I’ve worked with many organisations, assessing and focusing on how to improve flow. Here are two examples more reflective of the real world:

.8 x .7 x .9 x .5 x .8 x .6 x .4 = 0.048

.9 x .9 x .9 x .9 x .9 x .9 x .9 = 0.48

These examples illustrate a couple of vitally important points abut entrepreneurship and innovation. Perfection is impossible to achieve, such that even if an organisation invests to do extremely well across the board, it’s not difficult to understand why only half of their innovation efforts might succeed. It’s also not difficult to understand why innovation success rates are very low (less than 10%) across all types of enterprises and industries globally (Dobin Group, 2012; Richards, 2014; VIIMA, 2018).

Let’s summarise by describing what blockage and flow look like the in the real world. First, I hope you’ll excuse the bus metaphor, but here’s what blockage looks like in organisations and teams:

Let’s consider what great flow looks like using Walt Disney as an example of a massively successful entrepreneur and innovator, the founder of the world’s largest and most successful entertainment conglomerate.

I’d like to close by pointing out how Walt is a perfect illustration of what I call 'the entrepreneur’s paradox' – the fact that the entrepreneurial mindset is based on restless discontentment, and yet also inspired by optimism – that the glass can always be filled a little, or a lot more. As Thomas Edison (circa 1930) said: “Restlessness is discontent – and discontent is the first necessity of progress. Show me a thoroughly satisfied man – and I will show you a failure.”