This week’s Sunday Times article by our favourite journalist, Luke Johnson, reviews creativity in thinking and the disruption caused by successful businesspeople.
Here’s Luke Johnson’s article…
Entrepreneurs are the anarchists of the business world. Their mission is to overthrow the existing order. They can succeed because markets are essentially chaotic, which creates endless opportunities for interlopers to challenge the norm.
Trade, technology and changing behaviour mean that societies are increasingly dynamic. Established organisations are constantly trying to maintain the status quo, but they are almost always doomed to decline. Many industries are essentially burning platforms, but their leaders are in denial about the threats.
In many walks of life — politics, the public services, the professions and so forth — a belief in hierarchy, certainty and risk-aversion dominates. Entrepreneurship is the antithesis of this. To start a business, launch new products or enter fresh markets requires the ability to embrace insecurity in an attempt to forge the future.
Corporatism encourages people to think that change can be resisted. Managers and investors believe too much in plans and budgets, and assume they can anticipate problems. This desperation for safety makes them more vulnerable. Increasing regulation and bureaucracy just make organisations less adaptable and, like insurance, can foster complacency and moral hazard.
Economists mostly struggle to comprehend entrepreneurs and their impacts because they try to analyse them using the usual academic tools. The very nature of entrepreneurship is that it is unpredictable and hard to categorise, yet without it there would be no enterprises to generate wealth, taxes and jobs.
One reason why entrepreneurs can outperform large companies, despite having far fewer resources, is that creativity flourishes better inside small, hungry companies — before they become cumbersome and suffocated by office politics and red tape.
Invention thrives outside rigid structures and cautious environments, yet these are the hallmarks of big organisations. Corporates prize consensus over originality; they believe in endless compromise rather than anything radical.
I celebrate the essence of entrepreneurship because it cannot be pigeon-holed. As Patrick McGoohan, playing No 6 in the fabulous TV series The Prisoner, says: “I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own.” Every entrepreneur is a disruptor and a libertarian — even if they might not describe themselves as such.
Many of the finest entrepreneurs I’ve partnered have been fierce contrarians, happy to stand against the crowd, resisting the groupthink that so corrodes institutions from within. Peer pressure can be a powerful impulse, be it in a boardroom, lecture theatre or pub. Working on your own, or at least outside big entities, permits revolutionary ideas to foment — ideas that would be killed at birth inside the cosy corporate womb.
Capitalism succeeds because millions of people want to control their destinies and enjoy the freedom of running their own businesses. In every nation, if the state sets a sensible framework and gets out of the way, the animal spirits of armies of entrepreneurs will be unleashed, to the betterment of all.
Socialists such as Jeremy Corbyn fail to see that more government, public spending, taxation and regulation is not the answer. These just crush individual initiatives, which taken together are what actually deliver progress. The centralised command-and-control model always fails to deliver prosperity and liberty. The Labour Party leadership simply does not understand the power of markets, incentives, competition, trade, choice and innovation.
Of course, civilization requires the rule of law and basic property rights, but, sadly, so many people in positions of authority want more restrictions, more intervention, more nanny state — all for our own good, of course. I prefer to rely on the common sense and desire for self-improvement among a large proportion of the population.
Ultimately, the most important things in life are not determined by systems, legislation or five-year plans. Love, happiness, the gift of children, friendships — all arise in erratic and impromptu ways.
Similarly, entrepreneurship is a vital yet haphazard part of humanity, which can never be replaced by artificial intelligence. No machine will ever replicate the ingenuity and drive of the wealth creators.
You can read the original article here.
Luke Johnson is chairman of Risk Capital Partners and the Institute of Cancer Research.
At Nordens, we're more than just accountants - we're business experts who can help you achieve your biggest goals.
Our specialist strategic division at Nordens boasts some of the leading entrepreneurial business minds in the country. We cater towards delivering consistent success stories, whilst helping businesses achieve above and beyond their initial goals.
Through highly-tailored guidance, coaching and advice, Nordens Strategic are able to define exactly how your business can reach new levels of success.
Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we’ll steer you along the path to a greater future.
Every business, no matter how big or small, needs to make the right decisions, and how to best manage your accounts can put huge question marks over your business. Accounting2You is here to take that pressure off and provide you with all the answers you need.
Our bookkeeping branch offers a fully inclusive, comprehensive service that you can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of both individuals and small businesses.
With experts in payroll analysis, credit control and financial recording, Accounting2You will lead your business efficiently, and with real purpose, towards a prosperous future.
Voted as EXCELLENT - 9.9 out of 10 based on 164 reviews
We've always got our ears to the ground when it comes to interesting, useful and topical information relating to business and accountancy.
We love making videos that break down convoluted accountancy jargon into plain-talking, actionable and accessible facts.
In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.
Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). We worry about the bye-laws, regulations and ethical guidelines of the ACCA so you don’t have to! That makes us an ACCA-accredited employer as well as a Professional Passport-accredited one!
At Nordens, we're committed to keeping our clients updated on all things business strategy and news. Each week we update our newsletter subscribers on what really matters in the big bad world of business. That way, you can stay one step ahead!
In celebration of our 18th birthday, we’ve launched our Refer-a-Friend scheme, allowing you to receive a thank you gift from us of up to £1,000 for successfully introducing a new client.
Our team of experts will be in touch to find the very best time to hold a free, no strings attached, one-hour consultation.