MIT Sloan School of Management

Trond A. Undheim: Entrepreneurship and Social Change

Editor’s Note: Trond A. Undheim, Ph.D.,  has over fifteen years of multi sector experience in strategy, policy, communications, academia, and entrepreneurship. Currently, he is a Senior Lecturer at MIT Sloan School of Management. Formerly, he was a Director of Standards Strategy and Policy at Oracle Corporation, with wide responsibilities in long-term business development, strategy, public policy and standardization globally and in Europe. Trond is an executive, speaker, entrepreneur, author, traveler and blogger. You can read his full bio from here.

eTalk’s Niaz Uddin has interviewed Trond A. Undheim recently to gain insights about Entrepreneurship and Social Change which is given below.

Niaz: Dear Trond, thank you so much for your time in the midst of your busy schedule. We are honored to have you at eTalks. You teach Global Economics and Management as a Senior Lecturer at MIT Sloan School of Management. You are a leading expert on strategy, technology policy, entrepreneurship and the role of technology in society. At the beginning of our interview can you please tell us about entrepreneurship?

Trond: Entrepreneurship is to see, seize and share an opportunity to change something for the better in a lasting, institutional way, by creating a company, entity, program or initiative which provides services, generates products or makes concepts that can be traded or enjoyed by many. That was a mouthful, I guess: entrepreneurship is about embracing risk, change, and convincing people—this is sometimes hard.

Niaz: What is the significance of entrepreneurship in global economy?

Trond: As the trading of physical commodities gradually shrinks, entrepreneurship is about to become the only valuable commodity in the global economy. The reason is—it is all about flexibility. All sources of comparative advantage are temporary. The time window for innovation is arguably getting somewhat shorter every minute. This being said, entrepreneurship takes many forms. It is not just about startups, and the culture of entrepreneurship is different in each country. In my work with Global Entrepreneurship Lab (G-Lab), at MIT Sloan School of Management, I have found that even as emerging markets are at different stages of development and each have their own culture, the desire to innovate is the same among young entrepreneurs everywhere. All they want and need is to see good examples in front of them. Our student teams help out with getting quicker through the process, escalating change throughout society. But it starts one-on-one. It must build up. So, as significant as entrepreneurship might be, it is a slow force.

Niaz: How are technology, innovation and entrepreneurship integrated with each other? How can this integration be a help for the global economy?

Trond: There is entrepreneurship without technology but it is less effective. There is technology without entrepreneurship but it is futile and short lived. There is innovation wherever there are people connecting the dots between entrepreneurship and technology.  Without integrating the three, there will be no global economy, only elite pockets of internationalization.

Niaz: Do you think technology, innovation and entrepreneurship could be the solution to Poverty? How?

Trond: Despite new solar cooking devices, peer lending schemes, or cell phone empowered social movements, there is no single solution to poverty. For too long, technology has been thought of as a panacea that solves all problems, but we are far from it. Technology opens certain opportunities and forecloses others. Moreover, even though it initially may seem technology transforms opportunities for everyone, it usually, in the end favors the established elite or those who have resources to take the most advantage of it. This is the reason there are still problems everywhere we look around us, despite what many call ‘technological progress’, ‘information age’ or ‘globalization’.

We have increased the differences between people, and hence the opportunity both to succeed and to fail, spectacularly. Herein lies the challenge of integration; the globally economy theoretically connects things, but someone needs to establish those connections and re-establish connections when broken. Innovative initiatives that mobilize people, share information, gather knowledge, discuss best practices, or create marketplaces of ideas, products and services across boundaries of time, place, resources, and ability, will definitely contribute to the poverty issue in various ways. However, the issue is too complex for one strain of innovation to transform it all. Change needs to trickle down. Change needs to spread out. Change needs to bubble up. Poverty is clearly a multi-faceted problem that will fascinate, frustrate and motivate smart people, organizations and institutions to act for decades to come.

Niaz: Throughout history, high tech industries mostly belong to developed countries. As a result, under developed and developing countries alike have lagged behind. Can you please suggest us some ways to help those countries to come up with proper strategies to get involved with high tech industry to contribute to the global economy?

Trond: High tech industries are fostered by individual initiative, investors who are willing to take risks, and by a willingness to go to or even create markets where there yet are none. However, as small ecosystems of high tech entrepreneurship start forming even in countries that are not yet on the radar as emerging economies, each time, it gets easier. The challenge is to get enough launch momentum. Typically, what we see is that entrepreneurs, given such challenges, either are funded from outside the country by particularly risk prone or long perspective persons or institutions, or are a result of family money. Only in a few cases will angel investors emerge on their own, since they typically are former high tech entrepreneurs themselves. One strategy is for government incentives to stabilize and attract expats back to contribute. Another is to focus attention on particular locations around a strong university. A third is to build the products at home but use the born global concept to immediately try to act on the global market, or more realistically, one selected foreign market.

Niaz: You worked at Oracle Corporation as the director of standards strategy and policy, where you lead global business development, drove standardization, and influenced government policy in the EU. What do you think about the core challenges of entrepreneurs of third world countries have in order to come up with great ideas to build global technological business as well as to contribute in global economy?

Trond: The core challenge is to acquire the right set of skills and grasp the attention of funders and potential customers early enough, and before your money (and motivation) run out.  Moreover, another tough challenge is to convince the establishment that ideas matter, which means people around the entrepreneur—the first clients and investors must not just nod to existing power structures. They may need to be prepared to accept causing a bit of a stir. Entrepreneurship is a dangerous force to those not prepared to change or to those with vested interests to defend, such as established ways of doing things, monopoly markets, successful products, or healthy revenue streams that may be threatened by a new entrant, however small.

In terms of standardization, entrepreneurs should keep in mind that one thing is to have a novel idea, but a whole other thing is to be able to enact infrastructure change across a whole new market. To do that, you need to think in terms of standards, following standards, shaping standards, creating new standards that people will go along with. It is a negotiation game. You either join or try to create an ecosystem and then try to make it surround you and your customers. You cannot go it alone. Even Oracle learned that, early on, as that company was a startup facing the giant IBM. Oracle picked up the importance of having a database standard and built a great product around it. Look at where it is today. Larry Ellison can create a Japanese lake in California, own luxurious boats, and buy a Hawaiian island. Not a bad life to some. But, frankly, I think entrepreneurship is about much more than the money you create. It is about the relationships you build and the pride you get out of creating something new and at the same time something lasting.

Niaz: How to overcome those challenges?

Trond: I think the best way to overcome such challenges is to enlist team members who have experience from abroad. That way, you can bring change along with you. The other thing is to align with the forces for change within the country. You cannot turn everyone, but you actually only need to turn one-by-one. Every entrepreneur has heard this, and everyone knows what it means: be prepared not to take no for an answer. Beyond that, you need to find something that is actually doable. There are many good ideas out there but not all are doable. Doable for you, that is, in your situation. Make sure you have a good story. Storytelling can overcome most challenges. Even dictators, monopolists, and old money love a good story.

Niaz: You have also served as the national expert of e-government in the European Commission, where you created ePractice.eu, the world’s most successful best practice initiative in e-government, e-health, and e-inclusion. Can you please give as a brief of these terms: e-government, e-health, and e-inclusion?

Trond: E-government is when public services are reorganized and ideally improved or made cheaper or more convenient using ICT, although that is a tall order. E-health applies ICT to citizen/patient interaction, health-service providers, institution-to-institution transmission of data, or all of the above. E-inclusion aims at reducing gaps in ICT usage in order to improve economic performance, employment opportunities, quality of life, social participation, and cohesion.

Niaz: What is the response to the ePractice.eu initiative? What are the significant changes that have occurred because ePractice.eu?

Trond: ePractice.eu blends online and offline interaction on good practices in using ICT for services of public interest. It brings a varied set of around 100,000 stakeholders together, government policy makers, consultants, the ICT industry, NGOs etc. So far, it contains 1626 self –submitted cases from 35 countries around the world, For the EU, it has radically improved information and knowledge sharing. It has achieved significant momentum. Joining the community has tangible value, people attend workshops, contribute views, share, and learn. It is a true knowledge community, virtual and physical.

Niaz: What are the steps could be taken by the policy makers of third world country to get the maximum benefits of e-government, e-health, and e-inclusion?

Trond: As the UN e-government survey reveals each year, there are indeed gaps between nations’ internet readiness. This is unfortunate but something we all need to take into account. The issue is not just access to the internet, but what content is accessible once you are on the internet and which skills you have to make sure you can benefit and contribute. The challenge is multifaceted: education, training, specific skills, infrastructure, and content. Even the countries who have invested a lot of resources occasionally, some would say too often, get it wrong. This stuff is not simple. You need awareness across the supply and delivery chains.

Niaz: You have published your book ‘Leadership From Below’. Can you please give us a brief of ‘Leadership From Below’?

Trond: Leadership From Below, for me, is two things. A perspective on leadership: No need for a position in a hierarchy to have influence. A perspective on life: lead when you need.  There are many books out there right now tapping into the fact that the web seemingly has lowered barriers to lead. However, what I am saying is not that. There are still barriers. Technology is not really the point here, although it can help (and hurt). The point is to reconfigure the notion of what it actually means to lead. It simply has nothing to do with somebody giving you power from above (despite what those who elect the pope might think). True power can only emerge from below, from trusted relationships. Even God Almighty in Christendom was of the opinion that it was wiser to send his son Jesus to earth to convince people of the state of things than to simply tell them with a roar from above.  Even smart CEOs realize this. They know they are accountable to the Board, to shareholders, and to society at large (well, at least some CEOs think this way).

Leaders at all levels need to reflect upon what it takes to achieve real, lasting influence. Using force always has a cost. In fact, getting your way always has a cost, especially if it is recognized that you benefit from it. Instead, leaders need to embrace the somewhat slower, but surer process of involving peers in small-scale change efforts that have ripple effects across teams, organizations, and societies.

So, leadership from below is not simply a message to a new generation of leaders, or to small-scale leaders. It is the essence of true leadership. Leadership from below is not just a trend. In fact it is a stable feature of any society but it has recently become trendy. Oh, and one more thing, I did not write the book to say we should not accept any authority. My view is not anti-hierarchy, but a-hierarchical, or beyond hierarchies. I say: Follow when you can. Lead when you need.  Finally, since I wrote the book back in 2002, I have reflected a bit more and taken in some criticism, too. As it turns out, hierarchy remains systemic part of society. The reason is complexity. Things are getting complicated out there. The other is delegation. People love to delegate. Once you delegate, you give up power.

Niaz: What is the set of advice you would like to leave behind for technology geeks, innovators and entrepreneurs?

Trond: I wanted to leave a little piece of advice from my research on strategy failures in high tech entrepreneurship. First of all, it seems too few of us are willing to take a serious look at negative outcomes. This is unfortunate because there is a lot of learning to be had. But since those stories are often buried (although I am about to uncover some), every time you hear of a success story, try to find out what challenges have been overcome to get there. You will soon find that it is often those who have overcome the greatest challenges who succeed in the long term. Why, well, because they have also learned resilience.

If you want to learn more about this, follow my research on strategic outcomes in Cleantech firms. Essentially, we know that a lot of cleantech companies have failed over the last decade. There are many reasons why, but for the benefit of humanity, we need to ensure that some succeed and clean up our planet before it is too late. This is my agenda. It turns out both governments, multinationals, VCs, and entrepreneurs are interested in my work. We should indeed learn more from failure and we should talk about it. There is no shame in failing as long as you can reflect around how to do things different next time, or tell others about the perils of the unforeseeable unforeseen.

Niaz: Thank you so much for sharing us your ideas. I am wishing you good luck for all of your endeavors.

Trond: You are very welcome. It was a pleasure to speak with you, Niaz, and best of luck in your exciting entrepreneurial endeavor, eTalks. What a great concept: asking a set of great questions to people and change agents across the globe over email and letting them answer these questions on their own time without the pressure of a word limit or timeline. This is perhaps one of the keys to the future of communication: letting people speak. Sounds simple but it rarely happens.

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Further Reading:

01. Philip Kotler on Marketing for Better World

02. Hugh Mac­Leod on Creativity and Art

03. Daniel Pink on To Sell is Human

04. Naeem Zafar on Entrepreneurship for the Better World

05. Derek Sivers on  Entrepreneurship, CD Baby and Wood Egg

06. Jeff Haden on Pursuing Excellence

07. Rita McGrath on Strategy in Volatile and Uncertain Environments

08. Gautam Mukunda on Leadership

09. Gerd Leonhard on Big Data and the Future of Media, Marketing and Technology