I recently had the opportunity to spend some time studying the fascinating topic (in the heading to this article) and came across the following quote by international authors, Spinelli, and Adams:
“Entrepreneurship is a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced for the purpose of value creation and capture” (emphasis added)
I decided to analyse the three highlighted concepts in more detail and share my analysis with my fellow small business owners in this article, and the two that will follow it.
So, what does it mean to be “opportunity obsessed” or “opportunity focused”? Research seems to indicate that successful entrepreneurs concentrate on the fundamentals, amongst others, the seizing of new opportunities.
Timmins, Muzyka, Stevenson, and Bygrave in their article “Opportunity recognition: the core of entrepreneurship” came to a similar conclusion and found that there is a clear difference between high and low-performing firms’ opportunity recognition and exploitation models.
This view is shared by the well-known management consultant and author, Peter Drucker who once commented that: “…successful innovators are conservative…. They are not “risk-focused; they are “opportunity focused” (emphasis added).
This research contributes to a clearer understanding of why the attributes that most successful entrepreneurs possess are more than just personality characteristics, such as having a strong charismatic personality.
One example of such opportunity focus is found in discussion by author Jim Collins of the US firm, Nucor Steel. Nucor started its operations as an automaker but lost ground as the economy declined in the 1930s to 1940s.
It then recognised an opportunity to manufacture trucks and vehicles, for which there was significant demand by the defence industry at the time of the war in Korea in 1954.
After the Korean war, when demand from this source of business later disappeared, Nucor filed for bankruptcy. The board then appointed Ken Iverson (a metallurgist) as CEO.
Iverson who knew the market well, and had a passion for steelmaking, transformed Nucor (and the entire US steel industry) by further developing the mini mill manufacturing process.
By recognising an opportunity and staying focused on such an opportunity over a long period of time, Ken Iverson’s opportunity obsession helped NUCOR to become a $3.5 billion Fortune 500 company in the 1970s – 1990s.
Therefore, by being opportunity focused, Nucor converted a remnant side of its business-relating to “mini-mill” steel production-achieving great success in later years.
Nucor still exists today as the largest steel producer in the US.
The ability to recognize and seize an opportunity is a vital attribute that helps the entrepreneur to anticipate and meet changes in the business environment which may threaten the firm’s longevity.
This may require facing harsh realities at the same time as considering opportunities and being open to learning.