The Southern Colorado region, like many regions around the country, has reacted to the economic crisis by becoming introspective.
Introspection can be a healthy thing, and often results in improvement over the long haul. For example, individuals will often become introspective after a financial, health or other personal setback.
If correct conclusions are drawn about the causes of the setback and appropriate actions taken to prevent future re-occurrence, personal growth can result. We commonly call this process “maturation.”
Personal maturation is a process of shedding earlier versions of the self to become something new and better. Many of us likely would agree that our youthful former selves are nearly unrecognizable to us now. We’ve changed that much. We’ve each decided — sometimes consciously, sometimes unconsciously — to become better people.
Can metropolitan regions mature in a similar manner? Can the introspection that we are currently conducting at the regional level lead to corrective action such that, collectively, we will become something better? Will the future Southern Colorado region not be able to recognize its former self?
One of the actions that has been proposed is development of a regionwide strategic plan. It might be useful to reflect on what a strategic plan is and what we might expect from such a plan.
Using our analogy between personal and regional maturation, it is noteworthy that personal maturation usually is not guided by a strategic plan. Some people keep a journal or a diary, but these are retrospective observations about what has occurred, not prospective prescriptions about what should occur.
Some people set formal goals with specific ends that they’d like to attain. But formal goals are useful only for the more mundane aspects of life, such as weight-loss targets or books to read during the coming year.
The more momentous achievements of life, such as landing a coveted job, writing a best-seller or marrying the person of our dreams are “emergent” events. Such events are referred to as emergent because their causes are only partly attributable to our plans.
As John Lennon pithily remarked, “life is what happens while you’re making other plans.”
If we take a new venture business plan as analogous to a strategic plan, we can get some idea about the utility of planning.
Research has examined the relative success rates of entrepreneurs who plan versus those who don’t. No significant difference has been found: Entrepreneurs and ventures tend to succeed at the same rate with or without a formal business plan. Even more to the point, research has indicated that entrepreneurs who spend too much time planning are significantly more likely to fail than those who plan less.
This finding is related to a cognitive bias called the “planning fallacy.” This bias predisposes some to believe they can plan their way out of the ambiguities and uncertainties of the future.
A survey of venture capital firms asked whether they could recall business plans that stood out as exceptional. Significantly, none could.
When the survey asked how VCs make decisions about which ventures to finance, the answer was clear: people. VC firms fund people, not plans. All VCs know that plans not only will change, they must change in the face of shifting market, economic and political conditions.
If the people implementing the plan are not evidently adaptable, creative and resilient, they will not be funded.
What a strategic plan cannot do is chart a pathway to the emergent outcomes that are the result of dynamic and unpredictable processes, and of chance events. But it is precisely these emergent outcomes that the region must encourage and amplify.
Silicon Valley was not created according to a plan. It emerged from the unintended confluence of smart young people, new technologies, willing capital and attractive regional amenities.
As the Southern Colorado region looks to create a better future, it should bet on people, not plans. People of intelligence, courage and resilience are needed to create future wealth.
If we invest in a strategic plan, the best outcome would be one that encourages attraction of such people. Economic growth emerges from the independent efforts of people acting according to their own interests and talents.
Entrepreneurs, nimble CEOs and their executive teams, and small businesses to support it all are the ingredients of economic development. If these ingredients are mixed according to a supportive rather than directive political recipe, then anything can happen.
It is imperative that well-intended planners ultimately give way to creative and adaptive people to ensure future progress.
Tom Duening Ph.D. is El Pomar Chair in Business and Entrepreneurship and director of the Center for Entrepreneurship in the College of Business and Administration at the University of Colorado at Colorado Springs. He can be reached at 255-5152 or email@example.com.