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Right Idea, Wrong Time

Case Aims: To illustrate that timing as well as opportunity identification is critical to entrepreneurial success

Possibly the most frustrating source of an inaccurate vision is where an entrepreneurial opportunity is correctly identified, but timing in relation to market demand proves inaccurate. This outcome was illustrated by Robert Lipp when he was president of Chemical Bank in the USA. In the 1980s his vision was that the computer would revolutionise personal banking by permitting customers for a small monthly fee to use their PC linked via a modem and phone line to carry out paperless banking transactions (Eitorre 1995).

In 1983 the bank launched a home banking system called the Protjto Two with a goal of recruiting four million customers within five years. As noted by Eitorre, eventually the project had to be abandoned due to a much lower customer take-up rate. This unfortunate outcome reflected a number of problems. First, at that time only a minority of people had a PC linked to a phone line. Second, acceptance of online services in place of terrestrial transactions was still very limited. Had Lipp only waited a few more years before launching the concept, by which time the Internet had gained widespread acceptance, then no doubt he would be remembered as a visionary in the banking world.

Conger proposed that to avoid criticism the entrepreneur may exhibit one or more traits designed to retain support for their ideas, including the following:

  • 1. Gaining commitment by restricting communication of negative information and maximising positive information
  • 2. Relying upon anecdotal evidence to distract attention from negative statistical information
  • 3. Creating an illusion of control by attributing negative outcomes to external causes.

Another potential problem with entrepreneurs is that they may have inadequate managerial skills. This can in result in outcomes such as being excessively autocratic or, at the opposite extreme, maintaining excessive levels of organisational informality. This latter trait can cause them to ignore established communication channels and go directly to lower-level employees without first discussing matters with these individuals’ immediate superiors. Furthermore, should a specific issue be perceived by them as extremely important, their interaction with the project team can be detrimental to the project leader’s supervisory role. An example would be diverting the team to work on trivial issues, thereby taking them away from solving major problems which are more critical aspects of ensuring a successful project outcome (Hallier 2004).

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