Tuesday, 24 August 2010

A parable of enterprise

John is speaking with his mate Jim in the club and Jim mentions in passing a bit of a wheelbarrow crisis he’s facing. It seems Jim needs to get hold of 50 barrows at short notice. Just a passing comment.

Next day John’s driving past Scott’s Yard and he sees a compound full of wheelbarrows. John stops, buys the wheelbarrows for £15 each and rings Jim. “You know those wheelbarrows you wanted?” “Yes,” says Jim. “Well I’ve got 50 you can have for a grand but you’ll have to pick them up from Scott’s Yard.” The deal is done. Scott’s got rid of depreciating stock, Jim’s solved his wheelbarrow crisis and John’s made a tidy profit for the sake of ten minutes chat with Scott and a phone call.

So what you say. Just wheeling and dealing. But let’s look a little closer at the situation. On seeing the wheelbarrows, John has three options – he can ignore them and drive on, he can simply ring Jim and tell him about the barrows or he can see the opportunity, take the risk and make the profit. Be clear that most of us would not take that third option – the most we’d do is tell Jim and maybe get a pint out of him next time we’re together in the club.

People think there’s something grand, swish or complicated about enterprise. There isn’t. Enterprise is what John does and we don’t. It has two elements – spotting the opportunity and taking the risk. If you spot the opportunity but don’t take the risk – you’ll get a grateful pint from Jim. And if you take a risk but have no opportunity you’ll go bust.


1 comment:

Mike Chitty said...

Great simplification story for enterprise Simon. However it is a fairly diminished definition of enterprise that you are using. For me enterprise at its best is connected to concepts of 'good work'. It is about finding work that we feel expresses our potential and enables us to make a living while we do it. It is more than just the exploitation of information asymmetry in markets.