"Effectuation"--I like it!

In my last post, I cited a Wall Street Journal story that mentioned what Saras Sarasvathy calls "effectuation," which is a thought process used by successful entrepreneurs.

I thought what was there was pretty insightful, so I wanted to look up more. Unfortunately Sarasvathy is an academic, so most of her stuff is wildly expensive and unavailable at the libraries in my area. (Let's hear it for those academic presses! I hope they finish going under soon!)

Still, there's a Web site about effectuation, this article in Inc., and there are excerpts of Sarasvathy's work around--parts of her book can be read here, for example. And a nice definition of effectuation (contrasting it with causation, which is how managers at large corporations tend to think) can be found here. It reads:

Causation rests on a logic of prediction, effectuation on the logic of control

In her book, she lays out five principles success entrepreneurs tend to rely on. These are all principles focused on things these people control, rather than abstract or expert notions of what ought to work. They are:

1. The "bird in the hand" principle: You use what you have.

2. The affordable-loss principle: You plan depending on what you can afford to lose.

3. The crazy-quilt principle: Similar to the bird in hand, but it applies to people--if you can get someone to help you out with X, then you focus on doing X, instead of trying to do Y.

4. The lemonade principle: When life gives you lemons . . . you "leverag[e] surprises rather than trying to avoid them."

5. The pilot-in-the-plane principle: You are in the driver's seat, and what you want to do and are good at is more important than, say, what genre of book is the most commercial or what marketing strategy worked for somebody else.

I think these are all good, and many of them are especially applicable to writers, who really are the pilot in the plane!

To focus on one for a moment: The affordable-loss principle puts a name on a phenomenon I've certainly noticed--when people focus on the potential for success, they sometimes decide not to do anything, because of course there's never any guarantee that something will be successful. Or, they decide to take some insane risk, because they're blinded by their dreams of bestsellerdom.

But if you focus instead on the (REALISTIC) price you will pay for failure, then that helps you make better decisions: You will risk what you can afford to lose. That helps you avoid paralysis on the one side, and ruin on the other.

My observation about successful indie writers is that they tend to experiment and to keep experimenting until they find what works. If you never do anything, you can't ever figure out what works; if you bankrupt yourself, you'll take yourself out of the game too soon to succeed.