WHAT IS ENTREPRENEURIAL VISION AND HOW DOES IT WORK?

Working Paper #2003-19

Barbara J. Bird Associate Professor- Organizational Behavior

American University Kogod School of Business

4400 Massachusetts Ave., N.W. Washington, D.C. (202) 885-1924 (202) 885-1992

bbird@american.edu

Candida G. Brush Associate Professor- Strategy and Policy

Boston University School of Management

595 Commonwealth Ave. Boston, MA 02215

(617) 353-3146 (617) 353-5244

cgbrush@bu.edu

The authors are grateful to Norris Krueger, Bob Baum, Benyamin Lichtenstein, Tom Lumpkin, and Andy Hoffman for thoughtful comments on earlier drafts of this paper.

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WHAT IS ENTREPRENEURIAL VISION AND HOW DOES IT WORK?

ABSTRACT

Entrepreneurial vision is central to energizing and directing the birth, growth and

direction of new ventures. This paper defines entrepreneurial vision, suggests ways to

measure it, and explores how vision works in an emerging organization. We follow a

cognitive perspective to examine the sources of vision, the impact of vision on the

organizing process, and explore how vision relates to other important cognitive

constructs.

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WHAT IS ENTREPRENEURIAL VISION AND HOW DOES IT WORK?

Vision is the act of seeing things invisible- Jonathan Swift Entrepreneurial vision is crucial to energizing and directing the birth, growth, and

direction of new ventures. It provides a catalyst for motivating potential employees,

building a strategy and developing a new organization (McMullan & Long, 1990;

Larwood, Falbe, Kriger & Miesing, 1995). Research on vision is extensive, however,

the vast majority of empirical and normative work presumes that the leader crafts and

implements his/her vision within an existing organization (Nutt & Backoff, 1997; Bennis,

1992; Baum, et al, 1998). For example, research shows that leadership vision is central

to motivation (Bennis & Nanus, 1985; Conger, 1992; Tichy & Devanna, 1986; Galbraith,

Lawler & Associates, 1993), corporate strategy (Kanter, 1997), organizational change

(Nutt & Backoff, 1997), and firm performance (Baum, Locke & Kirkpatrick, 1998).

Vision is defined as an imagined future for an organization, a transcendant ideal or

mental image having organizationally shared values that leaders articulate to inspire

performance, direct action or create organizational change (House, 1977; House &

Shamir, 1993; Bennis & Nanus, 1985; Kanter, 1977). Hence current literature anchors

the discussion of vision within established organizational boundaries and routines, an

administrative history, identifiable culture, and ongoing strategic commitments (Aldrich,

1999; Andrews, 1971; Scott, 1987; Shein, 1987).

By contrast, the primary locus of entrepreneurial vision is within an emerging

organization. An emerging organization, whether an independent or corporate new

venture, is one that is unfolding, in a state of pre-launch (McMullan & Long 1990),

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gestation (Reynolds & Miller, 1992) or pre-organization (Katz & Gartner, 1988).

Organizing activities and events are in process, but the organization is not yet an

organization (Gartner & Brush, 1999; Gartner, 2001). The boundaries are unclear,

routines non-existent, cultural norms being formed and strategic commitments evolving

(Becker & Gordon, 1966). Relationships and transactions among participants are ill-

defined and far from stable (Ouchi, 1980). A new organization emerges when the

entrepreneur(s) creates or perceives an opportunity (Krueger, 2000; Bygrave & Hofer,

1991; Ucbasaran, Westhead & Wright, 2001), undertakes the tasks of acquiring resources

(Glade, 1966; Aldrich, 1999), and coordinates activities that involve different markets

(Liebenstein, 1968; Gartner, 1985). We contend that the process of organizational

creation is most motivating and effective when guided by an entrepreneurial vision. The

purpose of this paper is to define entrepreneurial vision, distinguish it from other

entrepreneurial concepts, and examine how vision works in an emerging organization.

We follow a cognitive perspective to explore the sources of vision and the impact of

vision on the organizing process. While our context is primarily a new entrepreneurial

venture, we recognize that entrepreneurial vision processes may apply in existing

organizational contexts (e.g. joint ventures, new product development, or new

international entry) where entrepreneurial vision may be used to organize resources, gain

commitment and set new direction. Hence our description may be broadly applied to the

creation of a variety of new economic entities.

THE CONTEXT OF LEADERSHIP AND ENTREPRENEURIAL VISION

Entrepreneurial vision is different in the temporal sense because its context is an

emerging organization. While leadership vision has three parts, a statement of the

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present, an assessment of a desired future and a roadmap to get from one to the other

(Jick, 1993), in entrepreneurial vision there is no present. There exists only a desired

future. Entrepreneurial vision is the creation of a new state, rather than the transition

from an old to a new state. Before resources are acquired, plants located or transactions

completed, the organization is an imagined economic entity. Entrepreneurial vision is

characterized by ambiguity. There is literally nothing there to see, and no history upon

which to build a vision in the usual sense.

To differentiate entrepreneurial from leadership vision, the four properties of

leadership vision proposed by Nutt and Backoff (1977) can be applied: unique vibrant

possibilities to improve the organization; drawing from the organization’s existing

values, culture, and traditions; communication that draws people in, tapping their energy,

emotion, and commitment; and allowing people to see a role for them to play. Instead of

improving the set of possibilities, entrepreneurial vision enacts new possibilities and a

new reality (Bird, 1989; Gartner & Brush, 1999). The possibility set in leadership vision

has limits, but for entrepreneurial vision no boundaries need exist.

Instead of surfacing, distilling, and abstracting desirable futures and collective

values from organizational members (Larwood, Kriger & Falbe, 1993) entrepreneurial

vision creates a new culture and imprints founding values (Schein, 1987; Boeker, 1989).

The desirable future, which may be reached by consensus in corporate settings, is instead

idiosyncratic and personalized for new ventures (Carter, Gartner & Reynolds, 1996).1

Where leadership vision creates and draws stakeholders in to strategic and

internal transformation of existing resources, entrepreneurial vision inspires initial

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commitments to organizational birth, survival and growth. Finally, where leadership

vision brings existing stakeholders into action with new roles and behaviors,

entrepreneurial vision secures constituents to enact an organization (Aldrich & Fiol,

1994). The entrepreneur creates new roles within the emerging organization (Baker &

Aldrich, 1994; Jellinek & Litterer, 1995; Stone & Brush, 1996) by acting “as if” (Gartner

et al., 1992). Therefore purpose and context further distinguish entrepreneurial vision and

leadership vision.

Although entrepreneurial literature recognizes the unique purpose of vision,

temporal and the contextual differences between emerging and established organizations

(Bird, 1989; Katz & Gartner, 1988), research on entrepreneurial vision is comparatively

sparse, fragmented and conflicting. Vesper (1990) suggests that prior to start-up the

entrepreneur develops a mental vision or projection of the venture. An early study of

entrepreneurial vision found that entrepreneurs imagined pictures, movies, and physical

arrangements of their future ventures by doing mental rehearsals of presentations,

conceiving plant lay-outs and sometimes using scenarios (Rockey, 1986). Hanks and

McCarey (1993) described the way that entrepreneurs identify an opportunity in the

marketplace and develops a concept leading to the establishment of a new organization as

a sequential process. Similarly, Filion (1991) drawing from case studies posited a model

of vision defined as “an image projected into the future of the place the entrepreneur

wants his products to occupy eventually on the market, and also an image of the type of

enterprise needed to get there” (p.28). This research implied that for successful

entrepreneurs vision is a manifestation of the “gaps” in the marketplace.

1 While some ventures start with teams or partners, academic cases on entrepreneurship and the popular press feature the leadership and vision of single individuals and while there is no rigorous empirical data to

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Looking at the way vision is conceived, Larwood, Falbe, Kriger and Miesing

(1995) and Larwood and Falbe (1994) found that entrepreneurs and executives are able to

reliably report the degree to which their vision had the qualities of planning,

formalization, actionability, flexibility, inspiration, communication and buy-in. Finally,

in a study of established architectural woodworking entrepreneurs, Baum et al. (1998)

and Baum, Locke and Smith (2001) found that communication of vision (here limited to

growth goals) played a strong role in linking vision to organizational performance. This

data was drawn from CEOs of established but closely held firms, more reflective of

executive vision than entrepreneurial.

These studies of vision do suggest the mental models and scenario planning

aspects of vision, the synonymous use of ideas and business models, and various usages

of the term “vision” (e.g., ideas, business models, plans). However, they tend to gloss

over the values, imagery and unique role of vision in the organizing process. Further,

the interactions of vision, opportunity and intention are not well articulated (Davidsson &

Wiklund, 2001; Ucbasaran, Westhead & Wright; 2001; Alvarez & Barney, 2002).

The remainder of this paper seeks to elaborate the foundations for entrepreneurial

vision (internal picture of valued future), its role in the organizing process, and

interactions with other related cognitions such as opportunity formulation (external

representation of value), and intention (internal precursor to action).

WHAT IS VISION?

Entrepreneurial vision shares with leadership vision a basic cognitive structure

and role. However, these structures and their roles have greater interest to and deserve

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support the contention, we propose that in new ventures, the number of visionary entrepreneurs is few

more explanation when considering entrepreneurial processes due to previously

mentioned temporal, purposive and contextual differences.

Vision, whether entrepreneurial or leadership, is a mental image of the products,

services and organization that the founder or leader wants to achieve, often with explicit

or implicit moral values (Bennis & Nanus, 1985; House 1977; House & Shamir,

1993).Vision can be characterized as a form of mental model, with two core components:

imagery and values (Collins & Porras, 1994, Senge, 1990). The image of the future is

often visual in nature—seen by the inner eye and serves to demonstrate to the “seer” a

possible future where currently held values or unmet needs are fulfilled. Visionary

cognition links current values to “future perfect enactments” (Weick, 1976) inspiring and

directing the entrepreneur or leader and prospective or existing insiders and outsiders,

toward a particular future.

In general terms, mental models are tacit and explicit understandings of how

conditions, actions, and resources are interrelated across time and space (Senge, 1990)

and include schemata (Marks, 1990). A mental model may be as simple as a set of

relationships showing some causality or consequence, (i.e., the picture of an “if…then

relationship), a diagram of critical interdependencies in a system being formed or

changed such as project management software (Jenkins & Johnson 1997), or a mental

motion picture of a chain of events (i.e., mental rehearsal). It may be as complex and

abstract as a theory-in-use (Argyris & Schon, 1996). Whether simple or complex, mental

models are necessarily incomplete (Hill & Levenhagen, 1995).

Values energize the mental model and are necessary to vision. Visions that

energize people whether they are potential or current stakeholders, are grounded on

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values broadly shared (House, 1977). Vision mobilizes people because they have some

core values that are not fully expressed or easily fulfilled, and the entrepreneur’s vision

for the organization allows for participation and enactment of some of those values

Images structure the values and link them to imagined but as yet un-manifested

objects, relationships, and/or activities. These yet-to-be realized futures are expressed as

word pictures, metaphors, charts, stories and/or various media presentations. A vision

that has clear and compelling imagery, offers innovation toward the values, and connects

to action can motivate people to realize change (Nutt & Backoff, 1997). This conception

of image differs from image theory advanced by Beach (1990) which posits images of

value (e.g., principles), trajectory (e.g., goals), and strategy (e.g., plans, tactics, and

forecasts). Beach’s notion of image is knowledge-based, not closely linked to visual

imagery, and is limited to decision-making contexts.

We now elaborate on these key constructs to enrich understanding of

entrepreneurial vision where there is no present and no apriori organizational constraints

and where the future possibility rests with one or few individuals. We then discuss the

sources or “causes” of entrepreneurial vision to answer the question “why is vision

important in founding organizations?”

IMAGERY AND VALUES IN ENTREPRENEURIAL VISION

“Images like other organizations have an embryology; they start off by being

simple, they grow and they develop and as they develop they become increasingly

complex. At each state of development, therefore, there are only certain

alternative ways to development open; everything builds on what has gone

before.” (Boulding, 1961, p. 95).

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Notice the place where you sit as you read this article. Now imagine reading this

in a more idyllic or comfortable place. Your notion of comfort reflects your values and

the picture you form in your mind is an image. The visions that entrepreneurs form for

emerging organizations often include such concrete visualizations. For the entrepreneur,

a vision might end up being a coffee shop/bookstore near campus, a software solution for

businesses, or a reading oriented program for cruise lines. The entrepreneurial vision is a

wholly mental image substantially influenced by personal values

Images and imagining

The unseen possibility in the new venture refers to what is seen by the inner eye

in imagery or imagination2. Images are by definition transient, perceptlike representations

that exist in short term memory (Horowitz, 1972; Lusebrink, 1991; Richardson, 1983).

Imagining is a process of forming and transforming these images (Forisha, 1983).

Mental images and imagining have been linked to related cognitions important to

entrepreneurial studies including perception (Neisser, 1972, Richardson, 1983, Hochberg,

1998), memory (Pavio, 1971, Marks, 1983), learning (Hochberg, 1998, King 1983), and

decision making (Beach, 1990; Miller, Galanter & Pribram, 1960). While there need not

be an objective or external stimulus to elicit them (that is, the image can be of a future

organization), images have characteristics of vividness, size, motion and color (Marks,

1999) that allows the person a sense of interaction with them, on an “as if real” basis.

This feature allows the visionary entrepreneur and her stakeholders to engage in sensory-

rich rehearsals and scenario planning. Note that images need not only be visual, but also

may be auditory, kinesthetic, and olfactory/gustatory (O’Connor & Seymour, 1995).

However, most cognitive psychology theory and research on mental images focuses

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exclusively on visual images (Koler & Smythe, 1979; Marks, 1999; Reisberg, Wilson &

Smith, 1991).

An individual entrepreneur’s vision can be considered cognitively complex, built

upon a hierarchy of cognitive components, which may be different across individuals due

to differences in experience and preference (Lusebrink, 1991, Powers, 1973). At their

most fundamental, images start with simple visual sensory components (lines, shapes,

dimensionality), images build complexity as spatial dimensions, relationships and

features such as color and texture are added. Even more complex are images that involve

temporal transformation and human interaction. These mental images “may include the

self, the world—future, present or past—and self-world interactions” (Marks, 1999, p.

569).

We characterize vision by two necessary conditions: it is conscious and it has an

experiential basis and therefore subject to individual’s control and learning3. The

transient and perceptual nature of imagery and therefore new venture vision is a

particular challenge to the entrepreneur who must keep an imagined possibility

consistently and clearly in his mind’s eye and there are no concrete organizational

manifestations for reference. He must be able to describe that possibility as if real even

though it is transient in his own mind. This cognitive task is difficult in controlled

experimental conditions (Anderson & Helstrup, 1993) and likely more difficult in

stressful, fast-paced and personally important situations. If the entrepreneur is aware of

his thoughts, ideas, memories, etc., but lacks experience to “see” a business, there is no

2 For the purposes of this paper these terms can be used interchangeably. 3 The entrepreneur is aware of this cognition. There are cognitions of which we are unaware such as some forms of memory, learning, and perception (Paul & Elder, 2002). There are also cognitions which may lack a clear experiential basis such as dreams and archetypes (Jung, 1936/1971)

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entrepreneurial vision. Likewise, if he has relevant experience, but does not form a

conscious cognition of the future, there is no entrepreneurial vision.

The particular content, degree of complexity, and vividness of the image

components of entrepreneurial visions are individual differences that are measurable and

we will argue, important. For example, an image of a venture that includes the founder

and/or other people may result in a venture with different qualities of partnership,

collaboration, customer involvement, or organizational culture than a vision without

images of other people. Likewise the image of a new venture that has an embedded

growth metaphor (like a balloon ascending, tree growing, etc.) may predispose the

ultimate venture toward growth. See Figures 1 and 2.

Figures 1 and 2 here

Values. The content and complexity of entrepreneurial vision rests, in part, on

the personal values, experience, and goals of the visionary entrepreneur. Bird (1989),

building on Rokeach (1973) foreshadowed the work of Sarasvathy (2001) by suggesting

that there were entrepreneurial instrumental or life style values (e.g., excitement,

independence, freedom) and terminal or outcome values (wealth, security, fame, social

responsibility) values that could not always be simultaneously maximized. Bird’s (1989)

review of the literature suggested that there were instrumental preferences among some

entrepreneurs for autonomy (Sexton & Bowman, 1984), independence (Hornaday &

Aboud), fun (Duffy & Stevenson, 1984), aesthetics (Komvies, 1972), and professional

values (Richman, 1985). She also suggested that terminal entrepreneurial values include

money either as a substitute for income or as a way of keeping score in an achievement

“game” and that in some cases there is an interest in fame, status and power (Kets de

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Vries, 1977) and in some other cases an idealism associated with social responsibility

(Hawkin, 1983; Kao, 1985, Palich & Bagby, 1995).

A look at recent literature suggests that values are not topic of great concern in

entrepreneurship outside self-interest which is presumed to be financial (Andrews, 2000;

Bygrave & Minniti, 2000; Bruton, et al, 2000; Shane & Venkataraman, 2000; Vozikis et

al., 2000). Other value-like propositions include ill-defined notations of desirability and

preference (Bygrave & Minniti, 2000: Krueger, 2000), the need for achievement which

may be construed as a value a well as a need (Lau, 2001; Shane & Venkataraman, 2000),

and the nature of the founder’s ambitions for wealth or legacy (Bhide, 2000).

One exception is the study of women business owners in the construction industry

which used Rokeach’s (1968) values survey (Olson & Currie, 1992). The study found a

strong relationship between some personal values and firm strategy. The other exception

is the work of Kotey and Meredith (1997) who used a measure of personal values derived

from Rokeach (1973) and England (1975). The authors attempted to form a continuum

from entrepreneurial to conservative values using these items. Their study of Australian

furniture manufacturers found performance, strategy and owner/manager values were

positively associated. Outside these studies, personal values have not been a variable in

recent entrepreneurship research other than implicitly.

Vision complexity. Vision content (what images and values are addressed) and

complexity (number of images and values, degrees of detail, levels of imagery such as

color, motion, and interaction) are two related but conceptually distinct dimensions to

entrepreneurial vision. Both can be assessed by content analysis of vision using criterion-

based content analysis (Boyatizis, 1998). The contents subjected to such analysis may be

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verbal reports or pictures such as shown in Figures 1 and 2. Because complexity and

content are correlated, we will treat them together in this paper.

Given the myriad of memories, experiences, values, and image components that

are possible in vision, the content and complexity of entrepreneurial vision are likely to

be associated with variations in experience both proximal (e.g., current work and

education) and distal (e.g., family of origin and growing up). As a cognition, vision

complexity is likely to be positively associated with other measures of cognitive

complexity (Jaques, 1976; Palich & Bagby, 1995). An entrepreneur, who has had deep

industry or prior start up experience, may formulate a more complex, detailed and

nuanced vision than someone with less experience. Likewise, vision complexity is likely

be a function of the number and type of values that are served as well as the particular

personal values served. A venture designed for profit maximization will likely be

cognitively simpler than one designed to also serve socially responsible values.

If we take an Aristotelian view of the nature of causation and apply it to vision,

we can see how vision content and complexity can change. Aristotle (0350 BC) posited

four “causes” for the existence of things: 1) formal, 2) efficient, 3) material, and 4) final.

Formal “cause” is the shape of the thing, its form. In this case, vision is formed of

images and values.

The efficient “cause” sets a process in motion. What initiates or motivates a

vision? Entrepreneurs begin conceiving their ventures from personally experienced

pushes (e.g., displacements, dissatisfaction with a job, underutilized resources of time and

talent), conscious pulls such as the desirability of a venture to meet personal needs and

values (Brockhaus & Horwitz, 1986, Shapero & Sokol, 1982), and emotional or

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unconscious tensions (Hill & Levenhagen, 1995, Kets de Vries, 1977; Kets de Vries &

Miller, 1986). These tensions and intentions to venture feed into an initial vision as seen

in Figure 3. Embedded in various versions of a vision, these tensions and values flow

through to opportunity formation of the entrepreneur(s) and then to specific new

organization implementation intention (Bird, 1989; Gollwitzer, 1993, 1999; Krueger,

2000).

Material “cause” is the stuff of which the thing is made. We suggest that at the

most abstract level vision is made of energy and spirit, the entrepreneur’s passion, desire,

and emotional investment in the vision along with “sweat equity.” Visionary passion is

built upon the values, memories, cognitive constructs, and emotions of one person (or a

small group). In this way entrepreneurial vision has simple energetic material compared

to visions of corporate leaders. However, when the venture involves multiple partners

either at startup or added strategically later, the number of different images and values is

likely to increase. As the number of images, mental models and energies of individuals

increases, from a single entrepreneur before a firm is created to a partnership of

stakeholders and eventually to a growing or large firm possibly a multinational or global

entity, the authors of vision increase and become more complexly interrelated. It is as if

the founding spirit of the firm becomes hybridized or agglomerated. If the nascent

venture is viewed as having a spirit like a panther (stealthy, quiet, focused, rapacious), by

the time it has shared ownership and control with investors and the public, changed

leadership, grown and structured several times, the panther has had appended to it spirits

from other sources. Perhaps these spirits are fast moving gazelle, strategic eagle, fast

replicating rabbit and the cautious cash cow. The spirit of the firm is now composite, a

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sphnix, griffin, or manitou, with parts of it “predator” and “prey” (rabbit and eagle). In

this way, the vision of the firm moves from simple to complex, from total buy-in of

founding team to partial, conditional buy-in or even resentment at new directions taken.

At a less abstract level, the material cause of an entrepreneurial vision comes from

learned models of business, markets, projects, organizing and the like. Stored in

memory, these models of other “positive” and “negative” real and ideal types become the

inventory of vision elements. The entrepreneur replicates, expands, “cuts and pastes”

these elements until a vision of the future organization emerges. Often this vision is

tested against market opportunities and the mental models of others for its motivating and

implementation potential. Based on these tests, the entrepreneur may adjust, refine or

recast the vision until a more motivating and implementable vision emerges as shown in

Figure 3.

The final “cause” is that which results from a thing’s existence, its teleology or

purpose. In this sense, entrepreneurial vision “causes” an intention to implement and this

in turn “causes” a new venture to be created (note that vision and intention alone are not

sufficient for a venture creation).

Thus far we have argued that the image and values components of entrepreneurial

vision give us tools for understanding the content and complexity of vision. We will now

show how entrepreneurial vision differs from other relevant cognitions. From there we

elaborate the flow of vision into implementing new ventures.

VISION’S DISTINCTION AMONG ENTREPRENEURIAL COGNITIONS

Entrepreneurial vision is related to three other entrepreneurial constructs:

intention, opportunity recognition/formulation, and self-efficacy. Like vision, these

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constructs include future-oriented cognitions but they differ temporally and in content.

We explore these constructs and examine how they are related to vision in the start-up

process.

Figure 3 about here

Intentions. Entrepreneurial intention, a widely researched cognition (Bird, 1988;

Jenkins & Johnson, 1997; Katz & Gartner; 1988, Krueger, 2000; Krueger & Carsrud,

1993; Krueger & Brazeal, 1994) is defined as “a state of mind directing a person’s

attention (and therefore experience and action) toward a specific object (goal) or a path in

order to achieve something (means)” (Bird, 1988, p. 442). More specifically,

entrepreneurial intention is sequentially focused over time (Bird, 1992) and the goal is a

new venture. While entrepreneurial intention may prove more complex, we conceive of

two critical intentions: intention to venture and intention to implement a specific venture.

The intention to venture, which is a “generic” intention to possibly start some business at

some time, can result later in the intention to implement a specific business, as shown in

Figure 3. Much of the research on entrepreneurial intention has focused on the first,

more generic intention to venture (Krueger, 2000; Krueger & Brazeal, 2001; Sarasvathy,

2001).

Vision relates to this level of intention with founders being able to see themselves

as business owners compared to whatever role they occupy at the moment. What is

missing at this level are the details on the specific venture and its process. Can the

nascent entrepreneur envision sales calls, decision making under time and financial

pressures, hiring others, or sweat equity?

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Distinct from the relatively vague intention to start a business, implementation

intentions are specific to a particular business. Rather than mulling about starting a

business, or spinning wheels thinking about alternative businesses, the successful

visionary entrepreneur will form implementation intentions (Gollwitzer, 1999, 1993;

Gollwitzer & Moskowitz, 1996). These implementation intentions specify concretely

when where, and how the entrepreneur will take action and which actions he will take to

mobilize his vision drawing upon the concrete images that form the content of vision.

These implementation intentions in essence provide a situational and temporal ecology

for action.

Implementation intentions serve to motivate the entrepreneurs themselves to take

action on a specific vision and to motivate others to join, lend credibility, add resources,

and purchase specific venture outputs. That is, a vision’s imagery and values as seen by

the entrepreneur serve as the basis and content for the myriad of communications and

action plans the entrepreneur has with herself and with potential stakeholders. She

motivates her own behavior direction, intensity and persistence through self-talk

(O’Connor & Seymour, 1995) and real or imagined interaction with others.

Using visionary language the founder can induce these others to see their role and

potential future of the venture and to feel a commitment to the shared values. Because

entrepreneurs may lack credibility that constitutes a fundamental basis of interaction, and

there is an absence of information and evidence regarding the activities of the new

venture, the entrepreneur must encourage parties to share his/her expectations, and to

believe in his/her reasonable efforts and competence (Stone & Brush, 1996; Aldrich &

Fiol, 1994). A pioneering founder cannot base initial trust building strategies on

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objective external evidence but instead must concentrate on framing the unknown in such

a way that it becomes believable (Aldrich & Fiol, 1994; Weick, 1979). To the extent that

the vision has concrete, simple elements that can be seen clearly and articulated

straightforwardly to oneself and others, the implementation intentions can be quickly and

efficiently formed and themselves envisioned.

Thus one pathway to new venture creation moves from the general intention to

venture, though a personal vision (imagination) to implementation intentions. We have

defined this a naïve entrepreneuring. See Figure 3. It is simply a picture of being in

business of some sort and if the entrepreneur proceeds from this to implementation

intention, the path lacks an external validation. On this path the implementation

intentions are more likely to be a poor fit with one’s competencies and the economic

environment than more strategic pathways to be described next. Implementation

intentions on the naïve path are likely to be less specific, less anchored in a realistic

timeframe, and the venture less likely to succeed.

Opportunity Formulation. External validation comes, in part, through the

interaction of vision and opportunity. There are two perspectives on opportunity, the first

suggesting it is objectively defined, a possibility that can be exploited within a relatively

short and finite temporal window, and not a mental construct (Hills, Schrader &

Lumpkin, 1999, Kirzner, 1985; MacMullan & Long, 1990, Stevenson & Jarillo 1990,

Shane & Venkataraman, 2000, Ucbasaran, Westhead & Wright, 2001). In this sense,

opportunity is external and separate from the entrepreneur, something that can be

recognized or discovered, depending on the information available to the entrepreneur

(Kirzner, 1985).

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The second view receiving recent attention suggests that opportunity is dependent

on the intentions, perceptions, and behaviors of the entrepreneur (Ensely, Carland &

Carland, 2000; Krueger, 2000; Brown, Davidsson & Wiklund, 2000). It is argued that

opportunity formulation is a creative process, enhanced by preparation, incubation,

insight, evaluation and elaboration (Hills, et al, 1999). In this view, there is an

interaction between the entrepreneur’s perceptions of the opportunity and vision of the

organizational future. Based on a learning process, search and exploration lead to more

specific knowledge which is connected to a commercial opportunity. Specific opportunity

formulation requires a set of skills, aptitudes, insights and circumstances which varies

widely across people (Venkataraman, 1997) and includes cognitive processes, such as

thinking, alertness and noticing within the search process (Kirzner, 1973).

Opportunity differs from vision in two ways: economic rationality and

temporality. Arguably, opportunity has external anchors and can be understood in

economically rational terms. In this way, opportunity is strategic, not personal or

passionate (Block, 1989; MacMullan & Long, 1990; Bhave, 1994). In contrast vision is

personal and often “irrational”, linked to affective, emotional, and intuitive experiences

and ideals (Block, 1988; Ensley et al., 2000; Hill & Levenhagen, 1995) and exempt from

objective evaluations. Finally opportunities are generally relatively close in time and

often time-defined.

The pathway to venture creation that moves from intention to venture through

opportunity formulation to intention to implement a specific venture can be understood as

strategic entrepreneuring. This pathway, shown in Figure 3, would lack the personal

passion and irrational tenacity of the more visionary pathways. Thus the implementation

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intentions are likely to have appropriate detail and time frames and the venture more

likely to succeed economically. However, the personal commitment and passion of the

founder is likely to be less than the visionary pathway described in the next section.

These founders are more likely to welcome equity and power sharing alliances and to be

less attached to their roles than those on the naïve and visionary paths.

Self-efficacy. Self-efficacy, the belief or perception that something is feasible, is

a core construct of work on entrepreneurial intention (Chen, Greene & Crick, 1998;

Krueger, 2000; Krueger & Brazeal, 1994, Locke, 1968). Our model suggests there are

two levels of self-efficacy vision. One is being able to imagine oneself being a business

owner. Here the self-image of the nascent entrepreneur interacts with memories and

fantasies of business ownership to see if the role fits. Without the specificity in what

“doings” are necessary, this is part of the naïve pathway.

The other level of self-efficacy vision is seeing the “doings” and behaviors (of

oneself) involved in implementing a specific new venture. Here the nascent entrepreneur

performs mental rehearsal of actions and interactions to be attempted (or not) in the

future. For example, seeing oneself make sales calls on specific customers or work late or

on the weekends. To the extent that the founder’s vision has been specified through

interaction with formulated opportunity and intentions to implement, she can see herself

taking specific action to make the venture take shape.

In both self-efficacy visions the cognition includes the self either associated (seen

through one’s own eyes) or dissociated (seeing oneself as if through a camera (O’Connor

& Seymour, 1995). These visions differ in detail and perhaps in the specificity of time-

line.

Note version 10 21

Visionary entrepreneuring involves the possibly iterative interaction of personal

vision, opportunity formulation, and the intentions to venture and implement a specific

venture, a shown in Figure 3. Such ventures are more likely to succeed than naïve

entrepreneuring because they have strategic qualities. They are also more likely than

strategic entrepreneuring to be personally important and tap the passionate commitment

of the founder.

CONCLUSION

Entrepreneurial vision plays a role in energizing and directing the birth, growth,

and direction of new ventures. We have argued that entrepreneurial vision is largely an

individual cognition closely associated with intention, opportunity formulation, and self-

efficacy, which all direct attention and resources toward the future. Visionary cognition

allows researchers and practitioners to see another facet of entrepreneurial behavior, one

that is linked to other established constructs but measured independently, establishing a

more substantial nomological net (Nunnaly & Bernstein, 1994).

The model proposed here shows that venture creation could come about with or

without vision. Absent vision, the process is less inspired, with less personal passion and

leadership commitment to long hours, financial risk, and difficult decision making

against uncertain timelines for milestones. Absent vision, the founder is less likely to

inspire the alignment, allegiance, and commitment of resources controlled by other

people. The model also shows the critical contribution of pairing vision with strategic

insights from opportunity formulation. However, opportunity alone, does not inspire

commitment.

Note version 10 22

What is necessary is the communication of a clear vision of a valued future

organization. That communication hinges on shared values and concrete, vivid and

experientially grounded component images. With these, the vision will be relatively easy

to describe and thus to share. The concreteness and experiential nature of the image

allows the word picture to be reliably told again and again and like a story where the

details change over time, yet all versions strongly correlate and all versions contain truth

(Raglan, 1956). As listeners, audiences, constituents, and the entrepreneur himself, hear

the same story of the nascent venture, they come to “remember” it, to retain the image on

an “as if real” basis (Weick, 1976).

Simpler concrete founding visions are while easier to communicate are also likely

to be more motivational in themselves. If vision becomes complex, with added

stakeholders, it may in fact become more abstract and less concrete, attempting to be

inclusive of the values of all stakeholders. An abstract vision is possibly less intrinsically

motivating as organizational participants cannot see the role that they will play and how

the roles and behaviors of others serve the vision. However, since stakeholders add

resources and legitimacy to the venture there may new and/or different rewards and

opportunity for organizational commitment that are intrinsically and extrinsically

motivating. Thus in the growing venture there may be a trade off between the motivating

potential of the founder’s vision and the rewards of legitimacy.

Several empirical research issues arise from this approach to entrepreneurial

vision. The measurement of vision content and relative complexity is a matter for

qualitative content analysis of verbal statements of vision as well as drawings such as

mind maps (Gelb, 1998) or symbols. Measures exist for values (England, 1975;

Note version 10 23

Rokeach, 1973) and imagery dimensions such as vividness and control (Marks, 1999,

Phan et al., 2001). Measures exist for the individual precursors to vision, which include

intention to venture, and other future oriented cognitions. Finally measures of

consequences of vision are either available or easily conceived (e.g., implementation

intention, communication frequency, style and medium, retention by others, commitment

and tenure of stakeholders and eventual venture variables such as size, growth, turnover,

competitiveness, structure, and culture).

Several other relationships are suggested in this paper. We have suggested that

the content of entrepreneurial vision will be influenced by the presence of partners and

these would include formal venture capital or large firm strategic alliances. We have

suggested that the involvement of these and other stakeholders changes the vision of the

firm as it grows. It might be possible to assess the content and complexity of the

entrepreneur’s vision longitudinally as he or she moves from initial vision to one that

involves sharing fiscal and psychological ownership.

Finally, practitioners, particularly those who assist nascent entrepreneurs can use

this model and relevant research to help individuals craft a vision. They can help

entrepreneurs iterate between their vision, the opportunity that is formulated, and the

visualization of implementation associated with implementation intention. Finally,

entrepreneurs can be coached to use their vision in communications.

“Make no little plans; they have no magic to stir men’s blood and probably in

themselves will not be realized. Make big plans; aim high in hope and work

remembering that a noble, logical diagram once recorded will never die.”

Daniel Hudson Burnham

Note version 10 24

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Figure 1

Entrepreneur’s Vision

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Figure 2

Entrepreneur’s Vision

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Figure 3How does Entrepreneurial Vision Work?

IntentionTo venture

EntrepreneurialVision

IntentionTo ImplementVenture

VentureCreation

Opportunity Formulation

Self efficacy: Can I see myself being a business owner?

Pathways:Intention to venture results in vision of some business, leads to implementation without opportunity assessment. Naïve entrepreneuring

Intention to venture leads to opportunity assessment and finally implementation. Strategic entrepreneuringIntention to venture interacts with vision and opportunity where each is “tested” by the other. Visionary entrepreneuring

Self efficacy: If I try, what specifically can I do?

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FOOTNOTES 1. For the purposes of this paper these terms can be used interchangeably.

2. We recognize that many ventures begin with teams and that even within this group

there is likely to be one lead visionary and no external constituency at gestation.

3. Einstein is reported to have made many important conceptual breakthroughs as a

result of mental experiments or gedanken experiments (Marks, 1990).

4. Creativity judgments necessarily occur within the cultural context of the panel.