Watch, Listen, Learn: How Entrepreneurs Gain Skills through Observation

“A tolerance for ambiguity” or even the ability to thrive amidst ambiguity is on everyone’s list of key traits for entrepreneurs. So how do successful entrepreneurs develop that trait? One might develop a tolerance for pain by continually enduring pain; but there must be a better way. Successful entrepreneurs don’t just strengthen their tolerance—they reduce the ambiguity. In many instances, founders gain insights and learn best practices by observing people and practices carefully across sectors, applying what they learn to great effect. The entrepreneurs below, all profiled extensively in my book Invent Reinvent Thrive (McGraw-Hill, 2014), are excellent examples of the power of watching and listening.

Maxine Clark expanded her vision of a store where people could customize teddy bears into the 400 Build-a-Bear Workshops in existence today. Part of Maxine’s early success was her ability to negotiate leases in malls on behalf of her start-up in an unproven business. To succeed, she used what she’d learned previously as president of mall staple Payless Shoes. “Even though I’d never negotiated a lease before . . . I had listened to our legal department talking about them,” she told me in our interview for the book. “I didn’t have to know everything about them, but I did need to know enough not to be dangerous.” The insights Maxine gained from observing lease negotiations helped Build-a-Bear thrive.

Howard Schultz, founder of Starbucks, used what he’d observed in Europe while working as a coffeemaker salesman to help generate the vision of a coffeehouse with a different kind of atmosphere, one that could become an appealing “third place” between home and work. Even though everyone—including the original owners of the Starbucks Coffee company, who employed Howard in sales—thought his idea for an upscale US coffeehouse was terrible, he persisted, eventually convincing others to invest. Starbucks wouldn’t be the business giant it is today if Howard hadn’t kept believing in his vision, fueled by what he’d observed across the Atlantic.

Mike Krasny, founder of computer distribution giant CDW, also encountered many naysayers. But while he was a self-admitted poor student with no business training, Mike had a skill many other would-be entrepreneurs lacked: learning by observation. Initially, that meant using what he’d learned working in his father’s auto dealership to place his first ad for computer sales. After he launched CDW, he continued to learn by observing, including watching the practices of and listening to advice from leaders of businesses he admired, from computer industry peers (Microsoft, Intel, IBM) to those in other sectors (Fel-Pro, Walmart, Quill). As CDW matured, Mike delegated key functional matters to professional managers, and learned from them and multiple mentors. Listening to his “teachers” helped transform a former C-student into an extraordinary business success.

Jim Sinegal grew discount retail warehouse Costco into over 670 stores representing over $100 billion in annual revenue today. Before launching Costco, Jim worked for Price Club for 23 years, learning a great deal from founder Sol Price. “He taught me everything that I know,” Jim told me during our interview, pointing out how much Price emphasized the need for strong leadership and careful planning. Jim also learned a great deal by observing the brokers who sold products to Price Club, identifying their strengths and weaknesses. That knowledge enabled Jim to work as a highly successful broker himself. After he left Price Club, his plan to open Costco went on hold due to a recession. While waiting for economic conditions to improve sufficiently to launch his own business, he worked as a broker. His listening paid off, enabling him to be ready to open Costco when economic conditions improved.

David Axelrod, former campaign manager and senior advisor for President Barack Obama and current director of the University of Chicago’s Institute of Politics, exemplifies the theme of learning by observation. David learned a great deal as a young journalist, first with a small Greenwich Village newspaper (The Villager) during college then as a Chicago Tribune reporter. He paid especially close attention to the political campaigns he covered, particularly the strategies of the media consultants for three Chicago mayoral candidates. A dinner with Bill Zimmerman, media consultant for one of those candidates (Harold Washington), gave David further insights into campaign-management skills/strategies, and soon he was able to make the leap from journalism to campaign director, eventually making history by helping the US’s first African American president get elected.

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While it’s easy to think of entrepreneurs as all about action, the best ones are both observers and doers, learning from watching and listening to others, then putting their new-found knowledge into action. That means sometimes the best course at any stage of a business—from pre-launch to maturity—is stepping back to see what you can learn from people, practices, and other companies, then formulating new ideas and strategies for success. As it says on one of my favorite T-shirts:

“Silent” and “Listen” have the same letters. Coincidence?

So listen up and learn what you need to reinvent and get ahead.

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