By Kevin Pledge
The purpose of the Entrepreneurial Actuaries Section is to serve the business needs of actuaries and other professionals with an entrepreneurial spirit. You may wonder what I mean by entrepreneurial spirit. Some may argue that it is a quality possessed by those who run their own businesses. I disagree. Being an entrepreneur is not necessarily about running your own business; instead, it is about how you approach business, opportunity and innovation, and whether or not you are an agent for change.
When I joined the Entrepreneurial Actuaries Section Council in 2010 I didn’t feel like an entrepreneur, despite having run my own business for 10 years. The problem was that my company had not been innovative nor taken risks for a while. The company I founded was well capitalized and prosperous thanks to the fees generated from existing customers. Ten years earlier I made the leap from a comfortable corner office in a medium sized insurance company to setting up a business from my damp and poorly lit basement. Many with whom I spoke at the time about hanging my shingles said that it wouldn't work because there was no demand for actuarial data warehousing—business conditions, they told me, would make it impossible to turn this idea into a successful product. But neither these comments nor the change of office environment affected my resolve: I got down to work, just like I had done on several projects previously. It was true that I was taking a risk, but I had done that in the past as an employee. And, as for the change of location, I had already worked in more than one setting. You see, several years before starting my company I set up a team to review the type of projects submitted to my employer. With insufficient space in the main building my team occupied a warehouse nearby that was adapted to serve as a temporary office. Twelve months later we realized our temporary accommodations were not really temporary; but this didn’t matter, we focused on the job at hand and achieved unprecedented success. During this period I made decisions quickly with little data available to support them—as it is often the case in the real world—and took risks on behalf of my employer while putting my personal reputation on the line. That year I felt I was an entrepreneur even though I collected paychecks.
So what is an entrepreneur?
Something I have considered over the past three years while on the Section Council is “who are we really serving?” Without a clear definition of who is an entrepreneur it is hard to understand what we, as a section, should do to serve our members. The conclusion I have come to is that entrepreneurism is a way of approaching and managing your work. You no longer look at your work as something you have to do. Instead, you ponder about what you need to achieve, think constantly about innovations, work hard, and take risks to attain your goals. Thus, the definition of entrepreneurship has nothing to do with working in a garage (although sometimes it happens that way); instead, it is about risk and innovation. The risks may be personal—your reputation, your goals—but you don’t have to start your own business to innovate and take risk. Someone working eight hours a day, putting company money on the line but shielding himself from risk does not meet my definition of entrepreneurship. Nor does someone opening a business franchise like McDonalds or Starbucks—it is true, she may be running her own business but she is basically following a formula that not only doesn't require innovation, but sometimes avoids it.
There are entrepreneurs in companies of all sizes. They constantly challenge the status quo, look for opportunities to innovate and are willing to take risks that could affect them personally. This is especially applicable to actuaries because most of us are employed by large companies, which could offer opportunities to take initiative and innovate. Although some may call these people intrapreneurs, I feel that is an unnecessary distinction—they are still entrepreneurs.
What do you think? Are you an entrepreneur, despite working for an established company?
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