Empowerment Through Ideas: Teaching Effectuation in Pakistan

Saras D. Sarasvathy and Gosia Glinska

Dr. Shahid Qureshi is determined to make the world a better place through effectuation, the set of principles for entrepreneurial decision-making developed by Darden’s Professor Saras Sarasvathy, based on a rigorous study of expert entrepreneurs.

Qureshi, an entrepreneurship professor at the Institute of Business Administration (IBA) in Karachi, Pakistan, heads the Aman Center for Entrepreneurial Development, where teaching the unemployed how to start a business has long been a focus. At first, he adopted a traditional approach, giving students tools for market research, business planning and raising money. The results were disappointing. “We even gave our students $1,000 of seed money,” said Qureshi, “which can go a long way in Pakistan, but most would go bankrupt. They didn’t have the right mindset.”

Then, while pursuing his Ph.D. in Germany, Qureshi discovered effectuation. Using Sarasvathy’s methodology, he taught the principles to 60 Pakistani students. “It was an experiment,” said Qureshi. “We didn’t have the seed money to give them, but the students found resources within them and slack resources around them and were able to start new ventures.” Paradoxically, the absence of money turned out to be a resource; it encouraged students to be creative.

The pilot’s success was a turning point. “Our center,” said Qureshi, “started focusing on teaching the effectual mindset.”

First Principles: Finding Your Best Self

As an elite school, IBA was unattainable for most Pakistanis. Qureshi, however, opened the doors of his center to lower-middle-class students, for whom steady employment is often a significant challenge. “The poor started coming,” said Qureshi. “The education system in Pakistan made them lose hope. Everyone was discouraging them. They were declared a burden to society. But we embrace everyone.”

Qureshi’s first objective was to change the students’ mindset of failure and helplessness. He started by teaching them one of the first tenets of effectuation — the Bird in Hand principle — which is a way of developing a clear assessment of one’s own personal endowments and readily available resources. “The first 40 hours,” said Qureshi, “are spent on helping students find the best things in themselves. We tell them, ‘Don’t compare yourself to anybody, because everyone is unique. Based on your bird in hand, try to find out what you can do.’”

To drive the point home in a way that was meaningful to Pakistanis, Qureshi started using the poems of Iqbal, one of the most important figures in Urdu literature, known for developing a philosophy of “khudi” or “self.” According to Iqbal, khudi is synonymous with a divine spark, which is present in every human being. One must embark on a journey of transformation to tap its power. “Iqbal also talks about dignity and self-respect,” said Qureshi, “and we use his poems to inspire and energize our students.”

Khudi ko kar buland itna ke har taqder se pehle

Khuda bande se khud pooche bata teri raza kya hai.

Elevate the self so high that even God, every time he writes your destiny,

Asks you: Tell me, what is your wish?

— Muhammad Iqbal

The Bird in Hand principle, augmented with Urdu poetry steeped in Pakistani culture and religion, proved to be transformative. Said Qureshi, “After 40 hours of Bird in Hand, the students don’t complain. They stop saying, ‘I don’t have the resources,’ or ‘I didn’t get good education.’”

A Sense of Purpose: Looking Beyond Profit

Qureshi’s entrepreneurship courses teach students effectual reasoning and encourage them to put those lessons into action. “Every student has to start something to get the certificate,” said Qureshi. But, perhaps more importantly, students are also encouraged to spark positive social change. “It’s about looking beyond selfishness,” said Qureshi, “and finding a purpose, which can’t be just making money. It’s how you help someone to become a better human being.”

Qureshi refers to this focus on the dignity of an individual and sense of purpose as the “pre-effectuation principles.” He said, “That’s what we added in the Pakistani context. Those principles amplify effectual reasoning and help students become more action-oriented.”

A Sense of Wonder: Seeing the World Through the Effectual Lens

Perhaps the best proof of the power of effectuation is the degree to which it affects the mindsets of those who come to Qureshi’s courses feeling powerless to change their future. As Qureshi noted, the success rate of new ventures started by those who were taught causal reasoning was 10 percent. After switching to the effectual logic, the success rate increased to 80 percent.

Inspired by the impact of the effectuation-based teaching methodology, Qureshi is hopeful that he can break the cycle of unemployment and poverty among many in his country. Following the four-month-long course, he believes that participants “see themselves and the world through the effectual lens,” as he put it. “The causal lens can make you myopic. The effectual lens makes you look around in wonder, and everything inspires you to be creative.”

When Darden’s Sarasvathy set out on her research journey almost 20 years ago, she wanted to revolutionize entrepreneurship education. Since then, she’s inspired countless teachers and entrepreneurs in all corners of the world. Success stories from developing economies like Pakistan prove that the set of principles she’s developed is not only an effective pedagogical tool, but it also has the ability to ignite an entrepreneurial spark in those who are most disadvantaged.

This article was developed with the support of Darden’s Batten Institute for Entrepreneurship and Innovation, at which Gosia Glinska is associate director of research impact.

About the Faculty

Saras D. Sarasvathy

Named one of the Top 18 Entrepreneurship Professors by Fortune Small Business magazine, Sarasvathy is a leading scholar on the cognitive basis for high-performance entrepreneurship. Her work pioneered the logic of effectuation — a set of teachable and learnable principles used by expert entrepreneurs to build enduring ventures.

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