Effectuation Stories

          Case studies, lessons and stories about Effectuation!

          Cirque du Soleil - The Show Must Go On


          In June of this year, Guy Lalibertí, Founder and CEO of Canada's Cirque du Soleil, was honored with Ernst & Young's World Entrepreneur Of The Year award. A fantastic achievement for anyone, particularly a man who started his entrepreneurial journey by walking 56 miles in 22 hours on stilts to gain attention for his then fledgling troupe of fire-breathing, accordion-playing entertainers.

          The Cirque: Present and Future

          Today, the Cirque du Soleil is no startup. Generating an estimated $600M in revenues and employing more than 3,500 staff and performers, it is a significant force in the entertainment industry. And instead of looking back at what made the Cirque du Soleil so successful (there are already numerous books and websites on the topic), we will consider the possible future of the Cirque. Can it stay entrepreneurial? Should it grow? What role might Guy Lalibertí© play?

          The Entrepreneurial Circus

          Since 1984, the Cirque du Soleil has created more than 20 new shows. Each is unique, with themes that range from water ('O'), to Eastern culture ('Dralion'); new efforts are expanding to integrate music from Elvis (coming in 2009) and the Beatles ('LOVE'). But the novelty of the idea, to create a circus without a ring or animals, remains a common factor. And having already visited 120 cities, it is now a repeatable, scalable, big business. New opportunities such as building a worldwide chain of Cirque schools, setting up a circus museum, or offering a line of products to the circus industry might provide the Cirque du Soleil team with the creation space necessary to harness the entrepreneurial spirit while continuing to grow into the future.

          The 'Raison d'Etre' for the Cirque

          If it were a public corporation, shareholders would demand to know how the Cirque planned to grow to $1, $2 or $10billion in revenue. But as the firm is 95% owned by founder Lalibertí©, defining the terms of success is up to him. Delivering top artistic quality to audiences, providing a desirable workplace for performers and employees, or offering performances to populations that might not otherwise be able to afford it could all provide alternative objectives to financial growth per se. Laliberte truly has a wider horizon of liberty in defining and measuring the future of the circus than the average CEO of a publicly traded company.

          Bringing in Adult Management

          As ventures successfully grow, it is not uncommon to see founders move or be pushed aside. Despite the fact that Bill Gates still runs Microsoft (the venture he founded), the skills it takes to create a new opportunity are quite different to those it takes to run a mature business. And while it may be distasteful for an entrepreneur to build detailed projections for a large enterprise, the prospect of releasing control of the venture she created may be equally unappealing. This tension was resolved three years ago at the Cirque du Soleil when Lalibertí© hired Daniel Lamarre, a Canadian executive with a broadcasting and public relations background, as Cirque's president and COO. This released Lalibertí© to work on developing new talent, creating themes for new shows, or doing something completely different. What will actually happen with Cirque du Soleil as it moves ahead is as unpredictable as the next move in one of their spectacular shows. And that is the point. As with many entrepreneurial endeavors, the past may not be the best predictor of the future. It is more likely Cirque will create something beyond a natural progression of what exists today ? something that reflects both its current means and the dreams of its large body of stakeholders.

          Managing Success

          One of the contingencies any entrepreneur must consider is what happens if a new venture is a financial blockbuster. How much time would you want to spend exploiting your successful idea versus exploring new ones? How would you want to measure success and incorporate non-financial aspirations into financial bottom-lines? And what would you want your involvement in the company to be over time? Thinking through these questions up front can help guide the decisions you make on your entrepreneurial journey ? even if you are on stilts for now.

          Written by Stuart Read, professor of marketing at IMD and Saras Sarasvathy, associate professor of business administration at the University of Virgina's Darden School.

          Publication: British Airways Business Life
          Stuart Read
          Saras D. Sarasvathy
          Relevant Principles:
          Pilot-in-the-Plane (Control vs. Predict)

          PDF 50X50-1BABL Cirque

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