You learn the basics of why a compass works in elementary school. I particularly remember folding a one-inch square piece of paper in the shape of a tent, and piercing two needles, one on each down-sloping half, first up from the bottom and then back down, so they would stay secured, parallel to the top crease and halfway down the side of the roof-shaped tent. The needles would have been magnetized previously by rubbing their tips on a magnet, and then you would balance the whole contraption, under the midpoint of the crease, on a pointy nail or another needle, so it would be free to rotate. If done correctly with good balance and little friction, the little paper tent would jiggle back and forth and rotate, eventually stopping with the needles pointing north. You would have successfully built a rudimentary compass.

As you know, compasses exist because Earth has a magnetic north. The location of this magnetic north has been moving for the past hundred years. It is not at the true north of the globe, what we know as the North Pole. These two facts – that magnetic north and true north don’t coincide, and that magnetic north has been moving – I believe can teach entrepreneurs a lesson or two.

I pulled my vintage editions of the Boy Scouts of America Field Book. Everything you ever needed to learn about the correct use of a compass and maps is included in these marvelous tomes. In order to correctly get from point A to point B, you will learn, you need to correct for the error of variation between compass or magnetic north, and true north. This is known as declination. According to my 1967 edition, depending on where you are in the US, the needle in your compass will lie east or west of true north as much as 20 degrees westerly in Maine, to 30 degrees easterly in Alaska. There is a whole lot of variation, and these degree declination lines are drawn on top of a North American continent map. The rule to correct your azimuth (the way you want to go towards) is to add westerly declination and subtract easterly declination. You obviously first need to know where you are, in the map, and see which declination line runs through your location. If you live in Vermont, where a compass points 15 degrees off true North towards West, you would add these 15 degrees to the zero degrees of true North to get 15 compass degrees. Walking in that direction (15 compass degrees), you are walking true North, get it?

What are the lessons I think entrepreneurs can learn from this Field Book? Analogous rules that apply to correct execution of your enterprise’s path for successful delivery of value to your target market, apply when you are travelling towards your next destination. Think of declination as your own perceived biases, or unvalidated hypotheses.

When hiking, not knowing to adjust for declination will set you on the wrong path. First, an error of 14 degrees, for example, means that for every mile you travel, you will stray a quarter of a mile. Second, knowing your declination, but not making the proper correction, doubles your error. If instead of correctly subtracting 14 degrees of declination to point your path you make the mistake of adding them, you go half a mile astray for every mile travelled. The 1967 Field Book gives you 4 simple tips to avoid going astray: “(1) Know that an error exists; (2) know which way the error lies, east or west, and to what degree; (3) make your compass show this error by bringing the needle to the proper degree of error east or west; and (4) without adding or subtracting any numbers, read true azimuth from the azimuth ring.

Making the analogy, you can understand (1) and (2) easily. First, know that your hypotheses are just that, until validated. Second, be aware of the spread within your assumptions and, as you look to correct for new insight observed, know what and how much to correct. Don’t try to correct for many things at once if you want to get a clear picture of cause and effect.

As for tips (3) and (4), as the entrepreneur, your judgement, trained by skills acquired through experience and careful analysis, is your main tool. This is something you must train for to get good at it, as you must train to use any tool, such as a compass. Tip (3) tells you to be objective in your reading of the error, and accurate in your response to it. Lastly tip (4) essentially tells you to read off the new path forward, as this is your new beacon. Following these tips, in your journey as an entrepreneur, is a great way to understand the underlying mechanics of executing, evaluating, and pivoting if necessary. The careful linking of this cycle, starting one after completing the previous, is the way to get accurately from point A to point B.

Our View from the Top – June 11, 2019