Airbus 330 flying overhead.
[image by Abdallahh,
some rights reserved]

On June 1st, an Air France Airbus A330 on a routine flight from Rio de Janeiro to Paris crashed into the Atlantic Ocean. 228 people died in the worst air accident in French aviation history. The disaster was all the more shocking because one of the world's most reputable airlines had lost one of the most reliable airliners ever built. Until the crash of Air France 447, some 600 A330s had flown for sixteen years without a single fatality.  The aircraft crashed in an area of the Atlantic up to 3 kilometres deep leaving little evidence apart from a small amount of floating wreckage and some bodies.  The crucial flight recorders (often called the black boxes) now lie on the ocean floor and have not been recovered.

One month later, France's air accident authority, the Bureau d'Enquêtes et d'Analyses pour la Sécurité de l'Aviation Civile, released an interim report based on what little was known; the aircraft had hit the water intact at high speed in a steep dive and showed no sign of fire or explosion. This interim report stated:

"At this stage of the investigation, the only established facts are:

• the presence near the airplane’s planned route over the Atlantic of significant convective cells typical of the equatorial regions;
• based on the analysis of the automatic messages broadcast by the plane, there are inconsistencies between the various speeds measured."

Over a five minute period, the aircraft's computers began to report a series of equipment failures that began in the vital airspeed sensors which are necessary to keep the aircraft in stable flight.

Over a five minute period, the aircraft's computers began to report a series of equipment failures that began in the vital airspeed sensors which are necessary to keep the aircraft in stable flight.

Our knowledge of the last few minutes of the AF447 comes from automated messages radioed back to Air France's maintenance facilities using a system known as the Aircraft Communication Addressing and Reporting System (ACARS). Over a five minute period, the aircraft's computers began to report a series of equipment failures that began in the vital airspeed sensors which are necessary to keep the aircraft in stable flight. At the time, AF447 was flying through a series of intense tropical thunderstorms; it would have flown through lightning and extreme turbulence and may have also encountered freezing conditions. In themselves, these should not have caused the loss of a modern airliner. A number of other aircraft safely threaded through the same storms that night without serious incident.

In the absence of a clear cause, some reporters and bloggers have begun to blame the disaster on the use by Airbus of computerised, "fly-by-wire" technology. It has been suggested that the computers on the aircraft, if they did not actually cause the accident, may have made it impossible for the crew to avoid disaster.

How aircraft are manoeuvred
So, before we have a look at why aircraft use computers and what they do, perhaps a small diversion is in order. Airplanes manoeuvre using a combination of "control surfaces" - sometimes (incorrectly) called flaps - located on the wings and tail. You've probably seen these devices working during take-off and landing. The outer parts of the wings contain the ailerons controlling the amount of roll (or banking) used to turn the aircraft on to another heading. The horizontal surfaces in the tail are called elevators and are used to change the pitch - the nose-up or nose down attitude of the aircraft when it changes height. The vertical surface on the tail is known as the rudder and is also used to turn the aircraft, this time without the sometimes disconcerting tilt of banking. The aircraft wings also contain the flaps which are used during take-off and landing to provide additional lift or drag.

The control surfaces are driven from the cockpit. In very small aircraft this can be achieved using manual linkages not too different from the brake cables found on bicycles. When the pilot moves the joystick, it directly pulls or slackens a cable, the other end of which is attached to a control surface. However, as planes become larger and faster, the amount of force needed to move the ever-larger control surfaces becomes greater and greater, until it is not physically possible to move them at all.

During the 1950s and 1960s aircraft designers increasingly switched to hydraulic linkages similar to those found in cars. In these more modern aircraft, movements of the joystick were transferred to the control surfaces through pressurised hydraulic fluid. Pilots did not need to be especially strong, the hydraulics did all the work. The weakness of hydraulic systems is that the plane needs to be threaded with pipes which must be regularly inspected for defects; a leak could result in disaster. To reduce the risk of any one system failing, the hydraulic system was duplicated - each control surface could be moved by any one of three (sometimes four) independent hydraulic circuits; the hydraulics were said to be multiply redundant. There are only a very few cases where all of an aircraft's hydraulics have failed in-flight, and the technology continues to be used on many modern aircraft.

The weakness of hydraulics is that they are heavy and maintenance intensive. If reliance on them could be reduced, or dispensed with entirely, aircraft could carry a more useful payload and spend longer in the air - both of which make them more profitable. Fly-by-wire is the solution to this; the long, complex hydraulic links between the joystick and the control surfaces are replaced by sensors and electrical cabling. When the joystick is moved, sensors read the changes and send electrical signals to hydraulic pumps located near the control surfaces. These pumps then move the surfaces as if they were directly linked to the joystick. Fly-by-wire technology was developed in the UK and US during the 1960s for military aircraft and received its first commercial use inside the Anglo-French Concorde in 1969, but it was not especially well known until Airbus chose the technology for the A320, unveiled in 1987.

The A320 revolution
Airbus had been founded for political motives with the intention of combining the expertise of various European airspace manufacturers to build a rival to the American airline industry, dominated by Boeing and MacDonell Douglas (now part of Boeing). Although Europe, and especially Britain, had led the world in developing airliner technology throughout the 1950s and 1960s, it had been the Americans who had gone on to dominate the World market for airliners. Airbus' first airliner, the A300, had become a successful twin-engined plane but had used relatively conventional technologies; the A320 would be a huge leap into the future. It was designed to compete both with the world's best-selling airliner, the Boeing 737, and also to replace the older, thirstier, noisier 3-engined Boeing 727.

The A320 was a revolutionary aircraft, not only including fly-by-wire technology, but also being one of the first airliners to be built using substantial amounts of composite materials such as carbon fibre. Its cockpit was equally novel; there would only be two flight crew - the engineer was no longer needed, their role being taken by a highly automated "glass cockpit" that replaced switches and dials with computer screens. Aggressively marketed, the economical A320 family of jets has sold nearly 4000 aircraft, making it the second most successful airliner in the world, and is likely to be built for many years yet. The success of the A320 allowed Airbus to plan even more ambitious aircraft including the twin-engined A330, the four-engined A340 and the enormous A380 double-decked super Jumbo which entered service in late 2007. This family of aircraft has allowed Airbus to rival, and sometimes supplant, Boeing as the world's largest manufacturer of airliners - much to that company's disgust.

Interior of Airbus A340 cockpit.
[image by Storm Crypt,
some rights reserved]

As well as emphasising the comfort, reliability and economy of their aircraft, Airbus have been keen to stress their exceptional safety, made possible by computer technology. Airbus took a decision that computer technology could be used to protect the aircraft from any action by the pilots that could damage or destroy it. The safe operation of an aircraft is constrained by a "flight envelope" which describes factors such as the maximum and minimum speeds, the tightest turn it can make and so on. If an aircraft exceeds its flight envelope it can result in injury to the passengers, damage to the airframe or a complete structural failure. The flight envelope is not a simple, static object; rather it changes on a number of factors such as the altitude. In theory, a computer can ensure that the aircraft remains safely inside the envelope at all times - the aircraft is said to have "flight envelope protection". The consequence of flight envelope protection is profound; the pilot no longer has absolute control of the aircraft; the computer will veto any action that would take the aircraft outside of the flight envelope.

But, before protection can be guaranteed, it is crucial that the computers are completely reliable and accurate.

Reliable computers
The Airbus contains five main computers divided into two main roles. Three of the computers are designated the primary flight control computers and are in day-to-day control of the plane; reading the pilot's instructions, monitoring the aircraft's position, speed and attitude; making the necessary calculations to keep the aircraft safe, and sending commands to the engines and control surfaces. These are backed up by a pair of secondary flight control computers which are constantly monitoring the aircraft, but only act if one or all of the primary flight control computers become unavailable. These computers are distributed around the fuselage so that an impact or hull breach should not disable more than one machine. Likewise, multiple cables link the computers - cutting one, or some of them, will not disable the entire system

In normal use, the computers each read the data from the pilot and sensors built into the aircraft and individually calculate the appropriate response. At preset intervals the responses from each computer are compared. If the result from one computer differs from the other two, it is automatically disqualified from further operation and a backup computer is switched in to make further decisions. Likewise, if one of the computers fails to respond in time for one of these votes, it is disconnected and a replacement called in. In fact, the aircraft can be safely flown and landed using only one computer, so there is massive redundancy built into the computer systems.

The designers of the Airbus computers went to enormous trouble trying to imagine all of the possible problems that could occur. Their first problem was the certainty that computer hardware and software is almost never completely free of bugs that could cause a program to crash and the to computer become unavailable. Therefore the primary and secondary flight computers not only come from different companies, but they must contain different components - so a hardware failure should not spread between the two computer systems. This diversity is replicated inside the software; with the primary and secondary computers each running different programs coded in different languages. These programs were developed by teams with exceptional records of producing high-quality software, using special software tools that should capture bugs long before the programs are ever used in real life.

Airbus's designers then went on to consider what would happen if the aircraft hit trouble - such as some of the vital sensors became unavailable. Just like Isaac Asimov's robots, Airbus aircraft are governed by three Laws.

The designers of the Airbus computers went to enormous trouble trying to imagine all of the possible problems that could occur.

The first is called Normal Law and applies when the aircraft and its systems are healthy. The flight control computers interpret the commands from the joystick and guarantee that the aircraft remains safely within the flight envelope; they also ensure that passengers remain comfortable by reducing the rate of changes in direction or altitude.

If some of the sensors fail, the hydraulics become unreliable or more than two computers are unavailable, the computers switch to Alternate Law. Here some of the protections are removed or relaxed, the aircraft can make more extreme manoeuvres but cannot exceed its flight envelope. This might sound counter-intuitive, you may be thinking this is the sort of circumstance where the pilots need more help from the computers; but Airbus' thinking was that, if the sensors or computers could no longer be trusted to read or interpret data correctly, then it was time to pass more control to the expertise of the pilots.

Further failures would force the aircraft into Direct Law. At this point the aircraft can no longer offer flight envelope protection and the Airbus must be flown like an older generation aircraft.

In the event of a catastrophic failure resulting in the total loss of power, the Airbus has a further mechanical backup mode which could be used to make an emergency landing, but would most likely be used for a few minutes whilst the flight crew tried to recover power. This is extremely unlikely to happen as the aircraft would have to lose both engines, the auxiliary power unit in the tail, have flat batteries and not be able to deploy the ram air turbine (a wind generator which can be swung out from the underside of the aircraft).

Wheels of Boeing777.
[image by Diorama Sky,
some rights reserved]

Flight envelope protection became a huge difference in philosophy between Airbus and its rival, Boeing. The American company was reluctant to remove ultimate control from the human and could cite a number of instances where an aircraft was only saved by exceeding the flight envelope. In 1985 a China Airlines Boeing 747 flying between Taiwan and the United States suffered a relatively minor engine failure over the Pacific. The crew did not follow the proper procedures for restarting the engine and the aircraft eventually tipped into a vertical dive. Disaster was only avoided when the pilot forced the nose up using the elevators. The aircraft vastly exceeded its envelope and suffered severe damage to its control surfaces and undercarriage but it was able to land safely with only two injuries. Airbus countered that such incidents were exceptionally rare and, besides, flight envelope protection would have ensured the aircraft never entered the dive in the first place.

Did the computers have anything to do with the loss of AF447?
The ACARS data sent back to Air France during the last few minutes show that the airspeed sensors mounted on the aircraft were registering as faulty. Following incidents on other Air France A330 and A340 airliners, the company had entered into discussions with Airbus, who had determined that certain sensor designs were prone to becoming clogged with ice or water and recommended that they be replaced as part of scheduled maintenance. Although the aircraft had not received the improved sensors, it had been declared safe to fly, but it is entirely possible that the airspeed sensors had developed a fault. As soon as the computers realised the airspeed readings from the sensors could not be trusted, they switched to Alternate Law, disengaged the autopilot and switched off the automated thrust systems. The computers would continue to keep the aircraft within the flight envelope, but the crew would be in charge of steering and maintaining the correct airspeed. The very last minute of the ACARS data suggests that the problems had continued to spread through the computerised systems responsible for maintaining the aircraft's speed and orientation. The very last message warned that the Airbus had entered a steep descent. Crucially, the data does not suggest that the computers had ever entered Direct Mode or indeed failed all together. The evidence is that the computers were battling to keep the aircraft in the air until disaster was unavoidable - they were working.

Previously, in 2008, an A330 belonging to the Australian operator Qantas experienced an in-flight emergency when one of the computers used to collate sensor data developed a serious fault which resulted in unexpected violent pitching and false stall and overspeed warnings. Fortunately, the computer was deactivated, but not before 115 people on board were injured. Airbus revised their instructions to pilots on how to deal with such an incident which proved useful less than three months later when a second Qantas A330 flying in the same area encountered a similar fault with the same computer in a different aircraft; fortunately, this time, no one was injured. Airbus and the computer's manufacturer are still trying to ascertain the exact cause of the problems but pilots have blamed radio interference from a powerful naval transmitter in Western Australia. Could a similar problem have befallen AF447? It is possible, but Airbus point out that the doomed aircraft used different computer hardware and software from the Qantas jets and it is extremely unlikely a similar bug could exist in both sets of equipment.

It is not impossible, but increasingly unlikely, that AF447's flight recorders will be recovered from the floor of the Atlantic Ocean. If they are found, air accident investigators will be able to examine the operation of the airliner's computers and sensors on a second-by-second basis and listen to the words of the flight crew. If they are not located, then we might never know precisely what happened on the flight. Instead, Airbus and the French authorities will have to make a reasoned judgement on what might have occurred and make recommendations to avoid their recurrence. Even before any report, Air France has replaced all of the airspeed sensors on its A330 and A340 aircraft.

The most likely explanation for the loss of AF447 lies with the failure of those airspeed sensors. If an airliner loses too much airspeed it loses the lift necessary to keep it in the air; it is said to have entered an aerodynamic stall. Stalling can also be brought about by sudden rises in the temperature of the air and by banking the wings. Pilots are trained both to recognise the potential for stalls and to recover from, them. But perhaps the crew of AF447 were overwhelmed by a series of events that began with what should have been a routine sensor failure. As they responded to the imposition of Alternate Law and their new responsibilities for maintaining the aircraft's speed, they would also have been quieting the various alerts appearing on their screens and fighting the storm. This would not have been the first time humans were unable to keep up with a computer in an emergency; the operators of the Three Mile Island nuclear power station in the United States were overwhelmed by so many alarms that they failed to identify a relatively minor problem that could have been easily fixed before it became a near disaster. Even now, Airbus will be examining how air crew are alerted to problems and determining if these might make circumstances worse rather than better.

...flying is still statistically safer than the drive to the airport.

Although much ink and vitriol has been spilled by supporters and detractors of Airbus' highly automated airliners; the accident records for aircraft with flight envelope protection are quite clear. Whilst highly automated aircraft  show improved performance and reliability and economics, they are neither more nor less likely to be involved in an accident. So perhaps it is the economic benefits that drive this technology. Even Boeing, so long a sceptic over fly-by-wire and envelope protection, is adopting it for the Boeing 777 and 787 Dreamliner airliners.

The statistics are also clear; modern aircraft are much safer than those of previous generations and flying is still statistically safer than the drive to the airport.

Find out more

Follow the unravelling of other disaster stories with forensic engineering:
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Silver Bridge
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Images

The images used in this blog are copyright. All are from flickr.com under the following creative commons licenses:

Airbus A330 flying overhead by Abdallahh - Attribution
Interior of Airbus A340 cockpit by Storm Crypt - Attribution/Non-Commercial/No Derivative Works
Wheels of Boeing777 by Diorama Sky - Attribution/Non-Commercial/No Derivative Works

About the author

Mike Richards joined the Open University in 1996 to help trial teaching over the Internet. Since then he has taught courses ranging from an introduction to robots to the engineering works of Leonardo da Vinci; but has spent most of his time writing about security - everything from the Enigma machines to e-shopping. He is currently working on a new course exploring the world of ubiquitous computers; imagine a world where computers so small and cheap they can be put in everyday objects - smartphones today, smartclothes tomorrow.

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In 2005, whilst addressing an audience of Oxford Entrepreneurs, Sir Alan Sugar remarked that “there’s nothing stopping anybody in this country from doing exactly what I have done; it’s no secret that I started with absolutely nothing” and indeed looking at what we know of his life now, admittedly a bit more after the Money programme, we know that his life is the stuff of dreams. Many entrepreneurs want to be him and many others want to be like him, and yet many others despise him.

All of this makes up a good story, but to me they necessarily raise some important questions: how good of a role model is he when it comes to inspiring young, inexperienced entrepreneurs? Has he got traits that can be emulated or learned? Or indeed what lessons do his life, his achievements and failures provide for wannabe ‘Sugars’? Here, I take a closer look at the personal and business attributes that have made Sir Alan Sugar and ask whether these attributes befit the future generation of British entrepreneurs.

Sugar at his best

He’s already the most talked about entrepreneur in Britain and his life story, as we have just seen in the Money Programme is well worn: Hackney-born and destined for a life of destitution he decided he could change his fate. Whilst still at school he boiled beetroots for the local greengrocer, made ginger beer to sell to his neighbours and bought photographic film, which he cut into camera-sized rolls and sold to friends. He had an instinct for a business opportunity and by the time he was 13, he was making more money than his Dad, a garment factory worker.

Later, his opportunistic flair lead him towards home computing and electricals, and made him very rich. He was a controversy-courting chairman of Tottenham Hotspur which he labels as a ‘waste of time’. His company, Amstrad, was sold to BSkyB for £125million. With his interests focused on construction, property (in Florida, Spain and Britain) and aviation, his personal wealth is now valued at around £790 million. Sir Alan is also known for his least talked about profile as a social entrepreneur. Through the Alan Sugar Foundation he gives generously to charity.

In 1993 he was the driving force behind the Excalibur Scholarship Scheme, recruiting 21 other UK companies to raise £1m to allow graduates from the old Eastern Bloc to study in Europe. In 1997, Gordon Brown asked him to join the ‘You can do it too’ scheme to promote the values of enterprise amongst alienated young people. He now devotes substantial time to the task.

Sir Alan, it seems, was born with flair to spot and act on opportunities. By being good at selling, spotting good opportunities and making key business decisions when it matters he is a self-made, big-time entrepreneur. Behind this façade, however, he is more known for his relentless energy, aggressive salesmanship, unabated self-belief, drive for new challenges and routinely sets himself new targets. Clearly these are qualities and characteristics of behaviour that are associated with entrepreneurial success and that appear frequently in studies of entrepreneurship. For example, persistence and perseverance, need for achievement, self-confidence, and self-belief is amongst the most frequently noted.

By being good at selling, spotting good opportunities and making key business decisions when it matters he is a self-made, big-time entrepreneur

A commonly quoted research study of new venture start-ups, that has stood the test of time over the past quarter-century, was conducted through the Massachusetts Institute of Technology by Jeffrey Timmons and colleagues. They identified fourteen important entrepreneurial characteristics of successful enterprise owners, which includes most of those identified in Sir Alan.

Nonetheless, Timmons admits that few entrepreneurs would possess all traits but felt that strengths in one might compensate for weaknesses in others. Many of these characteristics are self-explanatory (such as high personal drive and energy, self-confidence and setting clear goals) and some appear to be linked.

Whether these basic qualities are present from birth or develop over time still remains, however, an open question. Also, whether these qualities are unique to entrepreneurs, like Sir Alan, is also not clear but seems unlikely.

One point that is clear in looking at the life profile of Sir Alan is that entrepreneurship and entrepreneurial behaviour is quite diverse and is influenced so strongly by context that it is difficult to see how one personality could embrace all its facets, especially through all phases of the life cycle of one or more enterprises.

Either way, there seems to a strong indication that the decision to start an enterprise as a career choice is influenced by personal attitudes, attributes and behavioural preferences as well as background factors such as family, and social histories and traditions.

Just playing the game Sugar!

The Apprentice has certainly made Sir Alan a TV celebrity overnight, but is he acting out or is that the real him? What does any of this mean for him as an entrepreneur or businessman?

Surely, as is often the case with many celebrities, one would believe that Sir Alan Sugar's portrayal as Mr Grumpy on The Apprentice is an act. However, he denies it. In one of his interviews to the press about the show, he was quoted saying that “What you see on screen is me, there's no question of that, but it is the side of me the BBC chooses to show. There is more light-hearted banter, which hits the cutting-room floor because it doesn't put bums on seats. It's a one-way portrayal, not the whole of me.”

Altogether, Sir Alan takes his role on The Apprentice very seriously as he attempts to portray what to him is the real thrust of business life to date. He is a champion of entrepreneurship and the show attempts to teach those who are young and inexperienced about the basic errors in business, the key survival skills and why at times it is important that you get the simple thing done before you move to something more sophisticated. According to Sir Alan, the younger generation of business person has this fast-track-to-success aspiration, to leapfrog to getting an airline like Richard Branson, forgetting all the drudge work that can instantly cripple them.

Whatever the spotlight he is in, the media exposure has done wonders to the ‘Sir Alan’ brand. Not only has his business and products brands benefitted from free promotion but Sir Alan's increase in popularity has lead to him appearing in several television shows, including a special celebrity edition of Who Wants to be a Millionaire?

In 2005/6 he became the face of Premium Bonds on British television advertisements. He also appeared on Room 101 in 2005 and also on Friday Night with Jonathan Ross in April 2006 and The Apprentice won him a BAFTA in 2007.

You are fired! Sugar

Sugar's path to success has been all sweet, and certainly his rough and gruff character and attitude seems to provoke all kinds of critics and controversies, which he seems to thrive upon.

One of his most lamented controversies has been around his attitude to women and child care, and his grudge over flexitime work policies. Sir Alan Sugar questioning Katie Hopkins, one of the participants on The Apprentice, about her childcare arrangements annoyed many people. In his defence, however, in several interviews to journalists following this whole saga he explained that this was an issue taken out of context and extrapolated into headlines.

In fact, he avers that he shares great sympathy for women but firmly believes that some of the employment laws in this country are counter-productive. Accordingly, he argues that such laws prevent employers ask the real questions to women employees, like: where they live, whether they have children, have they made provision to have their children looked after. It gets blown out of proportion by the media. He similarly retains a contemptuous attitude towards business qualifications, such as MBAs and believes that the real learning is in doing the business.

Such attitudes have been perceived to be his negative traits by his peer entrepreneurs and businessmen. In fact a survey conducted by the Alliance and Leicester amongst entrepreneurs concluded that many see him as a bad business role model and many admitted that they have nothing new to learn from him. Such criticisms and controversies, however, do not seem to bother him much. In fact, as far as Sir Alan is concerned any publicity is good publicity.

When Sugar means business

Is Sir Alan a better entrepreneur or manager? He always claims that there is more to successful enterprise. To me, however, this statement is a bit incomplete. What is this ‘more’ that he refers to? Allegedly, I believe he is suggesting that being just a good entrepreneur or salesman in business is not enough. A successful business demands more skills and resources, albeit, the skills of a good manager. Let us explore this a bit.

Henry Mintzberg, a management guru has spent his academic career analysing and writing about the roles of managers in action. He believes that in doing his job, a manager performs the following roles: interpersonal roles – where the manager takes up roles as figurehead, leader, liaison and disseminator; informational roles – where the manager acts as a nerve centre, a disseminator and a spokesman from the organisation to the outside world; decisional roles – where the manager becomes a strategic decision maker and takes up roles such as being the entrepreneur, the disturbance handler, the resource allocator, and the negotiator.

Note that this expert suggests that being an entrepreneur is just one of the functional aspects of what a manager does amidst the great quantity of work that he does to sustain a successful organisation. Sir Alan’s ‘more’ suddenly seems to be making a bit more sense.

Sadly, in this discussion, we do not know enough about what Sir Alan really does to manage his businesses to analyse him according to Mintzberg’s theory. However, he does leave a trail of clues, thoughts and evidences which suggest that he believes in good management practices or at least on a set of managerial skills that work well within his organisational contexts. This facet of his skills very often gets hidden amidst his scruffy or controversial façade.

For instance, his blunt statements on the sort of people he doesn't like which open The Apprentice each week ("I don't like schmoozers, I don't like cheats" - and some choicer dislikes which push the programme back past the watershed) are not management textbooks' language, says very little about his verbal communication skills but make his expectations very clear to those under his authority.

He believes in a team culture. At various instances in The Apprentice he seems to disdain candidates who are not team players. He keeps telling his apprentices that without the help and support of other people, not only among their own team, but also in partnership with other businesses and business advisers, an entrepreneur is a loner and will not survive.

Yet he says the leap from lone-wolf businessman to becoming leader of a team – otherwise known as a manager – is one of the hardest but most important lessons an entrepreneur will ever learn. Sir Alan can also command loyalty. Witness his two long standing lieutenants and co-stars, Nick Hewer and Margaret Mountford. Some even say that he does listen and will respond positively to criticism, respecting those who offer it.

Sugar’s empire has so far been immune to the effects of the credit crunch and market downturn. He has an acute understanding of the liabilities of his business and managing the costs that can cripple his empire. In a recent interview, he was quoted saying: my wealth of experience one has gone through the valleys and mountains of these things before. The one we're in at the moment will bottom out and we'll rise again.

I've tailored my business to be immune from doom and gloom by not overstepping the mark…” These are just a few clues as to what Sir Alan’s ‘more’ means and we can keep exploring this forever but that’s not the point. The point is that there is more to successful enterprise!

Sugar's X Factor

So what are the stuffs that Sugar is made of? Deciphering his X factor is no easy task for anyone but we can certainly learn a lot in the process of doing so. His success in business seems to be characterised by a good masala, an intricate mixture of spices that makes up a good curry, of skills and attributes that have got him where he is. In essence he seems to have it all the hard-knuckled entrepreneurial personality, media savvyness, unwavered by critics and controversies and clear managerial acumen.

He is without doubt a born entrepreneur who trusts his finely tuned instincts and he has no time for nonsense business. In all, he takes pride in his self-belief that it takes one skill to spot an opportunity yet another to turn it into your advantage, a first lesson for any aspiring entrepreneur anywhere.

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William Henry Gates, known to his friends and the rest of us as Bill, is probably the world’s most prominent entrepreneur. From a teenager’s interest in computer programming, he founded and built Microsoft to its position of global dominance of the vast personal computer market. He is certainly one of the world’s richest individuals. Entrepreneurs, entrepreneurship and enterprise are today very fashionable topics. The self-made, intelligent and visionary individual, who sets up a business that eventually arrives on everyone’s ‘must have’ list and sees off all rivals, is now the focus of press, film and TV. Entrepreneurs are now role models. Yet, in 1955, when Bill was born in Seattle, very few people ever mentioned the word ‘entrepreneur’. Even as recently as 1975, when Bill Gates and Paul Allen founded Microsoft, calling a business person an entrepreneur was often a term of abuse in Britain, if not in the US.

Bill Gates.
[image © copyright BBC]

However, merely being extremely rich is not the same thing as being an entrepreneur. There are plenty of people with inherited wealth who did not have to lift a finger or take a risk. The term was first used to refer to merchants and traders who were prepared to bear the risk of buying goods and services at certain (fixed) prices, to be sold elsewhere or at another time for uncertain future prices. They were people who had the skills and energy to spot opportunities in trade and to act on their judgement. In the 1920s, Joseph Schumpeter, an Austrian economist, took the view that entrepreneurs are not opportunists but are energetic and competitive people who seek to gain an edge over their rivals by creating and adopting innovations. By this, he meant not only new goods and services but also novel processes, marketing, distribution, financing and ways of doing business. Thus, ‘modern’ entrepreneurs, in contrast to ‘classic’ entrepreneurs, create their own luck and opportunities. Furthermore, they are controlled rather than unbridled risk-takers. Schumpeter, however, was also interested in the motivation of the entrepreneur, which he ascribed to three main drives – a desire for social status, the joy of creativity or a desire to conquer, win and beat rivals (what is now often called need for achievement). So, what sort of entrepreneur is Bill Gates – classic or modern?

"merely being extremely rich is not the same thing as being an entrepreneur"

Bill Gates was born in Seattle to a father who was a leading lawyer there and a mother who was part of a prominent banking family. So, young Bill had no problem with social status and the family was not short of money. However, there is evidence that Bill was driven by a joy of creativity. As a boy, he was fascinated by computers and programming. He even managed to convince his teachers to let him drop maths so that he could pursue programming. At the age of 14, Bill and his school friend, (and future Microsoft partner) Paul Allen, converted an Intel processor into a traffic counter and earned $20,000 each for themselves. Six years later, in 1975, Paul talked Bill into dropping out of Harvard and travelling halfway across the country to New Mexico, in order to develop an interpreter of the BASIC programming language for the new Altai microcomputer. This opportunity gave birth to Microsoft but was clearly driven not by a desire to beat competitors but more by a love of doing something new, with new technologies, in a new industry.

Within ten years, however, Microsoft was creating its own opportunities and was on the path to becoming the $50 billion, 80,000 employee, multinational, dominant force that it is today in computing. The big opportunity came in 1981, when IBM turned to Microsoft to produce the operating systems for its new personal computers. To meet the IBM deadline, Microsoft bought the rights to an existing system for $50,000 and adapted it into the PC-DOS. Each IBM PC sold included the Microsoft system yet Microsoft retained the rights to sell to other customers. As clones of the IBM PC began to flood the market, they too were mostly using the Microsoft disk operating system (MS-DOS). As the money poured in, Microsoft stepped up its R&D so that it soon began to lead, rather than follow, market developments. So, Bill moved from being something in between an enthusiastic hobbyist, and a classical opportunity spotting entrepreneur, into a thoroughly modern entrepreneur who savours the creating of new opportunities. Bill now clearly enjoys being a winner.

Weblinks

• Join the discussion
• What makes an entrepreneur?
• Are you an entrepreneur?
• Just Do It
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• Watch the trailer
• Video extras: Bill and Paul's excellent adventure
• Is Microsoft finally breaking the mould?
• Bill Gates: The skills you need to succeed
• Profile: Bill Gates

Courses

• Professional certificate in management
• Investigating entrepreneurial opportunities

About the author

Colin Gray is Professor of Enterprise Development at the OU Business School, where he is responsible for research and teaching in small business and entrepreneurship.

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