EntreprenEntrepreneurial Managereurial Manager

7/28/2019 EntreprenEntrepreneurial Managereurial Manager

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The Entrepreneurial ManagerThe Entrepreneurial Manager


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There are convergentThere are convergent

pressures on being anpressures on being an

entrepreneur and beingentrepreneur and being

a manager as a venturea manager as a ventureaccelerates and growsaccelerates and grows

beyond founder-drivenbeyond founder-driven

survival. Key to futuresurvival. Key to future

success is the ability ofsuccess is the ability of

an entrepreneur to havean entrepreneur to haveor develop competenciesor develop competencies

as an entrepreneurialas an entrepreneurial

manager.manager.


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Old CW:Old CW: A good entrepreneurA good entrepreneur

cant be a good manager.cant be a good manager.

New CW:New CW: Ventures thatVentures thatflourish beyond startup canflourish beyond startup can

be headed bybe headed byentrepreneurs who areentrepreneurs who arealso effective managers.also effective managers.

UnconventionalUnconventional

Wisdom?Wisdom?


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Founders adapt forFounders adapt for

three key reasons:three key reasons:

Shift from creation toShift from creation toexploitationexploitation

Shift from passionateShift from passionate

commitment tocommitment to

dispassionate objectivitydispassionate objectivity

Shift from direct personalShift from direct personal

control to indirect,control to indirect,

impersonal control.impersonal control.


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Stages of GrowthStages of Growth

Startup StageStartup StageFrom 2 to 7 years; most perilous stage,From 2 to 7 years; most perilous stage,

characterized by efforts of leadcharacterized by efforts of lead

entrepreneur.entrepreneur.

High-Growth StageHigh-Growth Stage

In this, perhaps the most challengingIn this, perhaps the most challenging

stage, new ventures fail at 60% rate.stage, new ventures fail at 60% rate.

Lemons ripen.Lemons ripen.

Maturity StageMaturity Stage

Key issue is no longer survival. It isKey issue is no longer survival. It is

steady, profitable growth.steady, profitable growth.


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Stages of GrowthStages of Growth

StartupStartup High Growth Maturity StabilityHigh Growth Maturity Stability

00 3-43-4 10 1510 15 Time (Years)Time (Years)

Crucial Transitions:Crucial Transitions:

SalesSales 0-$3Million0-$3Million $2-10M$2-10M $7.5M+$7.5M+EmployeesEmployees 0 to 20-250 to 20-2525-7525-75 75-100+75-100+

ManagementManagementModeMode DoingDoing Managing Managing ManagersManaging Managing Managers

$100 M+$100 M+

$50 M$50 M

$25M$25M

$3 M$3 M

$1 M$1 M


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Entrepreneurial CultureEntrepreneurial CultureA common value systemA common value system

Difficult to measure orDifficult to measure orarticulatearticulate

Belief in and commitmentBelief in and commitmentto growthto growth

Team feels theyre in this thing togetherTeam feels theyre in this thing together

Goals and market determine prioritiesGoals and market determine priorities


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TheThe FitFitConceptConcept

It is important to have aIt is important to have a

management team whosemanagement team whose

skills are complementary.skills are complementary.


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Entrepreneurship Influence SkillsEntrepreneurship Influence Skills

Leadership/vision/influenceLeadership/vision/influenceHelping/coaching and conflictHelping/coaching and conflict

managementmanagement

Teamwork and people managementTeamwork and people management


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Exhibit 7.1Exhibit 7.1


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Traits Characterizing RapidlyTraits Characterizing Rapidly

Growing CompaniesGrowing Companies

High levels of change, ambiguity, and uncertaintyHigh levels of change, ambiguity, and uncertainty

Ongoing succession of nonlinear and nonparametricOngoing succession of nonlinear and nonparametric

eventsevents

Inexperience of management teamInexperience of management team

Counterintuitive, unconventional patterns ofCounterintuitive, unconventional patterns of

decision-makingdecision-making

Informality and fluidity of organization structure andInformality and fluidity of organization structure and

procedureprocedure


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Entrepreneurial Influence SkillsEntrepreneurial Influence Skills

Interpersonal/teamwork skillsInterpersonal/teamwork skills

Ability to create, through management, a climateAbility to create, through management, a climate

and spirit conducive to high performanceand spirit conducive to high performance Ability to understand the relationships amongAbility to understand the relationships among

tasks and between the leader and followerstasks and between the leader and followers

Ability to lead in those situations where it isAbility to lead in those situations where it is

appropriateappropriate


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Characteristics of SuccessfulCharacteristics of Successful

ManagersManagers

Managers skilled in leadership, vision, andManagers skilled in leadership, vision, and

influenceinfluence

Skillful in creating clarity out of confusion,Skillful in creating clarity out of confusion,ambiguity, and uncertaintyambiguity, and uncertainty

Able to define adroitly and gain agreement on whoAble to define adroitly and gain agreement on who

has what responsibility and authorityhas what responsibility and authority

Manage in a way that builds motivation andManage in a way that builds motivation and

commitment to cross-departmental and corporatecommitment to cross-departmental and corporate

goals, not just parochial interestsgoals, not just parochial interests


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ManagersManagers

Managers skilled at helping, coaching, andManagers skilled at helping, coaching, and

conflict managementconflict management

Creatively handle conflicts, generate consensusCreatively handle conflicts, generate consensusdecisions, and share power and informationdecisions, and share power and information

Recognize that high-quality decisions require aRecognize that high-quality decisions require a

rapid flow of information in all directionsrapid flow of information in all directions

Accept that knowledge, competence, logic, andAccept that knowledge, competence, logic, and

evidence need to prevail over official status orevidence need to prevail over official status or

formal rank in organizationformal rank in organization


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ManagersManagers

Managers skilled at teamwork and peopleManagers skilled at teamwork and people

managementmanagement Encourage innovation and calculated risk rather than byEncourage innovation and calculated risk rather than by

punishing or criticizing whatever is less than perfectpunishing or criticizing whatever is less than perfect

Expect and encourage others to find and correct their ownExpect and encourage others to find and correct their own

errors and to solve their own problemserrors and to solve their own problems

Make heroes out of other team members and contributorsMake heroes out of other team members and contributors

Generate trust among colleges and subordinatesGenerate trust among colleges and subordinates

Perceived as honest and direct, open and spontaneousPerceived as honest and direct, open and spontaneous


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Other ManagementOther Management

CompetenciesCompetencies

MarketingMarketing Market research and evaluationMarket research and evaluation

Marketing planningMarketing planning

Product pricingProduct pricing

Sales managementSales management

Direct sellingDirect selling

Service managementService management Distribution managementDistribution management

Product managementProduct management

New product planningNew product planning


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Operations/ProductionOperations/Production Manufacturing managementManufacturing management

Inventory controlInventory control

Cost analysis and controlCost analysis and control

Quality controlQuality control

Production scheduling and flowProduction scheduling and flow

PurchasingPurchasing Job evaluationJob evaluation


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FinanceFinance Raising capitalRaising capital

Managing cash flowManaging cash flow

Credit and collection managementCredit and collection management

Short-term financing alternativesShort-term financing alternatives

Public and private offeringsPublic and private offerings

Bookkeeping, accounting, and controlBookkeeping, accounting, and control Other specific skillsOther specific skills


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Entrepreneurial ManagementEntrepreneurial Management Problem solvingProblem solving

CommunicationsCommunications

PlanningPlanning

Decision-makingDecision-making

Project managementProject management

NegotiatingNegotiating Managing outside professionalsManaging outside professionals

Personnel administrationPersonnel administration


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Law and TaxesLaw and Taxes Corporate and securities lawCorporate and securities law

Contract lawContract law

Law relating to patent and proprietary rightsLaw relating to patent and proprietary rights

Tax lawTax law

Real estate lawReal estate law

Bankruptcy lawBankruptcy law


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Information TechnologyInformation Technology Information and management systems toolsInformation and management systems tools ..

Business to business, business to consumer,Business to business, business to consumer,business to government, all via the Internetbusiness to government, all via the Internet

Sales, marketing, manufacturing, and merchandisingSales, marketing, manufacturing, and merchandisingtools.tools.

Financial, accounting, and risk analysis andFinancial, accounting, and risk analysis andmanagement tools.management tools.

Telecommunications and wireless solutions forTelecommunications and wireless solutions forcorporate information, data, and processcorporate information, data, and process

management.management.

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