The Entrepreneurial Manager Chapter 7

1
The Entrepreneurial ManagerChapter 7

• Dowling
• BA 560
• Fall Term 2006

2
The Entrepreneurial Manager

• There are convergent pressures on being an
  entrepreneur and being a manager as a venture
  accelerates and grows beyond founder-driven
  survival. Key to future success is the ability of
  an entrepreneur to have or develop competencies
  as an entrepreneurial manager.

3
The Entrepreneurial Manager

• Old CW A good entrepreneur
• cant be a good manager.
• New CW Ventures that flourish beyond
  startup can be headed by entrepreneurs
  who are also effective managers.

Unconventional Wisdom?
4
The Entrepreneurial Manager

• Founders adapt for three key reasons
• Shift from creation to exploitation
• Shift from passionate commitment to dispassionate
  objectivity
• Shift from direct personal control to indirect,
  impersonal control.

5
Stages of Growth

• Startup Stage
• From 2 to 7 years most perilous stage,
  characterized by efforts of lead entrepreneur.
• High-Growth Stage
• In this, perhaps the most challenging stage, new
  ventures fail at 60 rate. Lemons ripen.
• Maturity Stage
• Key issue is no longer survival. It is steady,
  profitable growth.

6
Stages of Growth
100 M 50 M 25M 3 M 1 M
Startup High Growth Maturity Stability
0 3-4 10 15 Time
(Years) Crucial Transitions Sales 0-3Million
2-10M 7.5M Employees 0 to 20-25 25-75
75-100 Management Mode Doing Managing
Managing Managers
7
The Entrepreneurial Manager

• Entrepreneurial Culture
• A common value system
• Difficult to measure or articulate
• Belief in and commitment to growth
• Team feels theyre in this thing together
• Goals and market determine priorities

8
The Entrepreneurial Manager

• The Fit Concept
• It is important to have a management team whose
  skills are complementary.

9
The Entrepreneurial Manager

• Entrepreneurship Influence Skills
• Leadership/vision/influence
• Helping/coaching and conflict management
• Teamwork and people management

10
Exhibit 7.1
11
Exhibit 7.2
12
Exhibit 7.3
13
Exhibit 7.4
14
Exhibit 7.5
15
Traits Characterizing Rapidly Growing Companies

• High levels of change, ambiguity, and uncertainty
• Ongoing succession of nonlinear and nonparametric
  events
• Inexperience of management team
• Counterintuitive, unconventional patterns of
  decision-making
• Informality and fluidity of organization
  structure and procedure

16
Exhibit 7.6
17
Entrepreneurial Influence Skills

• Interpersonal/teamwork skills
• Ability to create, through management, a climate
  and spirit conducive to high performance
• Ability to understand the relationships among
  tasks and between the leader and followers
• Ability to lead in those situations where it is
  appropriate

18
Characteristics of Successful Managers

• Managers skilled in leadership, vision, and
  influence
• Skillful in creating clarity out of confusion,
  ambiguity, and uncertainty
• Able to define adroitly and gain agreement on who
  has what responsibility and authority
• Manage in a way that builds motivation and
  commitment to cross-departmental and corporate
  goals, not just parochial interests

19
Characteristics of Successful Managers

• Managers skilled at helping, coaching, and
  conflict management
• Creatively handle conflicts, generate consensus
  decisions, and share power and information
• Recognize that high-quality decisions require a
  rapid flow of information in all directions
• Accept that knowledge, competence, logic, and
  evidence need to prevail over official status or
  formal rank in organization

20
Characteristics of Successful Managers

• Managers skilled at teamwork and people
  management
• Encourage innovation and calculated risk rather
  than by punishing or criticizing whatever is less
  than perfect
• Expect and encourage others to find and correct
  their own errors and to solve their own problems
• Make heroes out of other team members and
  contributors
• Generate trust among colleges and subordinates
• Perceived as honest and direct, open and
  spontaneous

21
Other Management Competencies

• Marketing
• Market research and evaluation
• Marketing planning
• Product pricing
• Sales management
• Direct selling
• Service management
• Distribution management
• Product management
• New product planning

22
Other Management Competencies

• Operations/Production
• Manufacturing management
• Inventory control
• Cost analysis and control
• Quality control
• Production scheduling and flow
• Purchasing
• Job evaluation

23
Other Management Competencies

• Finance
• Raising capital
• Managing cash flow
• Credit and collection management
• Short-term financing alternatives
• Public and private offerings
• Bookkeeping, accounting, and control
• Other specific skills

24
Other Management Competencies

• Entrepreneurial Management
• Problem solving
• Communications
• Planning
• Decision-making
• Project management
• Negotiating
• Managing outside professionals
• Personnel administration

25
Other Management Competencies

• Law and Taxes
• Corporate and securities law
• Contract law
• Law relating to patent and proprietary rights
• Tax law
• Real estate law
• Bankruptcy law

26
Other Management Competencies

• Information Technology
• Information and management systems tools.
• Business to business, business to consumer,
  business to government, all via the Internet
• Sales, marketing, manufacturing, and
  merchandising tools.
• Financial, accounting, and risk analysis and
  management tools.
• Telecommunications and wireless solutions for
  corporate information, data, and process
  management.