The Entrepreneurial Manager Chapter 7

Dowling
BA 560 Fall Term 2006

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.

The Entrepreneurial Manager

Old CW: A good entrepreneur cant be a good manager.

Unconventional Wisdom?

New CW: Ventures that flourish beyond startup can be headed by entrepreneurs who are also effective managers.
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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. BA560 Venture Planning Prof. Dowling

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.
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Stages of Growth
$100 M+ $50 M

$25M

Startup
$3 M $1 M

High Growth

Maturity

Stability

0 3-4 Time (Years) Crucial Transitions: Sales 0-$3Million Employees 0 to 20-25 Management Mode Doing

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$2-10M 25-75 Managing

$7.5M+ 75-100+ Managing Managers

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BA560 Venture Planning Prof. Dowling

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
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The Entrepreneurial Manager

The Fit Concept

It is important to have a management team whose skills are complementary.

BA560 Venture Planning Prof. Dowling

The Entrepreneurial Manager

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

BA560 Venture Planning Prof. Dowling

Exhibit 7.1

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Exhibit 7.2

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Exhibit 7.3

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Exhibit 7.4

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Exhibit 7.5

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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

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Exhibit 7.6

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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

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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
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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
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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

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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
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Other Management Competencies

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

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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

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Other Management Competencies

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

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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.
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