This is an article I wrote shortly after my MBA and whilst setting up Eriskay Associates. Five years on, I am still a firm believer in start ups taking a structured approach to strategy and would be interested to hear how you go about it... For example, do you create a formal plan using Porter's models (Five Forces, Value Chain, Generic Strategies, etc...) or is it far more intuitive? What are the merits of formal and informal approaches? I'd love to hear your views.
Elevated Thinking and a Platform for Ambitious Growth: What happens when ambitious entrepreneurs are exposed to the strategic tools and techniques of world class blue chips?
It’s a question that came to me about two weeks into my MBA programme and plagued me for the next three years: How does any of this apply to an entrepreneur in an ambitious small business? True, an MBA is really a programme to develop mainstream managers in established, and generally large, organisations. But in an age where almost 98% of European and US businesses meet the Small or Medium-Sized Enterprise (SME) criteria, surely it’s time for some serious revision.
Of course, I’m not the first to question the validity of MBA-type learning for smaller businesses. In fact, Henry Mintzberg considers the applicability of most mainstream managerial thinking to all organisations as little more than a series of “myths” (oh, to be the one that became famous for making that observation!)
So, what was I prepared to do about it? The answer is that I spent the last 12 months adapting the major strategic methodologies of the programme to work with ambitious entrepreneurs in early stage businesses. With the help of two colleagues that shared my frustrations, we undertook a major adaptation of the cognitive mapping process known as Making Strategy to suit the needs and dispositions of small entrepreneurial teams. (We were so impressed with the results, two of us went on to found Eriskay Associates – a consultancy now in its fifth year)
The process we created was given the working title of Making Strategy for Entrepreneurs (MSE) and focuses the management team on the creation of a robust business model: the basis of their sustainable competitive advantage. It involves Decision Explorer software and the strategy making team seated around a projector screen. The software provides the equivalent of colour-coded Post It notes and linking arrows and some detailed analytic functionality.
It’s a stage approach that begins with asking the team to surface the issues that take up the majority of their management time. In contrast to their colleague managers in larger, more corporate organisations, entrepreneurs identify a unique mix of both personal and business issues; in no other area of business are one’s business and personal decisions so closely interlinked. Over a period of time, the team creates its strategic issues ‘radar’ – the range of major factors that the team has to monitor and keep a handle in order to keep the business on an even keel.
Subsequent stages facilitate the management team in the development of a system of goals and an exploration of the ‘competencies, assets and resources’ that are unique to the business, either individually or in combination. Ultimately, the business model is formulated through identifying the precise relationships between the two groups of concepts. Put simply, it’s about achieving what you want with what you’ve got (or need to get!)
And the results? Well, unsurprisingly, of the eleven entrepreneurs we worked with, each of them found MSE infinitely preferable to their previous approaches to strategy. Which, put bluntly, ranged from a rather anodyne application of tradition PEST and SWOT type analyses, to the comparatively simple and direct ‘winging it’.
As one of our clients put it: “It’s the visual impact that makes the difference. Seeing our business analysed and represented in that way, we were at once struck by the complexity of the business and the markets we are in and the comparatively simple and effective nature of our new business model – it was a real ‘Eureka!’ moment.”
Indeed, there seems to be something in the nature of cognition that works well with the entrepreneurial disposition – perhaps both are right-brain phenomena. Or perhaps entrepreneurs don’t have the patience for detailed analytics and strategic planning. Who knows? But what is clear is that Making Strategy for Entrepreneurs works. Of 25 clients that have now been through this process, all but one has reported significant or outstanding progress in a short space of time. This includes substantial increases in marketing and sales performance, quality and process improvements and a more confident and enlightened approach to business. In essence, MSE provides ambitious entrepreneurs with a fast track to business success:
Allan Ross, MD of First Independent Finance, and the first customer of Eriskay Associates said of MSE: “So far, a few months in, we have seen improvements in sales, improvement in marketing, improvement in processes and improvement in people. Our complex world has been simplified and we feel we are moving forward at a faster pace than the competition.”
Mark A Taylor
Mark A Taylor