The Entrepreneurial Manager Chapter 7 Dowling BA 560 Fall Term 2006.

The Entrepreneurial The Entrepreneurial ManagerManagerChapter 7Chapter 7

DowlingDowlingBA 560BA 560

Fall Term 2006Fall Term 2006

The Entrepreneurial ManagerThe Entrepreneurial Manager

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

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 33


Old CW:Old CW: A good entrepreneur A good entrepreneur

can’t be a good manager.can’t be a good manager.

New CW:New CW: Ventures that Ventures that flourish beyond startup flourish beyond startup

can can be headed by be headed by entrepreneurs who are entrepreneurs who are also effective managers.also effective managers.

Unconventional Unconventional Wisdom?Wisdom?



Founders adapt for Founders adapt for three key reasons:three key reasons:

Shift from creation to Shift from creation to exploitationexploitation

Shift from passionate Shift from passionate commitment to dispassionate commitment to dispassionate objectivityobjectivity

Shift from direct personal Shift from direct personal control to indirect, impersonal control to indirect, impersonal control.control.


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 lead characterized by efforts of lead entrepreneur.entrepreneur.

High-Growth StageHigh-Growth StageIn this, perhaps the most challenging In 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 StageKey issue is no longer survival. It is Key issue is no longer survival. It is steady, profitable growth.steady, profitable growth.


Stages of GrowthStages of Growth

StartupStartup High Growth Maturity Stability High Growth Maturity Stability

00 3-4 3-4 10 15 10 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+ManagementManagement ModeMode DoingDoing Managing Managing ManagersManaging Managing Managers

$100 M+$100 M+

$50 M$50 M

$25M$25M

$3 M$3 M

$1 M$1 M



Entrepreneurial CultureEntrepreneurial CultureA common value systemA common value system

Difficult to measure or Difficult to measure or articulatearticulate

Belief in and commitment Belief in and commitment to growthto growth

Team feels they’re “in this thing together”Team feels they’re “in this thing together”

Goals and market determine prioritiesGoals and market determine priorities



The The FitFit Concept Concept

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



Entrepreneurship Influence SkillsEntrepreneurship Influence Skills

Leadership/vision/influenceLeadership/vision/influence

Helping/coaching and conflict Helping/coaching and conflict managementmanagement

Teamwork and people managementTeamwork and people management


Exhibit 7.1Exhibit 7.1


Traits Characterizing Rapidly Traits Characterizing Rapidly Growing CompaniesGrowing Companies

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

Ongoing succession of nonlinear and nonparametric Ongoing succession of nonlinear and nonparametric eventsevents

Inexperience of management teamInexperience of management team

Counterintuitive, unconventional patterns of Counterintuitive, unconventional patterns of decision-makingdecision-making

Informality and fluidity of organization structure and Informality and fluidity of organization structure and procedureprocedure


Entrepreneurial Influence SkillsEntrepreneurial Influence Skills

Interpersonal/teamwork skillsInterpersonal/teamwork skills– Ability to create, through management, a climate Ability to create, through management, a climate

and spirit conducive to high performanceand spirit conducive to high performance– Ability to understand the relationships among Ability 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 is Ability to lead in those situations where it is

appropriateappropriate


Characteristics of Successful Characteristics of Successful ManagersManagers

Managers skilled in leadership, vision, and Managers 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 who Able to define adroitly and gain agreement on who

has what responsibility and authorityhas what responsibility and authority– Manage in a way that builds motivation and Manage in a way that builds motivation and

commitment to cross-departmental and corporate commitment to cross-departmental and corporate goals, not just parochial interestsgoals, not just parochial interests



Managers skilled at helping, coaching, and Managers skilled at helping, coaching, and conflict managementconflict management– Creatively handle conflicts, generate consensus Creatively handle conflicts, generate consensus

decisions, and share power and informationdecisions, and share power and information– Recognize that high-quality decisions require a Recognize that high-quality decisions require a

rapid flow of information in all directionsrapid flow of information in all directions– Accept that knowledge, competence, logic, and Accept that knowledge, competence, logic, and

evidence need to prevail over official status or evidence need to prevail over official status or formal rank in organizationformal rank in organization



Managers skilled at teamwork and people Managers skilled at teamwork and people managementmanagement– Encourage innovation and calculated risk rather than by Encourage 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 own Expect 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


Other Management Other 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



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



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



Entrepreneurial ManagementEntrepreneurial Management– Problem solvingProblem solving

– CommunicationsCommunications

– PlanningPlanning

– Decision-makingDecision-making

– Project managementProject management

– NegotiatingNegotiating

– Managing outside professionalsManaging outside professionals

– Personnel administrationPersonnel administration



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



Information TechnologyInformation Technology– Information and management systems toolsInformation and management systems tools..– Business to business, business to consumer, business Business to business, business to consumer, business

to government, all via the Internet to government, all via the Internet– Sales, marketing, manufacturing, and merchandising Sales, marketing, manufacturing, and merchandising

tools.tools.– Financial, accounting, and risk analysis and Financial, accounting, and risk analysis and

management tools.management tools.

– Telecommunications and wireless solutions for Telecommunications and wireless solutions for

corporate information, data, and process management.corporate information, data, and process management.

The Entrepreneurial Manager Chapter 7 Dowling BA 560 Fall Term 2006.

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