Category: Enterpriship

Entrepreneurs organize, operate, and assume risk for enterprises with the intention of transforming innovative ideas into products and/or services as businesses for profit, or meeting the needs of communities through not-for-profit associations. Enterprises are formed with the intention of being either lifestyle – serving the needs of local communities, or upwardly mobile – serving the needs of large markets. By applying the duplicable principle, a lifestyle enterprise can become upwardly mobile.

Lifestyle enterprises are the heart of Main Street. Lifestyle enterprises are focused on serving the needs of local communities. They are founded by an entrepreneur who either becomes a lifestyle business enterprise owner or eventually sells to one. They are closely held by a single owner, family, friends, or close business associates. They operate in traditional industries such as, but not limited to agriculture, automotive, contracting, food service, hospitality, light manufacturing and distribution, professional services, retail, travel and entertainment, and wholesale. They can operate from a single location, or several locations in a close geographic area, such as a municipality, county, state, or group of neighboring states.

Whereas the start-up risk can be high, it lowers as the enterprise gains a presence in local communities. Lifestyle transactions are predictable and repeatable in local communities because they relate to everyday activities – people are creatures of habit. However, location does matter. Business activity can change due to local, regional, national, and global economic conditions. Lifestyle enterprises are particularly prone to changes in transportation systems and demographics, and the impact of new or deteriorating neighborhoods. New residential, retail, office, and industrial developments can bring business if located nearby, or take it if located far away. Declining neighborhoods can be challenging if crime rates increase. Competition from scale providers, such as “big box” retailers or franchise systems can be challenging. Hence, a major differentiator for lifestyle enterprises is quality of service.

The lifestyle enterprise owner may be an active owner-manager or a passive investor with a delegated management team in place. In either case, the owner must pay attention to the enterprise because nobody else gives it and its constituencies the same level of care and attention. Owners must pay attention to the risk of theft, fraud and embezzlement too, especially when passive.

Upwardly mobile enterprises are the core of the activities of angel investors, venture capitalists, and Wall Street.

Upwardly mobile enterprises are focused on large market share, either industry-wide or in niches, with local-to-global aspirations. Their growth potential stems from highly innovative people that offer new products and/or services in existing markets, or existing and new products and/or services in new markets, or transform non-traditional industries into traditional ones over time. They create wealth.

Upwardly mobile enterprises start as narrowly held, first by the founders, and later by private investors seeking capital appreciation. They may become widely held publicly traded enterprises to gain scale. Upwardly mobile enterprises have a high risk in the early stages where capital appreciation opportunities exist. As they they gain market share and scale, the risk lowers. However, they must always be aware of changing market conditions. Long-term growth usually results from entry into foreign markets. Upwardly mobile enterprises require a professional management team of executives and other managers, which may or may not include the founding entrepreneur. A major differentiator for upwardly mobile enterprises is brand name recognition.

Upwardly mobile enterprises are particularly common in the high technology industries, where large markets are necessary to generate the cash flows required to command a respectable return on investment. However, if a technology really catches on around the world, the opportunity for capital appreciation can be significant. As fads fizzle, capital can depreciate too.

However, many upwardly mobile enterprises rely on a narrow set of well known products that are found in multiple markets around the world.

Lifestyle enterprises may become upwardly mobile enterprises over time. They grow by applying the duplicable principle: duplicating processes, functions, facilities, and equipment with proven products and/or services in one market that offer potential in others.

The duplicable principle can be applied to concepts ranging from single products to entire business systems, both corporate and franchised.

For example, Coca-Cola, Heineken, and Pepsi-Cola are recognizable worldwide. Although local practices may differ regarding packaging and distribution, these products have been duplicated on a worldwide basis.

For example, Starbucks grew through the process of duplication from a local lifestyle enterprise, owned by businesses associates, to an upwardly mobile public enterprise with global aspirations. It has expanded through its own and licensed locations, and with joint venture partners in selected markets.

Franchise systems offer a hybrid approach where the franchisor enables a lifestyle concept to become upwardly mobile by employing franchisee capital in exchange for a proven business system operating as a network.

For example, many car rental companies, fast food restaurant systems, and hotel chains operate as franchises around the world, such as Thrifty, Subway, and Holiday Inn.

Not-for-profit enterprises can be upwardly mobile also. Lions Club, Red Cross, Rotary Club, and Scouts are examples that have a worldwide presence.

Upwardly mobile enterprises may default to lifestyle enterprises it they cannot capture large markets.

The enterpriship disciplines of entrepreneurship, leadership, and, management apply to both lifestyle and upwardly mobile enterprises. Lifestyle enterprises differ from upwardly mobile in mindset. Lifestyle enterprises serve local markets locally, whereas upwardly mobile enterprises aspire to serve local markets globally.

Building sustainable advantage comprises the activities required to build a position in the marketplace and community-at-large that is responsible, meets both current and future needs, is advantageous, and achieves performance excellence. It is applicable from the creation of a vision to the delivery of the resulting value on an ongoing basis.

In the twenty first century, community and business leaders in both public and private sectors are addressing sustainability – meeting the needs of the present without compromising the future. Sustainability is an important issue for enterprises.

Whereas an enterprise may be started by a single entrepreneur to transform an innovative idea into a valuable product and/or service, there is mutual responsibility with its constituencies to perform and deliver value over time. Constituencies build vested interests in an enterprise as a consequence of its efforts to attract and acquire, expand, and maintain relationships with them. Employees rely on jobs, customers rely on products and/or services, suppliers rely upon orders, and investors rely upon return on investment from generation to generation. If an enterprise reduces or discontinues operations, the effect is disruptive on its constituencies, markets, and the community-at-large, if not devastating.

Accountants and auditors consider whether an enterprise is a “going concern” based upon its ability to meet its financial obligations. Doubts may arise from the inability of an enterprise to generate sufficient cash flows from operating activities, sell assets to generate cash, or restructure debt. Being an “ongoing concern” is an extension of the concept.

Continuing as an ongoing concern means that the management of an enterprise has the confidence, competencies and commitment to operate indefinitely. To do so requires fostering the entrepreneurial mindset and actions through the discipline of intrapreneurship, and reaching beyond business-as-usual by building sustainable advantage.

Considering sustainability responsibly in all decision making…

The sustainable enterprise employs three criteria in all decision making – are the mindset and intended actions environmentally, economically, and socially responsible?

Being environmentally responsible impacts the capabilities of people, processes, and products and/or services. It means taking care of the ecological biosphere by protecting natural resources; avoiding pollution of air, water, and soil; being energy efficient; and reusing and recycling materials, supplies, and products to reduce waste.

Being economically responsible means applying the disciplines of stewardship and value management to constituencies. Employees are offered fair compensation in exchange for loyalty and productivity. Customers are offered quality and value in exchange for loyalty and timely payments. Suppliers are offered loyalty and timely payments in exchange for quality and value. Investors are offered returns above the cost of capital in exchange for commitment. Regulators are offered compliance in exchange for freedom to do business within laws and regulations. Competitors are offered challenges in exchange for fairness. As a consequence, natural, human, intellectual, and financial capital is not just preserved but appreciates over time.

Being socially responsible impacts the markets and communities that the enterprise serves and is served by. The minimum standards for social responsibility include not engaging in deceptive or fraudulent practices, and providing safe facilities and equipment, processes and functions, and products and/or services.

Meeting the needs of both current and future generations…

What is widely used today may be extinct tomorrow; what is commonplace tomorrow may not even have been thought of today. So it is necessary to anticipate the wants and needs of the future while deliberating in the environment of the present.

The sustainable enterprise ensures that the entrepreneurial, leadership, and managerial roles are performed throughout on an ongoing basis to transform innovation into value. Plans and policies must be deployed and executed with anticipation and deliberation, and with contingency because events may take a different course from those envisioned.

Gaining a beneficial position that will continue over time…

Enacting change, either by causing it or responding to it, is essential for sustainability. Maintaining business-as-usual is insufficient – an enterprise must stretch beyond its comfort zone because the only certainty is uncertainty.

The sustainable enterprise gains a beneficial position that continues over time by developing, enhancing, or maintaining its current posture in marketplaces, or by being willing to change.

From the creation of a vision to the delivery of value on an ongoing basis, the sustainable enterprise builds:

• Aspirational advantage – loyal relationships between employee, customer, supplier, and investor constituencies because stated values and enacted values are consistent
  
  
• Competitive advantage – the position and posture that offers consistencies better value than competitors
  
  
• Collaborative advantage – relationships between suppliers, or customers, or peers as a partnership with a common mission, and operating dependently for mutual value
  
  
• Cooperative advantage – relationships between suppliers, or customers, or peers as an association with a similar mission, but operating independently for mutual value

Achieving performance excellence…

The sustainable enterprise tries to do the right things, and then do them well. It is not afraid to change direction when it is doing the wrong thing, or when things aren’t going well. It is not afraid to admit mistakes, learn from them, and move on. It is willing to take preventive action, but when cure is necessary, it takes remedial action swiftly. It strives to deepen relationships with current constituents with existing and new products and/or services, but also broaden relationships in existing and new markets.

Achieving performance excellence requires alignment between the enterprise and its constituencies externally, and between organizational units internally. It means exceeding requirements and expectations in terms of commitment to values and vision, and strength of financial and non-financial results including market share, resource utilization, productivity, time-to-market, cycle time, quality, satisfaction, and sustainability.

Building sustainable advantage from vision to value is an enterpriship (entrepreneurship, leadership, and management) competency.

Building sustainable advantage means gaining a favorable, superior, and beneficial position for an enterprise that will continue over time, either by developing, enhancing, or maintaining the current state, or by changing it. It is an ongoing process from the creation of a vision to the delivery of value. The Framework for Building Sustainable Advantage is a fundamental tool for establishing the mindset and actions required to transform vision into value on an ongoing basis within an environment of change – either by causing it or responding to it.

“Sustainable” means the ability to continue on an ongoing basis; “advantage” means being better off now or in the future relative to the past, or to other entities. Being advantaged applies both to individuals in their communities, and to enterprises in their marketplaces.

The sustainable enterprise employs three criteria in all decision making – are the mindset and intended actions responsible:

• Environmentally?
  
  
• Economically?
  
  
• Socially?
  
  

The sustainable enterprise gains a beneficial position that will continue over time by building advantage:

• Aspirational – stated values and enacted values are consistent; loyal relationships exist with constituencies
  
  
• Competitive – position and posture that offer constituencies better value than competitors
  
  
• Collaborative – relationships between suppliers, or customers, or peers as a partnership with a common mission, operating dependently for mutual value
  
  
• Cooperative – relationships between suppliers, or customers, or peers as an association with a similar mission, operating independently for mutual value

Employees, customers, suppliers, and investors participate with an enterprise as primary constituencies because they contribute to the value-creation process. Regulators and competitors participate as secondary constituencies.

Building sustainable advantage requires:

• Establishing the governance disciplines required to form a vision based upon innovative ideas, to enact change, and to deliver value through…
  
  
• …the capabilities of people, processes, and products and/or services to take advantage of opportunities in the marketplace…
  
  
• …and the effective utilization of natural, human, intellectual, and financial capital resources to provide a strong foundation for all activities
  
  

Governance disciplines…

Governance disciplines are the attitudes and behaviors required to build sustainable advantage for a vision, including taking responsibility for an enterprise, positioning it, and enabling the necessary relationships that deliver value.

Governance disciplines include:

• Stewardship – the responsibility for the performance of an enterprise and the delivery of value to constituencies. Stewardship competencies have three components: enabling, domain, and core. Enabling competencies depend upon the effectiveness of entrepreneurial, leadership, and managerial roles. Domain competencies represent the specific functional knowledge and technical skills required to perform an activity. Core competencies represent activities well done that give the enterprise an advantage.
  
  
• Strategy – the beneficial positioning of an enterprise in marketplaces so as to deliver value over time. Strategic plans are long-term statements of direction – typically three-to-five years or more, with short-term initiatives as necessary from the point of departure to one-to-three years out. Strategic plans decompose into enterprise aspiration and industry position and posture, competitive position and posture, performance improvement, constituency-based, functional, and governance components.
  
  
• Structure – the enabler of relationships between an enterprise’s infrastructure, products and/or services, markets, and constituencies that deliver value. An enterprise’s infrastructure includes processes, functions, facilities, and equipment.

Capabilities…

Capabilities represent the capacity and ability of people, processes, and products and/or services to realize potential quality and value. Capacity is a measure of utilization of resources. Ability determines expected quality of performance for activities; potential suggests possible outcomes of activities.

Capabilities include:

• People – the constituents of an enterprise: employees who devote careers, customers who are loyal, suppliers who advance credit and quality materials and supplies, and investors who source capital.
  
  
• Processes – the arteries of an enterprise. Every enterprise has a set of processes – groups of activities that take one or more kinds of inputs from which value is delivered to either internal or external customers, or both. The outputs are either end-products or components that are assembled into end-products in downstream processes within the enterprise or in its customers. Processes are the intersection of people and products and/or services. Macro processes cross functions and decompose into micro processes within functions. The highest level macro processes are planning and policy development, deployment, and performance measurement. The deployment process subdivides into research and development, and sales and production.
  
  
• Products and/or services – outputs from processes that are of value. The term “product” is associated with something that is tangible; the term “service” is associated with something intangible – capabilities delivered at the time of sale or shortly thereafter, and/or in support downstream. The term “products and/or services” describes collectively all types of products and services, including “service-oriented” products that are definable, duplicable, and repeatable.

Capabilities are delivered through functions. Functions are groups of knowledge-related (subject area) activities that have a purpose. Functions house people who deliver value through processes. Functions form the first level of organizational structure within an enterprise.

Every enterprise has three macro functions: governance, administrative, and operational. The governance function (the board of directors and the chief executive officer of a corporation, the members of a limited liability company, the partners in a partnership, or a sole proprietor) has the ultimate responsibility for the performance of the enterprise to its investors. The administrative functions include: enterprise, legal, finance, human resources, and information technology; the operational functions include research and development, operations, and business development. Operations subdivides into procurement, manufacturing (or equivalent), and distribution; business development subdivides into marketing, sales, and service. The enterprise function provides support activities for planning and policy development, and performance measurement; brand management; facilities management; community, employee, investor, and government relations; and internal audit. The research and development function is “cross-functional” and heavily project-oriented. It represents a set of processes for program management and engineering, and market, product and/or service, and infrastructure-related activities.

A functional organizational structure is suitable for entrepreneurial and small lifestyle enterprises. As an enterprise grows into multiple markets and product and/or service lines, more complex matrix organizational structures are necessary with business line, geographic, and demographic characteristics. Business lines separate activities such as merchandising, manufacturing (or equivalent), and financial, and enable concepts such as centers of excellence and utilities that support multiple organizational units. Organizational units may be decomposed into divisions, departments, branches, and plants, and also into reporting, responsibility, profit and cost centers.

Building sustainable advantage from vision to value requires optimizing the capabilities of people, processes, and products and/or services.

Capital…

Capital represents the resources used to generate income from economic activity. Capital resources include:

• Natural – anything related to the environment invested in the enterprise, and is the initial source of all raw materials
  
  
• Human – the characteristics of an individual person in terms of their ability to be economically productive
  
  
• Intellectual – knowledge that provides an advantage and must be protected
  
  
• Financial – money (or monetary equivalents and property) invested in an enterprise in the form of equity and debt

Enterprises are built on a foundation of natural, human, intellectual, and financial capital, which must be managed effectively and efficiently. Understanding the costs, risks, returns, and rewards associated with each form is essential to building sustainable advantage. Invested capital is employed for both operating and investment purposes. Equity capital represents ownership in an enterprise, and consists of the enterprise’s assets less its liabilities. Assets represent opportunities – what is owned by the enterprise, and what is owed to it. Liabilities represent obligations – what is owed by the enterprise.

In free markets, production and distribution activities are intended for profit, and the prices that determine gross revenue are ultimately set by supply and demand. Net income results from operating profit – gross revenues (dividends from other enterprises, fees, net interest, sales, rents, and royalties) less costs and expenses, net gains on sales of capital assets, less income taxes where applicable. Net interest revenue comprises gross interest revenue less interest expense. Cash flow represents differences between cash provided and used in operating, financing, and investing activities. On an accrual basis, net income is adjusted by non-cash charges and credits to determine cash flow.

The return on financial capital creates wealth, which is a source of future capital. There are many measures of return on financial capital based upon earned income before and after interest, taxes, depreciation, and amortization, and based upon invested capital with or without the inclusion of cash and investment assets. Whatever the measure, for an enterprise to be sustainable, the cycle of generating a return on financial capital must repeat indefinitely. In turn, wealth enables investments in natural, human, and intellectual capital.

Building sustainable advantage…

Building sustainable advantage is a migration path from an entrepreneurial enterprise as a venture to an intrapreneurial institutional enterprise. Whereas entrepreneurs organize, operate, and assume risk for an enterprise, intrapreneurs foster a culture of change within so as to keep it sustainable over time.

An entrepreneurial enterprise is not yet fully established as an ongoing concern, may have to rely upon external capital as opposed to bootstrapping to finance future growth, and is either in the emerging or growth stages of development (or decline stage, if it cannot institutionalize).

An institutional enterprise is established (stable with predictable constituency patterns emerging); is becoming, is, or was an ongoing concern; and is in the growth or maturity stages of development (or decline stage, if it cannot remain as an ongoing concern).

The stewards of an enterprise include management (the governance function, officers, and non-official managers) and associates (supervisors and staff). Every employee is a steward if they share the values, mission, and vision of the enterprise. Stewards administer the affairs of the enterprise, and protect its assets.

The stewards of an enterprise must be able to enact change, either by causing it or responding to it, which in turn generates change, and hence adapt to the changed environment accordingly.

Stewards build sustainable advantage by performing three roles:

• Entrepreneurial – transforming innovative ideas into value
  
  
• Leadership – setting direction that others will follow to achieve results
  
  
• Managerial – applying resources to activities to achieve results

Building sustainable advantage from vision to value is an enterpriship (entrepreneurship, leadership, and management) competency.

Business disciplines include subject areas such as finance and accounting, marketing and sales, operations, and information technology. However, subjects related to the humanities and social sciences are just as relevant, given that business is all about people. By understanding individual preferences, such as values, attitudes, beliefs, and behaviors, enterprises can better relate, build a rapport, and interact with their constituencies, and manage their human resources.

New entrepreneurs and lifestyle business enterprise owners, and to some extent executives and managers, are often somewhat astounded by the breadth and depth of knowledge and skills that they require to earn a profit. Without education and experience, they have to rely upon either their intuition or senses, or both, to assess situations and make decisions that influence, convince, or persuade employees to perform, customers to buy, suppliers to deliver, investors to finance, and competitors to retreat.

Lifestyle enterprise owners have a major burden because they are solely responsible for their enterprises, have personal capital and livelihood at risk, and are constrained by time and money.

Beyond finance and accounting, marketing and sales, operations, and information technology, other overlapping disciplines that impact business include: economics, engineering, program and project management, politics, philosophy, physiology, sociology, and psychology. Environmentalism is an emerging philosophical and social discipline.

It may be difficult to imagine entrepreneurs, lifestyle enterprise owners, executives, and managers as philosophers, sociologists, or psychologists. However, understanding individual values, attitudes, beliefs, and behaviors, and crafting enterprise values statements and guiding principles, missions, and visions are consequences of these disciplines among others. This understanding is essential to positioning the enterprise and its products and/or services in the marketplace. The impact of misunderstanding how markets accept and use products and/or services can be significant, especially if there is potential for a major loss of capital.

Formulating strategy requires knowledge of competitive, economic, environmental, political, regulatory, social, and technological trends. Strategy impacts marketing and sales, operations, finance, information technology, and human resources.

Economics…

The economics discipline addresses the production, distribution, and consumption of products and/or services. The factors of production include land, labor, and capital. Economics addresses human behavior related to scarcity. Economic models describe the effects of price and quantity on supply and demand in competitive markets. However, in a networked society of telecommunications and the internet, human behavior is also determined by abundance of nodes. For example, cell phones, email, and websites have utility when there is a critical mass of users, and a network operating at scale.

Engineering…

The engineering discipline addresses the transformation of natural capital into items that are useful and beneficial to people. Both entrepreneurs and intrapreneurs are often engaged in structural, mechanical, electrical, and plumbing engineering opportunities for both consumable and durable products, and the related facilities and equipment. Agriculture, mining, oil and gas, construction, and manufacturing are engineering-based industries. However the engineering mindset has been applied to financial and information management disciplines also.

Program and project management…

The program and project management disciplines address the transformation of ideas into value. Project management is the application of knowledge, skills, and enabling technologies to the development of new or enhanced products and/or services, processes, and systems, including facilities and equipment. Program management is both a function that coordinates the management of projects across the enterprise, and a set of techniques.

Politics…

The politics discipline addresses governance, authority, and power, and how decisions are made, both individually and collectively, to formulate plans, policies, and programs. However, individuals “play politics” by positioning themselves for authority and power or protection, often at the expense of the enterprise and its constituencies.

Government agencies establish laws and regulations that impact business enterprises in terms of licensing, fees and taxes, and compliance reporting.

Philosophy…

The philosophy discipline addresses understanding and knowledge, and is the practice of developing concepts and guiding principles that impact attitudes, beliefs, values, and behaviors. This discipline is relevant to the development of aspirational and inspirational statements that motivate followers to action, including employees, customers, suppliers, investors, regulators, and competitors. Such messages are not only used in transformational and empowered leadership situations, but also in enterprise and product and/or service branding, which impacts marketing and advertising, and ultimately sales.

Physiology and sociology…

The physiology discipline addresses human function. Physiological considerations are necessary for compliance with occupational, safety, and health laws and regulations, and for product design. The sociology discipline addresses how individuals are influenced by groups, and the products and/services that they either use or avoid. Such understanding is particularly useful in mass marketing efforts, and in the definition of market segments.

Psychology…

The psychology discipline addresses the human mind and behavior, and is essential to understanding the preferences of employees, customers, suppliers, investors, regulators, and competitors. Maslow’s Hierarchy of Needs and Jung’s Psychological Types are two examples of psychological theories that are relevant to business.

Maslow’s Hierarchy of Needs states that human needs are instinctive and characterized by levels of motivation for satisfying deficiencies or growth, and hence products and/or services. Maslow suggested that everybody has a “philosophy of the future” – what their ideal life would be like in about five years time. Their answer reveals where they are today – useful input for strategic planning, product development, marketing and sales.

Jung’s Psychological Types are personality models and styles from which many personality tests used in business are derived. Every individual has a personality style – specific personality characteristics that determine their preferences.

Every entrepreneur, lifestyle enterprise owner, executive, and manager has to know their own personal style and those of others. Understanding personal styles:

• Increases the likelihood of success in both social and professional relationships…
  
  
• …which is based upon the ability to relate, to build a rapport, and to interact with others by…
  
  
• …being able to entertain, inform, convince, persuade, and negotiate with them

***

By understanding personal styles, the humanities and social sciences disciplines can be applied using the enterpriship model – transforming mindset into action with relationships and order based upon the preferences of constituencies. That way, theoretical concepts earn practical value.

Understanding personal styles is an enterpriship (entrepreneurial, leadership, and management) competency.

Enterpriship consists of the entrepreneurship, leadership, and management disciplines within which are distinct roles. The roles are either appointed or emerge through need. The disciplines are shared between entrepreneurs, executives, managers, and others in an enterprise. Anybody can turn innovative ideas into value, attract followers, and apply resources to activities to get results if they so choose.

A discipline is field of study and a system of rules governing activities; competence is characterized by knowledge, skills, and experience in the field. Enterpriship competencies include:

• Entrepreneurship – starting, developing, and assuming risk for an enterprise
  
  
• Leadership – aspiring, inspiring, and motivating
  
  
• Management – directing and controlling events and activities of an enterprise
  
  
• Intrapreneurship – fostering a culture of change within an enterprise

Enterprises consist of one of more organizational units. A role within an organizational unit, such as a manager or supervisor, has a certain authority to command or influence within an area of delegated responsibility and span of control. The area can be a business unit, business line, or product line, subdivided as divisions, departments, plants, and branches. Responsibility within the area includes portfolios of activities, which consist of people, processes and functions, and products and/or services, with custody of assets. Individuals are accountable to higher authorities when they are required to report actual performance against plans and policies.

Definitions of roles:

• Entrepreneur – organizes, operates, and assumes risk for an enterprise
  
  
• Leader – sets direction that others will follow through commands or influence
  
  
• Intrapreneur – agent of change
  
  
• Management – overall authority and responsibility for directing and controlling events and activities as a team
  
  
• Executive – top line of management and official representative of an enterprise
  
  
• Manager – member of the management team, with a well defined area of responsibility in a reporting line to an executive, either as an official or non-official representative of an enterprise
  
  
• Entrepreneurial – transforming innovative ideas into value with both a product and/or services and a process orientation
  
  
• Leadership – setting direction that others will follow with a people orientation
  
  
• Managerial – applying resources to activities to achieve results with a process orientation

Key points:

1. Entrepreneurs intend to earn profits in businesses (“for profit” enterprises) or to give back to the community through not-for-profit associations
   
   
2. Entrepreneurs operate in unstructured environments, where there is little or no hierarchy
   
   
3. Intrapreneurs operate within structured environments, where there is well-defined hierarchy
   
   
4. Managers are responsible for processes in both unstructured and structured environments, which may include the assignment of people resources, but not necessarily
   
   
5. Leaders can exist anywhere in the organization from executives to team leaders within functions
   
   
6. Managers must be leaders when they are responsible for people

Enterpriship is the art and science of entrepreneurship, leadership, and management – disciplines for building enterprises and societies. The enterpriship manifesto for building enterprises and societies is characterized by seven guiding principles: equality, education, environment, energy, economy, employment, and effectiveness.

Enterpriship is the process of building enterprises with sustainable advantage. Enterpriship is both an art and a science. Art is an occupation that requires both knowledge and skills; science is method for systematizing knowledge. Through both knowledge and skills, enterpriship provides a systematized approach to building sustainable enterprises within a framework of three related disciplines: entrepreneurship, leadership, and management.

Sustainable means being able to continue over time, either by developing, enhancing, or maintaining the current state, or by changing it. Advantage means favorable, superior, and beneficial.

Entrepreneurship is a competency for starting, developing, and assuming risk for an enterprise. Leadership is a competency for aspiring, inspiring, and motivating others. Management is a competency for directing and controlling events and activities – management as a “team” has the authority and responsibility for the enterprise.

The entrepreneurial role is about transforming innovating ideas into value. The leadership role is about setting direction that others will follow through influence to get results. The managerial role is about applying resources to activities to achieve results.

The word “enterprise” means “undertake for a prize or cause.” One could argue that a society is a metaenterprise, representing the social relationships of all people in a community, and their wants, needs, and causes. Therefore, the enterpriship disciplines are also applicable to building societies.

A manifesto is a public declaration of intentions – the “Enterpriship Manifesto” is a declaration of intentions to build both enterprises and societies based upon seven guiding principles:

• Equality – treating everybody in the same way
  
  
• Education – enabling everybody to reach their full potential academically, professionally, and vocationally so as to act responsibly
  
  
• Environment – striving for sustainability for both current and future generations with clean air, water, and soil
  
  
• Energy – searching for sources that do not waste or pollute resources
  
  
• Economy – striving for the development, enhancement, and maintenance of opportunities for production and distribution of goods and services that meet or exceed the needs, wants, and causes of constituents
  
  
• Employment – participating in the process of production and distribution of goods and services for others as a basis for providing for oneself and dependents
  
  
• Effectiveness – acting efficiently and productively to earn results with quality

The enterpriship disciplines rely upon the competencies of individuals and the capabilities of people, processes, and products and services to deliver results; and the utilization of natural, human, financial, and intellectual capital to produce income and create opportunity and wealth for all constituents.

Successful entrepreneurs and executives have enterpriship competencies that enable them to know what to do and how to do it repeatedly. They can adapt to situations involving differing products and/or services and people because they have knowledge, skills, and experience in process execution. These competencies enable serial entrepreneurs to systematically transform innovative ideas into value; enable leaders to influence varied groups of followers; and enable managers to apply alternative resources to activities to achieve results. These competencies are characterized by the enterpriship model.

Enterpriship is the process of building enterprises with sustainable advantage within a framework of three related disciplines: entrepreneurship, leadership, and management. It is about the competencies of individuals and the capabilities of enterprises.

The word “entrepreneur” is derived from French origins meaning to undertake; the word “executive” is derived from the notion of execution of laws and affairs; and the word “manager” is derived from Latin origins meaning to handle with skills.

Successful entrepreneurs, lifestyle business owners, executives, and managers are “principals” that are well sought in business. Whether explicitly or implicitly, they can address what needs to be done and how effectively. In doing so, they resolve the key issues of who, when, and where – and perhaps the most important question of all in business: why?

Whether consciously or unconsciously, these principals apply their principles through models and methodologies to get things done. Their competencies consist of knowledge, skills, and experience acquired from training and on-the-job experience. The models represent forms and patterns for expected outcomes, and the methodologies describe the activities required to achieve them. These principals may also have preferences for certain tools such as systems, and reference and training materials. Collectively, such models, methodologies, and tools form their “credo for success.”

The enterpriship model is the basis for a credo for success. It describes the four activities that guide entrepreneurship, leadership, and management: establishing the mindset, enabling action, building relationships, and establishing order. It is a model through which all other models, methodologies, and tools that transform ideas into results can be enabled.

Establishing the mindset – an entrepreneurial role:

Radio show host Earl Nightingale offered “The Strangest Secret – we become what we think about” as a motivational statement. Results cannot be achieved without establishing a mindset first. The mindset should be future-oriented and holistic. Once established, a future mindset can be rolled back to the present, so that the direction for achievement is clear. The mindset should be based upon understanding and communicating the whole, not just a collection of components. Thus, ideas should be thought through from the “top down” holistically, even though they may be deployed from the “bottom up” in components.

For example, an architect starts with a sketch of an entire edifice, and engineers decompose the design into structural, electrical, mechanical, and plumbing components; the builder constructs it brick by brick. The design work is performed “top-down” and the construction work is performed “bottom-up.”

Enabling action – a leadership role:

Actress Lucille Ball popularized the saying, “if you want something done, ask a busy person to do it – the more things you do, the more things you can do.”

Transforming mindset into action requires the self motivation to aspire and inspire others towards motions to get tasks accomplished. It is essential to build momentum with anticipation and deliberation – the forces for organizing events and performing activities.

Both David Brewer, founder of Friends of the Earth, and futurist Frank Feather have suggested the notion of “thinking globally and acting locally.” Once successful results have been achieved locally, the “duplicable principle” of earning value through growth can be applied on a “local-to-global” basis. This approach suggests building momentum step-by-step within the context of a holistic mindset.

Building relationships – leadership and managerial roles:

The notion of building relationships applies to both people and processes. Nothing gets done without people, and ultimately everything gets done for people. Therefore, is important for enterprises to have positive relationships with their employee, customer, supplier, investor, regulator, and competitor constituencies. Understanding personal styles is essential to being able to relate, to build rapport, and to interact with others. Successful entrepreneurs, leaders, and managers know how to balance inter-personal skills with professional skills so as to entertain, inform, convince, and persuade their constituents.

However, in order to deliver products and/services through processes to people, it is essential to define structure. Structure is the enabler of the relationships between an enterprise’s infrastructure, products and/or services, markets, and constituencies. Infrastructure consists of processes, functions, facilities, and equipment.

Establishing order – a managerial role:

Transforming innovation into results is a haphazard process of trial and error to determine what works and what doesn’t. Lessons for success result from the experiences of failure. Whereas ideas may start out with elegance, the pressures of expectations to meet scope, objectives, budget, and schedule often lead to implementations in chaotic circumstances. However, it is usually the response from the marketplace after implementation that determines what really needs to be delivered.

As the environment stabilizes, it is necessary to add structure to unstructured situations, and establish order.

Plans to deploy ideas must include a provision for continuous improvement after implementation to adapt innovative ideas into results that are sustainable. Continuous improvement activities include repositioning in markets with selected products and/or services, restructuring operations, and reengineering processes.

It is important to have a feedback loop from performance measurement to planning activities to ensure that the lessons from the past are considered when preparing for the future. As successful entrepreneurs, leaders, and managers know, history does repeat itself.

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The enterpriship model provides the credo for entrepreneurial, leadership, and managerial success because it characterizes the what and how of getting things done: transforming mindset into action with relationships and order.

Enterpriship is the process of building enterprises with sustainable advantage within a framework of three related disciplines: entrepreneurship, leadership, and management. It is about the competencies of individuals and the capabilities of enterprises. Sustainable means being able to continue over time, either by developing, enhancing, or maintaining the current state, or by changing it. Advantage means favorable, superior, and beneficial.

Every individual who starts, owns, or is a member of the management team of an enterprise, should strive to build sustainable advantage. Sustainable advantage is essential to value creation because cash flows become predictable and reliable over long periods of time. As a consequence, it is easier to plan for investments in new endeavors and to maintain contingency reserves for downturns.

Building sustainable advantage requires proficiency in the disciplines of entrepreneurship, leadership, and management. Collectively, these three disciplines embrace “enterpriship.”

Enterpriship is both an art and a science. Art is an occupation that requires both knowledge and skills; science is method for systematizing knowledge. Through both knowledge and skills, enterpriship provides a systematized approach to building sustainable enterprises by employing the techniques of entrepreneurship, leadership, and management.

Entrepreneurship is a competency for starting, developing, and assuming risk for an enterprise. Leadership is a competency for aspiring, inspiring, and motivating others. Management is a competency for directing and controlling events and activities – management as a “team” has the authority and responsibility for the enterprise.

Being proficient in all three competencies requires experience. Entrepreneurs may lack the leadership and management competencies, leaders may lack entrepreneurial and management competencies, and managers may lack the entrepreneurial and leadership competencies to build a sustainable enterprise.

Upwardly mobile entrepreneurs have to demonstrate to investors that they can build large markets. Lifestyle business enterprise owners, such as dry cleaners, hairdressers, professional service providers, restauranteurs, and retailers, are responsible for everything in their businesses. Executives and managers in larger enterprises are under constant pressure from investors to generate quality earnings on an ongoing basis.

The enterprise depends upon the use of all three enterpriship competencies as do the employees, customers, suppliers and investors.

When entrepreneurs start enterprises, they tend to focus on the benefits and features of their products and/or services. Intrapreneurs, who are agents of change in established enterprises, tend to do the same thing. However, focusing on products and/or services alone is insufficient for building sustainable advantage over time.

Without people there is nothing in business. Processes must be effective and efficient at delivering quality products and/or services conveniently. If an enterprise can’t deliver, a competitor will.

Hence, the management team collectively must be proficient in entrepreneurial, leadership, and managerial roles that dictate successful people-oriented, process-oriented, and product and/or service capabilities.

The entrepreneurial role is both process-oriented and product-oriented, through which innovative ideas are transformed into value at every stage of an enterprise’s development.

The leadership role is people-oriented, through which direction is set that others will follow to achieve results – equally applicable to top-level executives, team leaders within functions, or anywhere in between.

The managerial role is process-oriented, through which resources (time, materials, and supplies) are applied to activities to achieve results.

These three roles embrace the planning and policy development, deployment and execution, and performance measurement activities of the enterprise. Deployment means positioning the resources of the enterprise in the best markets for its products and/or services. Execution means getting things done through people and processes effectively and efficiently.