Assessment Guide

Assessment Guide
2.
Prepare an academic report suggesting how Entrepreneurs might inform, or be informed by the management of projects. (2,000 word essay) [Part 2] (30% of module grade)

ENTREPRENEURSHIP, lesson plan
The study of a entrepreneurship, entrepreneurs and enterprise has been largely ‘phenomenological’ .. By this it is meant that the occurrence has been observed and inferences drawn from those observations.
Much of project management accepted practice has arisen in this way also.

Both, but certainly project management, can be said to be “social constructs”.
Constructed by society at large, to interpret and explain observable facts.

This brings great scientific uncertainty to the notions, and still commonly agreed, socially understood concepts but little in the way of testable definition.

What many economists do agreed upon is the importance of entrepreneurship and associated enterprise to a nation’s economy, both from renewal and so competitive advantage,and also from general economic activity. Typically more than 90% of a nation’s economic activity happens in enterprises that are entrepreneurial, and have less than 5 employees.

Schumpeter, an early writer on entrepreneurialism also identified the advantage that arose from ‘intrapreneurs’. These he suggested were people inside the larger organisation that acted entrepreneurial to bring innovation and enterprise to the actions of the larger organisation. Schumpeter saw this as being particularly advantageous, and it is tempting to identify his idea with the potential for the more enterprising project managers.

Entreprises could be conceptualised as projects in themselves.

Berber (1995), In the ‘E-Myth’ identified from observational research that new entrepreneurs might be divided into 3 ‘ types’ to assist analysis and explain success and failure amongst new start ups.
These where: the manager; the technician; the business person.
One skill set, was enough to get a business up and running, but all me three skills/areas of focus, were required to sustain the enterprise.
Typically, using observed cases, Gerber saw greatly technically skilled people leave their employer sand setup their own business only to find they abhorred the management and marketing side of the work, aspects that, however, were critical to continued success.

Key factors we think we are observing amongst MSc Alumni and associates who are entrepreneurial, in the general sense, include:
– a separation of technical ability and business management, some giving up the technical role in the medium term.
– long term thinking. Many had been thinking about setting up a business since their school days.
– they typically avoid borrowing, later we revised this to be, “were unable to borrow’ so moved slowly until the business was established.
– high rates of failure. Although this doesn’t happen to all people, some are successful from the beginning, others fail a great deal, but return to the business idea, with a persistence and
– habitual learning from that experience, without being emotional ‘downhearted’ from (what becomes) the temporary failure.
– typically they describe themselves as lazy but paradoxically, work hard, in their own time,
– and also create reflective (down) time.
– perhaps they think harder about the problems of the industry, and it is observable that they seem to be able to discuss the structure of the industry they are planning to work in.
– risk is perhaps the most contentious issue regarding the study of entrepreneurs. Many researchers suggesting that they are risk takers. We would contest this. Asked if the enterprise was risky, all entrepreneurs can be relied upon to say “yes”. But on closer inquiry, (through longer conversational approaches), we have chosen to interpret this risk behaviour as entrepreneurs as being highly focused ‘risk managers’. Putting a great deal of effort into identifying risks, uncertainties and issues, through extended consultation, and mitigating these risks away, to a degree that seems slightly obsessive. In contrast people working intro so called, and self styled ‘non-risk’ taking sectors such as local government and banking, take enormous risks with project outcomes and success, but of course do this at someone else’s risk, with someone else’s money.

To behave in this risk avoidance way, entrepreneurs, need of course to be ‘risk aware’. Having a great deal of your own capital monies invested in an enterprise can readily have that effect. Most especially if the entrepreneur has put his or her house up as surety.
Our idea of entrepreneurs being risk takers might well have simply arisen from a misunderstanding of risk perception on the researchers’ part. Asking an entrepreneur if a venture is risky is very likely to solicit as ‘yes’ answer for a whole host of reasons. Most pertinently because, in a way that doesn’t exist for company workers, the entrepreneur personally takes the risk, to self, to property, to reputation.

Innovation and entrepreneurial risk?
Also associated with entrepreneurs is the notion that they are ‘innovative’. Our own phenomenological research work did not reveal this. In fact pioneers in an industry sector tend to do to do less well that copying, so called ‘me too’ organisations. So a risk averse entrepreneur might avoid doing some think totally new/innovative.

Here again, as with risk, a closer look reveals another possible interpretation.

A less risky approach would be to enter an established market but to do something slightly better. A small process innovation. And as entrepreneurs are starved of capital compared to larger corporations, they need to innovate in order to break into the market, and get past the ‘barriers to entry’ (Porter 1985) that exist for new entrants to established markets.

Another way to achieve this, is through ‘creative destruction’. This is what Dyson did when he entered the vacuum cleaner market with an innovation that destroyed the repeating and lucrative vacuum cleaner ‘replacement bag’ market.

Another way from entrepreneurs to avoid risk is to ‘do what they did before’. Branson arguably does this when he serialises his success, taking the same model and applying it to another sector. Railway operation, running airlines, and his original business, a record shop, none of which are hardly innovative. (Although his initial break came from making his record shop ‘mail order’. Arguably innovative at the time.).

Entrepreneurs and the business case!
It is reasonably well documented that Entrepreneurs only write business cases in order to secure loans from the bank. And this is the only purpose they serve. It. Any be that entrepreneurialism requires a more fluid development of the business case. Certainly the entrepreneurs have detailed return on investment cases in their heads, allied to a keen sense of risks associated with those proposals. And as the case is ‘in their heads’ and they have no ‘other’ in the governance structure to report to, besides themselves, a written case may not be necessary.
According the finding s of the Gray report, into project business case development at the MoD, project managers may be more guilty of developing business cases that simply serve the purpose of justifying the investment funds, rather than anything more honest, or useful. In contrast Entrepreneurs are more accountable, to themselves, than many organisational employees might be.

Entrepreneurs, the unencumbered organisational project manager.
In this respect, the need to not have to report to any governance structure besides themselves, the reporting is complete, relies only on self scrutiny, but does rely on that scrutiny, does not need to exaggerate and perhaps sets the project manager/intrapreneur apart from then”unencumbered” entrepreneur, unencumbered by the organisation, it’s reporting structure and it’s process bureaucracy.

Beware the Leavers of Organisations?
Our sample is small, but of the entrepreneurs that we surveyed in our research several of them left an organisation and set up in competition in the same sector. All of these thought that they may never have left that organisation had the directors allowed me them to develop their business ideas for the company.
In one dramatic instance, the entrepreneur who left almost bought the failing company he successfully out competed.
Another forced out by the new owners, setup himself and found the previous customer group sought him out.
Another left the practice to set up herself and found her network of contacts also sought her out. Her old practice is me also a customer of hers.
Like the others she’d never have left had a promised partnership been kept. She notes that the old practice was significantly disadvantaged in the marketplace by their adherence to an older structure/processes.
Another, left his organisation only when the progression route became more difficult. He began to see his route to success as something he needed to do himself, leaving to set up his own business. And do significantly better than he could have expected by staying, better in terms of earrings and quality of life.

Risk managers?
Of particular note should.be the noticeable effort our researched group of entrepreneurs put into managing out risk for their projects.
For instance:
– beginning a business having first ensured they didn’t need to rely on it for income,arranging for their partner (husband or wife to be earning enough to support them during start up, or.
– starting at least the prototype of the business before leaving employment.
– having several contingency plans.

Transformational leaders?
In our case sample … Several of the cases could have been described as transformational leaders, and employing that style. Not any were autocratic, even with contracted resources.

What can projects managers learn from entrepreneurs and vice versa.
How might the preceding evidence (and Google Drive notes, and literature notes below) show how entrepreneurs might typically approach projects ..

List of project management activities… How might an Entrepreneur approach these activities?
Brief, problem or opportunity definition.
Feasibility study
Value management Workshop
Business case development
Risk management
Procurement (procurement strategy)
Planning strategy.
Stakeholder management
Team management
Change management
Post project review

References
See module guide for full reference listing.
Notes from…..
Bridge S, O’Neill K, Cromie S. (2003 2nd Ed) “Understanding Enterprise: Entrepreneurship and Small Business” Palgrave Macmillan
There are 9 copies in the Leeds Met library of this book. I would recommend it to you for this module. Bridges et al take an academic perspective and ‘investigate’ enterprise in this book and leave the subject unencumbered by ‘innovation’. It tests and debunks or supports some of the myths of entrepreneurship. It takes a critical thinking approach, examining what is meant by “enterprise” for instance, not accepting that we might know.

Selecting some highlights: Page 37 includes a table that lists enterprising attributes from Gibb:
•?
Autonomy/independence
Belief in control of one’s own destiny
Creativity
Determination
Flexibility
Goal orientation
Hard work
Imagination
Initiative
Leadership
Moderate rather than high risk-taking
Need for achievement
Optimism
Perseverance
Persuasive powers
Problem-solving ability.

Also from Gibb (19870 cited in Bridges et al (2003, p40)

The focus of learning.
Education focus on Entrepreneurial focus on
The past
Critical analysis
Knowledge
Passive understanding
Absolute detachment
Manipulation of symbols
Written communication & neutrality
Concept. The future
Creativity
Insight
Active learning
Emotional involvement
Manipulation of events
Personal communication and influence
Problem or opportunity

And

Entrepreneurial management Corporatist management
Values beliefs & goals
Growth by green field management
Short time horizons
Informal strategic project planning (policy & practice interlinked and emerging)
Failure means missed opportunity

Seeks incremental development as a means to reduce risk
Pursues action strategies with negotiation as and where necessary
Management evaluation on task completion

Status equals success in the market
Avoidance of overhead and risk of obsolescence by high subcontracting
Pursues effectiveness in the market

Organisational contrasts
Flat organisational structure
Challenge to owner legitimacy
Need to trust others for reward
Organic relationship emerging

Values beliefs & goals
Growth by acquisition
Long time horizons
Formalised planning systems (policy before practice)

Failure means resource-centredmisdemeanour (variance from standard)
Seeks large scale development with risk reduction by analysis/information
Pursues pre-negotiation strategies for decision making (personal risk reduction)
Management evaluation as routine aspect to the organisation
Status equals control over resources
Seeks ownership of all resources with objective of power and control
Pursues efficiency information to justify control
Organisational contrasts
Hierarchical organisation structure
Clear authority
Clear reward system defined
Regional/Legal structures

Bridges et al (2003 p55) suggest that the term enterprise might be applied when: “The task is non-routine”; “the task is somewhat complex”; “the task is goal directed”; “the goal(s) are demanding but attainable”;
And also when: “the task is tackled in an adventurous manner”; “the task is approached in a determined and dynamic manner”; “the task accomplishes the set goals (or comes near to doing so)”.
It might be apposite to remind the reader these descriptors apply to ‘enterprise’ not project. The similarity bears consideration.
Personal attributes, (Bridges et al 2003, p63-69), several personal attributes are suggested, which may apply in varying degrees, acknowledging the redundancy of ‘trait’ theory, these are: “Achievement motivation”; “Risk taking propensity”; “Locus of control”; “Need for autonomy”; “Determination”; “Initiative”; “Creativity”; “Self confidence” and “Trust”.
Several authors refer to 3 or 4 ‘roles’ that developing Entrepreneurs may enjoy or need, one example is:
(Hornaday, cited in Bridges et al 2003, p73)
Craftsman
Bus. Ownership
Entrepreneur
Professional Manager
Exploitation of innovation & growth

There’s more of worth in the development of small business I haven’t had room for here.
………………….

REFERENCES
Bridge S, O’Neill K, Cromie S. (2003 2nd Ed) “Understanding Enterprise: Entrepreneurship and Small Business” Palgrave Macmillan