NEW ENTREPRENEUR-FRIENDLY MANAGEMENT APPROACHES

Report
NEW ENTREPRENEUR-FRIENDLY
MANAGEMENT APPROACHES
An Overview
Bob Kolodney
May 3, 2012
20TH CENTURY STATE OF THE ART
STRATEGIC POSITIONING
Michael Porter’s Five Forces
That Affect Competitive Advantage
Supplier Power
Threat of
New Entrants
Degree of Rivalry
Buyer Power
Threat of
Substitutes
MANAGEMENT BY OBJECTIVES
(Peter Drucker)
BUSINESS PLAN
Executive Summary
Concept
Objectives
Market Analysis
Production
Marketing
Technology
Organization/People
Financial Projections
Ownership
Exhibits
EVALUATION OF BUSINESS PLAN
KEY ELEMENTS (William Sahlman)
1) People
2) Opportunity
3) Context
4) Risk/reward
USEFUL RATIOS FOR ORIENTATION
AND CASH MANAGEMENT
• Break-even = Fixed costs / (Average price per unit –
Average cost per unit)
• Quick Ratio = Cash and Equivalent + Accounts
Receivable/ Current Liabilities
• Acid Test = Current Assets – Inventory / Current
Liabilities
• Inventory Turnover = Sales/Inventory
• Alternatively, Inventory Turnover = Cost of Goods
Sold/Average Inventory
• The Key Metrics for your Business
FOUR NECESSARY TALENTS ON THE
VENTURE TEAM (Ichak Adizes)
- Vision (Entrepreneurial skill)
- Execution (Energetic, persistent accomplishment)
- Administration (Repeatable processes for consistency)
- Human relations (For integration, motivation)
EMOTIONAL INTELLIGENCE
(Daniel Goleman)
PERSONAL COMPETENCE:
SELF AWARENESS
SELF-MANAGEMENT
SOCIAL COMPETENCE:
SOCIAL AWARENESS
RELATIONSHIP MANAGEMENT
ROSEN’S PARADOXICAL TRAITS OF
TOP LEADERS
Realistic Optimism
Constructive Impatience
Confident Humility
MANY OTHER TOOLS/Visions
Such As:
TQM/Continuous Quality Improvement
Re-engineering
Balanced Scorecard
Matrices:
• SWOT
• Growth-Share
• Risk-Potential Reward
• Competitive Environment
Fish and other Popular Movements
The Momentum Effect (Stakeholder mobilization)
GREAT INSIGHTS AND TOOLS, BUT:
Huge Failure Rate of New Ventures
Even for VC-Backed Firms
(70% do not earn back capital invested)
Many Kamikaze Efforts
10-30-60 Untamed
Rampant frustration, wasted effort and capital
SOME 21ST CENTURY DEVELOPMENTS
DISRUPTIVE INNOVATION (Clayton
Christensen and Colleagues):
KEY ORIENTATION – Differentiate between Disruptive
Innovations and Sustaining Innovations and Act Accordingly
COMPONENTS OF BUSINESS MODEL
1) Value Proposition
2) Resources
3) Processes
4) Profit formula
CLASSIFICATIONS OF BUSINESS MODELS (Archetypes)
1) Solution Shop
2) Value Adding Process Business
3) Facilitated Network
BLUE OCEAN STRATEGY (W. Chan Kim)
Key Orientation: Craft product/service value proposition
to differentiate from competition, satisfy “noncustomers”, open up new market space and avoid head-tohead competition
FOUR ACTIONS TO CHANGE ELEMENTS OF
PRODUCT/SERVICE OFFERING:
1) Eliminate
2) Reduce
3) Raise
4) Create
For a Strategic Canvas Different from the Rest of the
Industry
LEAN STARTUP (Steve Blank, Eric Ries)
KEY ORIENTATION: The Startup as an Experiment – A
Series of Learning Experiences
Principal Components:
• Build-Measure-Learn Feedback Loop
• Minimum Viable Product
• Small Batch Approach
• Validated Learning/Learning Milestones
• Innovation Accounting/Actionable Metrics
• Persist or Pivot Decisions
• 5 Whys
• Continuous Innovation Organization
CO-CREATION
(C.K. Prahalad and Disciples)
KEY ORIENTATION – Creation of New Products, Services,
Experience and Enhanced Value through Collaboration
THE CO-CREATION APPROACH:
- Create Collaboration - Between Employees, Between
Employees and People outside the Firm , Most Notably
Customers (also Suppliers, Distributors, Retailers)
- Create a Community and an Engaging Experience
- Like a Huge Suggestion Box, but Much More
- Social Media Can Magnify the Impact
- The Process of Turning Zombies into Live Players
- An Art to Do it Effectively - Some Control Relinquished
- Notable Successes: Starbucks, Nike
SO – WHERE ARE WE?
Entrepreneurship: “A messy business – like making
babies…we haven’t figured out how to automate it”
Joe Lassiter
It’s still like the study of the Genome and the Brain:
• We have a lot to learn;
• We have started to figure out what’s inside the black box
of a successful New Venture;
• Still, Entrepreneurship = Extreme Management
• But, We are living in the best period for it in history;
• Communications and analytical technology let us move
faster and cheaper;
• The Business School Professors have developed
remarkable patterns for us to channel our thoughts and
actions.
CONGRATULATIONS
TO OUR ALL OUR NVC COMPETITORS
THANKS FOR YOUR TIME AND EFFORT
GOOD LUCK!

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