1 System System ® ® : : A New Approach to Developing A New Approach to Developing Entrepreneurs Entrepreneurs By: Gregg A. Lichtenstein, Ph.D. President, Collaborative Strategies, LLC Presentation to: Presentation to: WIRED West Michigan Quarterly WIRED West Michigan Quarterly Meeting Meeting Thursday, June 15 th , 2006 1:30 p.m. – 3:30 p.m. Location: Alumni House, GVSU Allendale Campus
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1 The Entrepreneurial League System ® : A New Approach to Developing Entrepreneurs The Entrepreneurial League System ® : A New Approach to Developing Entrepreneurs.
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The Entrepreneurial League SystemThe Entrepreneurial League System®®: : A New Approach to Developing EntrepreneursA New Approach to Developing Entrepreneurs
By:
Gregg A. Lichtenstein, Ph.D.President, Collaborative Strategies, LLC
Presentation to:Presentation to:
WIRED West Michigan Quarterly Meeting WIRED West Michigan Quarterly Meeting
If we want to create greater individual and If we want to create greater individual and community wealth, then as a community, community wealth, then as a community,
we collectively need to assume we collectively need to assume responsibility for...responsibility for...
Developing a supply of highly skilled entrepreneurs that are capable of building
successful companies in sufficient numbers to transform our economy.
We recommend a new set of “lens” that We recommend a new set of “lens” that allows us to shift from seeing an allows us to shift from seeing an
undifferentiated undifferentiated pool pool to seeing a to seeing a pipelinepipeline consisting of variegated stocks and consisting of variegated stocks and
A A pipeline pipeline offers us a way to map the supply offers us a way to map the supply of entrepreneurs and enterprisesof entrepreneurs and enterprises within our within our
communities. It consists of two key concepts:communities. It consists of two key concepts:
Our goal in managing the pipeline is to enhance the Our goal in managing the pipeline is to enhance the performance in each segment and to increase the performance in each segment and to increase the
movement or flow of entrepreneurs and enterprisesmovement or flow of entrepreneurs and enterprises
1. Entrepreneurship and innovation is an issue at every cell in the pipeline
2. The needs of entrepreneurs and enterprises at EACH segment of the pipeline are different as is the services and infrastructure necessary to support them
We can broaden our notion of the “business We can broaden our notion of the “business assets” in our communities to include…assets” in our communities to include…
Business Lifecycle Stage Type of Clients
Stage 0 – Pre-venture Aspiring entrepreneurs, potential entrepreneurs, entrepreneurs in search of ideas
Stage 1 – Existence Existing Entrepreneurs
Stage 2 – Early Growth Existing Entrepreneurs
Stage 3 – Late Growth Existing Entrepreneurs, Product Extension
Stage 4 – Maturity Intra-preneuers or Spin-out Ventures from Existing Companies, Strategic alliances bet. firms
Stage 5 – Decline Entr. attempting to reinvent their companies, e.g., 2nd or 3rd generation family members
We are missing valuable opportunities to expand our clientele – for example, by failing to include intrapreneurs (internal corporate entrepreneurs) and “managers” of strategic alliances between companies
Given this map of the community’s business Given this map of the community’s business assets – where would assets – where would youyou invest scarce invest scarce
What does the process of mapping your What does the process of mapping your pipeline of entrepreneurs and enterprises pipeline of entrepreneurs and enterprises
mean to a community?mean to a community?
You now have a concrete basis for making strategic decisions about how and where to invest your resources – and for how long.
Developing the region’s pipeline of Developing the region’s pipeline of entrepreneurs and enterprises involves 3 major entrepreneurs and enterprises involves 3 major
activities or strategies:activities or strategies:
1. Performance Coaching and Success Teams
2. Talent Scouting and Pre-venture activities
3. Opportunity Scouts and Market Development Service
Implementing the ladder of skill development Implementing the ladder of skill development (i.e., pipeline) by creating Success Teams(i.e., pipeline) by creating Success Teams
Ramp-up in ELS Participation Rates:
Year 1: 24 entrepreneurs or 2 teamsYear 2: 60 entrepreneurs or 5 teams
Building an Entrepreneurial Culture – Building an Entrepreneurial Culture – start small, allow the change to start small, allow the change to radiateradiate out and out and
influence the entire communityinfluence the entire communityCore folks – lead by example
The challenges faced by entrepreneurs in The challenges faced by entrepreneurs in working with service providersworking with service providers
E’s don’t know who to go to for what– E’s often don’t know what they need– E’s don’t know who does what; cannot make the right connection (or it takes too long, or is
simply impossible to accomplish) – E’s demanding new services that happen to already exist (i.e., not visible) or can’t get access – E’s don’t know how to judge the quality of a service; many have never used assistance
agencies; quality is often uneven, breadth of offerings, but no depth; E’s often don’t trust service providers (in some cases, for good reason – we have
observed providers that will provide only what they know, not what the E needs; also mismatch in levels, will not provide it how the E needs)
E’s are often overwhelmed by the number of providers and the array of choices; as a result they either do nothing or make the wrong choices
Referrals are rarely made or not made well E’s often don’t know how to utilize the assistance they’ve received E’s sometimes do the right thing but in the wrong order – often with devastating
consequences Many E’s have no map of how to grow their business that can guide them in these
decisions Entrepreneurs don't know how and where to address their requests for new services
Demand side issues: problems that service Demand side issues: problems that service providers experience with entrepreneursproviders experience with entrepreneurs
There never seems to be enough E’s with whom to work (e.g., we offer “x”, but no one is interested...; more service providers at events than entrepreneurs; constant trolling for clients, etc.)
The folks that show up (or are referred for help) don’t fit with our mission
E’s just won’t listen to advice E’s blame everyone else for their failures E’s make the rounds of service providers, but never seem to
progress (don’t make use of the assistance) E’s come for help when it’s too late E’s are unwilling to pay anything or don’t appreciate the value
of the help that they receive E's unwilling to cooperate with information requests (e.g., to see
their financials); [requires a need a relationship first]
Problems experienced by the Problems experienced by the community as a whole community as a whole
Unproductive competition among service providers Service provider goals do not always match the needs of the
community Ideological vs. strategic selection of client targets Inability to determine value, ROI to community as a whole Lack of data on impact of service provision; difficult to know
pattern of needs (due to balkanization). Difficulties in making wise investment decisions among a wide
array of enterprise development activities Concerns about effectiveness, efficiency, equity, sustainability
Design principle: Separate the functions of developing Design principle: Separate the functions of developing entrepreneurs from addressing their needs for entrepreneurs from addressing their needs for
technical and financial assistancetechnical and financial assistance
The two functions have different roles and objectives, requiring different skill sets, resources and values– Explain the development function– Explain the service provision function
An integrated and effective enterprise development system requires both systems (or sub-systems, or parts)
These functions must be separated because a single organization cannot perform both effectively (except in rare cases, but one cannot design a reliable system based on unusual people)
There must be a dynamic balance between these two subsystems (explain – neither can dominate); their operation must be integrated
There must be a dynamic balance There must be a dynamic balance between these two (sub) systems:between these two (sub) systems:
One for developing One for developing entrepreneursentrepreneurs
One for providing One for providing services – meeting needs services – meeting needs entrepreneurs have for entrepreneurs have for technical and financial technical and financial
The ideal service provider The ideal service provider systemsystem is is one that…one that…
Provides the entrepreneurs in our communities or regions with the right kind of help (i.e., technical and financial assistance) at the right time and at the right price – no matter where they are located in the region.
Example ofExample of Linkages among Service ProvidersLinkages among Service ProvidersI=Informal F=Formal
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SBDC F F F I F F F LCDB I I I LMBDC F F F METCO LBRC F F I I KMSDC I NDC Af.Am. Srat. Plan.Group I I I I I SCORE I I I I LW Co..-Minority Business team I I Mayor’s Office of Affirmative Action I I I Urban League I F I Mc Conn. Tech.Trans.Center I I I I Af.Am.Vent.Capital Fund I I VA Med.Center –Contracting Depr. I I LCDB Enterprise Group I I I I Capital Access Corp. I I I KY World Trade Center I LCDC –Business Plus I I F I I Black Chamber of Commerce I Human Relations Committee I I Minority Business Outreach I I I I I Export Assistance Center I I I SBA F I I F F
Data taken from Study of Louisville Minority Business Development Service Providers
What are the key ingredients or What are the key ingredients or building building blocksblocks for describing who does what? for describing who does what?
1. Type of client (i.e., which part of the pipeline – level of skill, stage in the lifecycle, type of business)
2. Entrepreneurial need (functional)3. The offering – the practices or interventions
Please note: the skill level of the clients with Please note: the skill level of the clients with which you work says nothing about your own which you work says nothing about your own
skills!skills! Few organizations work with AAAs and there is nothing
shameful about that. Blessed are those that work with Rookies and Single As;
they often require the patience of a saint! AAA entrepreneurs were once entrepreneurs at lower
skill levels. It is only by working with Rookies, A and AA entrepreneurs that we can produce AAAs or Major Leaguers.
We need a distribution of service providers at all skills levels in order to have an effective ladder or pipeline.
The ELS benefits service The ELS benefits service providers by:providers by:
Creating demand for services and improving utilization Linking clients to providers and providing them with
qualified, pre-screened clients Facilitating access on a proactive vs. reactive basis Linking different kinds of services for synergistic effect Enabling services to be delivered more cost-effectively Fostering coordination among service providers
Our experiences to date: Our experiences to date: Philadelphia, PA: with urban manufacturers, high tech
startups, minority businesses, etc. Louisville, KY with minority service providers Johannesburg, South Africa with micro-enterprises in
the garment industry Advantage Valley: WV/KY/OH: now more than 75
participating entrepreneurs Central Louisiana Western Michigan: WIRED grant recipient Lake Superior region: NE Minn and NE Wisconsin Lucent Technologies Corporate Incubator
How Collaborative Strategies works How Collaborative Strategies works with communities or regions: with communities or regions:
Our goal is not only to help create entrepreneurial communities and improve their economic performance, but to help communities develop their ability to achieve these outcomes for themselves.
This outcome requires: a well-designed system (which has been created, field tested and vetted), talented people to operate the system locally, and a skill-building process by which they learn the system and develop their skills to execute successfully.
Collaborative Strategies licenses the operating system as well as the tools and provides the training and on-going coaching necessary for communities to successfully operate an Entrepreneurial League System® themselves.
We collaborate with the community to form a team; we are jointly responsible for success.
“This workforce solution was funded by a grant awarded under Workforce Innovation in Regional Economic Development (WIRED) as implemented by the U. S. Department of Labor’s Employment and Training Administration. The solution was created by the grantee and does not necessarily reflect the official position of the U. S. Department of Labor. The Department of Labor makes no guarantees,warranties, or assurances of any kind, express or implied, with respect to such information, including any information on linked sites and including, but not limited to, accuracy of the information or itscompleteness, timeliness, usefulness, adequacy, continued availability, or ownership. This solution is copyrighted by the institution that created it. Internal use by an organization and/or personal useby an individual for non-commercial purposes is permissible. All other uses require authorization of the copyright owner.”
Please note that this material is copyrighted. Its distribution and use, which is encouraged, should be done with attribution and acknowledgement of the source.
The term “Entrepreneurial League System®” is a registered trademark of Collaborative Strategies