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Imagine a community that is seeking to develop itself.
Now imagine that you were given the chance to bring 100 people to the community. You had to choose between:
Which group would you choose?
Why?
More enterprising communities are stronger, wealthier, happier and sustainable.
Aren’t they?
The advantages are obvious.
So how come, when we’ve explained the benefits of enterprise so carefully, and offered all the help and support any budding entrepreneur could possibly need, we’re still not mowed down in the rush as enthused and energised communities respond to the call?
DCLG has sparked a renewed interest in enterprise in deprived communities with its investment in Local Enterprise Growth Initiative. The focus on enterprise is in danger of being overwhelmed by the much larger and wider investments going into the worklessness agenda (with more of a focus on routes into employment rather than creating your own work). It must be quite strange from the residents point of view. One week someone from the ‘Government’ is urging them to get ‘a great business idea’ or ‘start a social enterprise’ and the next week someone else is telling them to ‘brush up their CV’, ‘join a job club’ and ‘seek work’. I suppose we should not be surprised that these appear to be competing initiatives at the neighbourhood level – fighting to engage the same people in their respective ‘customer journeys’. But I would like to think that more could be done to help individual residents to see these as two possible options on their journey.
I think it is interesting to meet the range of service providers involved in the local enterprise work. Some come from a very ‘public service/third sector’ orientation while others have a much more ‘follow the money’ mentality looking to deliver the outputs (often very poorly specified) at lowest cost. This latter group usually have more experience of the way that public money is spent and understand that at some point they will be held to account for what they done. From day one they count and record what they think will interest the funders. The worrying thing for me is that both sides of this divide need a little bit of what the other side has to offer. Both risk failure for different reasons.
It is also clear to me the LEGI investments are not an end in themselves but rather provide an opportunity to play a part in a much monger term, potentially lucrative and worthwhile game. The cities and regions that can show that they can take public sector funding and provide a return on that investment in terms of reduced benefit budgets, improved health and psychological well being, reductions in crime and grime, increased tax takes and NI contributions and a whole range of other social and economic benefits will surely position themselves well for future investment.
Those that deliver a range of occasionally interesting, but ultimately unproven projects, are unlikely to see further funding once the LEGI money runs out. My worry is that some do not seem to be aware of the possibility of this larger game and are happy to settle for the effective project management of what they already have resigned to the fact that it will all be wound up in a few short years when the money has all been spent.
So the challenge is to create significant value from the current investments and to demonstrate that value in hard cash terms to funders.
In my first post in Understanding your Organisation I presented a really simple image that helps to understand the relationship between strategy (concerned with future well-being), operations (concerned with the delivery of service/product to current customers) and management as the function that integrates strategy and operations. Scarily simple – but I have found it to be a powerful framework for understanding organisations of all sorts – and for quickly spotting the root cause of under-performance.
I have found several different types of problem using this simple model. Firstly we have what I call the ‘Destruction of Management’. This is caused by the different priorities and drives of operations and strategy. The Ops folks are focused on systems and processes that are designed to service current customers efficiently and effectively. They are fiercely ‘customer facing’ and push management for time and other resources to improve current operations to meet customer needs. All well and good. Just as it should be. Their perspective can be described as predominantly looking ‘inward’ (how do we improve what we have got) and down – towards the front-line.
Now the strategy folks have a different set of interests. They are interested in the art of possibility.
Their eyes are set on the technology and markets of the future. They are fiercely ‘future’ and ‘change’ oriented. Their perspective can be described as outward (what is happening ‘out there’ – technology, market demographics, prices etc) and forward looking (how do we get what we need in terms of knowledge, technology and processes to compete in the future?). They pressure management to dedicate resources to bringing this new future a step closer.
So management is caught between operations pulling ‘inward and down’ and strategy pulling ‘forward and out’.
OUCH!
Most management finds it difficult to resolve these tensions between strategy and operations.
In some organisations the strategy folks win (they usually have more positional power in the organisation) and the ops teams become jaded and cynical as they are asked to engage with strategic initiative after strategic initiative – continually engaging in change that rarely seems to make things better in the ‘here and now’ – and often pulls them away from doing good work at the front-line. They start to seriously doubt whether anyone in the boardroom really knows what the business is about.
In other organisations the strategy side is very weak and the organisation becomes myopically focused on the ‘here and now’.
In other organisations (and in my experience this is the most common situation) both strategy and operations are relatively powerful forces in the organisation and management is just not strong enough to hold the forces together. Neither great operational improvements nor insightful strategy gets executed as ‘weak’ management uses the opposing forces to negotiate a mediocre status quo.
The Ewing Marion Kauffman Foundation in the US is one of the world’s top organisations for research and development into the SME sector. Although care has to be taken in translating their work (largely research based in the US) to the UK, I always find their publications to be worth a read.
They have just published a report following a longitudinal study of some 5000 small firms that were founded in 2004, tracking their development through the early years. I think that the report should provide useful insights for policy makers here in the UK and national and local levels as well as for anyone in the game of small business development supporting entrepreneurs.
Here are some soundbites from the report – and the questions that they provoke for me:
Each year the Kauffman Foundation produces an excellent ‘Thoughtbook’ that summarises it research findings and showcases some of the excellent work that the Foundation funds to support a wide range of entrepreneurs. You can request a copy here.
Which websites and organisations do you use to access information and support?