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Enterprise trumps Entrepreneurship

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I think that enterprise is much more important for our communities than entrepreneurship.
Entrepreneurship focuses on encouraging people to move into self-employment or to start, or grow their own business. If instead we focus on enterprise we are encouraging people to think about their current situation and how it might be improved. We are helping them to develop strategies that will move them towards their preferred future.
By promoting enterprise in this way we will of course encourage entrepreneurship. As people become more enterprising they may, on occasion, need to start a new business to get them from where they are to their preferred future.
However our default setting should be to dissuade people from starting a business. If we can easily put them off, then it is likely that they would not have the necessary perseverance to make the business work. If they are insistent that only by starting a business can they become the kind of person that they wish to be and create the kind of future that they wish to have, then, and only then, should we roll our sleeves up and do all we can to help them succeed in their entrepreneurial venture, safe in the knowledge that they have the determination and persistence that they will require to succeed.
By adopting a premise that we should persuade as many people as possible not to start a business I believe that we can significantly increase the survival rate of those businesses that do start-up. As people in the community begin to see businesses that are both well thought through and successful taking hold, more and more will begin to believe that starting a business is not almost inevitably going to end in debt and misery.
However, even in the most entrepreneurial communities it is likely that fewer than 10 in 100 people of working age are ever likely to start their own business.  I would contend that of those hundred people every one of them would benefit from learning how to become more enterprising. That is, how to identify their current situation how to recognise what an improvement might look like, and to put in place plans and actions to move in that direction.

This is why I think that enterprise is much more important, as a concept or a philosophy, for our communities than entrepreneurship. If we wish to have more entrepreneurial communities then we must start by first making them more enterprising.

Employment and Skills – 21st Century Stylee?

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  • How do we develop a workforce that is Fit for the Future?
  • How do we tackle the problems of ‘worklessness’?

Important questions that we have sought solutions to for most of my working life.

Broadly speaking we have two possible approaches.  We can  set up a committee of the great and the good, employers, politicians, civil servants from Learning and Skills and Job Centre Plus and we can task them with collating evidence on labour markets, forecasting the future and identifying practical and affordable opportunities to intervene in the systems of education and worklessness that will make sure we develop the workforce that we need, when we need it.  This centralised approach puts power and resources in the hands of an Employment and Skills Board and sets them an impossible task.  It is the Soviet approach to planning tractor production.  It didn’t work for them.  And it hasn’t worked for us.

This approach results in a relatively small number of experiments (pilots) that are later rolled out.  It relies on a committee to accurately ‘read’ the future – to spot opportunities for job creation and then to exert an influence on the ‘production system’ quickly enough to make a positive difference.  This is usually done by setting targets, shifting resources and waiting to see how things unfold.  Strategies are typically set for perhaps half a decade and ‘refreshed’ annually – single-handedly tackling the worklessness agenda by employing a small army of civil servant and academics to collect data and produce reports.

Such boards end up being an ‘interesting’ balance between the voice of the private sector and democratic accountability.  In fact they usually become stylized ‘war zones’ from which the private sector often retreats beaten into submission by public sector and academic working practices.  Certainly the voice of the small business sector is rarely effectively heard.

Board strategies usually find a few ‘keys’ (NVQs, Diplomas, accredited in-house training, apprenticeships) to a few kingdoms (construction, health and beauty, tourism, call centres, and anything prefixed with ‘creative’, ‘digital’, ‘bio’, ‘high tech’ or ‘high growth’).  Aspirations and strengths of people are subordinated to the Board’s ideas about future skills needs and ‘opportunities’.  Conformity is valued over originality.  Learning ‘off piste’ becomes tricky.

Alternatively we could radically de-centralise and localise the process of thinking and planning about ‘fitness for the future’.  Instead of relying on an Employer Skills Boards to ‘make things right’ we could lay down a challenge to people to develop the skills and passions that they need to secure an economically viable future for themselves, to find what, for them, is ‘good work‘.  To  find their own contribution.   We could develop enterprising people supported in enterprising communities.  This would need schools and colleges to focus on the learner and their vision for their future rather than on the curriculum or qualification structures.

Such a decentralised, enterprising approach might:

  • enable many more informed brains to be brought to bear on the problem of fitness for the future – academics, industrialists and civil servants do not have a great track record in ‘workforce development’
  • enable people to explore ways of doing what they can do best – and not sub-optimising to conform with the ‘few keys to the few kingdoms’ identified by ‘The Board’
  • encourage the local community to support people in acquiring the skills, experience and work opportunities that they need to flourish economically and socially
  • support people to find learning experiences that help them to become the person that they want to be – rather than to conform with the ideal established by a fallible and distant Board
  • significantly increase the volume of learning experiments in the labour market and enable word of mouth to make sure that we develop a dynamic, flexible, responsive and self-reliant workforce

Perhaps these are not alternatives.  Perhaps we need to develop both strategic and responsive approaches to employment, skills and worklessness in the 21st century.

One thing I am sure of… establishing yet another Employment and  Skills Board (this time for the Leeds City Region) is unlikely to give us a major step forward.

Portfolios and Metrics for Enterprise Coaching

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  • What sort of numbers is it realistic to expect a full-time enterprise coach to deliver?
  • What does a healthy coach portfolio look like?
  • If I employ 5 coaches to work in  city of 750 000, what sort of results should I expect?

Well here are my thoughts….

The basic unit of coaching is the 121.  Each 121 will usually take between 45 minutes to an hour.  Of course they can take longer – but this is rarely productive.

121s are intense, often emotional and usually challenging.  If they are aren’t, you are not doing it right!  This means that a coach can do on average 3 x 121s in a day.  This should mean that they can deliver well in excess of 600 personal coaching sessions in a year – 650+ is not beyond the realms of possibility.  Of course geography matters – if clients are scattered across Northumberland you will spend more time travelling than if you coach in an urban centre.

I would expect to see a coach working with about 200 unique clients in the course of a year.  Yes, three or so new clients coming onto the portfolio each week!  I would expect to see each coach working with a catchment area of between 15 and 50 000 residents depending on population density and other demographics.

The one hit wonders

A proportion of clients will come once and may not return for months or years, if ever.  We may have helped them enormously.  We may not have helped them at all.   We may never know – although if you are visible and accessible enough and they stay in the area you should be able to get some feedback.  I have known clients who were clear on what they wanted to do after just one session and went and did it.  In fact one client called me after 3 years and said that he had started his business and now wanted to expand – would I like to have a chat!  Others just don’t come back when they recognise that:

  1. I am not in the business of giving them money or pulling magic rabbits out of hats
  2. They will have to do some work on this – it is not an easy option

The percentage that fall into this category can vary widely usually depending on the kind of marketing used to promote the service.  If the marketing says ‘We can make your dreams come true’, ‘Funding available’, ‘Lunch provided’ or some combination of the above then the number of one hit wonders will be high.  Where marketing is through word of mouth, real clients telling others about what the service is really like and what it has helped them to achieve then they should be much lower.  Effective word of mouth depends on your service being quite literally ‘remarkable’ and you being prepared to actively ask clients for introductions and referrals.  If they are not happy to give you these it is likely that your service is just not good enough.

If the number of one hit wonders creeps much above 25% I would be wondering about whether we had problems with our marketing and reputation – or whether the coach was just not able to connect with the client group.

The Ideal Clients

In some ways the ideal clients are the one hit wonders who just go and do it, start a business, and return years later to look at business expansion.  But these are rare, and often can’t be counted for funding purposes!  The real ideal client engages with us, takes seriously the notion of doing work between meetings and returns for subsequent visits to make further progress.  We can build a strong relationship with them and provide much more support to them in developing their ideas and skills.  We can also start to see a story emerge about our own effectiveness.  We can record the progress the client has made and provide high quality quantitative and qualitative information on our effectiveness to funders.  Such ideal clients will typically require between 3 and 6 121 sessions over the course of anything from several weeks to 6 months or more.  I would hope to see good coaches with some 50%, or 110 plus clients each year.  Of these I would be expecting around 15- 20 clients to actually go ahead and start their business from anything within 4 months of the first 121 up to a few years after the first meeting.  There is much to be said for slow enterprise.  I would certainly expect a good, established coach, working in an effective system, to support anywhere between 15 and 20 or so starts each year.

I would expect upwards of 80% of these new starts to be trading 3 years later.  Survival rates should always be very carefully tracked, and serious consideration given by both the coach and the service as a whole as to how they can be maintained and improved.   Helping clients to start businesses that they have not got either the commitment or skills to manage effectively  or for which there is not a sufficient market to sustain will only help to set back the reputation of the service and the enterprise culture of the community.  However attractive it might be to get another start-up box ticked we should be doing all can to slow our clients down until they really have the very best chance of long term survival.  A much smaller number of really strong startups is worth much more to the long term enterprise culture of the community than a rash of sickly ones.  I only wish funding regimes would recognise this.

Anything significantly less than this would set my alarm bells ringing that all is not right.  The problem might be with the coach, with the enterprise coaching system (including marketing and administration), or with the enterprise culture in the community.  The coach cannot do this on their own.  There needs to be a substantial network of pro-enterprise individuals who can provide additional support and provide an effective counter the negative messages about enterprise that often pervade communities.

While the other 85 perhaps don’t start a business I would expect each of them to have been significantly assisted by the coaching process to clarify goals and learn how to be much more enterprising in their pursuit.  These outcomes are valuable and should be recorded and wherever possible paid for (or at least reported to) by the appropriate funder.

The Demanding Clients

So this leaves us with perhaps 25% of our clients, 40 or so in the course of nay one year, who are really demanding.  They need more than half a dozen 121 sessions.  Perhaps they are starting from a long way back and need many 121s over a period of years before they start to make substantial changes – or decide to stick with the status quo.  They may need referring to specialist service providers before our coaches can do much more with them.  Perhaps they just like to spend time with coaches, fooling themselves and others that they are really working for a better future.  Demanding clients may just need a higher level of support – live with it – or they may be a sign that actually a coach is promoting dependence, happy to keep working with clients who won’t make progress because they can just count the sessions.

The actual dynamics of a coach’s portfolio will vary depending on the geography, psychology and enterprise culture of the community they serve as well as their own experience and longevity on the patch.  It may take a couple of years to achieve a stable portfolio of the type I have outlined here.

It will also depend on the type of marketing support they receive.  Often well intentioned marketing activities can produce floods of clients that need to be seen, but who turn out to be one hit wonders of the worst kind.  I am a big advocate of expecting enterprise coaches to develop their own referrals through word of mouth from existing clients, perhaps augmented with a little bit bit of judicious PR.  Expensive advertising campaigns may attract punters to one off events and workshops but are much less effective at actually finding people who really want to work effectively and intensively with enterprise coaches.

The Role of the Manager in Supporting Enterprise Coaches

Call me a traditionalist but I think that the manager has a key role in both supporting the coach to develop an effective portfolio.  Each coach should be seen ideally every week, certainly fortnightly to review the portfolio and the progress that is being made by specific clients.  Ratios of one hit wonders to ideal clients to demanding clients should be tracked for clues about the performance of the coach and the system that they are operating in.  Where specific clients are providing cause for concern (insufficient progress is being made, specialist services are requires that are beyond the boundaries of the coaching service, client behaviours are causing concern for example) explicit strategies should be developed for managing them effectively.  At least three or four times a year the manager should observe the coach at work, accompanying them on 121s and providing them with feedback and coaching support.

Closing Remarks

Getting an enterprise coaching service to work really well takes years rather than months.  Coaches have to become known, trusted and skilled.  Marketing strategies have to be honed.  The numbers I have mentioned here are achievable but not in all situations and never instantly.  They have to be built towards with intelligence, insight and dedication.  Sadly, funding regimes often encourage us to take the expensive and unproductive short cuts of putting adverts on buses, building flashy websites and holding conferences and expos with dragons, apprentices, millionaires and free lunches just to get punters through the door.

But it is not any punters that we need. It is those who believe, because of our reputation and our track record, that we can help them to use enterprise to transform their lives for the better.

My notes on Doug Richard’s Entrepreneurship Manifesto

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While reading the manifesto I made some pretty comprehensive notes and numbered them for ease of reference.  No analysis yet – just my notes…pieces that especially provoke or intrigue me I have highlighted in blue…

Doug Richards Entrepreneurs Manifesto

1 Public declarations aimed at supporting UKs 4.4m entrepreneurs

2 Manifesto

2.1 A statement of principles highlighting challenges to overcome to release entrepreneurship

2.2 Spectre of capitalism

2.2.1 Greedy bankers

2.2.2 Amoral corporations

  • Pitting tax regimes against each other
  • Failure of a global commons means they can escape costs of infrastructure and society that supports them

2.2.3 Bloated State incapable of controlling capitalism

  • failing to deal with poverty, worklessness etc
  • Outgrowing the economy
  • We are demonstrably poorer – the system does not work

2.2.4 States competing to be servants of capitalism

2.2.5 The environment has no voice/the consumer no collective

2.3 Unleashing the Wealth Creators

2.3.1 Wealth of the nation rests on entrepreneurial activity

2.3.2 The state as a servant of society

2.3.3 Must harness the power of the entrepreneur to improve services

2.3.4 Size of the state is not the enemy

2.3.5 State run services immune from creative destruction

2.3.6 Fairness of the least…only the State can ensure fairness in health, education etc – no-one can have more than the least.

We cannot improve until we can improve everyone – and therefore we improve no-one

2.3.7 State’s role is to create playing fields on which entrepreneurs can be released to deliver service

2.3.8 Harness collective creative self interest of our entrepreneurial output for the benefit of meeting our social objectives

We will see a flowering of ideas, a manifold unfolding of new approaches and a gale of creative destruction

3 Declaration of Rights

3.1 Practical recommendations to clear the path for an explosion in entrepreneurship

3.1.1 Entrepreneurial culture as the only force that exists for growth, prosperity, fairness and social justice

3.1.2 Not about privilege; few getting rich at expense of poor;

3.1.3 About creating ladders of social mobility

3.1.4 Increasing wealth so we can afford services, health education etc

3.1.5 To harness entrepreneurship first we must understand it

  • Risk and reward

3.1.6 Must increase economic freedoms for all businesses taking business risks

3.1.7 Cut the time it takes to start a new business

3.1.8 Streamline regulations, exempt small business where possible

3.1.9 Get government out of Business Support – just focus on regulation

3.1.10 Free up family savings for investment in nascent business with credits and exemptions

3.1.11 Stop paying people to be unemployed – share costs of ‘teaching them to be employed’

3.1.12 Employers have no means to underwrite the costs of turning students into productive employees

3.1.13 Govt is largest consumer – must change procurement patterns

  • Must drive revenue to entrepreneurs
  • Open doors to innovation

3.1.14 Use new legal frameworks to broaden scope for social entrepreneurs – encouraging for profit co-owned businesses and for profits that deliver social benefits

3.1.15 Understand that we do not understand

3.1.16 Must empower people to step out on their own, take risk, hope for reward and move on from failure.

3.1.17 The corrosive impact of an over protective state is not merely the loss of our sense of responsibility to a civil society; it is the even more profound loss of our sense of capacity to change society, to have an impact, to be an entrepreneur.

3.1.18 Entrepreneurship can be taught and must be learned

Enterprise Development Needs a Very Different Response

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If we are serious about developing more enterprising individuals and communities, rather than managing the outputs that most enterprise funders are looking for (start ups and VAT registrations), we need to concern ourselves with the development of self-interest and the accrual of power through organisation, association, collaboration and the acquisition of ‘knowhow’.   We are in the realms of person centred facilitation, community development and education.  Not business planning.  This requires an enormous shift both in what we do, and how we do it.

Helping people to clarify their self-interest and find the power to pursue it requires very different structures and processes to those that we currently use to develop enterprise. It is not about setting up a business.  It is not about experiencing ‘Industry Days’ at school or attending ‘Enterprise’ Conferences with (not so) secret millionaires, dragons and ministers.  It is not about Catalyst Centres and managed workspaces (although these might be useful for the small percentage of people who choose entrepreneurship as the most appropriate way to express their enterprising souls).

It is about engaging in a dynamic and continuous reflection on who we are and what we want to become, and managing processes that will help us move in that direction in a complex and rapidly changing world.

The Davies Review defined enterprise as  the capacity to:

  1. handle uncertainty and respond positively to change – Resilience
  2. create and implement new ideas and ways of doing things – Creativity and change
  3. make reasonable risk/reward assessments and act upon them in one’s personal and working life – The Pursuit of Progress

No mention of employment, entrepreneurship or business. Instead it is about resilience, change making and progress.  Enterprise development needs to find a new home where this broader conception can flourish without the distorting, primarily economic calculus of entrepreneurs and The Treasury.  They will have much to offer to the development of entrepreneurship – but that is only ever likely to be relevant to a minority.  Enterprise needs to escape, what for many is, the deadening hand of business.

The art and science of enterprise is relevant to all and we need to build communities and relationships that understand how to nurture it.

One of my big regrets is that so little LEGI funding has been used to drive this sort of innovation.  Instead it has been used, often wastefully, in the short term pursuit of business startups and in placing cuckoos in the heart of some of our poorest communities.

Anyone up for some innovation in Local Enterprise?