Business owner or entrepreneur?

This blog is dedicated to all those new entrepreneurs who are making the transition from employee to employer. We commend your efforts, and wish you all the very best for the future and trust that you will enjoy this new blog. For those of you who have been in business for sometime we trust that this blog will give you new ideas and will help you expand your business horizons”.

The Paradigm Shift - The Process Begins

Paradigm shift: Definition – “a process changing or influencing a totally different focus”

The Entrepreneurial Paradigm Shift – “The ability of the entrepreneur to move from being employee focused to being employer focused”

In most cases that we have experienced, businesses are not started by qualified “entrepreneurs”, they are started by ordinary people, just like you or I. At some point in time the frustration of doing your job is what gives you the entrepreneurial brain cramp, as we call it. This is when you feel that you could do “it” better than your boss. Often this feeling is brought on by another pay cheque – yes the one that looks like every other one, the one that has not changed in years and certainly does not reflect the effort that you are making in developing the business for the boss.

Yes you are frustrated at seeing his wealth grow; the new BMW and fancy yacht and overseas holidays. It could simply be that you feel that your boss does not appreciate the effort you make towards the success of his business. It does not really matter what your reasons are for this entrepreneurial brain cramp – it is happening anyway. It’s that little entrepreneurial voice deep inside saying I better make a move and start a business of my own or I will be in the same position I am in for the rest of my life.

Your thoughts are probably along these lines, “Why am I working so hard to make this guy rich, while I could be doing it for myself. And hell, it does not take a genius to run a business otherwise this guy would not be in business. In fact without me he would probably not make it anyway, I am the best “technician” (whatever position) he has ever had”.

In most all cases there is a misconception that as the “technical” person in the company you fully understand the “technical” function within the company and thus can run the company. The technical work that a company does, does not constitute how a company technically operates. Just because you understand how to do the technical work does not mean that you will automatically understand the workings of a business which does technical work. The work that the business does is very different to the operation of business itself. So after a quick analysis of the situation you decide, “Yep I can run this business” – so you resign from your job and assume the enormous responsibility of starting a business without having done any research as to how to run a business!

Soon this quest for entrepreneurial freedom becomes just another mundane job as you go about doing the technical job that you were trained to do instead of running the company as you should be doing.

Not all entrepreneurial thinking takes place in micro enterprise. Let’s see how creative thinking can inspire entrepreneurial thinking in larger companies.

Many years ago I worked for an engineering company. It was a highly sophisticated electronic development company that had over 700 employees mostly all were degreed engineering types. But a newly appointed CEO provided me with a new insight to entrepreneurship and his concept has remained etched in my memory.

Because the company survived on the competencies of its engineers to develop new and original technically advanced products for international markets, there was little scope for these engineers to move up the management ranks and improve their benefits and salary packages. In fact they had found that too often a good engineer promoted to the position of engineering manager resulted in a poor manager. Taking the engineer away from engineering meant that the person was no longer involved in the development of new technologically advanced products, but was confined to manage the people who were doing the development. This often resulted in the finding that the “new manager” was in fact incompetent at management. But his engineering position having now been filled and his failure to be a competent manager resulted in his demotion or worse, release from the company. The result, the loss of a very good engineer! The newly appointed CEO began restructuring the company and redefining the engineering departments function and leadership. The approach he used was “just because a person is a brilliant engineer did not make them a good manager”. The first restructuring came in the form of the creation of business units where a set of products or product lines fell under the responsibility of a business unit. Each business unit had its own profit and loss center, thus creating small businesses within the company.

He then looked for entrepreneurial spirit amongst the existing engineers and sought out those who wanted to run their own business unit. In some cases he was not successful in recruiting internally for all of the business units and had to search outside the company for the skill sets he was looking for. Once he had his team selected they had a business restructuring meeting and each newly appointed “business unit” executive had to work with his team of engineers to put together a financial budget. This was done so that each person in the new business unit understood the importance of the units financial budget and what information made up the budget. This set of financial accounts would represent the unit as if it where a stand alone company. Thus the financials had to show sales, cost of good sold and expenses and of course had to reflect the profit or loss situation. The newly appointed entrepreneurs or business unit executives as he called them soon came back to the table with their individual budgets. Feeding off of each others competitiveness they created a good team spirit filled with rivalry, with unit exec’s making their own positions for success very audible. The CEO had effectively created intra-preneurship. A state of entrepreneurship within a large company! The CEO went further with his changes allowing each unit executive to provide the engineers with the same benefits packages as they would receive as if they had moved into management positions as long as they met the performance criteria. This kept the engineers very happy as they were receiving the benefits at the same level as their management counterparts would have under the old structure but they remained in the very important engineering function doing the jobs that they truly loved with the opportunity for growth as they succeeded. But such incentives could only come about when profits where made.

All individuals in the business units were now working towards common objectives and in doing so they developed into a very close knit team who were determined to deliver the goods.

The CEO had devised a method that would bring the entrepreneurial spirit to each of the business units and at the same time inspire the engineering team. This clearly demonstrated to me that the entrepreneurial spirit can be developed in larger companies. What this meant to me was that entrepreneurship could be introduced into different sizes of companies and at different levels.

Through the process of storytelling let us look into the dynamics of the “entrepreneurial brain cramp” and the inevitable paradigm shift.