ENTREPRENEUR CAPITAL INTRODUCT AIMS OUTCOMES INTRODUCTION AIM AND
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ENTREPRENEUR CAPITAL INTRODUCT
AIMS & OUTCOMES INTRODUCTION: AIM AND OUTCOMES Aim: Explain the ingredients of entrepreneur capital. Outcomes: 1. Define Entrepreneur capital 2. Explain the components of entrepreneur capital 3. Recognise the Entrepreneur cycle of organise, discover, achieve & protect 4. Introduce the Entrepreneur Action Model 5. Measure Entrepreneur Capital www. entrepreneur-thinking. com
COBRA BEER – LORD KARAN BILIMORIA WHAT DO ENTREPRENEURS DO? "Entrepreneurship is about coming up with an idea, wanting to take it somewhere and against all the odds making it happen, that's what entrepreneurs do” Lord Bilimoria www. entrepreneur-thinking. com
WHAT DO ENTREPRENEURS DO? ORGANISE, DISCOVER, ACHIEVE, PROTECT ▸ Breaking down Lord Bilimoria’s entrepreneur statement: § "Entrepreneurship is about coming up with an idea (DISCOVER, Create Value, Inventor), § Wanting to take it somewhere (ACHIEVE, Deliver Value, Leader) § Against all the odds making it happen (PROTECT, Manage Value, Manager), § that's what entrepreneurs do” [pull it all together, ORGANISE, Identify value, Coordinator] Lord Bilimoria (Cobra Beer) ▸ So, Entrepreneurs are: Coordinators, Inventors, Leaders & Managers! www. entrepreneur-thinking. com
ALL PEOPLE HAVE VALUE WHAT IS ENTREPRENEUR CAPITAL? “Entrepreneur capital is the recognition, understanding and mastery of the management of intellectual capital”
THE MASTERY OF INTELLECTUAL CAPITAL ▸ Intellectual Capital consists of intangibles and these are: • Human capital, • Structural capital and • Network capital www. entrepreneur-thinking. com
THE PILLARS OF INTELLECTUAL CAPITAL Entrepreneur Capital Pillars of Intellectual Capital Human Capital Ideas Structural Capital Process Network Capital Relations Discover Achieve Protect Inventor Leader Manager www. entrepreneur-thinking. com
INTELLECTUAL CAPITAL & LEVERAGE
HUMAN CAPITAL Human Capital Ideas Routines Skills Know-how Enthusiasm Attitude to Change Innovation Adaptability Work Experience Academic Qualifications Industrial Competencies Professional Qualifications Intrapreneurial Propensity Improvisational Ability Entrepreneurial Spirit www. entrepreneur-thinking. com
HUMAN CAPITAL & LEVERAGE
STRUCTURAL CAPITAL Structural Capital Management Techniques Management Processes Corporate Culture Training Regimes Service Agreements Customer Service Sales Systems IT Systems Intellectual Property Patents Copyright Trademarks Networking Systems Contracts Policies Procedures www. entrepreneur-thinking. com
STRUCTURAL CAPITAL & LEVERAGE
NETWORK OR RELATIONAL CAPITAL Network Capital Employees Customers Suppliers Shareholders Supply Chain/Network Distribution Channels Social Networks Brand Loyalty Partnerships/Collaborations Licensed Agreements Mutual Contracts Franchises Banks Venture Capitalists Business Angels External Agencies www. entrepreneur-thinking. com
NETWORK CAPITAL & LEVERAGE
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ENTREPRENEUR DEFINITIONS Entrepreneur Definitions Discover Achieve New Products New Services Innovation Improvisation Imitates Adapts Creates Recognition Intelligence Rule Changer Searches for Change Unit of Analysis Protect The Centre-piece Risk Prediction Independent Person Accepts Risk Internal Locus of Risk Control Funding Exploits Opportunity Profitability Emphasis on Function Control Unites All Means of Compliance Production Volunteer Coordinates Structure production & Consideration distribution Greed for Money Leadership Power Need to Achieve Self-Esteem Motivation Skill www. entrepreneur-thinking. com
PROTECT WHAT IS PROTECT? PROTECT: § ‘To defend our venture, financial and intellectual capital resources, workforce, customers, suppliers, partners and other stakeholders from loss, attack, insult or injury’ www. entrepreneur-thinking. com
A FRAMEWORK FOR SUCCESS THE PROTECT MODEL PROTECT Model Process Reporting Operations Recipes for success, products, patents etc Build reputation & credibility by transparency Property, premises, machinery, tools etc Tactics Tactical objectives and the means of achievement – competitive advantage Employees Contracts, remuneration, health & safety etc Generation, Leverage, Investment, Tax etc www. entrepreneur-thinking. com Management, Leverage, Waste Cash Time
ENTREPRENEUR CYCLE www. entrepreneur-thinking. com
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WHEN WE KNOW THE RECIPE WE CAN REPLICATE IT INGREDIENTS ▸ An ingredient is: ▸ Something or a substance that forms part of a mixture ▸ For example: In cooking recipes specify the ingredients to prepare a specific dish such as a cake. ▸ We can improve the cake by improving the quality of the ingredients. ▸ Some ingredients are ‘secret’ www. entrepreneur-thinking. com
ENTREPRENEUR ACTION INGREDIENTS ‣ Static Efficiency, Equilibrium is death ‣ Dynamic Efficiency, Changing Business Landscapes ‣ Coordinator, ORGANISE, Identify Value ‣ Inventor, Discover, Create Value ‣ Leader, Achieve, Deliver Value ‣ Manager, Protect, Manage Value ‣ External & Internal Rivalry ‣ Opportunity, Risk, Change Management ‣ Creative Destruction www. entrepreneur-thinking. com
MEASUREMENT When we know the ingredients of something, we can: 1. Successfully repeat the process through management systems 2. Measure it 3. Improve it 4. Exploit it Example ‣ To make a cake (tangible) we use weight, quantity, temperature ‣ The ingredients of Entrepreneur Capital are intangible eg discover, achieve and protect – how can we measure this? www. entrepreneur-thinking. com
MEASURING INTANGIBLES ‣One method to measure intangibles is to combine functions with the learning matrix ‣ Y=f. X ‣ Scale Y = fx Scale Ingredients Never Sometimes Often Always 2 Research & Totally Developmen Unaware t 3 4 Fully Aware Action & Rewards 1 Unconcio Concious Unconcio usly ly ly usly Incompet Compete ent nt nt www. entrepreneur-thinking. com
MEASURING ENTREPRENEUR CAPITAL ‣ Example Measuring Entrepreneur Capital (Example) Ingredien ts Discover Achieve Protect Never (1) Sometimes (2) Often (3) Always (4) x x x Note: Express the result as a percentage eg score 2 + 3 + 4 = 9 of possible 12. So, 9 divided by 12 x 100 = 75% www. entrepreneur-thinking. com
Finance Business Knowledg e Barri ers Personal Circumsta nces Regulatory www. entrepreneur-thinking. com
ENTREPRENEUR CAPITAL: KEY POINTS ‣ Key Points • Entrepreneur tasks: Organise, Discover, Achieve, Protect • Entrepreneurs have value, they are masters of managing resources • Entrepreneur resources are intellectual capital • Intellectual capital is made of ideas, processes & networks • To create and grow we must leverage and scale resources • To know how to grow we must measure our activities • Barriers and drivers have different meanings to different thinkers www. entrepreneur-thinking. com
WE ALL THINK DIFFERENTLY www. entrepreneur-thinking. com
SUMMARY 1. Entrepreneur capital is the recognition, understanding and mastery of the management of intellectual capital (– this is intangible) 2. Entrepreneur capital consists of Intellectual capital and this is comprised of Human Capital, Structural Capital and Network Capital 3. The Entrepreneur cycle consists of discovering, achieving and protecting value 4. The Entrepreneur Action Model pulls together business dynamics 5. Making ingredients transparent allows us to measure them www. entrepreneur-thinking. com
ENTREPRENEUR CAPITAL & ENTREPRENEURS • When we can break down the components of something • We can learn about it • We can model it • We can improve it • We can exploit it • We can measure it • We can overcome obstacles • We can modify, change and discard it www. entrepreneur-thinking. com
THE ART OF ENTREPRENEUR CAPITAL SUMMARY ▸ People have value, they have capital ▸ When we know the ingredients of something we can measure it, manage it and improve it ▸ Progress presents us with obstacles or barriers that we must overcome to maximise opportunities www. entrepreneur-thinking. com
ENTREPRENEUR THINKING EXERCISE
EXERCISE ‣ Exercise: ‣ Measuring Entrepreneur Capital § What are the pillars of Entrepreneur Capital? § How can entrepreneur capital be increased? § Local Dish - example www. entrepreneur-thinking. com
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