E-M8 Entrepreneurial Management for Eternal Mission

Understand Management

Why engage in Entrepreneurial Management?

Success rates for startup businesses are staggeringly low. Yet everyday thousands of people around the world make the decision to engage in business or start a non-profit and believe that they will defy those odds.

After all, one of the most effective ways to change our world, create value and be well compensated is through engaging in business. Individuals who run successful businesses gain the power to shape their own destiny. Operating an organization can be challenging and perilous, but it is often a powerful way to fulfill our God-given purpose. An organization gives us leverage to do many things that we cannot do by ourselves. Entrepreneurial Management gives us the tools to unleash this power.

What is Entrepreneurial Management?

Management is a discipline of running a business. It is the discipline of consistently covering all the bases, while focusing on the important. Management is stewardship of the resources on behalf of the owners to the greatest benefit of everyone.

Management principles can help us be effective in everything we do. But what if we need to start something new? Traditionally this was left to the few entrepreneurial types, who, we were told, are very different from the rest of us in their innate abilities. Yet, at the current rate of technological change, it may no longer be an option to rely on these natural born entrepreneurs. Today, to be effective stewards we must innovate and initiate in business and in life. As a result, this guide starts out with Entrepreneurial Management.

Management is distinct from ownership

The ownership and management in many startups are fused, but they do not need to be so. It is often practical to have people with the management skills manage a business that they do not own. Much of the wealth in the world is managed by the managers who have no or limited ownership. An owner’s interests are the same as an investor’s interests, and that is generating a return on the investment. Management, however, picks how to go about generating the return.

The management team, not the owner, arranges resources to the greatest common good. The management team attracts resources and controls them day to day, while the owners exercise limited and often indirect control. While the interests of the business typically represent the interests of its owners, a manager is held to a higher standard. Beyond responsibility to the investors, the management team has responsibilities to the community, customers, workers and business partners, just to name a few.

Management is distinct from workers

In a lot of startups there is no clear distinction between managers and workers. The problem with that is that when the organization gets busy doing, it has no longer any time to be thinking. Even in the startup environment it is practical to set particular time aside for specifically managerial functions: planning and making sure the plans are being followed. Some of the organizations even rely on an outside consultants, or advisors to meet with the team once in a while, just to keep things on track.

Why study management?

It has long been believed that there is something innately special about people starting or running successful businesses. Yet, in today’s world, the flexibility and speed of change are forcing more and more of us to start and manage various aspects of our lives, rather then relying on somebody to do it for us. It is no longer acceptable to leave the entrepreneurial tasks to others. We must learn the skills that will help us succeed.

While management is something that is traditionally taught in colleges around the world, it has proven to be a hard discipline to truly master. The fact that traditional educational system has failed to produce consistently successful managers does not negate the need for learning the discipline. Rather, it points to the need of the hands on learning that is typical of other hands on trades.

By focusing on practical aspects of management and blending all these concepts together in the study of entrepreneurial management we will be able to springboard in to step by step development of an organization through the disciplines discussed in the rest of this guide.

It is possible to learn and apply management principles and it can result in a consistent improvement in performance of a business. At some level it is for everyone, since all of us need to manage time, money, resources and relationships.

There are a few people that naturally gravitate toward making decisions and being responsible. Nevertheless, many of us need basic understanding of the business subjects should we ever need to navigate the waters of business and find the business partners with the skills to succeed. Studying all aspects of entrepreneurial management will help spare the headaches of learning these skills by trial and error and allow the advance to the more complicated challenges quickly.

Management is a Team Sport

Management is as much about working with others as about anything else. To be successful, a manager needs to function as a part of a team. In learning about management we will focus on many team development issues. Managers must gel together and work as a unit.

The team has the opportunity to make business fun. It is enjoyable to add value, but how much more when it is done in the fellowship of your peers.

Eight Management Responsibilities

Any organization, in order to be successful, needs to manage at least eight key areas. These areas are building blocks that require some level of previous success on the lower levels of the ladder to function.

The foundation of any business is a team of Entrepreneurial Managers. Managers that are willing to try new things and that have a long term vested interest in the prosperity of the organization.

But managers are powerless without the workers, or Manpower. Workers are individual contributors who will give their time to make the business happen. Engaged Manpower that cares about the business is at least as important as good Entrepreneurial Managers.

Manpower cannot get much done without the Means of production: tools and technology that allows people to get stuff done. We, the managers, will need to ensure that the proper tools are available at the proper times. Results of the workforce can be magnified by Enabling Tools. We may even have to think about doing some research and development (R&D) to provide them with tools that are not already available.

It is manager’s responsibility to organize a robust and consistent Method of Operations that allows for the most value creation, given the Means and the Manpower available. An Effective Method is the cornerstone of lasting capabilities that cannot be easily copied or acquired. It is the Method that allows us to service the market effectively.

The Market acts as the final judge of the added value. An organization cannot thrive unless it is constantly looking for ways to Expand to the new Markets and figuring out how best to serve them. The Market defines value. Even the best Management, Manpower, Means and Method are of no importance when there is no Market for the output of this business. In the right Market even struggling in other basics a company can often experience short term success.

Our Market activities should generate Money for the organization. In the end of the day, the company’s survival rests squarely on its financial performance. Money is the bottom line that keeps organizations ticking or closes their doors. Many excellent companies have failed because they could not manage their capital needs or their cash flows. Growing too fast or keeping margins too low, are just some of the ways in which companies in the strong Markets, with excellent Methods, Means and Manpower – fail. As managers we will work to ensure that money is constantly working for the company, that money entrusted to our organization becomes Energized. The Energized Money is money which produces value and more money.

Next on our list is the Mitigation of risks. It is not enough to generate money. At least as important, is to avoid the creation of unnecessary risks and to minimize the damage from the potential risks associated with being in business. A business has to operate within bounds of the laws otherwise it is no longer a legitimate business. Exposure Mitigation is thus another fundamental managerial responsibility.

But doing everything else right is irrelevant if the organization has failed to satisfy its essential purpose. Mission of the business is the highest goal of being engaged in business. Purpose, great big overriding God-given purpose has the power to energize and make meaningful the performance of all these other disciplines. As managers achieving a purpose of great importance, an Eternal Mission is the reason why we are in business

Fulfilling the Mission leads us to expanding the responsibility and capacity of the Management team. This mission can teach us to care and serve, prosper and succeed. Even if all else fails, it is something that no one can take away from us.

There are even times when our purpose will advise us to dissolve the business. Though just as likely, we may get ready to move on to yet bigger and better ways of creating value. As part of the Mission we must address both exit strategies and the flexibility for future growth.

So the eight areas that a manager has to manage to create a successful business are Entrepreneurial Management Team, Engaged Manpower, Enabling Means of Production, Effective Method of Operation, Expanding Market, Energized Money, Exposure Mitigation and Eternal Mission, collectively referred to as E-M8.

Management and Business Development Cycle

To simplify the study of management we will break it down in to same four phases that we will study in depth in project management: Start, Think, Do and Stop. Business goes through all of these phases to get started and continues cycling through all of them to grow, until it is big enough to be doing all of the steps simultaneously. These steps require roughly the same attention but are each done in turn, which makes it easier to study them. This guide is structured to break down all of M8 disciplines in to these four cycles, in order to pace us through each step.

Understand

To get us started, though, we focus on the category that is not a part of a regular cycle but rather an introduction to the whole thing. If you think of each phase a base on a baseball diamond, we will start the game in the dugout. Understanding the various aspects of business is crucial to doing everything else and while additional understanding will come through working each the phase, we need some basics to get us started.

Start

Once we acquire understanding of the business concepts, we can start. Start phase focuses on Research and Goal setting. We want to set clear meaningful goals in order to be able to go after them.

Think

We think through the tasks that need to be accomplished. Think phase focuses on what needs to be done and how to verify that it is done the way it should have been done. This sets up the game plan and gets us in the position to do these tasks. This phase requires us to go from Mission to Management, as it is always good to think things through with the end in mind.

Do

Before we are ready to really do business, the next step is to work out how to do each task. If ours is a simple undertaking, we can just do it, while going through this step. If it is complex, we can model or small-scale test it, but save the actual doing for a later time, in other words, the second cycle. During the first cycle we should work through all aspects of the plan to work the bugs out of it before going live.

Stop

Finally, in the Stop phase, we wrap up by evaluating what we learned out of the exercise, developing the contingency and growth plans and setting up for the Start of the second cycle.

Summary

It all starts and ends with a few people that have a vested interest in the long term success of the enterprise. It is not a matter of a title, but of the commitment to the team and willingness to work together to accomplish the team’s purpose. These people, managers, who are distinct from both owners and workers, need to be well trained and willing to work together as a team.

Managers need to be aware of the business cycle and the tasks relevant to the current phase of the cycle. As a team, they must cover the bases of E-M8: Entrepreneurial Management Team, Engaged Manpower, Enabling Means of Production, Effective Method of Operation, Expanding Market, Energized Money, Exposure Mitigation and Eternal Mission.