Session 1:
…….There is a difference between ‘Intrapreneurs’ who establish or join an enterprising division inside a big company and ‘Entrepreneurs’ who ‘go out on their own’.   Although, interestingly the intrapreneurs route to success is the same as the entrepreneurs.  People in large organisations have to find ways to pursue intrapreneurship.

Entrepreneurial traits:  stubborn, vision, inspired with great ideas, energy and they are determined.  They have charisma and charm, displaying natural leadership by inspiring others and leading from the front.  They ask the question “where is the pain?”  They find out what the problem is and envision a solution.  They also have potentially negative traits such as:  arrogance, manipulative, have too many ideas!

Cornerstones:  ‘Cornerstones’ are the building blocks and support team for entrepreneurs and most importantly they have long term commitment.  They are people who are grounded in their area of expertise but they also display entrepreneurial traits with flair and excitement.  An entrepreneur should be surrounded by 4 key cornerstones:

1. Finance – (usually a board member) they are heavily involved in the business and have a very proactive forward looking view of the organisation.

2. Innovation – New ideas and product development

3. Deliverer

4. Sales – Those team members who operate in the ‘hunter mode’ and are good relationship builders and company ambassadors.  The biggest problem a company usually faces is the lack of a sales cornerstone.  A good networker is key to the sales role.

It may be painful but it is advisable for entrepreneurs to give equity to cornerstones.  Entrepreneurs can all too easily bully their way through, when what they really need to do is ‘enfranchise’ cornerstones to ensure balanced decision making.  When the business expands further a further set of supporters are required – the ‘dream team’.
 
Dream Team:  A ‘dream team’ are those employees with energy and drive who are young at heart and are willing to try new approaches whilst being like the cornerstones having solid technical and entrepreneurial flair.  They are passionate and imaginative and team players. It is only possible to have 1 – 3 dream team members in a start up company. You do not want ‘Sir Humphreys’ on board who will always be finding excuses for not trying new approaches.

Employees:  Employees can be categorized into two groups – ‘Mountain’ or ‘Valley’ People.  They are either natural progressives, always scaling new heights or they are happiest doing business the same way as they always have and not feeling the need to explore new approaches.

Where’s the pain?
Everyone in a team has creative potential, not just the entrepreneur.  There may be an ‘observationalist entrepreneur’ in a team, for example, an accountant who can spot trends and patterns.  All team members need to ask ‘where is the pain?’ in order to find a solution to a problem rather than having a solution looking for a problem - like inventors or ‘techies’ who develop products and then go out to find a problem.

 

Elevator Pitch
The Elevator Pitch is the two sentences which are used to sell your idea/product.  If it can’t be communicated in two sentences it is either too long or not focused enough to be successful.  It describes why a customer should source your product/service instead of anyone else.  Merrill Lynch’s elevator pitch was ‘bringing wall street to the high street’. 

Mentor
The mentoring relationship is vital and normally works between a senior and junior. It’s success is based on creating an affectionate relationship and the enjoyment of each others company is paramount.  The mentor provides excellent advice and opens doors for the mentee.  The Prince’s Trust is a prime example of effective mentoring working.  The Prince’s Trust is for 18 – 30 year olds and £3k is given to get a business idea off the ground.  60% of Prince’s Trust businesses are still in existence four years later yet only 40% of businesses initiated with a bank loan are still operating after four years.  The difference is the mentoring provided.

Rapid Advancement to Reality
The idea needs to be prototyped first.  The shape of the market needs to be assessed to fine tune the product.  This is a very important stage called ‘Rapid Advancement to Reality’.  The customer is king and it requires an iterative process to come up with the right product or service.  It requires an ability to see patterns in the market and to be responsive to them.  The Dream Team is most important at this stage in creating the ‘emergent strategy’.

Seedling, Sapling and Mighty Oaks
A seedling company has 10 employees.  Once the company hires more than 10 it is a Sapling company and it can work up to 25 employees as a fully informed and ‘friendly’ business.  Between 25 – 35 employees the dynamics of the company change and there will be a communication breakdown if it still operates as before – life can never be the same again.  Growing beyond 20 employees a company will move towards becoming a ‘mighty oak’ in which case the original members will have important and challenging decisions to make.

As a company grows and becomes more dynamic – processes need to be introduced.  At this stage ‘cornerstones’ become restless and may become burnt out and they will either leave the company and need to be replaced or hand over to another manager for a new project.

The entrepreneur at this stage needs to stand back and start to delegate their area of responsibility and this is termed ‘killing the king’.  The kind of leadership that has taken the entrepreneur to the stage of ‘mighty oak’ is no longer appropriate to the organisation and what is required is an industry professional who can take on the development of a big company. The entrepreneur may need to investigate exit strategies eg selling off the company or becoming an intrapreneur instead.

Rhona Quinn – QMAC Construction Ltd
Rhona explained that her entrepreneurial ventures had taken a journey from the retail sector into construction and most recently publishing.   Rhona worked in the family business in Omagh after leaving school, and then decided after having studied the market to open a fashion boutique in Omagh in 1987.  She built up a successful and loyal clientele.  Meanwhile her husband was working as a sub contracted painter and in 1982 he decided to go it alone.  Rhona took charge of the books and growing the business.  Then Rhona spotted an opportunity for collating public sector tendering opportunities and after having approached LEDU she realized that no one else  was providing this service and 6 months later the first tendering directory was put together – the company was sold in 2003 to a UK competitor.

Mike commented that this was classic entrepreneurial activity – Rhona had obviously questioned ‘where is the pain?’ and although the businesses were sectorally different the problems and solutions were essentially the same.

When asked what Rhona’s biggest challenge had been she responded with the issue of developing and hiring the right people.    Rhona wanted the best staff available and started with hiring a financial expert and had to pay a higher salary than they had budgeted for but the gains of having the right person ‘on board’ were experienced early on by implementing the right systems and setting performance indicators. 

Rhona feels the closer you get to a customer the easier it is to have the right information to ensure an effective bid and she wants to move away from competitive tendering.  There is a need to talk to your customers often to meet their high expectations.  

The Beermat entrepreneurs added that having customers as your mentor is a very effective way to gain insight into your company.  Ideally you should ask a customer to write your ‘elevator pitch’.

The Construction Industry is systems driven and there needs to be a focus on whether the systems are improving the quality of service eg completion of a site diary.  For foremen who have not been traditionally educated completing the site diary was a significant challenge and courses with CITB have been undertaken.  QMAC is also an Investor in People organisation and the accreditation has been good for the morale of staff.

When Rhona was asked about her Mentors she found them to be invaluable as they challenge every decision she makes.  It can be lonely as a manager and a mentor is needed to sound ideas off.  Rhona has a key mentor/advisor whom she meets with sometimes on a monthly to a quarterly basis with the board members in attendance to discuss company plans.

Michael McQuillan – The Streat
There are 9 Streat café outlets in Northern Ireland and the company is now moving into franchising their operations.

Michael started his career on placement with the Tara Hotel in London and his manager and mentor was Owen Dillon, Michael also met his wife Nikki during his placement.  When Michael returned to Northern Ireland he set up Manor House Catering with his brother John and admits it was a valuable learning period and the company is still successful today.  Michael admits he has his priorities in life right – with his family coming first.  He had always wanted to have a café company with a difference which he could balance running whilst spending quality time with the family.  In 1999 the first Streat café was opened on Belfast’s Dublin Road with 5 employees and now there are 94 staff employed throughout the province.

When Michael was asked about any particular challenges he had to face on the way and not taking 'no' for an answer he said he had used the £65k equity from his home to finance the first café.  His bank manager quickly believed in his business, especially when he returned to him in month 2 with an operational profit from month one.  When Streat two and three were set up the staff levels were increasing significantly and there was a marked expenditure in time and money on training staff which the banks and investment agencies questioned.   A ‘financial hiatus’ hit the company in terms of cash flow shortly after and a PAYE bill from the inland revenue arrived for £11.5k. The company was not able to pay the full amount and Michael took the £11.5k and divided it into four payments which he postdated on four separate cheques for the Inland Revenue to cash, each subsequent month.    This is just one example of how he has found a way through the difficulties which you inevitably encounter in setting up your own business.

The biggest ‘battles’ in the business are people oriented.  When Streat 3 opened he had 25/26 employees and suddenly the focus on the business switched to ‘people issues’.  Nikki‘s skills from an HR background were quickly employed and she came out from lecturing into the business.  Investors in People accreditation was awarded to the Streat and it was found to be very effective in assisting with staff development and in tightening up business procedures. 

Michael is proud that The Streat is the first multi site café to be awarded a National Training Award in the UK.   Typically cafes have a high turnover at 50% however the turnover for the Streat is around 18% and decreasing due to the development of the team.  Michael incorporated customized training entitled the ‘9 laws of sandwich success’.  It works through a manual via completing the training and reminding and training again and reviewing as a constant process.  Michael explains he is going for growth and people development will be a permanent fixture for the Streat.  He wants to build a team that work well together and have fun together.  He suggested that every opportunity should be used to build relationships and recently the staff completed a first aid course, for example, which also had the effect of team bonding. 

The Franchising of the Streat is the next stage of the business development and there are 3 franchises open before August 2004.  Michael is keen only to give the franchise to the right franchisees who will be innovative in developing the business and who will treat the business as a ‘people business’ and not just for making money. 

The Beermat entrepreneurs noticed that Michael’s next step is world domination as he hopes to open his 42nd Streat on 42nd Street.

Renah Shepherd – Parcelforce Worldwide
Renah is a self confessed intrapreneur and explained that she came to Parcelforce in 2002 when it was top heavy, with a 'jobs for life' attitude.  It was loss making with duplicate processes and revenue as opposed to profit oriented.  A diktat from DTI came to turn the company around.

The first task Renah was involved in was cutting the losses – where there wouldn’t be an immediate effect felt.  Renah had to look at ways of doing business smarter and to cut out the areas which didn’t need to be done at all. The balanced scorecard was used looking at the four areas of finance, people, delivery and operations.  There was ongoing change management and compulsory redundancies were not introduced.  Jobs were lost not people. There was the involvement of militant unions in negotiations and consultations followed.  The Union actually arrived at the solution and a recovery plan was set in place.  The staff was retrained and the opportunity of franchising owner delivery drivers was introduced.

Renah found that her mentors along the way were not necessarily older and wiser but always essential. 

The external franchisees were in competition with Parcelforce Worldwide drivers and the franchisees were also encouraged to supplement their income with other key customers and to encourage sales.  This has led to many direct improvements.

Renah is not in a position to give staff equity but she believes the best route is to ‘empower’ staff.  The balanced scorecard has set out the company goals to be met.  A ‘fixing budget’ has been implemented in order for drivers to solve problems so they can ‘fix the pain’ there and then without the problem of having to go through several lines of management to address a customer issue.

To remain ‘teachable’ is an important attitude to have as a manager and accepting that you don’t know everything and to be flexible.  Renah knows first hand the experience of ‘killing the king’ and has been banned from the depot!

Round Table Discussions

The beermat entrepreneurs then asked each table to discuss ‘where is the pain in my business?’ and then each table reported back.  The summarized pains were: 

Customers consistently choosing the lowest price from tendered bids instead of a quality product with after sales service.
Government processes and bureaucracy
Finding a skilled Sales Manager
Defining their role in the company if they are a ‘remote’ worker – working off site
Finding a good mentor
Motivating and inspiring employees – especially when English is not their first language and they are on low wages
Time management
People issues – finding and retaining the right staff
Government funding
Economic climate in aerospace industry - post September 11th
‘Sir Humphrey’s’ – those team members who try to stifle innovation
Change management – introducing a business plan with huge changes to the company and keeping long term staff on board
Managing customer expectations and educating customers in a competitive environment
Too much time being dedicated to processes and not people
Tendering – too much administration involved
Fear of failure – operating in an environment which is not entrepreneurial
Getting past the gate keepers in companies you are approaching
Keeping a business personal whilst keeping the volume right.
Being a ‘jack of all trades’