The Entrecode© - New Research Insights into how Entrepreneurs Operate

Our latest research findings into the behaviour of 250 successful entrepreneurs destroys some real myths and provides some helpful insights.

1. The key correlation between entrepreneurial behaviour and success is goal directed energy. Focusing all the energy with purpose and direction. This is highly correlated.

2. Other highly correlated factors are:

- Persistence
- Need for others
- Commitment to vision
- Emotional robustness
- Focused
- Prioritise and sacrifice

3. Moderately correlated behaviours were:

- Drive
- Positive mental attitude
- Action orientation
- Achievement culture

4. Factors which surprisingly did not correlate or were even negatively correlated were:

- A history of family business which may even by detrimental
- A previous history in sales was negatively correlated
- Being overly concerned with self and image was negatively correlated
- Self development correlates if it is business related
- Networking is not highly correlated unless it is purposeful
- Big picture and intolerance of detail was positive
- Not working in a systematic way was highly correlated!

5. In the sample we researched 4 contextual factors were highly correlated with success:

- Making things happen at school - usually achieving results in adversity with minimal resources (education system please note)

- Failure in formal exams and leaving school early

- Being previously accountable for the performance of a team or a business

- Serving an 'apprenticeship' in the industry where they start their business for at least 10 years.

There, a few more insights from Entrecode© into the mysterious world of the entrepreneur. Watch this space for more revelations!

How to Significantly Boost the Efficiency of Your Business

1. Introduction

Ways to boost the efficiency of a business are well tried and tested. I have summarised 4 of them in this short paper and would be happy to discuss any or all of these ideas with interested parties.

2. First Principles

“If you always do what you have always done, you will always get what you always got”

The key to boosting efficiency is to look at the business differently, through different spectacles.

New Perspectives = New Opportunities.

So create a process that works and train managers in the process to enable them to drive efficiency. Better still select a small group of entrepreneurs and give them the process and they will produce results 6 times expectations on average! – see my website for examples.

Ensure you select people who:

- Have the power to act
- Are up for it
- Are open to learning
- Work at pace
- Have a range of experience and perspectives
- Preferably entrepreneurial and innovative

See my paper ‘The Entrecode Approach to Business Development’.

3. Efficiency Boosting Processes – An Overview of 4 Processes

3.1 Zero based budgeting

Most budgets are constructed by forecasting sales then estimating costs and what is left is the profit. Profit becomes the variable. In zero based budgeting you estimate sales then state the profit required and the costs become the variable.

So if sales are £100million and we need £10million profit then you can afford to spend £90million max on costs. This forces managers to prioritise what costs are musts and what they then need to cut. Brutal but effective.

3.2 Fixing system slippage

A process that always produces results way beyond expectations is the Fixing System Slippage Toolkit in my book ‘Doing the Business’. You get teams within a business to audit the actual usage (not policy or theoretical) of key systems.

Before you use this process take tranquilisers as you will find things you will not believe – that’s the reason for doing it!

3.3 Value gap analysis

This is quite a complex but very powerful cost reduction and also business development process. Basically when selling complex solutions you need to map the key value points across the process from initial customer dialogue right through to payment of final invoice.

Normally there are internal conflicts in the customer’s organisation across their silos that you need to understand and manage for the customer. This is because different departments using different customer silos can have conflicting drives and objectives and unless these are managed the sale can be lost.

Across this process will be things the customer really values and will pay for and others they will not. So you need to ensure:

- You fully understand the value points across the customer’s organisation.
- Make sure you emphasise and sell the value they require.
- Cut costs in areas they do not value but you offer.

The problem is customers very rarely tell you what they do not value so you keep offering these services and incurring unnecessary costs.

Key Source Read: The Prime Solution, Jeff Thull

3.4 Aligning key individual’s activities with key strategic priorities

Most Business Units have 3/4 key strategic priorities i.e. win work, drive efficiency, control the culture, etc. Successful delivery of these goals depends upon the right people focusing their time on them.

A brutal lesson is to ask individuals to name their 2/3 key strategic goals. Then ask them to take out their diaries and add up the time they have spent on them in the last month….. Argh……. I have done this in 2 businesses recently and their results were in line with previous experiences i.e. less than 5% of key time on the named priorities.

So a major efficiency boost can be made by simply helping senior people link goals and time. If a Director’s key responsibility is say efficiency and they spend less than 5% of their time on it what are the chances of success?

4. Summary

Using these procedures enables managers to look at their businesses through different glasses. This creates new previously unseen opportunities to boost efficiency.

The key insight is that it’s not what you do IT’S THE WAY THAT YOU DO IT that gets results.

Goal Directed Energy

In our latest research into entrepreneurs, goal directed energy was highly correlated with success.

Here is how to do it:

1. Identify your overall goal.

2. Work back from the goal - identifying the key strategic steps towards it.

3. Focus all energy and time on step 1 - ignore step 2.

4. Avoid all distractions. Say NO to anything that will not help with step 1.

5. Complete step 1 then move on to step 2.

This is easy in theory but..... 99% of people get distracted by energy vampires, trivia etc, or indulge in multi tasking which gives the illusion of being busy......
In fact, most people concentrate on one task for an average of 6 minutes then get distracted and it takes them up to one hour to get back on to the original task.

No wonder most of us are busy fools.

There, goal directed energy, done.

How Entrepreneurs Solve Problems

Entrepreneurs solve problems well because they are options thinkers. If plan A does not work they can quickly develop a plan B then C and D....... 80% of the rest of the population are procedural thinkers and require a process to follow to solve problems; if their process does not work they are stuck.... until somebody gives them another process to follow.

So, how does entrepreneurial options thinking actually work and can it be learnt?

Option 1: I have done this before so I will do it again. If that fails ......

Option 2: Ask somebody in my network who knows. If that fails.......

Option 3: I will ask somebody who might know somebody.... If that fails......

Option 4: Just try something and learn from it then adjust next time. If that fails......

Option 5: Outsource it to somebody else.

The keys are above:

1. Having a strong network

2. Being persistent and being able to recover from setbacks

3. Taking personal responsibility for results.

These requirements can be built and learnt.

Getting into the Zone

Peak performance in any activity comes when people are in the zone. This is the optimal mental state which the sports world has known about for years but it is relatively unknown or discussed in the field of management and business. So here goes.....

My research into successful entrepreneurs which led to the identification of the Entrecode (how entrepreneurs start and build great businesses) identified the key factors of being in the zone in business.

Positive Mental Attitude - seeing the cup half full and staying positive at all times.

Recovery from setbacks - being able to use setbacks as rocket fuel to propel performance forward. Not getting deflated which shows in body language and negative self talk (Andy Murray please note).

Persistence - keeping going through adversity.

Focus - keeping the priorities in mind and not getting distracted (not multi tasking!).

Action Orientated - just doing it and getting on with things.

Drive - this comes from early life experiences that lead people to want to succeed to show people they are OK!

The good news is that all of these apart from drive can be coached, but how often are they on the curriculum of MBAs or business courses? Usually never, so we are not training people for peak performance in business.

So wake up universities, colleges, consultants and trainers and start adding real value to people and business.

By the way, you can tell when you have been 'in the zone' because you will have been totally focused, accomplished a great deal and when you look at your watch you will be surprised how the time has flown.

There, getting in the zone - done!