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Nigel Brooks Seminar

The Guide To Business Leadership Development
Featuring:
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Enterpriship Disciplines Building Sustainable Advantage From Vision To Value

THE BUSINESS LEADERSHIP DEVELOPMENT CORPORATION
The Center for Business The Center for Business Leadership Development Leadership Development

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These are the notes accompanying the Nigel Brooks Seminar entitled: “The Guide To Business Leadership Development” The seminar is currently offered in a three hour live session. http://www.nigel-brooks-voice.com/thenigelbrooksseminar.html http://www.enterpriship.com/Seminars/Seminars.html http://www.bldsolutions.com/cbld/

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If I could show a way to jump start your career or business, and make it sustainable, would that be interest to you?
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In this seminar, I will discuss the enterpriship disciplines, and building sustainable advantage from vision to value...
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Enterpriship Disciplines Building Sustainable Advantage From Vision To Value...

Establishing the mindset; enabling action
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Objectives

Explain the process of building enterprises leveraging the enterpriship disciplines: entrepreneurship, leadership, and management Discuss the notion of building sustainable advantage Discuss the characteristics of a sustainable enterprise
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Benefits

Better equipped for entrepreneurial, leadership, and managerial decision making Improved understanding of people, process, and product capabilities Stronger appreciation of sustainability in business

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You are...

Entrepreneur/intrapreneur Lifestyle business enterprise owner Executive Manager Professional – administrative/technical Student
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What are entrepreneurship and intrapreneurship?

Entrepreneurship is a competency required to start, develop, and assume risk for an enterprise Intrapreneurship is a competency required to foster a culture of change within an enterprise and keep it sustainable over time

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What is leadership?

A competency for setting direction that others will follow... ...through influence

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What is management?

As a competency, the practice of directing and controlling events and activities As a role, consists of those with authority and responsibility for directing and controlling the events and activities of the enterprise

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Who is an entrepreneur or an intrapreneur?

An entrepreneur is an individual who organizes, operates, and assumes risk for an enterprise with the intention of transforming innovative ideas into products and/or services for a profit An intrapreneur within an enterprise is an individual who takes the risk to transform an innovative idea into value
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Who is a lifestyle business enterprise owner?

An owner of an enterprise in a local community – may be:
– – –

Founding entrepreneur An active owner-manager A passive owner with a management team in place

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Who is an executive?

An executive is a member of the top line of management of an enterprise with major areas of authority and responsibility

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Who is a manager?

A member of the management team in either an official or non-official capacity

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Who is a professional?

A qualified competent individual with:
– –

Knowledge in one or more functional areas Skills

Personal Technical

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Entrepreneurs – leaders – managers

Entrepreneurs are not necessarily good leaders or managers Leaders are not necessarily good entrepreneurs or managers Managers are not necessarily good entrepreneurs or leaders

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Enterprise

Undertake for prize or cause Group of activities intended to produce income organized as a:
– – –

Business of any type or size Not-for-profit association Government agency
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Non-profit enterprise has exemption for tax purposes
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Upwardly mobile and lifestyle

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An enterprise comprises one or more entities

Corporation (legal and business) Limited liability company (business) Partnership (business) Individual sole proprietorship (legal and business)

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Enterprise characteristics

Micro – professional Small – professional and commercial Mid-market – commercial and industrial Large – industrial and corporate

Definitions based upon number of employees, revenue, and capital
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Enterpriship

Process of building enterprises with sustainable advantage within a framework of three related disciplines:

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Enterpriship...(cont'd)

Derived from the words:
– – – –

Management Leadership Enterprise Entrepreneurship

Both an art and a science
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Enterpriship...(cont'd)

About the:
– –

Competencies of individuals Capabilities of enterprises

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Enterpriship...(cont'd)

Discipline:
– –

Field of study System of rules governing activities

Competencies – knowledge and skills Capabilities – capacities and abilities

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Enterpriship framework

Characterizes attitudes and behaviors of entrepreneurs and executives
– –

Entrepreneurs who start with nothing Executives who have to be intrapreneurial in order to achieve sustainable advantage
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Enterpriship framework... (cont'd)

Recognizes what entrepreneurs and executives do best:
– –

Entrepreneurs – innovating Executives – leading and managing

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What are art and science?

Artistry is an occupation that requires both knowledge and skills (competence) Science is a method for systematizing knowledge Knowledge is information that has been learned and retained Information is organized data (facts and figures)
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What is sustainability?

Being able to provide for current generations without damaging the ability of future generations to provide for themselves

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Sustainable enterprise

Employs three criteria in all decision making - are the mindset and intended actions responsible:
– – –

Environmentally? Economically? Socially?

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What is sustainable advantage?

Sustainable – being able to continue over time

Either by developing, enhancing, and maintaining the current state Or by changing it


Advantage – favorable, superior, beneficial

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Building sustainable advantage

Comprises the activities required to build a position in the marketplace and community-at-large From the creation of a vision to the delivery of the resulting value on an ongoing basis

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Building sustainable advantage...(cont'd)

Activities:
– – – –

Are responsible Meet both current and future needs Gain a beneficial position Achieve performance excellence

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Beneficial position

Aspirational advantage – loyal relationships between employee, customer, supplier, and investor constituencies because stated values and enacted values are consistent Competitive advantage – position and posture that offer better value than competitors

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Beneficial position...(cont'd)

Collaborative advantage – suppliers or customers in partnership dependently Cooperative advantage – suppliers or customers in association independently

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Performance excellence

Doing the right thing, then doing things well Alignment
– –

Externally with constituencies Internally with stewards

Exceeding expectations

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BLD has a set of capabilities for building enterprises

Models

Methodologies

Tools

● Hi-Spot Review ● StratNet ● DueDiligencia ● HiPotentia ● HiProforma ● HiPerforma ● Personal Styles
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BLD packages its capabilities

Individuals – Enterpriship BLDer Enterprises – Sustainable Advantage BLDer
– –

Framework Migration Path

Individuals as stewards in teams build enterprises with sustainable advantage
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BLD packages its capabilities... (cont'd)

A standardized, systematized, integrated approach to business building for entrepreneurs, lifestyle business enterprise owners, executives, managers, professionals, and the enterprises they serve From a start-up venture to a sustainable enterprise (entrepreneurial to intrapreneurial institutional)
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Enterpriship model

Establishing the mindset

Enabling action

Establishing order

Building relationships

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Background quotes

Earl Nightingale - “we become what we think” Frank Feather - “think globally, act locally”

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Individuals apply the Enterpriship model to enterprises

Four activities that guide entrepreneurship, leadership, and management Basis for all other models, methodologies, and tools that transform ideas into results It forms the “credo for success”

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Individuals apply the Enterpriship model to enterprises...(cont'd)

Translate mindset with models... ...into action with methodologies to achieve momentum... ...through relationships... ... with order... ...to get results (profit, value-added, wealth)
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Related to the Personal Styles model

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Four Personal Styles

Challengers – who appreciate action and adventure Causals – who appreciate creativity and relationships Stabilizers – who appreciate law and order Visionaries – who appreciate innovation and understanding
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Enterpriship model application

Monetize ideas by being able to:

Build markets, products and/or services, and infrastructure Communicate effectively:
◆ ◆ ◆ ◆

Entertain Inform Convince Persuade
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Enterpriship model application ...(cont'd)

Turn chaos and uncertainty into law and order Add structure to unstructured situations Implement:
– – –

Global-to-local Holistically Future-oriented
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Maslow's Hierarchy of Needs

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Paradigm shift

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Change response cycle

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Adoption cycle

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From vision to value

Mindset and action for change:
– – –

Causing change Acting as a consequence of change... ...thus causing further change
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Establishing the mindset/enabling the action:
Framework For Building Sustainable Advantage

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Establishing the mindset:
Framework For Building Sustainable Advantage

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Governance disciplines

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Governance disciplines... (cont'd)

Stewardship – the responsibility for the performance of an enterprise and the delivery of value to constituencies Strategy – the beneficial positioning of an enterprise in the marketplace so as deliver value over time Structure – the enabler of relationships between an enterprise's infrastructure, products and/or services, markets, and constituencies that deliver value
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Stewardship

Stewardship – the responsibility for the performance of an enterprise and the delivery of value to constituencies
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Stewardship competencies

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Entrepreneurial role

Stewards transforming innovative ideas into value for the enterprise and its constituencies

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Entrepreneurial role...(cont'd)

Adaption based upon feedback
– – –

Tuning Standardizing Integrating

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Stewards

Stewards include management and associates (supervisors and staff)... ...collectively administering the affairs and protecting the assets of the enterprise Every employee is a steward if they share the values, mission, and vision of the enterprise
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Leadership role

Setting direction that others will follow to achieve results

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Leadership role...(cont'd)

Self motivation – developing enthusiasm for an innovative idea and/or commitment to values Aspirational leadership – establishing the mindset for communications Inspirational leadership – communicating and building relationships with others Establishing an environment for team motivation

Relationship and negotiated agreements between leaders and followers
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Self motivation

Positive attitude Ambition Confidence Commitment Self-assessment
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Aspirational leadership

Values and guiding principles Mission – statement of purpose Vision – an inspirational statement of a future state (reasonably achievable) within the context of a longer-term aspiration (dream) Value proposition – statement of benefits and differentiating features
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Inspirational leadership

Attracting and acquiring Expanding breadth and depth Maintaining Retaining or retiring Focusing
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Motivating others

Influencing the motion to action Enabling followers to motivate themselves

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Team motivational leadership

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Transformational and transactional leadership
Macro level Micro level

Power-centric ● Empowering

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Appointed and emergent leaders

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Managerial role

Applying resources to activities to achieve results

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Managerial role...(cont'd)

Organization Execution Evaluation Adjustment

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Organization

Confirming scope, objectives, and goals (budget, schedule, and quality) Assigning people to tasks Securing facilities and equipment, and materials and supplies Training
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Execution

Communicating with the team and sponsors Assigning and accomplishing tasks Solving problems Handling exceptions

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Evaluation

Monitoring the earned value in terms of scope, objectives, budget, schedule, and quality Assessing the people Assessing the facilities and equipment, materials and supplies

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Adjustment

Tuning (scope, objectives, budget, schedule, quality, resources) Taking corrective action for future performance

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Strategy

Strategy – the beneficial positioning of an enterprise in the marketplace so as deliver value over time
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Strategy

Long-term statements of direction – typically three-to-five years out or more, with shortterm initiatives as necessary from point of departure to point of arrival one-to-three years out Supported by information technology strategy, tactical plans, operational plans, financial plans, business plans for financing, and budgets
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Strategy...(cont'd)

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Market-driven: goods producing or service providing Production-driven: product-driven or service-driven

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Hi-spot review

High level strategic plan for opportunities and threats – quick situation assessments and direction setting Mini strategic plan, initiated on an unplanned basis to determine a response to unanticipated events, ideas, or activities, that impact strategy – may result in repositioning, restructuring, or reengineering Supported by due diligence efforts
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Price/cost

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Position in the marketplace

Value-added or commodity ● Custom or mass produced

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Position in the marketplace... (cont'd)

Geographic – local, regional, national, multinational (within nations),international (between nations) global Demographic Psychographic (frequency, recency, value) Centers of excellence
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Narrowing the gap

Cost ● Differentiation ● Focus

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Vertical integration

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Horizontal integration

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Business plan for financing

Subset of strategic plans aimed specifically as a focused succinct presentation to potential investors Sources of financing include:
– – –

Private debt – lifestyle enterprises Private equity – upwardly mobile enterprises Public debt and equity – publicly traded upwardly mobile enterprises
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Business plan for financing ...(cont'd)

Format can be used for internal budget requests or to external investors Tell a story Elevator pitch (30 seconds)
– – – –

Problem Solution Name Affiliation
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Business plan for financing ...(cont'd)

Presentation

Management team
◆ ◆

Roles and responsibilities Qualifications

Enterprise overview
◆ ◆ ◆ ◆ ◆

Position within the industry Values Mission Vision Value proposition
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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Needs opportunity
◆ ◆ ◆ ◆

Situation in the marketplace Complication that makes the situation difficult Problem to be addressed Solution to be offered by the enterprise

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Markets and market segments
◆ ◆ ◆

Size and growth potential Evidence of growth and awareness Position in the supply chain

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Products and/or services
◆ ◆ ◆

Value and benefits Functions and features Differentiators
➢ ➢

Distinctive features Proprietary functions

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Research and development
◆ ◆ ◆ ◆

Capability Intellectual property Protection Feasibility study results
➢ ➢

Proofs of concept Prototypes

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Competitive strategy
◆ ◆ ◆

Advantage Competition Barriers-to-entry

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Business and revenue/profit models
◆ ◆ ◆ ◆

Product pricing and projected and forecasted volumes Cost of products sold Operating expenses Operating profit

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Marketing strategy and action plans
◆ ◆

Channels Alliances and partnerships

Operations strategy and action plans
◆ ◆

Insourced activities Outsourced activities

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Marketing strategy and action plans
◆ ◆

Channels Alliances and partnerships

Operations strategy and action plans
◆ ◆

Insourced activities Outsourced activities

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Financing strategy and action plans
◆ ◆

Amount of financing required and for what purpose Schedule of total financing and investor rounds

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Business plan for financing ...(cont'd)

Presentation...(cont'd)

Financial plan
◆ ◆ ◆ ◆ ◆ ◆

Assumptions Projections and forecasts Milestones for key events and accomplishments Constraints Risk factors Contingencies

Investment opportunity and exit strategy as supported by term sheet
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Business plan for financing ...(cont'd)

Term sheet:
– – – –

Amount of financing requested Description of ownership interest Deal structure Capital structure of the enterprise

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Business plan for financing ...(cont'd)

Term sheet...(cont'd):

Sources of funds

Amount of financing raised to date in prior rounds Amount of financing anticipated in future rounds

Uses of funds

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Business plan for financing ...(cont'd)

Other items that may be required
– – –

Due Diligence package Private placement memorandum Registration statements

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Structure

Structure – the enabler of relationships between an enterprise's infrastructure, products and/or services, markets, and constituencies that deliver value
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Structure

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Infrastructure

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Process model

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Duplicable principle

Enterprises generate wealth through scale through the duplication of processes that are:
– – – –

Predictable Repeatable Measurable Trainable

Scale leads to mass production; custom production is hard to scale unless prefabricated components are used
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Function model

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Governance function

Ultimately responsible for the enterprise and accountable to the shareholders/partners/members
– –

Board of directors/partners/members Chief executive officer/partner/member

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Culture is the consequence of governance

Values and guiding principles form the basis for decision making ● Values form the basis for behavior because they describe management's system of beliefs ● Guiding principles set standards for behavior and provide directives for what is expected

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Administrative functions

Enterprise – support for planning and policy development and performance measurement, investor and public relations, government affairs, brand management, community relationships, real estate, philanthropy, ombudsman, internal audit Legal – regulatory compliance and protection, litigation
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Administrative functions... (cont'd)

Finance – borrowing, financing, investing, credit extension, insurance, accounting Human Resources – employment, compensation, training, development Information Technology – analytical and operational systems

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Operational functions

Research and Development – innovation, program and project management, engineering: markets, products and/or services, infrastructure Operations – procurement, manufacturing (or equivalent), distribution Business Development – marketing, sales, service
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Managing growth

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Employees and stewards

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Business units

Centers of excellence ● Utilities

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Product lines/market segments

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Business constituency model

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Capabilities

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Capabilities...(cont'd)

People – aptitude and proficiency Processes and functions – effectiveness and efficiency Products and/or services – features and benefits

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Capabilities

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People

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People...(cont'd)

Physiology – with respect human function Sociology – with respect to product and/or service usage Politics – with respect to respect to decision making for planning and policy development Philosophy – set of guiding principles for practical activities
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People...(cont'd)

Psychology – with respect to understanding the behaviors of:
– – – – – – –

Employees Customers Suppliers Investors Regulators Competitors Community-at-large

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Relationships
Four stages of development

Four stages of connection

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Capabilities

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Process/function model

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Plants and Branches

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Program/project management

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Performance measurement

Financial

Key indicators
◆ ◆ ◆ ◆ ◆ ◆

Value Profitability Liquidity Leverage Activity Solvency

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Performance measurement... (cont'd)

Financial...(cont'd)

Measures

Revenues, costs and expenses, profits Gains Cash flows

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Performance measurement... (cont'd)

Non-financial

Key indicators
◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆

Quality/defects Satisfaction/complaints Compliance/violations Competence Market share Turnover Capacity/utilization Productivity/efficiency
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Performance measurement... (cont'd)

Non-financial...(cont'd)

Measures
◆ ◆ ◆ ◆

Market penetration Product usage Time-to-money Cycle time

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Performance measurement... (cont'd)

Sustainability
– – – – –

Accidents Anti-pollution Safety Welfare Recycling

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Key questions

Which issues, events, and activities should be prioritized as high, medium, and low, and why? Who and what needs attention now, and why? How should plans and policies be deployed and executed?
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Capabilities

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Products and/or services

Consumables and durables ● “Service-oriented” products

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Product management cycle

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Channels

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Capital utilization

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Natural capital

Anything related to the environment used by an enterprise Original source of all raw materials, including air, soil, and water Misuse of natural capital damages the environment

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Human capital

Characteristics of individuals that enables them to be economically productive including:
– –

Confidence Competencies
◆ ◆

Functional knowledge Technical skills

– –

Experience Commitment
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Intellectual capital

Knowledge that gives an advantage that must be protected Derived from people, and manifested in processes and/or functions, and in products and/or services Protected through copyrights, patents, and registration of service and trademarks
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Financial capital

Financial capital
– –

Equity Long-term debt

Equity (ownership by investors)
– –

Assets (opportunities – owed/owned) Less: liabilities (obligations – owe)
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Financial capital...(cont'd)

Financial capital (invested capital)
– –

Investment Operating

Additional sources of operating capital – advances, borrowings, credit extensions, short-term loans

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Financial capital...(cont'd)

Capitalization

Book value of equity of an enterprise plus the fair value of its long-term debt Classification of a cost as operating or investment capital as opposed to charging as an expense

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Financial capital...(cont'd)

Financial capital (invested capital)
– –

Investment Operating

Working capital
– –

Current assets Less: current liabilities
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Financial, managerial, and regulatory reporting

GAAP verus UNICAP (expense versus capitalization) Full absorption versus variable direct costing Standard costing versus activity-based costing for direct/indirect, fixed/variable, and controllable/uncontrollable expenses

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Equity

Equity

Capital stock
◆ ◆

Paid-in Additional

– – –

Retained earnings Other comprehensive income Less: treasury stock
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Comprehensive income

Comprehensive income

Net – realized

Gains on sales of investment assets Operating – revenue less cost and expenses

Other – unrealized

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Operating income

Operating income

Net revenue
◆ ◆

Gross revenue Less: discounts, allowances, and returns

Less: costs and expenses

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Revenue

Dividends (from investments) Fees Interest Rents Royalties Sales
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Costs and expenses

Cost and expenses
– –

Cost of revenue Operating (selling, administrative, and general)
◆ ◆ ◆

Asset-related Employment-related Service-related

Income tax
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Cost reporting

Period Job/project Process Cost of production Product
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Cash flow

Net cash increase
– – – – – –

Cash provided by operating activities Less: cash used by operating activities Cash provided by investing activities Less: cash used by investing activities Cash provided by financing activities Less: cash used by financing activities

Earnings before interest, income taxes, depreciation, and amortization
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Economic model

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The language of value

Value – worth and/or useful (relative term) Wealth – abundance, having cash flow to support a lifestyle Income – financial gain over time creating wealth as capital for reinvestment

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Language of value...(cont'd)

Possibilities – what can be achieved within the capabilities of resources that are available or can be acquired Assumptions – assertions and propositions about the past, present, and future Probabilities – likelihood of outcome

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Language of value...(cont'd)

Supply
– –

Increases result in price decreases Decreases result in price increases

Demand
– –

Increases result in price increases Decreases result in price decreases

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Language of value...(cont'd)

Exchange – the process of offering an item and receiving another of the same or similar value Price – the exchange value offered by the seller for an item or earned based upon an accepted bid Cost – the exchange value bid by the buyer for an item or incurred when accepted – the value that must be given up to acquire an item
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Language of value...(cont'd)

Quality – the perceived value of an item by a prospect or customer at premium or discount from market price or value, based upon:
– – – – – –

Value proposition Abundance Convenience Scarcity Risk Minimal defects
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Value pie

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Value pie...(cont'd)

Employees – fair compensation and a safe environment in exchange for loyalty and productivity Customers – quality and value in exchange for loyalty and timely payments

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Value pie...(cont'd)

Suppliers – loyalty and timely disbursement of payments in exchange for quality and value Investors – returns above the cost of capital in exchange for commitment

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Innovation investment model

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From mindset to action...

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Enabling the action:
Migration Path For Building Sustainable Advantage

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Entrepreneurial enterprise

Not yet fully established as a going concern
– –

Venture – start-up/early stage Committed to becoming an ongoing concern

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Institutional enterprise

Established Becomes an ongoing concern as an intrapreneurial enterprise innovating internally May acquire entrepreneurial enterprises to innovate Striving to be a sustainable enterprise
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Enterprise lifecycle

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Entrepreneurial and institutional enterprises

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Three waypoints of entrepreneurship

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Three waypoints of intrapreneurship

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Features of the migration path

Ongoing concern Established – founded, stabilized, permanent Permanence – ability to generate income on an ongoing basis Change with in permanence – stability within an environment of change
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Ongoing concern

Does not intend to discontinue activities... ...and has the competence and commitment to:

– –

Operate indefinitely and will not become inactive, seek bankruptcy protection, or liquidate its assets Earn profit Finance operating and investing activities efficiently and effectively
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Ongoing concern...(cont'd)

Fosters the entrepreneurial mindset through intrapreneurship, and avoids business-asusual “Ongoing” fosters both rational and emotional factors; “going” concern is defined under GAAP

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Sustainable enterprise

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Sustainable advantage

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Recap

Explain the process of building enterprises leveraging the enterpriship disciplines: entrepreneurship, leadership, and management Discuss the notion of building sustainable advantage Discuss the characteristics of a sustainable enterprise
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Further reading

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Websites

www.bldsolutions.com/cbld www.nigelalbrooks.com www.enterpriship.com www.etailia.com www.understandingpersonalstyles.com www.individualcompetencies.com
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You are now a:

Master of enterpriship Prepared to build sustainable advantage from vision to value

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Enterpriship Disciplines Building Sustainable Advantage From Vision To Value...

Establishing the mindset; enabling action
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Nigel Brooks Seminar
The Guide To Business Leadership Development
Featuring:
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Enterpriship Disciplines Building Sustainable Advantage From Vision To Value

THE BUSINESS LEADERSHIP DEVELOPMENT CORPORATION
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