Management and Excecution
Once the entrepreneur finds a repeatable and scalable business, he goes to the execution phase: customer creation and company building. This comprises creating user demand and building the organization to transition from a startup to a scalable business.
The Business Model Canvas is very helpful in the execution phase. Assuming that the value proposition has been designed and tested, the objective is to execute the identified activities and to manage the resources for the delivery of the value proposition and the satisfaction of customers.
The Customer Development Process
Evidence demonstrates that millions of entrepreneurs come up with great ideas, but most of them fail at the execution part of the strategy. Larry Bossidy and Ram Charan in their book titled “Execution: The Discipline of Getting Things Done” argue that execution depends on three fundamental areas: people, strategy and operations. McChesney, Covey and Huling in their book titled “The 4 Disciplines of Execution” describe the challenges and opportunities for entrepreneurs when executing a startup. See Table below.
Tom Davenport, a well-known professor in Management at Babson College, describes a set of differences between companies’ execution and entrepreneurial execution. This is based on four dimensions: strategy formulation, process management, performance measures, and culture. Davenport argues that entrepreneurial execution should treat employees “neither as passive recipients of a fully-executed strategy, nor as sole creators of it.” Strategy formulation should allow employees to submit ideas, but the founders should develop the core attributes of the strategy such as the markets to be approached and the products to be offered. Process management should also involve employees in process design and process implementation. In this way, the startup should follow a ‘process thinking’ model emphasizing cross-functional collaboration, customer orientation and measurement of key outcomes. The Lean Startup concept should be extended to the real application of ‘lean’ principles into processes; that is, each worker is considered as a learning individual who continually attempts to make a process better.
Start-up and Execution: Challenges & Opportunities
Building the strategy, structures, and systems from scratch without a clear framework or boundaries
Recruiting and welding together a high-performing team
Making do with limited resources
You can do things right from the beginning.
People are energized by the possibilities
There are no rigid preconceptions
With respect to performance measures, studies of effective entrepreneurial execution suggest that metrics should be delivered to those who do the jobs that the metrics measure. Hence, process metrics should go to the process workers concerned, customer metrics should go to those working with clients, etc. At the beginning, these measures should be presented visually and in a simple way. Eventually, Davenport highlights that a startup should have a culture of experimentation and learning. Under this perspective, any strategy or process within the entrepreneurial execution should be treated as a hypothesis.