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Nexus Summer 2006


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Nexus Summer 2006

  1. 1. 1 Warwick Business School Alumni Association magazine: summer 06
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  3. 3. 3 message from the dean 3 A s Dean of one of Europe’s leading business schools I am delighted that this resources will pave the way to ensuring that we can compete with the very best in terms of attracting and maintaining the very best faculty and students, and also summer’s graduation will take offering world class facilities. our alumni community to over 20,000. I hope that we can As the academic year draws to a close and our new inspire you all to tell our story building nears completion, it is time to bid a fond strongly to the outside world farewell to the current Vice-Chancellor, Professor and promote our brand, thus David VandeLinde. Throughout his time at Warwick ensuring that WBS goes from David has been a loyal supporter of WBS and personally strength to strength. championed the idea that WBS should enjoy the devolved budgetary status that we now do. Without a A tremendous boost to the School has come in the last doubt the progress made by WBS in the last five years few months with a gift to WBS of £500,000 from the would not have been possible without David’s support. University’s Chancellor, Sir Nick Scheele. I would like to We wish him the very best in his retirement. reiterate my personal thanks for this gift. Sir Nick, who was President and COO of Ford Motor Company until WBS is regularly described as having fostered an February 2005, said: ‘Throughout my career in business, entrepreneurial spirit in its students and this edition I have supported the concept of leading by example and of nexus gives you a glimpse of that. I hope you enjoy accordingly have donated a gift of £500,000 in the hope reading it as much as I have. I look forward to hearing that others will follow suit so that we can begin to redress your own tales of entrepreneurship over the years to the balance with our friends [at business schools] in the come – do keep us posted! USA and compete on a more even playing field.’ I am delighted to announce that this very generous gift was followed shortly after by several other major donations to WBS from graduates. As funding from the government continues to play a less significant role in our sources of portfolio income here at WBS such additional contents 4–7 WBS news 7 9 8 teaching entrepreneurship Nigel Sykes 9 getting started Robbie Vann-Adibé 10 from Dragons’ Den to ER Professor Harry Scarbrough 11 in mint condition Tim Morgan 20 22 12 the habitual entrepreneur phenomenon Professor Paul Westhead 13 smart choice Dr Frank Craig 11 14 entrepreneurship and development finance Andrew Trigg 15 social entrepreneurship Dr Paul Tracey 19 16 WBS development programme 17 WBS alumni board 18 volunteers in action 19 overseas event reviews 20–21 UK event reviews 22–23 alumni news
  4. 4. 4 nexus: summer 06 research review WBS’s Industrial Dr Simon The second is a comparative study of Relations Research Collinson, MSM, European multinational firms in China, Unit (IRRU) has recently elected also looking at joint-ventures and alliances. been awarded a Lead Ghoshal A central question is: who is learning major contract to Fellow under what in such partnerships and why does it provide information the ESRC and matter? The study, run jointly with Mark and analysis EPSRC sponsored Easterby-Smith at Lancaster University, Mark Hall IRRU for a new EU Simon Collinson MSM Advanced Institute examines the possibility that European research network of Management firms are ‘breeding their future competitors’ monitoring developments in industrial (AIM), has commenced work on two in China. The findings will help EU firms relations, working conditions and corporate further ESRC funded projects. One to better understand the challenge of engaging restructuring. As well as providing a range study British small and medium-sized with China whilst retaining their own of inputs focusing on UK developments, enterprises (SMEs) in China to understand competitive advantages. Simon adds, ‘A IRRU is one of just three institutes the challenges they face in alliances and number of UK and European firms already across the EU chosen to coordinate the joint-ventures with Chinese firms. The involved in the study have been introduced preparation of a series of comparative, project will provide insights into the by WBS alumni. I’m interested in hearing analytical reports on key EU-wide topics. problems of entering and operating in from any alumni working for UK or EU The contract for this work is worth up China for firms that have limited resources firms that are involved in joint-ventures to €275,000 per year and will run for and expertise but see huge opportunities in or alliances in China who are willing to four years. The project started in March, this emerging market. participate.’ E supervised by Principal Research Fellow Mark Hall. Much discourse innovation include not only managers and about public staff, but also politicians and service users. The new network, sponsored by the services reform Public sector innovation needs to be judged Dublin-based European Foundation for appears to hinge against different criteria of success from the the Improvement of Living and Working on the need for private firm. For the latter, organisational Conditions, is intended primarily to serve public organisations advantage is the metric of success, whereas the needs of a core audience of employers’ to become more the measure for public services is public associations and trade unions at national Jean Hartley IGPM innovative. Yet, value, which concentrates on benefits and European level, governments and EU innovation in the for the whole of society not solely the institutions. It will replace three separate public service sector is poorly understood, individual organisation. EU ‘observatories’, including the European and there is an over-reliance on models of Industrial Relations Observatory, which innovation from the private sector. Jean’s research is funded through the IRRU has been part of since its inception Economic and Social Research Council’s in 1996, and the more recent European Research, workshops and teaching by Advanced Institute of Management (AIM), Working Conditions Observatory, for which Professor Jean Hartley, of the Institute of of which she is a Public Service Fellow. IRRU has provided UK data since April 2005. Governance and Public Management, aim She also leads a large research programme to fill this gap. Her work has developed examining the diffusion of innovation in Dr Lynne Oats, ideas and models of practical value to local government. Her major report on Senior Lecturer policy-makers and practitioners as well as innovation was recently published on a in Accounting contributing to academic knowledge not government website. and Taxation, only about the public sector but also the has received an private and voluntary sectors. W award from the vationanditsContributiontoImprovementA Lynne Oats AFIN Centre for Business The public service sector is replete with ReviewExecutiveSummary_id1500176.pdf Performance, examples of innovation but the drivers of Institute of Chartered Accountants in England and Wales, to investigate the changing role of accounting in the Research by Dr Sue professional qualifications by managers corporate tax compliance process. The Bridgewater, MSM and prospective managers. This relatively project, to be conducted with Penelope group, revealed recent interest in gaining professional Tuck, University of Southampton, will that over 500 management qualifications is already examine the ways in which the recent trend managers for the making a real difference to management towards alignment of accounting and tax four top English performance and thus length of tenure in profits in the UK affects the relationship divisions have been management posts. Both the Pro License between HM Revenue and Customs and dismissed from their and the Certificate in Football Management Sue Bridgewater MSM large corporate taxpayers. post since 1992, run by WBS are proving increasingly bringing damaging attractive to managers and prospective Mark Hall and Professor Mike Terry, IRRU, instability to the game. However, she also managers seeking to add managerial insight with Professor John Purcell, University of outlined how a new professionalism in the to their considerable football skills. Bath, have been awarded a major two to four post of manager is already achieving results year research project for the Department on the pitch and could thus help managers To download the report of Trade and Industry. The contract, worth stay in post longer. w £190,000 over the first two years, involves football-managers-0106.pdf assessing organisational responses to the Sue’s report demonstrated a significant For more information on the Certificate in recent Information and Consultation of change in the fortunes of managers brought Football Management Employees (ICE) Regulations. about by the increasing uptake of relevant w
  5. 5. research review nexus: summer 06 5 A new report from by Government to build a new fleet of CSME hosted the Dr Catherine stations will undermine the development International Mitchell and Dr of the far more important renewable and Conference on the Bridget Woodman demand reduction technologies which are Financing of SMEs in of the WBS Centre necessary to reduce carbon emissions from Developed Countries Catherine Mitchell and Bridget Woodman CMuR for Management the remaining 92 percent or so of energy in April, building Stuart Fraser CSME under Regulation demand. For more information on the on the outcomes (CMuR) which examines the contribution report, published by WBS together with and response to the ground-breaking UK nuclear power could make to the UK’s environmental think tank Green Alliance research into SME finances by Dr Stuart energy ‘mix’, says that if Government opts w Fraser, WBS Senior Research Fellow, (2004 to take up the option of new nuclear build, 13/Nuclear/puts/renewable UK Survey into SME Finances). it risks becoming locked into expensive technology that will make it harder WBS, working with University departments Computer Science and Mathematics, has been overall to reduce carbon emissions. The awarded £3.8 million in the second round of the Science and Innovation Awards announced authors say that while nuclear power is a by the Engineering and Physical Sciences Research Council (EPSRC). The award is to set up low carbon technology which provides 8 the Centre for Discrete Mathematics and its Applications led by Professor Mike Paterson of percent of energy demand, a commitment Warwick with Professor Bo Chen as a member of the Executive Team leading the WBS input. hot off the press Essential Quantitative The Strategy Pathfinder Multi-Asset Class Investment Methods for Business by Dr Duncan Angwin, Strategy by alumnus Guy Management & Finance, MSM, Stephen Cummings, Fraser-Sampson (DLMBA 3rd edition by Les Victoria University of 85–9), published by Wiley, Oakshott, Practice Link Wellington, and Chris claims that if UK pension Manager/Senior Teaching Smith, University of funds had practised multi Fellow, ORIS. A concise, Adelaide (formerly at WBS), asset class investing during accessible, comprehensive published by Blackwell. Built the 1990s then the present introduction to quantitative techniques around 82 micro-cases of real-life problems funding deficit would not emphasising business relevance and faced by companies and executives, drawn exist and the recent spate of closures of final discussing the challenges of problem- from a rich tapestry of business activities salary pension schemes would not have solving in the real world. across Africa, the Americas, Asia, Europe been necessary. w and Oceania. w www.blackwellpublishing. w Business.asp#Quantitative com/book.asp?ref=1405126132&site=1 productCd-0470027991.html Operations and Process Marketing Management Taxation – Policy and Practice, Management – Principles and and Strategy was originally 13th Edition 2006/2007 by Practice for Strategic Impact developed by the late Peter Andy Lymer, University of co-authored by Nigel Slack, Doyle, WBS Professor of Birmingham, and Lynne Robert Johnston and Stuart Marketing. Now in its Oats, WBS Senior Lecturer Chambers, WBS Operations 4th edition, published by in Accounting. Published by Management, with Alan Pearson Education, Philip Fiscal Publications. Written Betts, published by Pearson Stern, Senior Lecturer in in an accessible style with Education. Approaching the subject from Marketing and Strategic Management, has many examples, activities and questions a truly managerial perspective, the book updated this comprehensive but concise throughout, this textbook gives a thorough inspires a critical and applied mastery of the and practical management guide to the understanding of the UK’s taxation core principles and processes fundamental important ideas in advanced Marketing principles and current practices. to managing business operations. and Strategy. w w W 10% off We are pleased to be able to offer all WBS alumni and staff not only a 10% reduction on The Changing Institutional International Business by Face of British Employment Alan M Rugman, Professor this book – but through a generous offer from Relations, jointly edited by of International Business, the publisher – a 10% reduction on ALL their Professors Linda Dickens of Indiana University, and Dr books for any orders placed before the end of WBS and Alan Neal of the Simon Collinson, Senior 2006. If you are a current student of WBS the Law School. Published by Lecturer in International deal is even better – 25% discount off this title Kluwer Law International, Business, WBS. as well as also qualifying for the 10% deal off the volume marks the 30th Outsourcing. Emerging the publisher’s other books. All orders must anniversary of the Advisory economies. Environmental impacts. Just quote code:WBS2006.10 for the 10% alumni Conciliation and Arbitration Service (Acas) three of the many key issues currently deal and WBS2006.25 for the 25% discount and provides a contemporary picture facing international businesses, all of which for students. Then quote the publishers web of the institutional landscape of British are examined in the fourth edition of this address and email: employment relations. well respected textbook. W w e
  6. 6. 6 nexus: summer 06 WBS news generous gift the fifth annual Sir Nick Scheele, Chancellor Warwick-Acas Lowry lecture of Warwick University has donated half a million The annual Warwick-Acas Lowry lecture was held at WBS in March, pounds to Warwick with Alan Johnson MP, Secretary of State for Trade and Industry, Business School and hopes scheduled as the guest speaker. At the last minute the Minister had to it will encourage others to remain in London and sent a video introducing his lecture entitled consider supporting the ‘The World of Work’. The lecture, delivered by one of his officials, University. Sir Nick has had set out the Government’s key priorities and argued that addressing a long association with the these calls for a change in the role of employment legislation. University and was once a member of the WBS Board; w he became the University of Warwick’s fourth Chancellor in March 2002. Sir Nick has said, ‘The competition between UK and USA universities is a fact of life which can be seen most significantly within our business schools. Although USA business schools got a head start, Europe, and particularly the UK have demonstrated that the provision of excellent business education can be found on this side of the water too. However, there is still one area where I perceive that the UK is at a considerable disadvantage to our North American competitors. The funds donated to universities by alumni and other beneficiaries in the USA dwarf the sums donated here. Although European Alumni now compete favourably with their North American counterparts in the salary stakes, the culture of giving to your university simply has not developed here as it has in the US. Many of you will know that I have had a long involvement with the motor industry, but it has not necessarily been cars that have motivated me but practice of business and the science of management itself which is why I have endowed Warwick Business The lecture provided an ideal opportunity to launch a book jointly School with this gift.’ edited by Professor Linda Dickens of WBS and Professor Alan Neal of the Law School (see hot off the press P5). Rita Donaghy, the WBS Scarman Road Phase 3 Stage 1 development Chair of Acas (centre) formally launched the book and Linda is pictured third from right. moves towards completion in September 2006 first fellows The National School of Government has named Dean Howard Thomas, and Professors John Benington, Jean Hartley and Colin Crouch of WBS among the first Fellows to its Sunningdale Institute – a group including internationally rated academics and industry figures, and offering development to government and public service organisations on operational and delivery issues. WBS has the biggest involvement of the participating organisations. w new degree at WBS WBS is launching a new Masters degree, the MSc in Management, starting in October 2006. The degree has been designed to meet demand from top quality graduates in subjects unrelated to STOP PRESS: The Times Good University Guide 2007 again business, who wish to follow a career in management but do not rates WBS in the UK top three for both Business Studies and have the work experience necessary for The Warwick MBA. Accounting & Finance. The University as a whole maintained 8th place out of 109 UK universities. w
  7. 7. WBS news nexus: summer 06 7 multimedia at WBS winning team We now have the ability to record selected At a lunch to celebrate the end of the events at WBS on high quality digital video, spring term, a £1,000 prize was presented edit them and post them on the web site as to the winning team of MBA students for a video file, convert them into audio files outstanding group project work on the for podcasts and burn them on to DVD to Practice of Management (PoM) module send to anyone who wants a high quality for the academic year 2005–06. The prize copy. Over recent months we have recorded was sponsored by the Fund for Academic press conferences, guest lectures including Excellence, thanks to generous donations presentations from IBM and Mary Jo Bane from alumni, friends and staff of WBS. Sailing to success from Harvard, posted a podcast by Dr Bridget Woodman on renewable energy and recorded the Winter Graduation assembly. A WBS crew of MBA students reached second place in the Global MBA Trophy, ‘It is predominantly a tool for news organised by London Business School, gathering and assisting the external losing only to SDA Bocconi’s crew. The promotion of the Business School,’ said crews competed for three days, in six WBS Director of Communications, Vincent fleet races in the port of Piraeus, Greece. Hammersley. ‘However, we are fortunate Crew members: Bobo Baudin, Skipper to attract first class speakers and if we can (Sweden), Odul Akin-Rousk (Turkey), capture these presentations and other Panos Anastasiou (Greece), Gaudenzio selected events I see this as a major benefit BonaldoGregori (Italy), Evangelos to both alumni and future students.’ Christodoulou (Greece), Filippo Riva (Switzerland/Italy), James Smith (South The eight members of the team were: Africa/UK). winter graduation Michael Brockmann, Lee Fisher, Kartik Kumar, Lillian Mbindyo, Irina Motovilova, The team now competes in the SDA WBS hosted a buffet lunch for over Richard Walker, Abdoul Wane and Bocconi MBA’s Cup 2006 (Santa Margherita 100 WBS graduands, their families and Emmanuel Sissimatos. and Portofino, Italy, 21–24 September). friends, attending the Winter Graduation If anyone would like to be part of the ceremony at the University of Warwick on inner courtyard of the building. Howard WBS crew, or can identify sponsorship Wednesday 25 January. Thomas, the Dean of WBS, gave a speech opportunities for the team, please contact congratulating the graduands on their Panos Anastasiou. The Scarman Road lounge was extended achievements and Head of Alumni by the installation of a specially Relations, Nathalie Walker, welcomed e commissioned marquee within the them to the WBS Alumni Association. media round-up coverage in the Middle East. Still abroad, WBS WBS alumni have been equally active. Dean Howard Thomas made news in the Thomas Sparrvik (DLMBA 95–00) was the In the year of football’s World Cup, it academic press of the USA when he was made subject of an article in an international was particularly appropriate that Dr Inaugural Fellow of the Strategic Management edition of the Financial Times on how Sue Bridgewater kicked off WBS media Society, joining an elite list that includes his MBA has boosted his career, David coverage with a press conference at the Harvard’s Michael Porter and business guru McNulty (MPA 00–5) was profiled in Warwick in London office. She presented Gary Hamel. national media about his career success in the first stage of her research into trends the public sector, and Nicholas Yeo (MSc in professional football management. Professor Colin Carnall, as Director of Fin Maths 98–00) was quoted widely in Every seat in the room was taken, and Executive Programmes at WBS, is regularly Asian media and the Reuters newswire on the resulting media reports covered the featured in training and development the performance of stocks in the Asian full range from international satellite publications with expert comment and markets. It is good to see other alumni in television to local newspapers. To date, articles on his latest book. Professor Andrew the news due to successful career moves we have logged 50 different sorts of media Sturdy’s research into the use of consultants, and promotions (see alumni news P22/3). coverage on this topic alone. particularly in the public sector, formed the basis of a programme for BBC Radio 4’s File on There just isn’t room to list all the alumni Other faculty have been raising the Four. Dr Catherine Mitchell and Dr Bridget and faculty who have contributed to WBS profile too with media coverage. Woodman are fighting a two-woman battle the media for their particular areas of Professor Martin Cave, Head of the on the side of renewable and sustainable expertise or career success. Keep up to date Centre for Management under Regulation energy sources, in an effort to counter the with WBS in the news online – go to our research centre, is an international and nuclear industry’s current push for favourable recently upgraded web pages at: influential figure in the development media coverage. Catherine has appeared on of telecommunications. He chaired the BBC2’s Newsnight and written articles in The w ground-breaking Telecoms Regulatory Guardian, while Bridget has been interviewed Authority 2006 Development Review by local radio and contributed to BBC TV’s Panel in Bahrain, which achieved wide Countryfile programme.
  8. 8. 8 nexus: summer 06 focus on entrepreneurship teaching entrepreneurship Nigel Sykes, Principal Teaching Fellow, CSME, gives an insight into his approach to teaching entrepreneurship. I walk around and notice people speaking in acronyms. An example is the classic four Ps of marketing. Well, here are my 3 Ps: What we try to encourage in the Entrepreneurship teaching at WBS is that each student is a remarkable talent and a to translate this into reality. What we really do at WBS is to tease out latent entrepreneurial talent. Some say ‘this what have Pinter (Harold the playwright), good entrepreneurial team recognises each isn’t for me’ and that’s a good outcome. Plato and Prostitution NOT got to do with other’s talents and encourages different Some, having studied the course say ‘I now the way I teach Entrepreneurship? leadership capabilities to take over the know who I am and where I fit within an helm of the business as it and the landscape entrepreneurial team’, which is brilliant. Harold Pinter’s ‘The Caretaker’ is set in a it traverses, changes. one room flat and there are only two parts Then there are those who may have felt for in the play. One, the owner of the flat, and Some are good ‘envisioners’ and lead the some time that they had a burning desire to the other, a man staying with him, who has creativity phase and principal forming get something started, and they find they no home and seemingly no real prospects stage of the business venture. Others can fly, ignoring those negative voices that either. That is until, we learn, he can get are good ‘enablers’ who lead the process had held them back for so long... again, to Sidcup to collect his papers (his MBA?) and strategy forming stage and finally a very worthwhile and significant outcome. and then he believes everything will be the ‘enactors’, the practical ‘doers’, even okay. I sometimes feel that the MBA can be specialists. Everyone in the team gets to So I suppose Entrepreneurship is taught at seen like that but Entrepreneurship is more know and appreciate each other’s skills and Warwick so these 3 Ps can be avoided. In about developing the individual rather talents and learns to recognise, encourage summary, we’re more about recognising than focusing on the qualification. and release each other. and releasing entrepreneurial talent and capability, developing an encouraging Finally Prostitution, the last of the 3Ps rather than a critical culture, and helping we do not teach on the Entrepreneurship people to fly out of the restrictions that Everyone in the team gets option, you will be pleased to know! What can be imposed by more controlling and on earth do I mean? hierarchical structures out there. to know and appreciate each other’s skills and talents and To illustrate, I taught a session at a local school recently and the students thought, learns to recognise, encourage ‘Here is a man from Warwick Business and release each other School, and he is going to talk about the author in minute Entrepreneurship. We will go and hear about how to acquire funding and make Nigel’s background money.’ In the first ten minutes there was is in sales and retail Now to Plato who gave us the notion of management, a stunned look on their faces as I avoided marketing and outlet a republic and Platonic dualism. Born talking about money at all. development. He is into a wealthy ruling family in Greece, the former Enterprise I’m sure he was a bit put out when civil So often the expectation is that the teacher Agency Director unrest saw his family fall from favour. He of Entrepreneurship will just talk about and manager of pilot Community went off and met a few Gnostics, mystics where winning ideas come from and then Programme project and thinkers of that time (a bit like going how to make your proposition attractive linked to industry to WBS I suppose) and came home with to a banker or investor who will then put with Birmingham a cunning wheeze. If we can encourage up the money. I would even go so far as Chamber of Industry and Commerce. Nigel people to fit into a system that is controlled to say that in extreme cases people find works in a ‘catalytic’ role in helping to release capability and talent through individual, by the state (him) and has elected officials themselves saying things like: organisational and (supposedly but really his mates) we will inter-organisational opportunities. create a republic or corporate structure and there will be order and everyone will What position would you like me in? Research Interests: family business succession; behave (be controlled in other words by social entrepreneurship; understanding What do you want me to do? success and evolution of firms particularly in them) and I will be the person whose name What do you want to hear from me? terms of marketing and team development; and reputation will live on for ever as the international economic regeneration through one who thought of this cunning idea and ... so that I can get the money I need for small business and entrepreneurship, plan. Platonic Dualism and the Republic my business. This is so like the oldest particularly in Eastern Europe, Latin America, DPRK (North Korea) and Zimbabwe. he created is a dangerous idea really, when profession in the world isn’t it? And we can you consider that Gallup have found that end up being slaves to money. over 80 percent of 1.2 million managers interviewed by them were not employing It is a challenge teaching Entrepreneurship their talents and capabilities in their work, beyond the theoretical constructs and on a daily basis.
  9. 9. nexus: summer 06 focus on entrepreneurship 9 getting started Robbie Vann-Adibé (MSc MSOR 84–5) is one of WBS’ most successful entrepreneurial alumni, with over 20 years of experience in technology, start-ups, consulting and financial services in the USA and Europe. R obbie was most recently the turn- around CEO of Ecast, a San Francisco based digital jukebox company. He whereas in later years I developed a very different set of criteria for what to look for in a workplace – which were: Thirdly, IPOs are becoming harder for start- ups to achieve given the cost of compliance and the capital markets receptivity. developed Ecast from a start-up to an • Do you like the people? If you like them, operational enterprise, paving a clear path you’ll be willing to take their input The fourth trend is the emergence of a to success in a proven multi-billion dollar • Can you learn something from the people new breed of acquirers who are prepared to market, stimulating users’ appetite for you’ll be working with? This probably acquire companies just on the basis of their delivery of the best internet-based content means they are good at what they do and people and technology and not as a self- – anywhere, any time. will satisfy their customers sustaining business. • Are people having fun? If they are, then it Robbie came to campus in February 2006 probably means the working environment So given this chasm between entrepreneurs to share his wealth of experience with will be productive; their customers and established venture firms, Robbie Undergraduate, Specialist Masters and satisfied and the place is functional strongly believes there is an opportunity MBA students. See the box below for a for a new style of Venture Firm to work few of his top insider tips on the road to Technology start-ups – the basics with entrepreneurs before they receive entrepreneurship. • If you can’t afford to take 12–18 months established venture capital, or are acquired. off with no salary – don’t do it! He is in the process of creating such a firm. A perspective I wish I had had at the • Consulting is a great perch from which to beginning of my career come up with new ideas – it’s essentially Robbie’s final piece of advice is, ‘Don’t get ‘When I began my career, the criteria I used people paying you to tell you their so focused on the destination that you to determine where to work and who to problems and come up with solutions forget to enjoy the journey.’ work for were very different – I looked at • Try to engage a trusted resource with things like salary, title, job description etc, relevant expertise early to help vet your idea(s) the author in minute A few big lessons Creating a team • Technology is almost impossible to Robbie is happily Work in a big organisation/corporation develop alone married to another Warwick alum, first – you will learn a huge amount and • My experience suggests that you need Linda, who he met it will stand you in good stead for start- at least two people to start a successful during his time at up activity and securing VC funding technology based venture – the technician Warwick, and – or put another way, make your early and the business person considers his two children his greatest mistakes on someone else’s payroll. • You are better off with people you’ve start-up projects ever. worked with and knowing what they are Don’t over-plan – go with the flow good/bad at Robbie started his career as a developer on Wall • Find your ‘mirror’ – having someone Street, building trading and clearing systems at – you never know where your next Morgan Stanley and Credit Suisse First Boston. opportunity may come from. around who spends all the time agreeing He helped launch several start-up technology with you is a waste of salary! companies including Seer Technologies, a CASE Learn to do something really well. • ‘Test drive’ working together – work tools firm. He did a stint in consulting as a Senior together to refine your idea and see what Associate at Booz Allen Hamilton in San Francisco, where he led strategic consulting initiatives. He Don’t burn bridges (aka shut the door that feels like held various senior positions at global software but always leave a window open) – in giant, Oracle, and was Vice President of Product many industries you’ll meet the same Always scanning the horizons for Marketing at start-up Illustra, an object-relational opportunities, Robbie has begun to focus database company acquired by Informix. Robbie people at different junctures of your co-founded Viant in 1996, a web-consulting career and it’s best that they think well on the venture capital industry that has company, leading its global expansion. Viant of you. operated in the USA for some 30+ years. completed an initial public offering in June 1999 According to Robbie, ‘There are four on NASDAQ. Cultivate your network – stay in touch trends creating new opportunities in this An active angel investor, he was an early investor with colleagues – you never know when area. The first we are seeing is an increase in companies such as Inspired Gaming, Volantis they might need you, or you them. in the number of entrepreneurs who are and Sidestep. starting businesses early in their career, Stay healthy – success without your bootstrapping their companies and are not Robbie is establishing an early stage venture firm in California with several VC friends (remember personal health is the wrong result. attracted to venture capital. The second is that advice about working with people who you that venture capitalists are enjoying ‘large will enjoy the journey with?) helping to advise and Don’t be intimidated by people smarter fund dynamics’ which preclude them from nurture start-ups in the San Francisco Bay area. than you – hire them. systematically making small, early stage investments.
  10. 10. 10 nexus: summer 06 focus on entrepreneurship from Dragons’ Den to ER Professor Harry Scarbrough reports on current Innovation, Knowledge & Organisational Networks (IKON) research group projects. I nnovation is generally held to be critical to long-run success in the global marketplace, yet is something challenges of exploiting breakthroughs in scientific knowledge to improve medical practice. At the moment, such The reasons for this have to do with the dense clustering of leading science and business research centres in specific that many firms do badly or not at all. breakthroughs often fail to reach hospitals, regions of the USA (especially Boston) This is not generally due to a lack of new even though patients are in desperate need and also the different career paths that science and technology opportunities of the new treatments they might bring. people follow in the two countries. For (though UK firms do still under-invest This project draws on IKON members from example, it is common to find a clinician in R&D). It has a lot more to do with the universities of Warwick (Jacky Swan, working in a hospital in the USA who the skills and organisational capabilities Anna Goussevskaia, Ademola Obembe), is also simultaneously working with a needed to exploit and commercialise such Coventry (Maxine Robertson), Leicester biomedical company. This does lead to opportunities. This challenge involves (Mike Bresnen) and Bentley College, USA, ethical dilemmas – see episodes of the firms being able to simultaneously explore (Sue Newell). Their study has looked at the USA TV series ER for examples. But, in and exploit knowledge – a big challenge reasons for failure and delay in this process, general, commercial arrangements between because these tasks require very different and whether experience from the USA has clinicians and private companies are seen types of management. anything to teach us in the UK. as more acceptable in the USA than the UK. This is an area where the IKON research Overall then, the study has found that group is carrying out leading-edge research. in the UK, there is a greater degree IKON is based at Warwick but is networked of separation between professional This ability to select with other universities in the UK, USA and groups and between public and private Brazil. It also works closely with KIN (the (and reject) innovation organisations. This means that there is Knowledge and Innovation Network), a opportunities is critical to more of a need to establish ‘bridging’ consortium of leading international firms, mechanisms to connect the different including Schlumberger, Conoco Phillips, successful commercialisation. disciplines and/or different organisations Masterfood, PwC and others. Understanding how decision- involved. By contrast, in the USA, these makers inside and outside groups and organisations are already more One of IKON’s current projects is tightly ‘bonded’. examining the exploration-exploitation firms do this successfully, and challenge through a collaborative study maybe how it differs between KIN activities are described on its web site with Boston University in the USA. I the UK and the USA, should w am directing this study, which involves identifying the way in which groups such be a significant contribution as venture capitalists and corporate venture to the debate on how the UK the author in minute teams make investment decisions on new technology opportunities. The challenge can make better use of the here – echoed by the BBC TV series knowledge produced by its Harry Scarbrough is Dragons’ Den – where entrepreneurs pitch world-leading universities and co-founder of the IKON Research Centre and their ideas to secure investment – can be likened to the successful venture capitalist’s research institutions the Knowledge and Innovation Network ability to identify two or three attractive (KIN). He is also propositions from the hundreds of business currently Director of a plans received every year. This ability to major ESRC research programme on ‘The select (and reject) innovation opportunities Their work (still ongoing) shows that evolution of business is critical to successful commercialisation. the exploitation of most scientific knowledge’ which Understanding how decision-makers inside breakthroughs depends on scientists encompasses a number of projects examining and outside firms do this successfully, from various disciplines working together the creation and exploitation of knowledge, and maybe how it differs between the with business experts and clinicians. including his own study (jointly funded with the Cambridge-MIT Initiative) of ‘The UK and the USA, should be a significant For example, the development of tissue dynamics of networked innovation’. contribution to the debate on how the engineered products (used in cartilage UK can make better use of the knowledge repair and wound treatments) needs Research Interests: management of knowledge produced by its world-leading universities medical scientists to collaborate with and learning in organisations; role of social networks in innovation processes; and research institutions. clinicians, materials scientists, biologists, commercialisation of innovation. geneticists, venture capitalists and Another IKON study (co-funded both by lawyers. The team refers to this activity as the ESRC’s EBK programme mentioned ‘interactive innovation’ and reports that, above and the EPSRC Warwick Innovative in general, the USA is better equipped to Manufacturing Centre) focuses on the support this kind of innovation.
  11. 11. nexus: summer 06 focus on entrepreneurship 11 in mint condition Tim Morgan (BSc Accounting & Financial Analysis 94–7) is Commercial Director of Mint Digital, a leading new media company that creates concepts for interactive television. Here Tim explains how he came to join forces with fellow undergraduate Andy Bell (BSc Economics 94–7), who started the company in 2004. ‘A ndy and I originally met at Warwick as undergraduates in 1994. We were separated on graduation in 1997 as our careers went on divergent paths. Andy went into interactive television whilst I joined Ernst & Young as a trainee chartered accountant. After qualifying, I spent the next five years in mergers and acquisitions. ‘In 2004 Andy started Mint Digital, an innovative new media company making interactive television. I had always hoped that one day we would run a business together, so when he told me about Mint Digital, I offered to lend a hand. Multi award winning interactive designer Noam Sohachevsky joined in November 2004 and I started to get involved at about the same time. ‘I began by helping with financial and commercial matters in my spare time since I still had a day job working in acquisitions. By the end of 2005, the company had developed to a stage where I had to make a decision; to continue my career in the City or to go full time at Mint Digital. I loved Left to right: Andy, Tim and Noam the work I was doing for Mint so much that when the opportunity came along to join full-time, I took it without hesitation.’ ‘The thing I am most grateful to WBS Mint Digital has developed a reputation for meaningful innovation, punchy content If you start a for is the bread and butter financial and commercial education. As an and effective design. The company has business, I think it is undergraduate, it is easy to be seduced by been responsible for several successful the strategic side of running a business, web based concepts for television clients imperative to work but it is the practical day-to-day issues that including Channel 4, Discovery USA, and are most fundamental when it comes to RDF Media. with people you like getting started. Since the start of 2006, Mint has attracted and admire ‘WBS is the perfect nursery for anyone private equity funding and has won with entrepreneurial ambition. This is many awards for its work. Most exciting because of the quality of the people at the of all, at the annual MIPTV (international Tim continues: ‘In Andy and Noam I School, many of whom have a wealth of television) festival in Cannes in April, have partners who are not only extremely entrepreneurial experience themselves. Mint was crowned the winner of a BBC talented but who I get on with like a house Also there was a focus on corporate case sponsored competition to develop the on fire. I also think that you should only studies that demonstrated the practical cutting edge media concepts of tomorrow. start a business if you passionately believe application of the financial and strategic in what you are doing since it requires a theories that I had learnt. This summer, Mint is launching lot of hard work and it is easier if you enjoy ‘Bloombox’, a web application that makes yourself. ‘Most of all, my experience at WBS was it easy for media companies to acquire fun. I really look at back at my time at WBS user generated content. ‘Bloombox’ is an ‘Finally, the most fulfilling thing of all is fondly and I met a lot of great people while example of the type of product that puts being able to be true to yourself and stick to I was there.’ Mint at the centre of the convergence your principles. between old and new media. w
  12. 12. 12 nexus: summer 06 focus on entrepreneurship the habitual entrepreneur phenomenon In a forthcoming book, Paul Westhead, WBS Professor of Enterprise, provides the first systematic study of habitual entrepreneurs. Here he reveals the key findings and implications of his research. Despite media hype, case study evidence of sales or employment growth. Habitual opportunities, support agents need to suggests that not all habitual entrepreneurs entrepreneurs who had previously ‘failed’ improve the provision of information. who own more than one business, either reported lower levels of living standards. sequentially (serial entrepreneurs) or Habitual entrepreneurs also require concurrently (portfolio entrepreneurs), Human capital: Habitual entrepreneurs assistance with converting imagination, are consistently successful. My book is were less likely to focus on their perceived creativity and innovation into better based on survey evidence involving a technical capability. Superior firm quality opportunities that are problem/ representative sample of 730 private firms performance was associated with highly market focused with greater wealth creating in Great Britain. A human capital approach educated entrepreneurs and those leveraging potential. was used to explore the general and specific managerial and entrepreneurial capabilities. profiles of habitual entrepreneurs with Weaker firm performance was linked Novice entrepreneurs need to be made prior business ownership experience with entrepreneurs citing only technical aware that simply being in possession of and novice entrepreneurs with no prior capabilities. technical knowledge, and a related idea, business ownership experience to leverage. does not guarantee a successful business. The contribution of business ownership Key implications Novice entrepreneurs should be encouraged experience vis-à-vis other dimensions Business ownership experience: The assets to use sources of information utilised by of human capital was explored within a and liabilities of business ownership habitual entrepreneurs. multivariate regression framework. experience need to be considered. Habitual entrepreneurs possess both the inclination Failure: The view that ‘failure is the fuel Key findings and ability to identify opportunities but of success’ was not validated by this Scale: Habitual entrepreneurs owned 52% of some lack the skills and capabilities to study. Initiatives supporting ‘failing’ surveyed firms. In total, 162 firms involved exploit them fully. entrepreneurs to return to entrepreneurship serial entrepreneurs whilst a further 216 may be promoting a culture of failure. firms involved portfolio entrepreneurs. Venture performance: Studies that focus Assistance may be required to foster solely on firm performance (ie sales and intelligent failure, which seeks to change Background: Habitual entrepreneurs were employment growth and profitability) an entrepreneur’s mindset and behaviour more likely to be men and generally may fail to provide an understanding of to overcome personal biases (ie hubris and reported business ownership family the entrepreneurial human capital drivers denial). backgrounds. They cited a high level of linked to the opportunity identification that similarity between current and previous creates future wealth. Habitual entrepreneurs The habitual entrepreneur phenomenon businesses. who identify more than one opportunity (Edward Elgar Publishing, Cheltenham), have better choices and have the resources is due out at the end of November. Opportunities: Habitual entrepreneurs to pursue more opportunities. Portfolio identified more opportunities over a entrepreneurs accumulate larger personal five-year period and pursued a higher wealth. Compared to other entrepreneurs, the author in minute proportion than novice entrepreneurs. More portfolio entrepreneurs take smaller amounts opportunities were identified by highly of money out of each business, but have Paul Westhead, educated entrepreneurs who had engaged in more businesses to draw upon. WBS Professor of intensive information search as well as those Enterprise, Centre for who had leveraged their managerial and Resources: The resources needed to identify Small and Medium entrepreneurial capabilities. opportunities may not necessarily be the Sized Enterprises. same as those required to manage successful Visiting Professor of Entrepreneurship (Bodo Information: Habitual entrepreneurs individual ventures. Habitual entrepreneurs Graduate School of searched for information less intensively need to accumulate and leverage managerial Business, Norway, 2001– but used additional knowledge from and entrepreneurial capabilities. present; former Professor employees, consultants, financiers and of Entrepreneurship at government sources more frequently. Customised external support: In addition Nottingham and Stirling Universities Business Schools and Senior Research Fellow at Warwick, Entrepreneurs citing high entrepreneurial to specific advice on new firm creation, 1992–7. Research posts at Imperial College and capability searched for information practitioners, consultants and government Cranfield School of Management. Consultancy more intensively, used additional sources agents should provide customised support experience for EIM Business & Policy Research, and identified more opportunities. (ie information, training, advice, etc) 2005. Links with OECD, Paris; Higher Education Paradoxically, those entrepreneurs targeted at the specific needs of habitual Funding Council for England and Wales; and Scottish Enterprise. reporting higher information search entrepreneurs. Business failure rates may be pursued fewer opportunities. Information reduced considerably if additional support Research interests: habitual entrepreneurs, overload may, therefore, be a problem. is made available to facilitate business internationalisation of SMEs, training Performance: Businesses owned by habitual idea evaluation and feasibility analysis. programme take-up and benefits, technology- entrepreneurs did not report superior levels To enable more entrepreneurs to identify based firms and Science Parks.
  13. 13. nexus: summer 06 focus on entrepreneurship 13 smart choice Dr Frank Craig (DLMBA 99–02) CEO, Smart Holograms, shares his first-hand experience of entrepreneurship in the Life Sciences sector. I have a PhD in Microbiology and over 10 years executive management experience in the Life Sciences industry. I am basically frameworks at WBS which I later used for market analysis and development of a professional Human Resources function a serial entrepreneur and have started three at Smart Holograms. A blend of creative, biotechnology firms from the ground up. entrepreneurialism tempered with In each case I was the first employee and a management discipline is optimal for Founder. Aurora Biosciences Corporation effective company growth. was the first, based in San Diego. This became worth £1.6 billion five years Studying the MBA by distance learning after founding. The second was my own was great fun. It was interesting to meet management consultancy business called people from different industries and see Venture Consultancy Limited (in 2002) the linking thread of management. The which was based in the UK but established teachers were very professional and the international clientele in Europe and North ones I remember who made a lasting America. The third is Smart Holograms impression were usually the humorous Limited based in Cambridge, UK, which ones. I will claim ‘diplomatic immunity’ is also a Life Sciences firm. This company and refrain from naming them! is only a few years old and is now worth around £150 million. WBS has a world-class reputation and regularly produces high quality, Smart was co-founded in 2002 as a spin- peer-reviewed articles and books on out company from Cambridge University entrepreneurship. I also see that it started to exploit an exciting new technology a venture fund called Warwick Ventures that enables the development of a new in 2000 to help form spin-out companies generation of sensors for use in medical from Warwick’s intellectual property and devices and the diagnostics sector. The technology base. My perception is that it technology comprises novel interactive is being proactive in this area – which is a holograms ‘sensor holograms’ that can good thing. be engineered to change wavelength, image, brightness or position in response My personal goals are to continue building to a wide range of biological, chemical my career as an international CEO and to and physical stimuli. We are primarily develop my business Smart Holograms to focusing on developing innovative glucose its full commercial potential. sensors for diabetics and other tests for infectious diseases. Undoubtedly, since this I was also delighted to be invited onto the a platform technology, it has applications Advisory Board of Warwick Business School in many other markets such as Life Sciences recently to add some ‘entrepreneurial tools and security and packaging. spirit’. I aim to enjoy life, encourage my children and continue seeing the world via growing its annual revenues by over 600 travel (this time perhaps I can travel the percent and is quadrupling its UK facility other way round!) The biggest challenge size. We are also now aiming to open a Boston-based facility later this year. The w for some entrepreneurs is firm has raised over £18 million to date and balancing entrepreneurial has five Blue Chip partnerships plus a major energy with management Government contract. Last year I travelled the author in minute around the world performing international discipline business development, which was fun. Frank has a PhD in Microbiology from the University of Glasgow and an MBA from WBS. The biggest challenge for some He has ten years of international, executive entrepreneurs is balancing entrepreneurial management experience in the Life Sciences I joined Smart Holograms as its first energy with management discipline. sector. He is a serial entrepreneur who has employee and CEO in August 2003. The Some start-up firms struggle because they founded three firms. He is currently CEO company currently has 25 employees, of Smart Holograms Limited – a medical fail to grow from a few person start-up diagnostics firm based in Cambridge (UK). a custom-built laboratory and offices to a managed firm with proper systems Frank is also a member of the Advisory Board in Cambridge, UK, and an office in San and procedures that ensure effective of Warwick Business School. Ramon, California. Smart is currently management. I learnt some very useful
  14. 14. 14 nexus: summer 06 focus on entrepreneurship entrepreneurship and development finance Andrew Trigg (MBA 82–3), a partner in Thompsons, Chartered Accountants, discusses aspects of entrepreneurship and development finance in the context of providing corporate finance advice to business proprietors. spread of commercial and financial skills, has the best possible chance of providing incentivised with share options. Annual them with their risk rate of return, typically net profits have increased steadily. with an exit within three to five years. Exit Contrast this to Engineering, which used timescales can inevitably be influenced by to generate around twice the net profit of the exit timing requirement of the funder Electrical, with two shareholders/directors of the development capitalist, often a and one very capable second tier manager. pension fund. The manager had no employment contract or share options before he left for pastures A common requirement for a successful new about 18 months ago. Over the last funding approach is a management team financial year Engineering has achieved with a strong track record across a good little more than break-even. balance of skills. I have been invited to advise both sets One funding example which strikes close of shareholders on their exit strategy to to home is T Total an early stage and achieve a full price on a trade sale. My exciting retail business where I am serving view is that at best Engineering could face as non-exec Finance Director. Fellow around two years of ‘grooming’ before the directors include Nick Green, formerly shares should be offered for sale. Tesco director of Clubcard, Andrew Villars who was Spirit Group Director of Drink and I am also currently advising on the Penny Mallory, with a specialism in sales acquisition of a £40 million p.a. turnover promotion and marketing in addition to multi-site Retailer. This is one of several being a TV presenter and a National Rally target companies identified by me for a Champion. management buy-in team headed by Keith Webster (MBA 03–4). The owner of Retailer The first stage Business Angel funding I hold first meetings with in excess of 50 is a very talented entrepreneur and he round was challenging to say the least. SME proprietors every year across a range of believes his dozen or so senior managers are Having established and traded our first industrial sector and scale of activity. Many better at their jobs than he would be. One store for some months and recently of these businesses are ‘proprietorial’; as of the benefits of this level of organisation contracted a major wholesale deal to supply long as they sustain a reasonable earnings is that it makes the task of raising a 450 outlet, non-competing, retailer we are stream to provide their owners with a acquisition finance relatively structured now bracing ourselves to face the funding comfortable living there is little perceived and predictable. market again as a prelude to a major store change from year to year. roll-out; starting in Oxford. These examples underline the need for A minority of the businesses I get to adaptability and management support as see enjoy significant annual growth to two of the key elements for companies with sales, net profit and net tangible assets entrepreneurial ambitions. the author in minute providing a full risk rate of return to their shareholders. I describe these as Some texts include the raising Andrew is a Chartered Accountant with ‘entrepreneurial’; one of the acid test of risk finance as one element of specialist experience in advising on a variety of corporate finance cases. He is a member qualities being would a development entrepreneurship. For the ambitious of the ICAEW Finance and Management capitalist buy into this business? company shareholder/director I believe Faculty, as well as the Corporate Finance that the raising of such finance should be Faculty. He served as a director of a City based Many owners of smaller businesses would viewed as part of a process rather than an Development Capital/Corporate Finance like to achieve a risk return for their hard event. company for five years. work; they identify elements of commercial His earlier experience involved some years in a detail for improvement but appear to be As the development capitalist trawls senior commercial financial management role overlooking some of the fundamentals. through all of the usual commercial and with a FTSE 100 retailer and also included six financial headings to be found in business years in the City office of KPMG. Take a couple of examples: An Electrical plan checklists they are assessing what Andrew is a partner in Thompsons, Contractor and a Civil Contractor both impacts on the forecasts and consequently a growing practice in the centre of Bedford with annual sales around £5 million; but their exit return each commercial with five partners. there the similarity ends. statement will have. E w Electrical has an enthusiastic and capable A development capitalist’s primary second tier management team with a objective is to assess whether a business
  15. 15. nexus: summer 06 focus on entrepreneurship 15 social entrepreneurship In this article Dr Paul Tracey, Lecturer in the Centre for Small & Medium-Sized Enterprises (CSME), gives examples of businesses formed and managed with social as well as commercial objectives and explains the challenges they face. T ony Blair, George Bush and Bill Clinton have all reported the role and importance of social entrepreneurship. organisations. Donors ‘benefit from a one stop, hassle-free service enabling them to fulfil their environmental and social entrepreneurs (opportunity recognition, the marshalling of resources, and the creation of the new venture) – with the Universities are increasingly offering responsibilities’, and Greenworks sells added complexity of defining, building courses and conducting research on the the furniture on to schools, charities, support for, and achieving social outcomes. topic. Social enterprise clubs have appeared community groups and start-up businesses across dozens of university campuses, and at discounted prices. I am presently working with Owen social entrepreneurship business plan w Jarvis – a social entrepreneur and competitions are now commonplace, formerly Director of Social Franchising at in both USA and UK business schools. But social entrepreneurs can also lead Community Action Network – on a project Moreover, the 2005 Net Impact conference businesses which have a more ‘for-profit’ designed to identify the characteristics of hosted by Stanford University – an event emphasis. For example, Cafédirect is a successful social enterprises, and the skills for graduate students in business and limited company selling ‘fair trade’ tea and competencies exhibited by successful management studies interested in social and coffee to provide above market prices social entrepreneurs. By combining our entrepreneurship and corporate social and good employment conditions for experience and knowledge, we aim to make responsibility – attracted a record 1600 disadvantaged tea and coffee farmers a substantive contribution to a new and participants. in developing countries. In addition exciting movement. But what, you might ask, does the term social entrepreneurship actually mean? And what kinds of people are involved in running social enterprises? Put simply, at the core of social entrepreneurship is the notion social entrepreneurs create businesses of trading for a social purpose, and it requires that social which have both social and commercial objectives, but where surpluses are entrepreneurs identify and exploit market opportunities primarily reinvested in the enterprise or a in order to develop products and/or services which allow social objective rather than distributed to owners. In other words, at the core of social them to generate ‘entrepreneurial profit’ for a given entrepreneurship is the notion of trading for social project a social purpose, and it requires that social entrepreneurs identify and exploit market opportunities in order to develop products and/or services which allow them to generate ‘entrepreneurial profit’ for a given to dividends to shareholders, around 8 social project. percent of annual profits are invested in the the author in minute training and support of farmers in Africa, Some brief examples will help to illustrate Asia, the Caribbean, and Central and South the kinds of organisations that social America. w entrepreneurs build and manage. Greyston Bakery, based in New York, is one of the And yet while these and many more social world’s best known social enterprises. enterprises have been very successful, It provides employment for people who plenty of others have struggled to have been marginalised from mainstream balance meaningful social outcomes with labour markets, many of whom have commercial viability. Indeed, a study been unemployed for long periods. by William Foster and Jeffrey Bradach The profits from the bakery are used to published in the Harvard Business Review subsidise a range of community-focused last year found that only a quarter of USA- Paul Tracey was previously Lecturer in services including housing, childcare and based social enterprises were in profit, Social Enterprise at Judge Business School, healthcare in the Yonkers district of New concluding that ‘despite the hype… few of Cambridge University. Has also held posts at York. w the ventures actually make money’. the School of Geography at Oxford University and the Centre for Entrepreneurship at Another social enterprise that has been Certainly, it appears that social Newcastle University. very successful in both commercial and entrepreneurship is a particularly Research Interests: entrepreneurship; social terms is Greenworks, which earns demanding form of entrepreneurship regional innovation; social and community income by recycling unwanted furniture – social entrepreneurs encounter the entrepreneurship; corporate social from corporations and public sector same challenges as more traditional responsibility.