my_kirill_riabtsev

 **PAGE MAP **  2) My view on entrepreneurship as a concept. 3) My view on the practical aspects of entrepreneurship. 4) My business idea - Alternative Management Education. 5) Few notable examples of successful entrepreneurial ventures from South Africa. **
 * 1) TED Talks: Sir Ken Robinson on education system and creativity.

Education system and human creativity. A must see clip for anyone who ever thought education is not what it is supposed to be: [|Sir Ken Robinson: do schools kill creativity?] 

 MY VIEW ON ENTREPRENEURSHIP AS A CONCEPT   Management scholars appear to be searching for a common conception of entrepreneurship. They look for generalities in entrepreneurial behaviour and try to pin point the key features of success in entreprenuerial ventures. The underlying assumption is that entrepreneur is a certain kind of person with some clearly definable specal features. To me, the only unifying characteristc of the entrepreneur is the choice, however made, of earning a living from self-employment instead of selling his/her time, skills and effort to an employer. And they do so by providing the markets with a product or service independently of any other organisation or an individual. Of course, this means that activities like organised crime, manipulation of people's feelings for material gains and professional sports are not entrepreneurial activities, because they do not provide markets with a product or service for which the markets are prepared to willingly part with their money, thus forming a contract in traditional commercial sense.

  In all other matters, entreprenuers are nothing differnet than anyone else. There are optimistic and pessimistic entrepreneurs. There are flamboyant excentrics and dull realists; supersticious nuorotics and educated intellectuals; rude drunkards and classy gentlemen. And, of course, everything in between those extremes. An entreprenuer can be anybody.  Some scholars argue, that there are entrepreneurs within organisations, the so-called "intraprenuers". According to them, these are the people who exhibit entreprenuerial behaviour within organisations, where they are employed. I dare to disagree. If the only unifying character of the entreprenuer is the choice to earn a living from self-employment, then the only kind of behaviour, which could be considered entrepreneurial under the umbrella of his employer is the one in which he/she is employing the resources of the organisation to earn a living for him/herself in addition to (or instead of) the salary recieved from the employer.

A typical example would be using the client network, which an emolyee is able to develop under the roof of his employer organisation to conduct seperate business transactions. Bankers and consultants sometimes form seperate joint ventures with the clients of their employer bank or consulting partnership and generate additional income streams like that.

On the other hand, if the individual is consistently coming up with new ways of making money for his employer, be it in product/service innovation, creative management practices or new strategies for expanding into different market segments, then such behaviour can be classified as purely innovative, and the person exhibiting it as innovative individual. The key difference here is that entreprenuership may or may not rest on creativity of the entreprenuer. Some entreprenuers, even very succesful ones, are not innovative. Warren Buffet said once, "first you get innovators, then immitators, then idiots". Any of these three can be comfortably classified as entreprenuers, simply because they try to earn a living by providing a product/serive to the market independently of the employer.

But what I see as a real problem is not the attempts to classify entreprenuers as a seperate breed of people. That in itself is a fairly harmless exercise limited to intellectual demagogy and a waste of paper on journal publishing. However, what is worrying is the consequent attempts to identify key characteristics of successful entreprenuers and derive a recepie, that can be followed in order to become a successful entrepreneur. Biographic and autobiographic books of the rich and famous self made businessmen a la Richard Branson, Donald Trump and Warren Buffet are populating the shelves of the book stores everywhere in the world. Steven Covey's "Seven habits of highly effective people" has become an international bestseller, and numerous journals and magazines, like Forbes, HBS, and McKinsey Quarterly extensively interview succesful self-made business tycoons.

These efforts inevitably drive the idea, that there is some unique set of (inherent or aquired) qualities, which separate successful entrepreneurs from unsuccesful ones and, therefore, effectively imply that aquiring these capabilities is a recepie for success. I am prepared to bet that sufficient research will reveal, that there were hundreds of entreprenuers with no less and even greater level of development of these personal qualities than the examples cited in discussions of the characteristic of successful entrepreneurship, but who nevertheless were unsuccesful, or less succesful in their entreprenuerial undertakings.

There were probably dozens of entreprenuers in UK at the same time of Richard Branson's with business ideas which, if analysed at the time, had the same or even greater probability of achieving great success as those of Branson, but which did not succeed for a number of complex interdependent reasons, which the individual qualities of the entrpeneur may, in fact, have nothing to do with. People tend to forget (or don't realise) the complexity of the world.

Of course, one can identify similarities in the characters of all the successful entrepreneurs, just like one can conclude that most succesful entreprenuers, at one stage or another, wear a suit. But those similarities are by no means the main reasons why these individuals achieved great success in their ventures. We like wonderful fairytails and try to derive lessons from them for personal success. And of course, no one bothers to ask the loosers, even though it seems logical to learn from the major mistakes of the people who failed than seek to copy the moves of those, who succeeded.

So, entreprenuership is simply a form of offering the market a product/service and a way of earning a living for an individual. I don't believe that it can be classified as a special kind of personality, like a poet or a special forces officer. Positive attitude is, of course, more conducive to success than pessimism, and it undoubtedly helps to be clear headed rather than hazy. But success in entreprenuership is probably more attributable to being at the right place at the right time. Or around the right people, for that matter.

 MY VIEW ON THE PRACTICAL ASPECTS OF ENTREPRENEURSHIP 

Keeping in line with my conceptual view of entrepreneurship, I will now turn to its practical aspects and summarize the key strategic considerations of an entrepreneurial venture. Since I see entrepreneurship as a means of earning a living from self-employment by providing the markets with a product or a service independently of any other organisation or individual, it may be expected that the list of practical considerations would resemble the list of common business planning tools. Product-service offering, market segmentation, sources of funds, strengths and weaknesses and so on. However, I want to take a different angle and focus on the personal strategy of the entrepreneur him/herself.

Assuming that the choice of becoming an entrepreneur is a conscious one, it is perhaps very useful to first and foremost create a kind of self awareness by revealing the key reasons for making a choice to go the entrepreneurial way. I know that for myself I will certainly conduct this exercise first, before thinking about the business model or the source of funding. And even though one can argue (as I in fact did above) that the motivation for going the entrepreneurial route is mostly just financial, that is hardly ever the end goal in itself. There are many ways of making money besides starting own businesses. In fact, except in case of the rich-and-famous Forbes listed mavericks, most businesses earn moderate incomes for their owners (think of the numerous restaurants, small suppliers, contractors, etc).

So, since the money (expected) to be made in an entrepreneurial venture is just the means towards some other end, it would be wise for anyone to first reveal for themselves, what that (true) end is. Having done that, it will be easy to determine, whether starting own business is actually the best way to reach that end. Perhaps it is not. Below, I have discussed what I think is the key question, that a potential entrepreneur should ask him/herself before planning to launch an independent business venture.

Why do I want to do it?

Majority of people will say, that they feel they can make good money (or lots of money, lets not lie to ourselves) by starting and running own business. In that case, most feel that there is more money to be made there than via employment. Although this is probably true in many cases, this is by far not true in all. Lets consider a simple example. A person is thinking of starting a business and the medium term forecast for the venture he contemplates tells him/her, that he/she will be able to earn around 100,000 dollars per annum in personal income, from the business (assuming this includes salaries and the share of profit). In order to start, a person needs a loan of around 45,000 dollars, repayable over 2 years in monthly installments. Seems like a fairly good business idea.

Now, this very same person can take the same 45,000 dollars loan, invest in an MBA in any one of the FT Top 100 business schools and expect to earn a salary of around 113,800 dollars (2009 average for the FT top 100 schools) per annum. A slightly better income, but without all the risks associated with launching and running the new business. Of course, in running a new business, the entrepreneur has the potential to grow it to such proportions, that the incomes will far outsize those of any MBA salary. But, what is important is to compare the expected outcomes of the two alternatives at the point zero, which effectively means comparing probabilities of success of the two. Well, most of the time, the probabilities of success of earning an MBA salary will be significantly higher than those of launching the new business (even simply for the fact, that an MBA grad has a large pool of employers to tap into after school, whereas the business commits itself often to a very narrow market segment at first).

So, if it was purely a financial consideration, then I am sure more than half of the entrepreneurs would probably stay in employment or invested in further education. Of course, there are cases, where the financial considerations are so vastly greater and/or the probability of failure is very low (for example, a government employee securing a sole supplier's contract for a government project and forming a JV with his brother to provide that service) that it is better to choose the business. However, most of the time, this is not the case, and one has to consider generalities, not the extremes (because the latter is easy to judge).

Inquiring beyond the financial considerations, one often finds people saying that they want to be their own boss - be in control of their own life, time, and so on. This reason is more interesting and probably far truer than the drive to simply make money. Strive towards independence is embedded in many of us and running own business, in modern days, often seems like the best (perhaps the only way) to achieve that state of being. However, I can argue that this strive to be in control of own life suffers from the same illusion as does the motive behind financial gains from own business. This comes partly from the inherent link between the financial side of the business and people's understanding of what "independence" is, and partly from the need to change something in the aspects of person's life, which actually have nothing to do with the business or professional occupation. The two are most often intertwined, of course.

Financial independence, which is sought after by many who plan to start own business, is directly associated with the expected incomes from the business, which is inevitably linked to the probability of success (or failure). As I have discussed above, in most cases the financial gains that can be reasonably expected from the business venture hardly outweigh the alternative sources of income, if analysed with due diligence. So, if "independence" is understood in financial sense, then most aspiring entrepreneurs should realize, that they will likely not become more financially independent by starting a business and, perhaps, may even be less financially independent that if they pursued a carefully thought out career with a corporation.

On the other hand, many want to become entrepreneurs, because they feel like they need to change something in their life. That often manifests in dissatisfaction with the job they currently have, the boss(es), the culture of the organisation they work in. It often feels to them, that by starting their own business, they will eliminate all these unpleasant aspects of their daily life. However, in my view, this is simply a search for the magic pill. An all too known way of running from yourself by trying to alter the environment: change friends, relationship(s), places, clothes, residence, and so on. I think that, if this is the true motivation behind entrepreneurial effort, then such person is likely to fail, because the problem essentially lies inside him/herself and a change of outlook on life, not the change of circumstances is what is needed. Business, in this case, will not help make the person independent.

Finally, the very notion of independence is highly illusory in itself. Mr McAfee, the creator of the famous antivirus programme, a multimillionaire, who later went bankrupt during the property bubble in US, said in an interview to CNBC: "people think that you own stuff, but what they don't realize is that stuff actually owns you". Although this idea is not new and we often hear it in various forms, it is the one, which many aspiring entrepreneurs fail to sufficiently consider. Entropy is a very powerful law in physics and, the more (interdependent) stuff there is, the higher the chance of it forming random patterns of behavior. Control is essential in the running of the business, and in pursuit of greater independence, the person is becoming more and more dependent on controlling what is becoming less and less controllable.

All this is, of course, true for the entrepreneurs, who strive towards ever higher goals and seek to perpetually grow their business and their personal wealth. There are, possibly, entrepreneurs, who want to achieve life balance - a certain size of business, enough to cater for the family and enjoy life. However, in this case, before considering starting own business, one should again revert back to an informed weighting of the business versus conventional employment. Many jobs allow the person to earn a moderate income and achieve a balanced lifestyle without extreme stresses of business related risk (examples include various government workers, airline pilots, doctors and many more).

Having a clear understanding of the personal state of mind before thinking about launching own independent business should, in my opinion, form the foundation of any entrepreneurial strategy. One needs to understand, what is it that he or she really wants at that stage of their life. If it is independence, then what do I understand by independence? What does it mean for me to be independent? Being able to buy whatever I want? Having the freedom to plan my own time? Making own business decisions? Having authority over people? Proving to myself (read "to others") that I can be the best? Once the answers to these questions are found, it would then perhaps be useful to ask yourself: and why do I desire those things now?

I think that, having good self awareness will allow an aspiring entrepreneur to better understand his/her underlying needs. Once those needs are understood, it will be much easier to determine, what kind of business that particular person is more likely to succeed in and, therefore, define the focus of his entrepreneurial efforts. This may sound obvious, but surprisingly often we jump into the entrepreneurial bandwagon first, and only later stop to think about why are we doing it.

ALTERNATIVE MANAGEMENT EDUCATION - THE BUSINESS IDEA //"We are not born without creativity, we get educated out of it" Sir Ken Robinson, TED Talks, Monterey CA, February 2006

// My business idea for alternative management education is premised on the blend of concepts of transformational leadership (Bass & Avolio, 1993; Bennis, 1996; Bass, 1998; Humphreys & Einstein, 2003), diversity and inclusion (Vaughn, 2006; Page, 2007) and context-relevant education (April & April, 2007). The fundamental difference is the shift from the transactional management practices (Burns, 1978) characterized by the command-and-control hierarchy towards humanistic leadership (Cowan, 2007), characterized by recognition of mutual relatedness, collaborative management and leading by empowerment instead of incentives and threats.


 * Course Structure**

Transformational leadership begins with intrapersonal work. At my school, the students have acquired good level of technical expertise in various applied business management disciplines via their undergraduate studies and have gained sufficient practical experience in these disciplines through work.

Just like a conventional business school.

However, what is different is that in my school, no time will be spend on technical subjects **at all.** The focus of the entire programme will be on the three phases of development.

1) Personal Development 2) Intrapersonal Development 3) Interpersonal Development

In that sense, my business school is actually a narrow specialization of some sort, unlike the conventional business school, which aims to create generalists by teaching them a bit of accounting, a bit of marketing, a bit of economics, a bit of everything. The focus is on giving the finance expert, for example, the skills necessary to lead the bank in the humanistic way, harnessing diverse talents, acknowledging and appreciating diversity of skills, talents, views, and ideas, and empowering people to be creative. The purpose is to gain competitive advantages by recognizing intricate mutual dependency of humans on each other and on the physical environment and thus being able to create sustainable value for all the stakeholders, not just push production, make sales and generate profits.

//Personal Development// incorporates interactive courses on basic personal psychology; skills of personal reflection and internal and external awareness; and systems thinking skills. The emphasis is on learning how to recognize the emotions and understand their impact on our actions. How to recognize and appreciate the complexity of the world in order to make better inferences from the data available. And how to deal with stress by recognizing the root causes of the problems and learning to make decisions in an uncertain and ambiguous situations. The course is a mix of applied psychology and philosophy of science. The key aim is to ensure the student is able to process own emotions when they arise and make better conclusions from the information available instead of being simply reactive. The learning is conducted by extensive reading of the materials in own time and facilitated large group debates of the model scenarios relating to those topics. Various systems thinking exercises and projects are given to be done in smaller groups and individually.

//Intrapersonal development// rests on the assumption, that the student has learned to recognize the emotional undercurrents of his/her own and aquired sufficient critical thinking skills, enabling him/her to handle complexities of various degrees. This part of the programme teaches communication and listening skills. Time is spend in learning conflict resolution, dialogue skills, facilitation skills, constructive inquiry, presentation skills, oratory skills, effective use of written forms, and related disciplines. The learning is conducted via extensive paired interactions, small and large group processes, simulated conflict resolution scenarios, simulated negotiations, individual and group presentations and simulated interviews of various contexts.

//Interpersonal development// is the final part of the programme. The skills acquired in the previous modules are put to the test in the many project scenarios, where small groups work to find the best solutions, accounting for all the narrow and broad implications of the choices they make in deriving the strategies for tackling the issues presented to them. The groups are formed with diverse technical skill sets, combining students with different primary qualifications so that they can have sufficient knowledge base to address the purely technical aspects of the projects.

The projects are designed and presented to the students in an often complex and ambiguous way. Frequently, it will not even be immediately apparent what the objective of the project is and students will have to first develop an understanding of the underlying issues, key stakeholders and their real needs. Added complexities will come in the form of random flow of information. The groups will be given tasks unexpectedly and in incomplete format. Along the way new, often controversial information will be added and conditions of the project modified. There will be external stakeholder (e.g., the clients of the project, the regulators, "green groups" and so on) whose roles will be played by the mix of school educators and the external partners of the school: for example, companies who actually have real problems and outsource it to the school in such a manner to see if the school can handle it better (this can also be a platform for future recruitment of the students).

The purpose of such exercises is to make the students apply the personal mastery and intrapersonal skills acquired in previous modules to the complexity and dynamism of the real world like situations. The experience is meant to be highly stressful, but the students, who have achieved sufficient self mastery and interpersonal skills should be able to handle it well. Those groups will perform best, which have not learned to work efficiently, but which are capable of creating human synergies and perform as a harmonious whole, instead of a collective of individual parts.


 * Business Canvass**




 * References

*April K.A., April A.R., (2007), **"Growing Leaders in Emerging Markets", //Journal of Management Education//, Vol.31(2), 214-244 **
 * Bass B.M., (1990), "From transactional to Transformational Leadership: learning to share the vision", //Organisational Dynamics//, Vol.18(3), 19-31
 * *Bass B.M., Avolio J.B., (1993), "Transformational Leadership and Organisational Culture", //Public Administration Quarterly//, Spring, 112-121
 * Bennis W., (1996), "Leader as Transformer", //Executive Excellence//, Vol.13(10), 15-16
 * Burns J.M., (1978), "Leadership." New York. Harper & Row.
 * Humphreys J.H., Einstein W.O., (2003), "Nothing New Under the Sun: transformational leadership from historic perspective", //Journal of Management History,// Vol.41(1), 85-95.
 * Page S., (2007), "The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools and Societies." Princeton, Princeton University Press, New Jersey.
 * Vaughn, B., (2006), "High Impact Diversity Consulting", San Francisco, CA; Diversity Training University International Publications Division.

SOME NOTABLE ENTREPRENEURIAL ACTIVITIES FROM MY HOME COUNTRY - SOUTH AFRICA

[|Here Be Dragons] is the venture capital fund setup for financing small companies by world famous entrepreneur Mark Shuttleworth [|link]

[|Social Network] dedicated to attention economics. David Duarty put forward the idea, that in the modern world of abundant informaiton, marketing should focus on capturing the attention of the relevant audiences in the best possible ways. Members have the space to discuss best strategies for marketing their products/services online.

[|IT Entreprenuers Community] dedicated to promoting Western Cape Region (Cape Town and Western Province) as the new hub for venture capitalists and IT innovators. Not just a social network site. The launch, which took place in Cape Town in October 2009, included high flying businessmen, like Johann Rupert ([|link]) the founder of Richemont ([|link]), and influential politicians, like Dr.Ramphele ([|link]) and was an immense success. [|Brazilian Style Cafe Franchise] (which has no Brazilians in it) is enormously popular in South Africa. A truly South African brand, which has a unique vibe and the business model that limits the assortment to coffee and traditional Portuguese style pastry and sandwiches. Brazilian music and the staff is trained to shout out orders to each other in Brazilian slang. Now open in the centre of London too, near Picadily square.

[|Union Swiss] is a Cape Town based company, which makes [|Bio Oil] - a brand that is sold in over 27 countries around the world. The highly potent product for dermatological treatment of scar tissue, stretch marks and general improvement of skin health. The patent was acquired by the company for Rand 2 million (about 180,000 euro) in 2001. Today, the company makes annual sales of over 1 billion Rand (about 100 million euro) with a single product and only 45 people workforce.

[|SAB Miller] is a South African top 10 world beer companies. Owning world famous brands, like Miller, Peroni and Grolsh, the company chose a unique strategy to create competitive advantages. It realized, that in most countries beer brands are something deeply rooted in people's culture and often represents their age old traditions. With that in mind, SAB decided not to advertise their associations to those iconic brands and maintain them as they are. In many countries, like Russia, most people are completely unaware, that some of their famous, patriotic beer labels are owned by a South African company. This strategy allowed SAB to grow and retain domestic market share in many beer-loving nations and on top of that won it a high merit for social responsibility.

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