For new entrepreneurs getting together a business plan, the list of activites it's something like this:
So the big difference is that you let the marketplace define the problem you're going to solve and how to solve it, in stead of having a client telling you what problem to solve. Besides this a lot i similar for the two parties. What's more, they both work in groups most of the time.
- doing research and collecting data in the marketplace
- analyze data
- define the problem you want to solve/your technology can solve
- create a business plan, the plan will present the data you've collected, the analysis of it and the strategic plan based on the analysis
- present plan to investors if you need funding, present it to new employees to establish a common goal
After attending countless company presentations, talking to consultants in different companies. I have made crafted an image of what consultants do, some of the activities they perform.
For new management consultants the list of activities looks something like this:
- doing research and collecting data in the marketplace
- analyze data
- collect data from the company and its stakeholders
- analyze data and compare external and internal data
- prepare a presentation with a solution though a plan to the issue presented by the company
So the big difference is that you let the marketplace define the problem you're going to solve and how to solve it, in stead of having a client telling you what problem to solve. Besides this a lot i similar for the two parties. What's more, they both work in groups most of the time.
Entrepreneurs as consultants
But if you look at the competencies an entrepreneur need; a huge capacity for work, the ability to find the right information and analyze it correctly, to understand an industry, to deliver what his audience wants (investors, employees, customers) it's somewhat similar to what competencies consultants need. The danger, if you have and seasoned entrepreneur is that he's no used to having a boss and might prove a stubborn employee. He's used to guiding the ship and might get frustrated when his advice is not followed up on.
Consultants as entrepreneurs
What about the other way? The consultant has dealt wit a lot of other companies problems in different industries and would bring valuable experience into a start up. However, it requires a tough stomach and a high level of flexibility to be an entrepreneur. As my professor at Boston University School of Management said ; "How do we define the success of an entrepreneur? He can walk into his office the next day and still have a job". You need to work on something you're passionate about to withstand the effort it takes to start a company.
Testimonies from entrepreneurs
I would argue that the experiences the two holds, is useful in the other profession. It's all about the personal passion and abilities of the individual that will be crucial for the success of the new undertaking. During my summer at Boston University this summer I attended some sessions related to this topic. One guy had started in BCG and then got hired by a company after consulting them, continuing into the role as an start-up-CEO (in other words: part of an "entrepreneur team") in several other companies. He claimed that his background as a consultant was crucial to his following carrier path. Another person there had started companies since college and claimed that he never would go into consulting. I'm not the latter guy. But I enjoy the testimony of the first one and truly believe that being a consultant is something that enables you to learn a lot about different industries and how to run companies (at least for management consultants), increase you capacity for work, and meet a lot of competent people.
Do you think there is a big difference between writing a business plan and consulting as a management consultant?
I think you are slightly off when it comes to "a client telling you what problem to solve." Often, the problem is that the client does not know what his REAL problem is. He might have a vague problem; decline in revenue, increase in expenses, decreased customer satisfaction, etc. But these are often just the tip of the iceberg, and the job of the consultant is to find the underlying issues.
ReplyDeleteGood post :)
ReplyDeleteI have a suggestion for a followup:
"Is the NTNUs School of Entrepreneurship education entrepreneurs or do they educate consultants?"
I think there is a differers when it comes to the mindset between being an entrepreneur and a consultant. If the NTNU School of Entrepreneurship can address this differences, I think they might become an even better school of educating entrepreneurs.
I agree Robert, but for a start-up the problem to be solved necessarily comes from the marketplace the company is launching in. While in bigger companies have the same source of problems, they also have problems to be solved internally. Is that a better way to put it?
ReplyDeleteNow, Truls I agree on the issue of mindset. How would you describe your mindset? It would be fun to see Robert do the same thing as a representative from the consultant side...
I think your follow-up is something that should be looked into, but not being a consulting school doesn't make us a school of entrepreneurship. Comparison to a "consulting scool" could be fun and then we need something from the entrepreneurial view, an ongoing question is whether you can educate entrepreneurs at all?
With regards to different mindsets, I think it is important to differ between mindset and skillset. The way I see it, the business skills required are fairly similar. The entrepreneur might have more technical skills than a consultant, although they are not a necessity. Business skills can to a large degree be taught in grad school. (But also learned the "hard" way...)
ReplyDeleteThe mindset part is more tricky. Is a mindset something that can be taught explicitly by a professor? I don't have the answer, but I have some hypotheses. I believe that being around persons with a certain mindset might influence your own. We talked to the boss of NSE today, and he stated that mindsets are something they take into consideration when accepting students. They want a mix between the analytical, more rational students and the visionary risk-takers. (To stereotype.)
It is also interesting to look at the alumni from NSE. Some of them became consultants after graduation, but more and more of them are actually returning from the "Dark Side" and becoming entrepreneurs after a couple of years in consulting. They state that NSE gave them the skillset needed to be consultants, and that consulting gave them other skills they can benefit from when they are re-launching their entrepreneurial careers.
I believe you comment something very important Robert. "Being around persons with a certain mindset influence you own". That is why I think it would be beneficial for NSE to have more lectures with these kinds of people, or that NEC should have a closer collaboration with experienced entrepreneurs. Maybe even try to work with them instead of using so much time on other classes. I think entrepreneurship is a learning by doing experience.
ReplyDeleteWhat I like about the Entrepreneur program at BI Nydalen, is that they have close connection with outside entrepreneurs.
This is very useful when you are done writing your business plan and what to step into the real world with your venture.
For NEC this could be as simple as establishing a closer collaboration with ESAF.
I believe that this adaption might result in more students jumping face first on a entrepreneurial project without getting the confidence and safety they work up when working as consulters for a period of time first.
And Joakim: Im not that unlike Robert. I just happen to live together with Anders! ;)
What about the other way? The consultant has deal with a lot of other companies problems in different industries and would bring valuable experience into a start up.
ReplyDeletebusiness plan startups
You're right Melanie. I am currently working as a consultant and share your your insights on the matter.
ReplyDelete