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Innovation and Entrepreneurship

There are a number of theory and frameworks used in the analysis of any company or venture. We can gain insight into some of the current thinking that applies to start-ups in the full commercialisation cycle, and provide for concepts of strategy, innovation and entrepreneurship, linking the three into the act of commercialisation.

Entrepreneurship

An intrinsic part of the commercialisation process is the notion of entrepreneurship and innovation. Differences emerge between nations and geographic locations. In Australia, innovation is treated as a separate concept to entrepreneurship ( and entrepreneurism). In fact there is very little data linking entrepreneurship to innovation and in turn to commercialisation. The importance of such links though is paramount.

Innovation is an act of commercialisation and Schumpeter, as early as 1911, linked the concept of innovation to the definition of entrepreneurship (Stevenson 1999).

If entrepreneurship can be defined as a value creating process, then clearly all types of organisations can participate in the entrepreneurial process. Entrepreneurship is not just about starting businesses and Stevenson (1999) goes further in stating that ‘entrepreneurship is a process by which individuals or organisations pursue opportunities without regard to the resources they control’. It is in essence a management process. The emphasis is not so much on what resources one has but on the opportunity itself.

There are clear differences between having an entrepreneurial focus and an organisation (or individual) having a more administrative focus. These differences will result in very different outcomes for the organisation. The way in which each views resources and opportunities is best demonstrated by figure 3-1 below.

A number of conceptual dimensions are treated in very different ways. The entrepreneurial mindset is geared up to achieve very different outcomes to the administrative manager. These dimensions relate to very different values and attitudes towards strategy, risk, rewards, opportunities, and resources.

Figure 3‑1 Conceptualisation of entrepreneurial management

Innovation

Innovation is perhaps the most crucial component linked to strategy as Hamel (2000) has argued, however innovation is not just a process of invention or creation but one of value actualisation. Innovation is considered as a necessary part of strategy in order to compete effectively in markets. There is a very strong relationship between innovation and entrepreneurship. The entrepreneurial approach often places great emphasis on innovation. Innovation however varies between incremental and ground breaking, radical innovation.

The latter is considered essential in order to create the most value, unfortunately this aspect of innovation is not often considered by policy makers. Innovation (radical) is a process which creates commercial value, and it involves the matching of new ideas to market needs (Hindle 2002), hence it is an act of commercialisation.

It goes beyond products to include processes and new business concepts. Furthermore it requires the entrepreneurial capability described above and it deserves a bigger focus in the Australian government’s innovation policy, “Backing Australia’s Ability”.

Innovation in this sense can never take place without its main protagonist, the educated entrepreneur. The conceptual dimensions of entrepreneurs discussed previously are attributes which make it possible to deal with the realities of this type of innovation.  Australia has some of the best R&D and science in the world, but that is of little consequence without the extra step to transform this knowledge into commercial and valuable outcomes. Innovation is the act of commercialisation performed by entrepreneurs.

In contrast, the US has a long history of bringing together all the elements required for commercialisation, clearly segmenting the process of innovation in terms of relationships between technical, market, and business steps. Identifying along the way the resources and people required along that process, primarily that of entrepreneurs dealing with the realities of commercialisation. Business development represents the strategy and structure of the innovation process.

Strategy

There are a number of conceptual models around strategy which are static. Strategy is anything but static, and in the space where innovation, commercialisation and opportunities exist, require a flexible strategy process that can change and adapt fast and is a natural fit. The intended strategy, as below demonstrates, is not always the realised strategy.

Figure 3‑2 Emergent strategy process

Source: Adapted from Mintzberg 2003, The strategy process, 4th edn.

Strategic management (David 2001) leads an organisation to formulate and implement decisions across functional units such as marketing, finance, operations, and R&D in order to meet its stated objectives in pursuit of its mission. This model begins with a mission and vision statement, and flows on to the development of long term objectives, developed after internal and external audits.

Before you begin, know your terrain.

Clearly if one was to begin a strategy process, one would take stock of their external environment and trends, evaluate own strengths and weaknesses (internal) to evaluate the best way to proceed forward. However this may not be sufficient for start-ups in the medical devices segment. For start-ups, David’s (2001) model is a starting point. The sequential process implied is anything but sequential nor is it typical in real life and start-ups are anything but typical (Mintzberg 2003).

There has been a significant shift in the way strategy is defined. Traditionally beginning with mission and vision statements and objectives, it has evolved into a more holistic approach, recognising that strategy is much more about people and the environment (however chaotic) and less about the accuracy of the compass needle fixed on a pre-selected course or destination. Mintzberg (2003) recognises David’s strategic management model as one of many definitions of strategy, and implies that strategy is a plan, a course of action and destination.

Strategy is not only a plan, but also may consist of:

  • A perspective; much in the way a company;s culture perceives the external world.
  • A position; where the company see themselves in that world.
  • A pattern; recognizing that strategies are not always planned or intended but may emerge.

You must have the ability to recognise patterns quickly and identify breaks in those patterns.

This last aspect of strategy is pertinent indeed as strategy is not always clear, nor is it followed to the letter by executives. Looking at patterns will reveal the true strategy behind the organisation. If one is to analyse and determine strategy where it matters most for highly innovative and emergent industries, one needs to enter the zone of complexity an area naturally avoided by administrators.

This is an area at the edge of chaos and uncertainty and it is an area where entrepreneurial and innovative firms are found. Complexity theory deals with open-ended environments, and the routine way of doing things largely become irrelevant. Here the role of strategic management is one of facilitation rather than control, thus allowing a process to emerge.

Complexity theory portrays a significant aspect of uncertainty or unpredictability. This has implications for strategy and management decisions. This drives the need for strategy to be emergent as discussed earlier and not set in stone. The road to success for many lies in as much experimental, trial and error as it does careful planning, standards, and guidelines.

This area of complexity is where one finds the highest turbulence, and one must be adept with the symbols and language in a highly turbulent world.

Depending on where one sits, it calls for a different style of management or leadership and a different set of decisions. The model implies that complex interactions between components of a system often screen or bury the connections between actions and long-term outcomes.

Organisations are complex adaptive systems and this model has much relevance in strategic planning, innovation and entrepreneurship. The long term development of some organisations may in fact be a self-organising process (hence emergent) calling for a learning culture rather than an administrative one.

Leaders in the zone of complexity often act as facilitators, empowering others, raising tough questions, allowing and exploring contradictions and promoting diversity. In most cases, organisations fall into the bottom left corner of the model in fig 3-3. This is an area where decisions are based on known facts, leaders are experts or represent authority and power vests in a few. Predictability is the preferred currency one may not always have, and direction is achieved by design.

Figure 3‑3 Business strategy and emergence of complexity theory

Source: Adapted from Stacey R 1996.

The forces of strategy

Strategies do not exist without strategists, and strategists do not just have an ability to see into the horizon. They have an ability to see different perspectives, and different patterns. They are not limited by any one view or frame of thinking, and thus the first force of strategy is cognition (Mintzberg 2003). Each of the six forces below has an impact on strategy, and if understood well can be put to work on one’s own strategy process.

  • Cognition

How people may think and perceive strategy is an important factor in the strategy process. If strategy is about doing something different (Hamel 2002) then one has to think outside the parameters of their organisation. Literally think outside the box and develop a way of framing, and reframing various perspectives to gain new insight (Bolman & Deal 1997). Individual cognition however is fraught with biases which can be positive and negative to any decision making process. A self administered SWOT (strengths, weaknesses, opportunities, threats) analysis may highlight the strengths and ignore one’s weaknesses. But allowing the cognitive process to take shape through metaphors and exploration will result in a richness of possibilities.

  • Organisation

The organisational structure is critical to the strategy of the organisation. Strategy may have to be designed according to the existing structure. Conversely, the structure may have to change to accommodate the new strategy. Part of the internal audit will be to focus on your strengths and weaknesses, and this will drive the strategy process. Mintzberg (2003) contends that there are many types of organisation structures, and that matching strategy to the type of structure is crucial, if that organisation is to support any strategy. Authors Bolman & Deal (1997) in Reframing organisations and Gareth Morgan (1996) in Images of Organisation eloquently demonstrate the importance of organisations and structure to strategy. These authors use the concept of metaphor in organisational analysis, useful in analysing your organisation. Bolman & Deal (1997) offer a four frame model consisting of structural, human resource, political, and symbolic. In each frame, metaphors come into play facilitating the analysis. These metaphors describe an organisation in terms of a factory or machine, a family, a jungle, or a theatre. Morgan (1996) in turn provides for an almost infinite way of looking at organisations, once again through metaphor an organisation is compared to machines, political systems, biological organisms, cultures. Viewing yourself or organisation through various metaphors, it was possible to appreciate a number of perspectives in which the you operate, the way your organisation is managed, and is seen by stakeholders. Analysis thus can go beyond the traps placed by the immediate evidence, to identify the membership or customer base as the ‘real’ organisationand not as merely paying customers as a traditional demand-supply model would imply, but more like shareholders of a company (Hanich, A 2004).

  • Technology

Advances in technology and the speed at which this occurs often contributes to new opportunities as it does to obsolescence. In any business arena technology has a part to play and has a direct impact on strategy. Technology can also change the way we do things and communicate.

  • Collaboration

Collaboration is an important aspect in the strategy process. Companies today clearly have to take on a collaborative strategy. This is a force at the forefront of some industries such as the biotechnology and medical device industries. Collaborative strategies may have several objectives for any one firm. It provides leverage, access to knowledge, links suppliers and customers, reduces the risk for radical initiatives and often it is used to reduce competitive pressures.

  • Globalisation

A myriad of drivers and parameters affect any global strategy. Many industries like Biotechnology have become a borderless phenomenon. Companies must look to global markets to reap any value out of their innovation process. A global strategy must be different to any domestic one. Assumptions may lead to the oversimplification and attempted replication of a business model abroad, resulting in failure. Given that a lot of companies see themselves as local, this aspect of strategy may not seem relevant. However it is an important aspect, as most economies are in one way or another a participant in an international ‘game’.

  • Values

Underlying a firm’s strategy are its values. Values are the drivers of human behaviour and there needs to be a degree of coherence between individuals’ values and that of the firm’s (Hanich, A 2004). Although values are not observable, behaviours are. An organisation’s behaviour depends on the type of leadership it has. Values, leadership, beliefs, and expectations are all linked into strategy. Operating values are therefore part of any strategy process.

Strategic tools

There are a number of strategic tools, methods, frameworks, and models available for strategic planning. A recent study by Curtin University (Frost 2003) revealed that most small and emerging organisations use a very small portion of tools available in their strategic planning.

Many firms recognise that a variety of tools are available, however most resort to the use of PEST, SWOT, and budgeting for most of their decision making. Given the changes in the way we do business and global markets, it is essential to understand the concept of strategy and the strategic process.

The purpose of using these tools is primarily to provide or present information through different perspectives or frames.  Tools are in effect instruments of communication, of complex issues affecting the organisation.

The absence of strategic planning and management will result in a short life span for any organisation.

In a regulated environment such as biotechnology and medical devices, Frost (2003) emphasizes that strategic planning is critical for a younger organisation. The cost of regulation can be prohibitive and strategic planning is an effective way for firms to compensate for these regulatory and compliance costs.

There are many reasons why small organisations do not fully utilise the range of tools and techniques available, which may include:

  • Focus on past events;
  • Lack of proper implementation;
  • Short-sightedness;
  • Human nature.

Failure in the past to implement the right tool in the right situation results in incorrect strategies. This in turn further fuels the false credence to the common statement “it’s been done before”.

Failure to recognise that techniques alone do not make strategy, further implementation is always required. The tools alone do not provide answers, but they are very useful in the process of getting the right answers. The tools essentially support the strategic management process (Frost 2003).

Strategy often fails due to poor implementation because the strategies devised are not completely understood by management or because management systems may be designed for operational and not strategic control. Strategy is long term and failure to recognise this, results in the development of solutions for the short-term. Most firms focus on cost containment, internal KPI and head count for a sound yearly profit. This often is at the expense of long-term returns, market-share and gains in intellectual capital. If strategy is measured in relation to a KPI which only reflect internal parameters or past performance only, then it will translate into a strategy that is internally driven, and will eventually result in an incomplete strategy.

Another factor contributing to the lack of tool usage is that managers are individuals and they often apply individual logic to problems in complex organisations (Bolman & Deal 1997).

Human nature, after all seeks out order and quick answers to problems, instead of focusing on exploration and idea generation. Managers tend to seek answers to problems from past experience and therefore may not be based on future trends or changes, and are therefore no longer relevant. It is interesting to note that according to Frost (2003) very little attention is focused on key success factors, the value chain, competitive position, market opportunity, and competitor analysis.

I hope this provides some readers with food for thought on the increasing complexity and turbulent world of business we are entering in 2020, and what it might take to stay in business longer than your competitors.

The first 40 days of 2020

So there is no doubt that the year 2020 has so far, delivered more turbulence than ever before, out-of-control fires, followed by ravaging floods, temperatures above 20 degrees Celsius in Antarctica, droughts, Brexit, the Corona virus, China’s economy and supply chain stalling, retailers closing down, airlines and tourism sectors down, international students from China kept out costing the Australian economy billions, and it has only been 47 days into 2020!

I remember reading Nassim Taleb’s Black Swan years ago where he talked about a ‘black swan’ event as a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.

We don’t know when a ‘black swan’ event will occur next, but we do have to have the foresight to visualise and model a number of future scenarios to be better prepared for change. More importantly, we have to have the ability to predict situations that are not strictly a ‘black swan’ but with rigour can be somewhat expressed in terms of probability.

But I’m getting off track, though this is a fascinating theme. This article is more about being alert, open to change, and being prepared, operating knowingly in an increasing turbulent environment.

So, what is turbulence?

Turbulence could be described as unpredictable uncertainty that is often as a result of unknown unknowns and rapidly changing environments where there is a lack of clarity into the future.

The elements that contribute to turbulence are therefore ambiguity, complexity, paradox, discontinuity, in turn, creating or leading to surprise, uncertainty, but also opportunity. According to Dr. Colin Benjamin the definition of turbulence is “the experience of something totally unsettling that you cannot predict”.

There is no argument that the world is becoming more and more turbulent, and it will be our capacity to deal with turbulence that will determine success and longevity in business. More importantly, it will be our capacity to deal with complexity and recognise patterns and breaks in those patterns that will lead to innovation and opportunities in the future.

So when investing in a business, look into multiple scenarios, look at the team and their capacity to deal with complexity and uncertainty, look at the way each individual handles turbulence and how the sectors you’re investing in will be impacted in the next 50 years.

Remember, if your answer to our questions is along the lines of “for the foreseeable future…” you had better rethink!

This is a teaser to begin our thinking, and we will follow with a number of articles on this fascinating subject.

A significant business opportunity

So what makes a good opportunity?

In this short article, we expand on the opportunity and the process of selecting good investments.

Opportunities land on our desk all the time, time is precious, We cannot be “All to Everyone”, and more importantly, if we choose to invest our time and resources into an opportunity with mediocre returns, we  forego other, more lucrative opportunities, something we term as “opportunity cost”.

So how we assess opportunities makes a significant difference to a) time management (and pile of papers on my desk ) b) my quality of work  c) reducing opportunity cost and d) maximising opportunity rewards.

So what’s the answer?

Follow a quick screening, reductionist principle, do not try to fit a square peg in a round hole, and don’t be everything to everyone. Stick to your mandate, profile and investment philosophy.

The ‘reductionist’ principle is nothing more than a flow chart of decision making, pivoting each answer through a “go or no go”  decision matrix. A “no go” answer and the business plan goes to the “round” file (no exceptions).

The screening part is the qualitative part of the process, and for us it is based on a number of venture screening methodologies and our own research and the ensuing years of assessing business plans and ventures. The questions asked are critical, and the way the answer is derived is just as important as the answer itself.

The screening aims to answer a number of main issues, namely:

  1. Does the venture or opportunity create value to the customer?
  • If so, how? Does the venture or opportunity solve a significant problem faced by customers? Is the customer willing to pay a premium for that solution?
  • What are the market characteristics like? Is the market robust, creating high (and durable) margin and moneymaking opportunities? Is the market growth worthwhile (>20%), does the venture exhibit strong, recurring revenue generated from a low asset base? Therefore does the venture have the capacity to return attractive returns for investors?
  • What does the team look like? Have they done it before? Is there a good fit between the founders, managers and potential investors?

The quick screen seeks to identify details on the market and margins, the range of competitive advantages, the value creation and harvest issues and the overall potential, to determine whether it is worthwhile to embark into a deeper analysis of the opportunity.

Assuming the venture proposal passes my quick screen, it’s time to roll up  sleeves and really take a long hard look at the opportunity. It is here where we have the opportunity to ‘tweak’ a venture proposal for added value or identify a ‘fatal flaw’ to avoid sunk costs in a venture. From here on, the screening is a collaborative effort with the founders, managers, stakeholders to determine the best approach to investors.

The screening at this stage is on the basis of answering well over 300 questions aimed at looking at a number of criterion which include:

  1. Opportunity
  2. Market and Product
  3. Need
  4. Economics
  5. Model
  6. Harvest
  7. Value Creation
  8. Sustainable Competitive Advantages
  9. Competition
  10. IP
  11. Team
  12. Alliances
  13. Fatal Flaws
  14. Assumptions
  15. Implementation
  16. Decision Making
  17. Risk and Mitigation
  18. Scenarios

At the end of the process, we have the privilege of placing the opportunity into one of a number of categories:  is it  a cash cow? Part of a Fad or fashion? Is it a hobby? Is it buying the ‘entrepreneur’ a job or is it creating real value?

Is the venture chasing the real opportunity or is it investing a ‘better mousetrap’? Is it led by innovative entrepreneurs or by technology led technocrats?

Quite often a business plan is rewritten based on any new information and insight uncovered. At worst, a bad opportunity is avoided or a good opportunity is identified or ‘tweaked’ and a well written plan is confirmed to be investor ready. At best, investors will be convinced to part with their cash and back your venture.

Project Finance

When it comes to Project Finance, if you need the cash yesterday, please do not apply. Project Finance is precise and onerous and requires months of work and planning. It is not the cheapest form of finance, but it does provide for ‘greenfield’ solutions, based on projected cashflows. Moreover, Project Finance has some additional benefits for the company, which include:

  • Allows the company to ‘ring-fence’ the project and not affect its balance sheet or borrowing power.
  • Lending of funds is based on a stream of cashflows generated by proposed project assets. In a sense therefore, it is also considered to be a limited recourse funding, not exposing the company’s assets outside the project.
  • It provides a structure for ‘sharing’ risk and may involve several joint venture partners, particularly useful in cross border situations which could provide an opportunity for double or even triple dipping structures and tax advantages across jurisdictions.
  • A Project Finance approach allows for the careful management and control where a consortium is involved in a multi-discipline project. It provides for structure, discipline and project management processes which allow for the coordination of various participants.

The top five sectors (in order) preferred by financiers in this discipline are:

  • Power
  • Infrastructure
  • Public Private Partnerships
  • Mining
  • Oil and Gas

Other emerging sectors  include Large Scale Manufacturing, Renewable Energy, and Leisure based  sectors such as theme parks, resorts and casinos.

However, any sector can benefit from taking a similar approach to funding, and imposing the rigour of project finance internally. Considering the inputs, risks and modelling sensitivities not only provides great insight for the management, but addresses concerns and provides comfort to investors and financiers in a way which goes beyond the usual best case scenario and worst case scenario approach most managers take.

In any type of Project Financing there are a number of risks (anything from 15 to 20) which need to be carefully considered. Part of the due diligence involved is to identify each risk, rank them in order of potential impact to the bottom line, and address where possible through mitigating strategies. I emphasize “where possible” because there are some risks that you just simply accept as part of the course, in which case you merely identify and assess how the risk is allocated (who carries that risk). So what are some of the risks we look at?

POLITICAL   TECHNOLOGY ENVIRONMENTAL
COMPLETION   SUPPLY RISK SOCIAL
SPONSOR   RESERVE (inputs) LEGAL
OPERATING   MARKET TAX
INFRASTRUCTURE   FINANCIAL FORCE MAJEURE

If you have a project and do not consider each risk, then you run the risk of a credit committee rejecting the project (if lucky), and you will find an uphill battle in trying to obtain funding. At worst though, if funding for the project is generated internally or through third party equity, an oversight of any of the risk factors mentioned, potentially places the project and equity at an unacceptable level risk.

This type of financing takes time to negotiate, and for smaller sized projects, structured alternative strategies may be the best approach in order to save time. A stepped approach, could allow a project to begin to take shape, fund bankable feasibility studies and provide a ‘bridging’ function, while the company negotiates longer term project finance. As project finance requires an equity component as well, creating a form of guarantee on behalf of the sponsors to provide an additional level of comfort to the lender, but without tying up huge sums of cash for the sponsor (developer) should be considered.

Principals and Principles

Back in 2002, I wrote a short paper on Entrepreneurship. I created quite a stir, when I got in front of an MBA class and began my presentation with the following statement: “ there are some things that cannot be taught in class and there is a mind-set in entrepreneurs which is decidedly different to managers, therefore to some extent, aspects of entrepreneurship are not easily transferred to a class of MBA students”.

Almost two decades on, I stand by what I said, and expand to discuss the Principles of entrepreneurship and the Principals as the main protagonists in a venture, supported by managers, brokers and sometimes intermediaries, but never replaced.

  1. The Principles:
  For Principals (Entrepreneurs) Driven by the opportunity
Multiple stage – end commitment
Risk is shared, accepts risk, but requires rapid growth
Based on value creation
Able to understand change
Unrestricted by resources or structure
Stakeholder management, better outcome for all Compensation is based on ‘Harvest’  
  For Managers (Administrators) Driven by resources under control
Single stage commitments
Seeks lower risk, higher certainty
Not based on value creation, but activity
Requires stability not changing environments Restricted by procedures, resources
Management of task, regardless of outcome Compensation is based on experience, seniority or tasks performed  
  For Intermediaries (Brokers) Driven by short term opportunity or gain
No commitment or due diligence required
All risk is transferred to project owner
Based on fee for service or introduction
No need to understand environment
Restricted in capacity to add value in real terms Management of introduction, not success of venture
Compensation philosophy is to ‘clip the ticket’ (and pass it on)  
  1. Principals are opportunity driven entrepreneurs:

The role of an entrepreneur has more to do with the mind-set of an individual and their attitudes towards uncertainty, risk and reward, as well as their ability to operate in open-ended environments of rapid change, chaos and creativity. In other words, entrepreneurship is defined as behavioral, and relates to how the individual (the Principal) behaves within their paradoxical environment.

The entrepreneur embarks on a venture, regardless of the resources at hand and makes things happen with the aim of ‘making the pie bigger’ for all stakeholders concerned. Entrepreneurs are Principals  that “own” a project in more ways than one, who negotiate and ride the ups and downs and are responsible for the outcome of that project, and who therefore have an overall schema of the project and the possible scenarios in their mind. Often the entrepreneur acts as an “Architect”  putting pieces together that add value and make sense. The reward is at the end, at harvest time, and it is an event where all stakeholders are rewarded for their part. In other words, compensation is always based on value creation.

  1. Managers are administrators working within agreed and set guidelines:

In contrast, Managers, do not operate in open-ended environments effectively, and need a sense of rules and consistency in the way they approach and manage  tasks. Their role is to manage a whole project or parts of a project with objectives which are apparently ‘static’.

Where the principal has a focus on the opportunity, the manager has a focus on administration, and often restricted by resources held or controlled. The manager is ill equipped to make decisive, direction changing actions which affect the outcome of a project. In terms of compensation, they are duly compensated for results delivered within the opportunity ( restricted by the resources at hand), but this compensation is always based on responsibility and seniority, and not based on value creation.

  1. Brokers and Intermediaries are neither opportunity driven entrepreneurs nor administrative focused managers:

Compensation is almost always short term, a fee for service, or ‘clipping the ticket’, it is not value creating in itself, and does not carry the responsibility of managers. The usefulness drops away after an introduction or door is opened to the success of the venture, and in some cases, where it is poorly structured, it is a potential drain on the business or project financed ( as would be the case in daisy-chain commission agreements where there is more than one introducing party).

Because the compensation is rather short term and is based on an ‘introduction’ and there is no value add to the project, then it carries little responsibility on a successful outcome. It certainly carries no due diligence on behalf of the client and any advisory role is possibly (in some cases) skewed towards the short term gain. This is especially evident if introducers do not discern between a good deal or a bad deal, and accept clients in any situation in order for a service or product to be sold, regardless of the client’s needs.

In conclusion, I admit that we have all acted one or more of the above roles, but it is useful to understand the limitations of each and know when each role is best applied.

We can all be intermediaries or brokers by providing an introduction between parties. Most of us can learn to be managers by following procedures and agreed tasks, but it takes a little more effort and understanding of what is at stake to be an entrepreneur, and therefore fewer can walk the path of Principals.