Passion & Pragmatism

Thursday, 16 July 2009

I’ve spent a fair bit of time over the last couple of years or so providing formal and informal advice to people setting up their own businesses, or who are in the process of developing a fledgling business into a fully-feathered bird, ready to fly.

Personally, I find the administrative or process side of this very straightforward, if a little dull most of the time. Setting up a limited company with Companies House, buying domain names, registering for VAT, opening bank accounts and informing HMRC don’t exactly set alight a fire in my soul, but to me, they are pretty simple things - like following a recipe when cooking. To others though, these can be stumbling blocks that the fledgling bird trips up and falls over, never to recover.

In a later blog, I’m planning to discuss the ways in which these seemingly insurmountable hurdles can be overcome, but here I want to discuss the challenge of harnessing a passion and using it in the most effective way possible.

Two people I’ve worked with recently have had very clear ideas about what they want to do, great technical capability in the areas they want to work in, and a huge belief that they are doing the right thing and that it’ll work. That’s wonderful...but unfortunately not enough on its own.

Any business needs some pragmatism. The often sullied “beancounters” are an essential part of any successful business - the road to success is littered with great ideas poorly executed or badly controlled. The real challenge for fledgling businesses, particularly those being started by one individual with a great idea and tons of passion, is where to get the pragmatism from.

Dividing the possible sources into two, we get:

1) From within

One potential route for entrepreneurs is to genuinely go it alone, and there are some enormous advantages in this approach. A common reason for setting up your own business is to be in control, and if there is no-one else there, you most certainly are in control. But, and taking the risk of stating the blindingly obvious, there are some significant drawbacks:

• The passionate entrepreneur and the pragmatic manager are rarely perfectly balanced in a single individual. One style will tend to dominate, at the risk of overpowering the other.
• The demands of using an unnatural style can be extremely draining, reducing the energy and enthusiasm remaining for the natural style.
• The individual concerned may end up spending too much time inefficiently and ineffectively, doing things that are not allied to their core strengths, and therefore not spending enough time doing the things they are really good at and enjoy.

At it’s worst, the practicalities of running your own business can put people off completely. Even if that doesn’t happen, they can make the start much harder and more challenging than it ideally would be, and, if that challenge becomes too great, entrepreneurs either give up, or end up running a financially unrewarding hobby business.

2) From outside

Getting someone else in to perform the basic grunt for you, as you follow your inspirational, passionate dream, can be the perfect solution to this - in essence, you do the bits you’re good at, and get someone else in to do the other bits. With the big organisations I usually work with from a training point of view, this focus on understanding and utilising people’s natural skills is critical. The questions that the passionate entrepreneur must ask to benefit from this solution are as follows:

• Can I afford it, and, if so, how? There are many options to look at - having an equity partner, paying an outside consultant, or employing someone. Each have their risks and benefits, which will vary case-by-case, but each should be looked at in turn and weighed up.
• Who should I choose? Someone with the requisite skills is a given, but, equally importantly, it is someone you can trust. You are going to be relying on them to do things that are necessary, but that you are not interested in and may not even understand, so they need to be on your side. However, even with trust, make sure that agreements are drawn up to avoid confusion and a future breakdown in trust if difficulties arise.
• Am I going to listen? The chances are, the pragmatic manager will say things that the passionate entrepreneur doesn’t like. Often. Even if they are the same physical being. Each side must listen to the other, be accepting of a different viewpoint, and they must work together to get to the Socratic ideal of “perfect truth”, or at least a good, workable plan!

Adam Smith’s theory of the division of labour (I am geeky enough to have a favourite economist) from the Wealth of Nations gave great examples of how these different roles (the passionate entrepreneur and the pragmatic manager) can be split, or contained within one person:

A gardener who cultivates his own garden with his own hands, united in his own person the three different characters, of landlord, farmer, and labourer. His produce, therefore, should pay him the rent of the first, the profit of the second, and the wages of the third.

One person doing all three in this case is incredibly challenging, but by analysing the resources needed to develop a business, the rewards needed for each part, and defining the roles and responsibilities clearly, the passionate entrepreneur can succeed beyond even their wildest dreams.