COURSE SYLLABUS EMERGING ENTERPRISE CONSULTING MBA Program Department of Entrepreneurship Oklahoma State University

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1 COURSE SYLLABUS EMERGING ENTERPRISE CONSULTING MBA Program Department of Entrepreneurship Oklahoma State University EEE 5313 Instructors: Mr. J. Wiese Section A (and guests) Class Meets: Office Hours: Room and by appointment Fall 2009 Office: Website: Phone: PREREQUISITES: students must be enrolled in a graduate program at Oklahoma State University or have instructor permission to take this class. COURSE OVERVIEW: Entrepreneurship is the key to the American dream. Sustainable growth and an enhanced standard of living for all Americans are dependent on a vibrant, growing entrepreneurial sector. There is a need for entrepreneurs with creative business concepts and the courage to turn these concepts into sustainable enterprises that create jobs for citizens and create value for customers. There is a key difference, however, between starting a business and growing one. The majority of small businesses fail to achieve meaningful growth, are marginally profitable, and operate as mom and pop or hand to mouth types of businesses. A smaller number are responsible for the vast majority of new jobs, new products and services, and net new wealth creation in society. It is this reality that lies at the heart of the Emerging Enterprise Consulting course. The themes of this course are innovation and sustainable growth. Our focus is to facilitate the survival and growth of existing small businesses that are owned and managed by local entrepreneurs. The course is actually organized into two major components, and these are pursued in parallel with one another. Students will be exposed to a series of modules that address various aspects of the consulting experience. These modules, and the entire course sequence, is designed around the SEE Model, which is a three-stage model intended to guide teams as they approach, decipher, and ultimately create value for the entrepreneurial enterprise. The second component involves actual consulting interventions. Students will be organised into teams of four, and each team will be assigned to one consulting client. The teams will meet regularly with each client, and, employing the SEE Model, move through an evolving series of steps which culminate in a set of value-creating deliverables for the client, and a final consulting report. COURSE OBJECTIVES: The course sequence has six primary learning objectives. Upon completion of this sequence of two half-courses, students should have developed:

2 An understanding of the consulting process and, specifically, of a logical and systematic process for identifying the problems and opportunities confronting small, entrepreneurial firms; A knowledge of how to effectively apply this process to an entrepreneurial enterprise, and specifically, how to thoroughly critique the operations of the business and to establish priorities for a) improving the efficiency and effectiveness of the enterprise, and b) growing the business; An appreciation for the unique characteristics, requirements and contributions of emerging enterprises and the entrepreneurs behind these enterprises; The ability to create value for a consulting client in terms of specific deliverables. These deliverables can take the form of new methods, processes, approaches, systems, products, services; Skills in working with individual entrepreneurs, establishing positive relationships, building trust, sharing information and experience, educating, learning, and solving problems; Enhanced capabilities in the creation of a final consulting report. TEXTBOOK: The Best Business Books Ever by Perseus Publishing This book has 2 page synopses of the best business books. It is a simple and enjoyable read that will give you a background and basics from the best books and the most notable leaders in the field. Pay special attention to the different ideas on management.. Flawless Consulting, by Peter Block, 2nd edition. This book explains the fundamentals of consulting built around a 5 step model that you use every time you meet with the client. It also goes into the personal skills that you will need to maintain a strong relationship with the client in order to mutually work toward the desired outcome. Be aware that you will also be able to utilize these same skills in any business including a major corporation or non-profit to demonstrate your leadership ability in problem solving while working in a team environment. The essentials are in the first 1/3 of the book, the rest concentrates on practice and refinements. STUDENT EVALUATION: Class participation 15% Engagement letter and action plan 5% SEE Model write up 15% Class exercises and cases 10% Team Presentation 10% Final Consulting Report 40% Diary 5% 100%

3 A B C D F Below 60 ENROLLMENT AND ATTENDANCE POLICY: Students enrolled in Consulting to Entrepreneurial Ventures must be highly motivated graduate students. The course is an integral part of our MBA Concentration in Entrepreneurship. Enrollment in this course sequence is an elective choice, and participation in consulting activities is a privilege. Accordingly, attendance is required. As each class focuses on a key aspect of the consulting experience, more than one unexcused absence will lead to the student forfeiting his/her class participation grade. Students who anticipate scheduling conflicts should not enroll in the course. COURSE OUTCOMES: Students will receive a grade for the course and those earning a B or better will receive an EEE Program consulting certificate. In addition, recognition will be given to the top two outstanding consulting projects and they will be entered in national competitions. CONSULTING PHILOSOPHY: There is a sacred trust involved when attempting to intervene and assist a business in addressing its problems, needs and opportunities. Especially when dealing with businesses that face severe constraints in terms of time, money, and other resources, it is imperative that student consulting teams create meaningful value for the firm, while not wasting the time or resources of the entrepreneur, and also not creating unrealistic expectations. Further, students are acting as ambassadors of Oklahoma State University and the EEE Program, and this implies that a standard of excellence is applied to all activities undertaken in the community in the name of the University. Also, your businesses will demand that you use absolute discretion when discussing their business particulars with anyone. Students must be willing to accept the responsibilities implied above, and to demonstrate a strong commitment to serving the entrepreneur in a manner that is substantive, pragmatic, and has lasting value. They must, in the final analysis, know and understand the entrepreneur's venture as well or better than he/she understands it. COURSE FORMAT: This is an "applied" course sequence. In that sense, it builds upon all of the other courses taken in the business school. Students will encounter aspects of finance,

4 marketing, operations, human resources, business & society, and technology in each of their consulting engagements. There may also be a strong dose of psychology, sociology, engineering, art and other disciplines. While the rest of the entrepreneurship curriculum addresses the theoretical and conceptual aspects of the subject area, Emerging Enterprise Consulting is concerned with "hands-on" interventions. Accordingly, the course format includes some lectures, a number of very practical readings, class discussions of these readings within the context of emerging enterprises, a series of cases, a number of role plays, some guest lectures from subject matter experts, and a series of applied class exercises. The course leader is Mr. Jon Wiese and he will involve a number of guest presenters. COURSE STRUCTURE AND ASSIGNMENTS (changes may be announced in class as we go): Week 1 24 August Introduction and Conceptual Approach This class will serve several purposes. It will introduce students to the SEE Program, the instructor team, and the course syllabus, including a number of administrative details. The basic requirements and expectations of the course will be outlined, including the formats for the final consulting report and the diary which each student must keep. Special emphasis will be placed on deliverables, project timelines, and managing client expectations. The importance of, and approaches to, building a trusting relationship with the clients will be stressed. Further, fundamental differences involved when consulting with a start up business vs. a larger corporation will be introduced. Although many of the course topics parallel the basic business school curriculum, the need to tailor this knowledge base to reflect the distinct nature and nuances of the small business consulting environment will be explored. Students will also be introduced to the SEE Model, which is to be used by the students when performing their consulting engagements. This model will provide a logical approach to consulting that will facilitate the exploration of the entire business entity. Last, students will participate in a team activity to facilitate learning about group dynamics. Readings/Assingment to be prepared for Week 1: Review the SEE Model The five stages of small business growth, Neil C. Churchill and Virginia L. Lewis Chapter 1: Entrepreneurship and Small Business Management Week 2 31 August Structuring the Engagement, Warning Signals, Role Plays This session will have four components. First, students will be assigned to consulting teams, and one client will be allocated to each team. There will be a detailed discussion of the initial client meeting, a crucial element in a successful consulting engagement. A role play will then be conducted to give the students a feel for the dynamics of early client meetings. The students will be required to assess a hypothetical client situation and determine the key problems confronting the entrepreneur, after which discrepancies

5 will be identified between student perspectives and the actual client requirements. The role play will incorporate many of the issues students are likely to encounter: marketing, finance, growth, planning etc. Thirdly, we will explore the SEE consulting model in much more detail by applying it to an actual case scenario. Lastly, students will be provided with a list of warning signals, information that should alert the consultant to potential problems that may actually exist within the client firm. Readings/Assignment to be prepared for Week 2: Read and develop an understanding of the SEE Model Field casework: methods for consulting to small and startup businesses, Lisa K. Gundry and Aaron A. Buchko Flawless consulting: the contracting meeting, Peter Block Read Dine in Style case and prepare questions for discussion Week 3 Developing an Economic Model of How the Business Makes (or Should 14 September Make) Money; Accounting and Record Keeping First, there will be a review of the initial meetings held by each team with their client. Then the class will shift to accounting issues with a review of basic accounting principles. The beginning point is understanding the cost structure of the business, and then developing a simple model of how the business makes money. In this vein, we will apply the concept of operating leverage and cost-volume-profit relationships to your client s firm. In addition, break even will be discussed. Beyond this, the module will focus on assisting small business owners in constructing and interpreting accounting and record keeping systems. When students are consulting to small business owners, there is a need to recognize that owners frequently do not have thorough records that show the full financial picture and history of the business. Discussion will focus on the importance of record-keeping, with emphasis on making it relevant and understandable to small businesses. We will examine how the consultant interprets the client s income statement, balance sheet, and cash flow statement, and draws implications. Key ratios will also be examined. Readings/assignments to be prepared for Session 3: Chapter 16: Financial Analysis for Growth Cash flow forecasting comprises eight elements, Lawrence Tuller The logic of profit, Jack Stack Read assigned Case and prepare case questions Opening letter due Week 4 More on Accounting; the 'Growth' Business Plan 21 September

6 This module is a continuation of the discussion from Week 3. Emphasis will be placed on using accounting information for decision-making. We will discuss how to help entrepreneurs ensure they have and are getting the maximal value from an accounting system. In addition, tax issues will be explored as they relate to financial reporting. The class will then move to a discussion of the business plan and its role in supporting growth. After briefly reviewing the structure of the business plan, we will examine the different audiences for a business plan and what it must convey to each. The class will then critique a business plan from an actual business. Readings/Assignment to be prepared for Week 4: Chapter 17: Cash Planning and Working Capital Management Chapter 5: Planning the Business Read the Koidra-Tek Asia Business Suite Plan (Pg. 549 in text) Layer One of the SEE model draft due Week 5 Understanding the Business Environment, the Customer and the Market 28 September Entrepreneurs are often very product and production focused, with only a limited understanding of market dynamics. This session will focus on developing an accurate picture of the market, who the customer is, and the segments the client should be focusing upon. We will highlight techniques for obtaining market information from the clients themselves, as well as other secondary sources. Some specifics will include performing inexpensive market research, assessing market size, defining target markets, determining how to reach the target market, and building customer databases. Both business to consumer and business to business marketing will be discussed. Readings/Assignment to be prepared for Week 5: Chapter 2: Entrepreneurship and the Dynamic Environment Market Analysis by Guiltinan and Paul Read assigned case and prepare case questions Action plan due

7 Week 6 5 October Marketing and Sales The total value proposition of the client will be examined. Student consultants will critique all of the elements of the client s marketing mix to ensure not only consistency, but the maximal value is being produced for clients. Client marketing objectives and strategies will be assessed, with detailed attention to issues of positioning and product differentiation. The product/service mix will be critiqued in terms of where the firm is making money and where it is allocating resources. Attention will also be devoted to the firm s approach to price setting, with an emphasis on value-based rather than costbased pricing. Readings/Assignment to be prepared for Week 6: Chapter 10: Customer-Centered Marketing Read assigned case and prepare case questions Week 7 12 October Preliminary presentations; Even More on Marketing and Sales A preliminary presentation will be given by each student team indicating the background and primary issues faced. More discussion of the presentation requirements will be given in class. The client s communications mix will be examined in depth. Teams will learn to critique the extent to which communications approaches reflect the nature of how the client s customers make their buying decisions. Student teams will also be introduced to the concept of guerrilla marketing, with each team identifying a variety of guerrilla approaches that could be applied in their client firm. In addition, the effectiveness of the firm s selling methods will be reviewed. Attention will then be devoted to looking at the design and management of the distribution channel and channel relationships. Readings/Assignment to be prepared for Week 7: Chapter 11: Developing the Marketing Plan: Customer-Centered Marketing Chapter 12: Strategic Marketing for Global Growth Preliminary presentation Week 8 Product Management, Inventory, Production, External Relationships 19 October and Operations Operations are the heart of the business, for this is where the core value is created for the customer. This session will cover operational issues that are pertinent to the entrepreneur. A key component will involve modeling the production or service delivery system of the entrepreneur to ensure maximum efficiency and effectiveness. Other specific topics include quality management, customer service, service delivery, and determining optimal levels of production.

8 Also, this module will look at operations with a focus on acquiring raw material, purchasing and leasing equipment/facilities/land, managing inventory, and related issues. The importance on managing relationships with suppliers and finding new sources of value in the value chain will be stressed, together with them management of payables. Use of technology in addressing some of these issues will also be discussed. Readings/Assignment to be prepared for Week 8: Chapter 13: From Mass Production to Mass Customization Chapter 14: Process Strategy in Product Companies Chapter 15: Process Strategy in Retail/Wholesale and Service Businesses Read assigned case and prepare case questions Week 9: 26 October Financing Issues in as they Apply to Your Small Business Client This class meeting will focus on small business financing issues. The biggest constraint small business owners often face is the lack of capital. This session will provide an overview of traditional sources of financing available to small business owners (banks, partners, angel investors, venture capitalists) as well as more informal sources (friends and family, personal networks, credit cards, inventory, customer financing, barter) and how to best access that financing. The class will discuss the preparation the company must do to access capital, like preparing a business plan and cashflow projection, with an eye towards their positioning to the investor/bank. Emphasis will also be placed on determining exactly how much money is actually needed, and the creative approaches available for structuring the deal or arrangement that reflect the nature of the source. The class will also discuss frequent mistakes made by entrepreneurs in accessing financing and how to help businesses avoid these pitfalls. A bank representative will also give their perspective on the bank loan process. Readings/Assignment to be prepared for Week 9: Chapter 18: Financing Growth Chapter 4: An Overview of the Journey Getting the most from your banking relationship, James McNeill Stancill When the banks say no, DTI Capital alternatives, U.S. Small Business Administration, Women s Business Ctr. Financing your new business Layer two of the SEE Model draft due Week 10: 2 November Human Resource Management and Culture Issues People are the essence of the growth-oriented small business. Yet, many of these companies rely on very informal and non-systematic approaches to selecting, training, motivating, rewarding, evaluating and structuring the work of their employees. In this

9 module, we will explore key issues surrounding the management of people in small businesses, both as individuals and in teams. Special focus will be placed on job design, performance appraisal, and compensation issues. Attention will also be devoted to ensuring the client firm is attentive to legal issues affecting employment-related practices. Readings/Assignment to be prepared for Week 10: Chapter 8: Managing the Human Resources of the Entrepreneurial Company Chapter 7: Preparing the Management Team and the Organization for Growth Five reasons why we procrastinate and five strategies to put off putting off, Adams, Time Management Delegation, Harold L. Taylor Week 11: 9 November Legal Structures, Legal Issues and Organizational Structure This session will have three major components. First, we will briefly review the key questions surrounding the types of legal structures available to small businesses, and their implications for your clients specifically with regards to tax issues. Secondly, we will proceed to a discussion of major legal concerns of the emerging entrepreneur, including those related to contractual obligations, managing employees, discrimination liabilities, and bankruptcy will then be covered. The session will also address the basics of how to hire and fire employees. Further, attention will be devoted to the controversies surrounding bankruptcy. How to protect a business from legal issues as well as resources for solving labor law problems will be covered. Thirdly, we will examine the organizational structure of the business, and how the structure and organization of a business must change as it evolves.

10 Readings/Assignment to be prepared for Week 11: Chapter 3: Entrepreneurial Strategy and the Legal Environment Chapter 6: Virtual Team Building Week 12: Growth Strategies 16 November Growth is the theme of the course. Any successful business will have to deal with growth issues. The remainder of this session will focus on designing and implementing a growth plan, allowing the entrepreneur to plan for growth, and not to be overwhelmed by it. Specifically, it will cover how to recognize personal, market, financial, and organizational barriers to growth, discuss various strategies to overcome those barriers, identify which strategy is best for the client given his or her situation, and discuss how to help the client implement the correct strategy. Time will be spent on the trade off between the need for control and growing the business, the link between the entrepreneur's personality and his or her growth strategy and opportunities, how much growth is too much and the speed at which a business should grow. Strategic alliances, networking, acquisition, and licensing will be discussed. Readings/Assignment to be prepared for Week 12: Chapter 9: Rapid-growth Strategies for Entrepreneurial Companies Should you use standard or tailored growth solution? Aldonna R. Ambler Be cautious in considering company growth strategies, Aldonna R. Ambler Expanding the business, parts 1 and 2, Chamber Digest How big should your business be? Chamber Digest When the phone won t stop ringing Diverse Strategies Read assigned case and prepare case questions Week 13: Businesses in Trouble; Harvesting Issues; Family Succession Issues 23 November This module focuses first on early warning signals of trouble in a small business. Related to this is a discussion of why products and businesses fail. A second area we will explore concerns exit strategies for businesses that are ostensibly successful. This will be related to the entrepreneur s personal model of the venture. Finally, we will explore unique aspects of family-owned businesses, the relationship between the family unit and the business unit, approaches to addressing the problems that arise in familyowned businesses, and the importance of and approaches to succession or transition planning. Readings/Assignment to be prepared for Week 13: Reasons why new businesses fail and what to do about it, Chamber Digest Avoiding failure, Chamber Digest The Family Venture by Wendy Handler Read assigned case and prepare case questions

11 Week 14 and 15: 30 November & 7 December Summarizing The Consulting Experience: Team Presentations Student teams will make formal presentations in which they summarize the application of the SEE Model to their client and outline their deliverables and recommendations for the client. Clients will be invited to attend these presentations, along with the EEE Program faculty team. Assignment: Prepare thirty minute presentation on your client consulting experience based on guidelines provided in class. 14 December: Final Consulting Report and Diary Due