A recent article for the Harvard Business Review caught my attention. The piece is called Entrepreneurs: You’re More Important Than Your Business Plan, and authors Rich Leimsider and Cheryl Dorsey make the bold claim that “the business plan is overrated” and, on the other hand, the entrepreneur himself is often overlooked. I do agree with this statement.
In the article, Dorsey and Leimsider enumerate eight rules for success which their investment company uses in evaluating and analysing business proposals handed over to them. The principles are as follows: Purpose and Passion (Do they care deeply about this issue or community?), Perspective and Resilience (Will this person bounce back from the obstacles this person will surely face in building this business?) Point of Entry and Leadership (Can you envision this person entering a field in a transformative way and inspiring others to action?) Power Source and Resource Magnetism (Can this person attract money, people, and other resources to his or her cause?), Innovation (Has it been tried this way before?), Importance (Does this organization tackle an issue that matters in the world?),
Potential for Big, BoldImpact (Could this organization directly, or by example, change a big system?), and A Good Business Plan (Does the start-up plan (budget, timeline, staffing, etc.) seem thoughtful?).
It is interesting to observe that half of this list focuses on the attitude and personality of the entrepreneur (and/or the management) rather than on the business itself (in fact, the business plan only comes into the picture in the last point). The authors say that the reason behind their apparent emphasis on the entrepreneur is that it ensures that regardless of the merits or demerits of the business, it will be able to flourish and not bounce back from challenges if the entrepreneur has the right character.
In is worth noting, however, that this kind of seemingly extremist thinking may be due to the fact that the context, from which the authors have their experience, is a social enterprise environment. It can be argued that while the entrepreneur’s personality is of utmost importance in this particular line of business, so is not always the case for other sectors and industries. The authors also clarified that the considerations they listed can also apply to entrepreneurs from other fields. However, I would personally warn other businesspeople and investors against focusing too excessively on the entrepreneur. Of course it matters, but business strategies and other considerations such as competition and market are important as well.
Finally, a note to my fellow entrepreneurs: If you want other people to believe in your brand or business, start by making them believe in you and your team. After all, you are the one who knows your business the best; and you are the one who will ultimately make or break the business. It may sound as a cliché, but one mantra I often share with my colleagues and budding entrepreneurs is this: Poor management can destroy the best idea or business case, while excellent management could make business out of almost anything.
Knut Harald Nylænde is the founder and incumbent Chief Executive Officer of Moxie AS, a booming group of investments companies in Norway. With more than 20 years of experience as a businessman and entrepreneur, Knut aims to promote responsible and innovative entrepreneurship through his blog.