The Tribune

By SIMON COOPER

Res Socius

SOME business graduates believe that everything coming out of Harvard Business School should be bowed down to, and that the right method always gets you where you want to be. However, there was a disbeliever at the University where I studied in the UK. She told me: "If it sounds convincing, look for reasons not to believe it."

I grew up in a society where there were approved methods for almost anything. There was only one way to do algebra, a hamburger went between two halves of buns, and 2+2 always equalled 4. After all, it's tempting to believe that everybody can have a crack at being a space scientist, and that anybody could become the next prime minister.

An article published in the Harvard Business Review on March 15 has had me thinking for the past few months. Are we really saying that anybody could become a Bill Gates by following a method? I very much doubt this. Besides, for entrepreneurs to make money we do still need workers and consumers, too.

The scientific method that Francis Bacon dreamed up in the 17th century deserves some blame for this. This was the general idea that you could repeat experiments and get the same results. But we all respond differently, don't we? I'd like to believe that there's more to being human than a batch of chemicals.

The journalist writing in the Harvard Business Review takes up a different position, and postulates a new approach called effectuation (or taking effective action, if you prefer). It works this way:

1. Understand who you are, what you know and who you know

2. Come up with a do-able idea

3. Work out a budget

4. Find investors to manage the gap beyond what you can afford to lose

5. Use these collaborators to co-create new wealth

You're absolutely right if you think that something's missing. There's a gap you could drive a bus through between Stage 1 and 2. That's where I think true entrepreneurship fits in - a lonely, risky, free-wheeling and heroic phase that has far more failures that successes.

I prefer to think in terms of different stages in the life cycle of an individual business. These include pioneering, consolidating, maintaining and re-energising. To me it's far more a question of positioning oneself in the right phase, as opposed to a one-size-fits-all approach that may work well with elastic socks.

I'm frequently asked whether there's any sense in buying an existing business for sale. My answer is that this depends on where your talents map into the individual business cycle. If you come from a corporate environment you might well belong somewhere between consolidating and re-energising an existing business. If you are a pioneering spirit, though, then perhaps you should start your own enterprise.

NB: Simon Cooper is a founding partner of Res Socius, a business brokerage firm and businesses for sale directory service. Res Socius is authorised by the Bahamas Investment Authority to facilitate the sale and purchase of businesses, and provide consultancy services. Contact 376-1256, visit www.ressocius.com or scan the QR code below.