Ron Fountain has a 40-year career as a finance executive and entrepreneur. He is also a Weatherhead alumnus of the EDM, EMBA and Professional Fellows Programs. Now he is taking on the position of Executive Director of Weatherhead’s new entrepreneurs program, Leading the Growth Enterprise: An Executive Experience for Leaders of Growing Businesses. In the following interview, he shares his vision for a program that is focused on changing the face of Ohio business.
Give us some context for Leading the Growth Enterprise. Why did Weatherhead decide to launch this program now?
Entrepreneurship has become an increasingly important commitment of the Weatherhead School over the past few years. There are many levels and layers to the concept. Only one of the things that defines successful entrepreneurship is the ability to start a business. While that’s essential, we know that a vast majority – over 80% of businesses—fail in their first year. So having a good start is important. But when a sound start becomes a successful business, the next challenge is how to grow that business. This is fundamental to the creation of enterprise value. This doesn’t mean just having a spurt of growth in the first year or two, but developing an approach and an organization that continues its growth for the next five years, ten years or even longer. This Weatherhead program focuses on how to grow a successful entrepreneurial business and how to grow it sustainably.
When is the successful entrepreneur ready for this program?
Readiness for this program isn’t determined by the number of years you’ve been in business or even the sector in which you’re operating. Rather, this program is for entrepreneurs who have started a business they now consider to be successful and where achieving sustainable growth represents their next frontier/challenge.
Keep in mind that the duration of the start-up phase can vary widely. Success for someone who has gone through the early stages of starting a business can sometimes be determined after year or two. But occasionally businesses take longer to develop, and it might be five or six years before you can say it has reached a state of satisfactory success.
That seems like a long time to wait. Can you give an example?
With my own firm, Capital Acceleration Partners, after a year to 18 months, we had a successful business by any measure. However, part of that success came from doing some things that were not even anticipated when we conceived of our model. We responded to changes in our environment and that, in turn, changed some of the activities in which we became active. Frankly, we had to consider and renew our business model a couple of times. We recognized and acknowledged dramatic changes in the business environment. While we wanted to be attuned to those changes and responsive to the evolving needs of our clients, we also knew we had to set clear frameworks that would help us keep our basic business focus.
As this example illustrates, there are internal and external forces that impact your business growth. This program prepares successful entrepreneurs to address both. We will provide answers to some questions and some challenges, but more importantly we will also prepare our participants to develop solutions on their own to problems they might confront. That assures sustainability!
What are the essentials for a business to grow?
Though we hear it many times, it’s often overlooked in our rush to handle the day-to-day issues – success starts with a vision. You need an idea of what you are trying to create. It doesn’t need to be crystallized in every detail, but you need a sense of what will define your success. Envision what your customers will say and how they will feel about you. Picture how your competitors will regard you and react to your actions in the market place.
Another essential is strategy, and a strategy is more than an idea of what you’ll make and sell or what service you will deliver. Strategy involves looking at the whole market, the competition for your product or service, or alternatives available to your customers. And it encompasses how you plan to operate, how you allocate resources, divide the efforts of human capital and coordinate the efforts of that resource.
After vision and strategy, the next element is structure. Many times we put structure in place first because we have a structure or because we have personal preferences about structure. We might then try to fit some elements of strategy into the structure we have created. But when we only focus on what we can do and ignore what we must do to satisfy our customers, our business is threatened. Developing good structure, one that supports a sound business model, is essential for sound execution.
You can’t have successful execution and a sound business without leadership. During the early phase, when the entrepreneur’s business consists of a small number of employees, communication and other activities are easily coordinated. Everyone is in close proximity. But once the business develops some size – a critical mass – the entrepreneur needs to assume a new level and a new style of leadership. You simply can’t be hands-on in everything. Communication becomes more important and more complex. It gets harder to accomplish alignment to achieve real focus and solid results.
Remember, many businesses begin with a great idea, but many fall apart because the entrepreneur is unable to implement or sustain the operating strength of that idea over the long haul. This program is about achieving good, sustainable results in a growth environment.
Speaking of businesses that fall apart, what are the most common pitfalls to growing a business that this program will teach you to avoid?
From my experience, there are two.
1) Outgrowing your capital.
This certainly includes economic capital but it can mean other forms as well, like outgrowing your human capital.
2) Falling prey to ill-defined and uninformed opportunism.
It’s important to be careful about not following too many opportunities to distraction because that can lead you away from your core competencies. Whether it’s your own capital or capital you raise from others, you have a responsibility to use the capital as you indicated. Getting away from your core strength can sound the death knell of a business. That doesn’t mean you can’t look at other things, or consider other options, but that’s “informed opportunism.” Stay focused and don’t get distracted by every opportunity. Straying from that core pulls you away from your commitment to such considerations as time, money, and other resources.
Considering all your business experience, what will you personally teach and contribute to this program?
My primary function will be to facilitate learning not only from the Program Faculty to the participants but also across the participant group. In addition I will be talking about strategic elements of competitive analysis, looking at tools to understand competitive forces and how to make sound choices in complex and changing competitive environments. Sometimes your competition isn’t even the guy in the next town, but rather it’s the alternatives to your product or service that are available to the customer. The goal is to make your product or service so uniquely valuable the customer can’t resist your proposition.
Everyone knows entrepreneurs are constantly investing their time and capital into their business. Why should entrepreneurs make this kind of investment in their education/development?
Weatherhead has an established track record of ensuring a return on investment for education that is solid and very good. I have a pretty rational style and if that were not the case, I would not have invested so heavily in my own education at Weatherhead. This program capitalizes on that track record of success. It goes beyond the classroom to provide an equally important, experiential component to knowledge creation. Each program participant will identify and hone in on a specific opportunity or challenge facing their business, and spend the next seven months supported by business coaches and their peers to develop a strategic solution to that challenge. We have an outstanding group of professional business coaches, including experienced consultants and practitioners, to provide ongoing support and feedback as entrepreneurs sort through challenges.
From my own experience at Weatherhead, I know this process creates solid experience that develops skills that can be transferred to other challenges. You can’t beat that combination of knowledge and practice. These projects are expected to return real dollars to the business. We are doing something wrong if the investment in this program doesn’t return 5-10 times the overall program investment.
That's a powerful statement. In the end, then, what 3 major messages do you hope this program gets across?
First, haphazard and poorly founded growth is not sustainable even when it might outstrip early forecasts. To be sustainable and successful, entrepreneurial businesses require a vision, a well thought out strategy, a structure that makes the strategy executable and the leadership skills and discipline to bring all of the elements together.
Second, because entrepreneurs typically spend so much time on their own businesses, they sometimes lose perspective on the big picture or their perspective is too narrow. This program provides interaction among entrepreneurs from a cross-section of industries that will facilitate the sharing of practical solutions across a wide range of issues and problems. While we know that an idea that works in, say, a food service business may not have direct applicability to a product business, if we look at the core issue beyond its simplest form, we often find lessons in one that can be transferred to the other.
Most important of all, successful entrepreneurs don’t go it alone. Over the course of these seven months, entrepreneurs will develop real relationships with a network of other entrepreneurs, faculty and practitioners to provide them with perspective, answers and support. That’s hugely important to the success of entrepreneurs and essential to having a good business over the long-term. I can’t stress enough the powerful knowledge network that these participants will gain from this experience.
For more information, to schedule an informational interview with Ron Fountain, or to apply, please visit: http://weatherhead.case.edu/exed/ent/, email: firstname.lastname@example.org or call: 216/368-6413. The deadline for submitting an application to this program is December 15, 2006. Program starts January 25, 2007.