Theoretical Insights Provided by RO Concepts in Understanding Entrepreneurial Work

Speaker A You are about to hear a presentation that we have called Small Entrepreneurial Organization long Term Growth and Sustainability Ro Concepts applied as consulting tools to facilitate entrepreneurs tasks. This presentation deals with the development of some tools and concepts used to help entrepreneurs achieve a degree of sustainability and growth in their small entrepreneurial organizations. These tools and concepts are the result of more than 30 years of experience working with entrepreneurial organizations in the field of consulting the incorporation and application of the Requisite organization and of other theoretical developments such as those developed by Schumpeta, Drucker. Luca Pacioli and others the direct contributions of Dr. Jacques and Catherine Kason the contributions of other colleagues such as Dr. Aldoshlemensen and Dr. Emmerich Solomassi, among others. Before beginning, I would especially like to thank Ken Shepard, who encouraged me to prepare and participate in this material and Don Folk and Robin Rutili, who will be in charge of coordinating this session. The presentation has been structured along four main axes. First, the elaboration of theoretical concepts regarding SEO and the quadruple role of the entrepreneur founder, stockholder, member of the association executive board and chief executive of the organization. Second, Ro concepts that can be applied to the SEO and the entrepreneur three cases and testimonies of entrepreneurs in Argentina, 1986 to 2005. And fourth, the consultant role in the Small Entrepreneurial organization. As the first two issues of this presentation are closely related, we'll begin by discussing them simultaneously. They are the SEO concepts and the application of the Ro concepts. Recalling one of the first concepts proposed by the Requisite organization we find that there are two clearly defined spaces within our organizations. The superior space corresponds to the association and the lower one is designated for salaried work. Dr. Jack's theories allow us to systemize an organization's work beginning at the top with the CEO right down to the company's lowest ranking employees. This generates an organization of pairs of bosses and subordinates which can execute the daily workload and carry out the organization's objectives. This organization, which will be led by this individual has been created by the so called members of an association. These people are the ones who have decided to undertake what in economic terms is known as risk investment. The members of this association make up the governing body of the organization and it is this governing body which in turn is in charge of making sure that all the daily work that has to get done gets done. Typically, this governing body is called the board of directors and is made up of the members of the association which in economic terms are referred to as the shareholders. The shareholders are those who will provide the initial capital with which to undertake the tasks that the executive organization led by the CEO must then carry out. These shareholders must choose what form of governing body they want for the association and the association, in turn, designates the CEO who will be the salaried individual. Let's take a look at the three existing types of economic work enunciated by Jax. The first type of work is the one done by the shareholders known as shareholder work. Let's call this t one. That is, work done by shareholders. The second type of work is the one done by shareholders working as members of the association in its governing body. We will call this kind of work T Two. And the third type of work is the one we find in all areas where wage earning occurs. This category covers all ranks in the organization from the work done by the organization's highest authority to the menial task handled by those on the lowest rung of the career ladder. This. We will call t three. These, then, are the three kinds of work as understood in economic terms. Another interesting point is to understand exactly what Dr. Jacks called entrepreneurial work. For Dr. Jack's, entrepreneurial work is, above all the one done by the shareholders who are the ones that have decided to risk their capital and secondly, the one done by the members of the association's governing body. Both these forms of work, T One and T Two are the ones we will call entrepreneurial work while the kind of work known as T Three is the one done by the structure of subordinate managers all of them without any exceptions. Now, let's consider the idea that any independent worker that is, someone not working as an employee also does these three types of work in his ongoing activity. That is, he risks a certain amount of capital he governs himself and he does wage earning work. But this independent worker who does these three kinds of jobs does not lead an organization. And it is precisely this organization which we will be discussing today. Let's look now at this entrepreneurial work that gives rise to these organizations. Within this entrepreneurial work which is the essence of small business we'll find an entrepreneur or businessman who has decided to risk a certain amount of capital and to do the kind of work the kind of work we've called T One which here was done by the shareholders. At the same time, this gentleman will also do T Two work. This T Two work is the domain of the organization's yes, of the organization's governing body. And on top of all this, this entrepreneur will also do the work reserved for the organization's top executive. That means T three type work. Fine. Now, as any of us will intuitively realize initially at the start of his undertaking he will not have sufficient work so as to be employed full time. As a result, he'll start to dedicate his time to some other task perhaps in the field of production in a service area or maybe in the marketing or selling of the product or service. It is to note that this entrepreneurial individual that we're referring to has a vocation and at the same time takes pleasure in what we call substantive technology. Let's have a look at this example. This person was very possibly a salaried MD. A medical doctor within a large organization. And as a result of his growing skills, one day he decides to invest and risk some capital either on his own or perhaps with a partner. He then sets up an organization which he himself will lead. He then works there in the same way he did at the hospital attending patients. We can consider this his production area. So let's just review his situation. This gentleman spends most of his day working as an MD attending his patients. He dedicates a small part of his time and his work to leading his organization, which is made up of a few other MDS and perhaps an administrative assistant. Together with his partner, they'll be part of the organization's governing body and will have decided to invest and risk a certain amount of capital to undertake this enterprise. Capital what happens when one observes these organizations in large organizations? Please allow me at this point to make this distinction any person working for a salary understands that a governing body exists and that the shareholders also exist be they or not on the board of directors. The amazing thing that we have noticed, and which possibly is one of the tools a requisite organization uses to assist these businessmen in their work is the fact that when one works with entrepreneurs everything they see and think about is located at the organization level or below. This means that they see themselves as part of a two tier organization. I'd like to insist on this .1 of the fundamental tools in consulting when working with entrepreneurs is to help them identify and distinguish between the existence of two additional forms of work. The first is the work done as a member of the organization's governing body that is, on the board of the directors. And the second, the other job they have is also as a member of the organization, but strictly as shareholders. These two types of work which we have called T One, t Two are not visualized, are not thought about, are not identified by the founder businessman this person who, right from the start, as Schmper would say, uses his instinct to create an organization and a company there where previously there was nothing, only sees the everyday work he does. That is that work which begins at the top, at the point of highest accountability and then continues to a lower point where the work must be executed or the service rendered. So it becomes quite clear that when the organization first starts to exist at its birth the only thing that this individual can visualize is the existence of a two tier organization which is the focus of our presentation the entrepreneurs or businessmen's small organization shin.