Field of Dreams
Lyons Helps Entrepreneurs Reach The Major Leagues
By Todd Wetzel
Before he opened his janitorial business in 1989, John Perry II was at a crossroads.
He had worked for more than 10 years in the restaurant business, enduring long, odd hours. But things were different now. "I was getting ready for the birth of my second child, and I realized that if I stayed in the restaurant industry my children would never see me," Perry recalls.
After he "fasted and prayed" over his decision, Perry started Dirt Busters Janitorial Service in Barboursville, W. Va.
For years he operated primarily by word of mouth and advertising in the Yellow Pages. His business grew but under no organized plan. Perry's restaurant years gave him plenty of managerial experience, but he lacked entrepreneurial know-how.
One day an acquaintance told him about the Advantage Valley Entrepreneurial Development System Collaborative, a local organization that incorporated a system created by a University of Louisville professor.
That day would change the way Perry looked at his business.
Making The Matrix
Using 18 years of research, Thomas Lyons, the Fifth Third Bank Professor of Community Development, and Gregg Lichtenstein, president of New Jersey-based consulting firm Collaborative Strategies, developed the Entrepreneurial League System (ELS) to help streamline "enterprise service providers"--such as business incubators--and rate entrepreneurs based on their experience and knowledge.
|
Lyons became interested in the topic while studying for his doctorate in urban, technological and environmental planning at the University of Michigan in the mid-1980s. At the time, business incubation was a new concept being adopted nationwide. How this affected the growth of upstart businesses became a prime research topic for Lyons when he moved to Michigan State University's Institute for Public Policy Research.
He met Lichtenstein a few years later while serving on the research committee of the National Business Incubation Association.
"We found we were mutually interested in incubation--the concept behind pooling resources and risk to enhance entrepreneurship opportunities for success," Lyons says. "We wanted to see how regions and communities that did not have any cohesive plan for economic development could pool their resources to leverage the concept into something bigger."
During the course of their research the two discovered a major deficiency in how entrepreneurs' needs were being addressed.
"It was not enough just to have the resources available for entrepreneurs," Lyons says. "We needed to find a way to help them build the capacity to use them to their full benefit."
Over several years, Lyons and Lichtenstein interviewed more than 100 entrepreneurs and studied dozens of service providers nationwide. They identified the resources entrepreneurs need to succeed and pinpointed the obstacles that keep them from accessing those resources and realizing their full potential--everything from lack of availability to complicated paperwork.
Next, the two compiled a list of 114 business incubator practices and then assigned each to one of 36 combinations of entrepreneurial resources needs and obstacles. Their matrix was met by the business community with enthusiasm, yet there was more work to be done, they soon learned.
"They did not have a context to use the matrix," Lyons explains. "Until we provided that framework, the matrix was just an interesting way to think strategically about entrepreneurial needs."
Play Ball!
In subsequent research Lyons, and Lichtenstein discovered two more obstacles to entrepreneurs meeting their goals.
|
First, business incubators and others who assist entrepreneurs often offer competing or fragmented services. So while the entrepreneurs might get initial help, often they are turned loose before they're ready to be on their own.
Second was getting word out to the entrepreneurs about all the organizations that could help them--often, the organizations were not even aware of each other.
Lyons and Lichtenstein also recognized that skill levels vary greatly from one entrepreneur to the next. So with the help of a Northwestern University psychology professor, they developed a set of questions for assessing the levels.
This questionnaire became the first step in the ELS. Once an entrepreneur's skill level is determined, a level is assigned that mimics those of Major League Baseball's farm system (Rookie, Class A, Class AA and Class AAA). The entrepreneur is then matched with a service provider appropriate to the level and assigned to a team made up of others at that level. The team members offer support and bounce ideas off one another. In addition, each entrepreneur is provided with a performance coach, who helps her or him to become focused regarding business goals.
When the entrepreneurs master one level of skills, they are "promoted" to the next level and are matched with service providers that can provide them with the assistance that is appropriate to that level at a price that is equally appropriate.
"What we've discovered is that entrepreneurs classified as rookies and Class AAA often find funding and technical resources that are readily available," Lyons says, "while too often entrepreneurs in the middle slip through the cracks.
"We are trying to lay the groundwork for a pipeline of opportunities that are funded through the entire process of developing a viable business."
Lyons tested his system locally when Louisville Metro Government asked him to help assess the city's minority enterprise assistance programs. After reviewing the local service providers who actively market programs for minority entrepreneurs, Lyons suggested that they form a network to better promote themselves.
He also recommended that the Metro Development Authority's Business Resource Center serve as the entrepreneurs' entry point by assessing their skill levels and directing them to the appropriate provider.
Verna Goatley, the center's manager, says the network of minority business service providers is going strong. "The lines of communication between our organizations are open like they never were before," she says.
"We now have a better idea of what programs and services are offered among our agencies and can better track entrepreneurs' progress as they enter the system."
Having the network helps create continuity when programs change or are discontinued, Goatley adds. For example, when one organization recently lost its funding and had to close, another member was able to take over its services with little disruption.
"This system helped us realize that we are not competitors, we are partners," Goatley says. "It has helped us move 200 people through the system smoothly each month and make sure they are getting the help they need, regardless of which agency is providing the help."
Advantage Valley
With the pilot ELS program a success, Lyons began looking for an opportunity to fully implement the system. He found it in Advantage Valley, an area that includes parts of West Virginia, Kentucky and Ohio.
Initial attempts to stimulate economic development in the region focused on luring in outside businesses.
"For many years, political and business leaders in our area thought that to have 'good' jobs, there had to be large employers," says Gayle Vest. Vest is managing director of Advantage Valley Inc. (AVI), an economic development agency serving the area. "There was a focus on recruiting big businesses to spur economic growth, and it just was not working."
Eventually, Vest learned of Lyons from a group of entrepreneurs who had heard him speak at conferences. "They were really interested in the things he had to say. That carried a lot of weight with me," Vest says.
Lyons and Lichtenstein were brought in to implement ELS, funded by a $375,000 grant from the Claude Worthington Benedum Foundation. Mark Burdette, who had built a successful telecommunications business in the area, was hired as general manager of the resulting Advantage Valley Entrepreneurship Development System Collaborative.
Burdette is a firm believer in the ELS approach, as he attributes the success of his own company to the two mentors who helped guide him and his business partner.
"After I sold the company I didn't have a really good plan to map out what to do next and I felt really alone," he says. "I remembered what kind of help our mentors gave us, and I told myself that some day I wanted other people to experience what I experienced."
Earlier this year, the Advantage Valley ELS was one of only six applicants--out of 183--to receive a $2 million grant from the W.K. Kellogg Foundation, established to foster entrepreneurship in the nation's rural regions.
In addition to Advantage Valley, the ELS program has helped minority-owned garment businesses in Johannesburg, South Africa, and laboratory technology commercialization in the Johnstown, PA., region.
"Although the focus of the system is entrepreneurship, I believe it could also be applied to what is called 'intrapreneurship,' in which corporations spin off businesses," he says. "Nimbleness is important in the global economy, and large corporations need to use entrepreneurial thinking, but is a larger context."
In its current form, many entrepreneurs find that the ELS has given them new insight into their businesses--John Perry among them.
"After taking part in the ELS," he says, "I finally figured out that Dirt Busters was not a cleaning company; it was a hiring company. ELS helped me focus on what is really important in building my business. Your company is only as good as the person who is out there doing the work for you."
