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Dr Kevin Mole, Warwick Business School. Outline of the Slides Two levels of analysis – The organization – broader or deeper? – The adviser – skills or.

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Presentation on theme: "Dr Kevin Mole, Warwick Business School. Outline of the Slides Two levels of analysis – The organization – broader or deeper? – The adviser – skills or."— Presentation transcript:

1 Dr Kevin Mole, Warwick Business School

2 Outline of the Slides Two levels of analysis – The organization – broader or deeper? – The adviser – skills or relationships Using data from Business Links – evaluation survey of 3500 firms Previous categories of BLOs – 40 first interviews Four types of BLO Evidence on their effectiveness from main survey of Business Links The first meeting

3 Context The research was part of the SBS funded Economic Evaluation of Business Link In Business Links network model of 2001 there were local franchisees. Business Link Organizations (BLOs) SBS wanted to explore the different features of the local Business Link Organizations in order to make some assessments about good practice

4 Resource Dependency Theory In resource-dependency theory, the firm exists within a network of interdependencies composed of multiple interest groups (Pfeffer and Salancik, 1978). To govern a firm, managers have to control its internal and external environment to manage and stabilize these interdependencies (Fligstein and Freeland, 1995). Rather than fit with the environment; managers actively influence their environment. They do this by trying to reduce their dependence on external sources. Managers gain the power to manage.

5 Clustering the models BLOs were cluster on the basis of four categories; – The way in which the business decisions were made – Related to the cost per intervention, – The proportion that came from the SBS and EU – The Proportion of Intensively assisted clients. Cluster models could be used to classify the BLOs

6 Mole: Four models of brokerage High Proportion of Intensive Assistance Low Low High Intensity of Assistance Pipeline Forcing Light-touch Brokerage Managed Pipeline Forcing Brokerage Managed Brokerage

7 Clustering Managed Brokerage (cost per intervention, %SBS funding etc) Cost per intervention

8 Support Service Profile For intensively-assisted firms, significant differences were evident between the profiles of BLO assistance. The key differences between the four models of BL assistance/BLOs were: – Managed brokerage BLOs were most likely to be providing intensively- assisted firms with business planning assistance or action plan development – Help with raising finance was also most likely to be offered by managed brokerages; – Managed brokerages and BLOs operating both managed brokerage and Pipeline Forcing managed pipeline forcing brokerage were most likely to be providing assistance with e-commerce and IT.

9 Impact Coefficients in Regression Models of Employment Employment Growth Coefft-stat A. Intensively-assisted firms Light-touch0.0252.757 Managed Brokerage0.0694.117 Pipeline Forcing0.0181.275 Managed pipeline forcing brokerage0.0351.754

10 Significant impacts were found from three of the four types % increase

11 The significant impacts from the different types of BLO Figures in brackets show Intensively assisted firms get a 2.5% boost to employment from a light touch model 1 BLO. On employment growth – Intensively assisted firms - Light-touch (2.5%) and managed brokerage (6.9%) On sales growth – Intensively assisted firms – managed pipeline forcing brokerage (9.4%) – Other assisted firms – light-touch (weakly 5.5%) On sales per employee – Other assisted firms – light-touch (7.2%)

12 Mole: models of brokerage and impact High Proportion of Intensive Assistance Low Low High Intensity of Assistance Pipeline Forcing Light-touch Brokerage Managed Pipeline Forcing Brokerage Managed Brokerage Employment Sales Sales per employee

13 Broader is not better We can cluster BLOs on the basis of their management decisions. Crudely we find that some BLOs aim to provide more depth to their assistance whereas others aim to intensively assist more companies. Most operate a light-touch approach. Those Business Links that provide the most intensive assistance have th strongest effect on jobs those that seek to increase the proportion of intensive assistance have great variation in the impact making no significant impacts. In terms of the number of significant impacts – light touch brokerage seems to provide a reasonable impact. There are impacts from non-intensive assistance also weakly on sales but also on sales per employee. The evidence is consistent with the suggestion that the selection into intensive assistance by clients is important.

14 Influencing clients in the first meeting First meeting critical (Bennett and Robson 2003) Business Link moved towards Information, Diagnostics and Brokerage (IDB) (theory from Turok and Raco, 2000; Hjalmarrson and Johansson, 2003; Lambrecht and Pirnay 2005) Financial pressures compressed these diagnostics into the first meeting

15 …this brings up issues.. Trust – how does an adviser get to the heart of a business problem in 67 minutes? (Meyerson, Weick, and Kramer 1996) Power – do you need to share power to get buy-in? (Schein, 2002)

16 Methods The research was based on an analysis of 41 first diagnostic meetings between adviser and client taped by all 17 advisers working in a Business Link. The clients that advisers worked with were: – 4 recent start-ups – 15 companies were struggling – 2 companies were in exceptional circumstances – 15 companies were growing slowly – 5 companies were very high growth and high growth potential; two were AIM listed

17 Methods and Analysis Advisers were not able to predict whether this would turn out to be a good meeting or not. These were live meetings, not a drill The evidence presented was subject to the assessment of two qualified colleagues who performed the same task and a consultant whos expertise was in this area (and had experience)

18 Criteria used in the study CriteriaDefinitionRelated to Concept in table 1 1 BreadthWas the meeting wide-ranging enough to uncover the major needs and check for problems in the key functions? Agency of both agents and process used by business adviser 2 DepthDid the adviser user deeper question when a topic merited it and develop a view of causes? Agency of adviser 3 Data sufficiencyWas the adviser soliciting factual performance and market data to supplement opinions and self assessment by the client? Trust of adviser by client 4 Quality of Questions Were the questions penetrating when they needed to be? Were they phrased and sequenced effectively? Advisers process

19 CriteriaDefinitionRelated to Concept in table 1 5 EngagementTo what extent was the client engaged? Demonstrated by: active participation in the conversation, speculating (rather than just imparting information), asking the adviser questions, expressions of enthusiasm and tone of voice. Trust of adviser by client 6 ActionsTo what extent were actions described in SMART terms? What firm verbal agreements were made? How enthusiastic was the client about these agreements (indicated by the client adding or modifying details and by tone of voice)? Outcome 7 Reported Satisfaction It was customary for the client to either volunteer or be asked whether they were happy with the meeting. To what extent were they? Outcome

20 CriteriaDefinitionRelated to Concept in table 1 8 Pressing problemDid the issue that caused the firm to seek advice require immediate attention? Structure of client 9 PreparedDid the adviser ask the client to prepare information for the meeting and did the client do so? Confidence, agency of adviser 10 StructuredWas the meeting structured with a set agenda focused on the issues at hand? Confidence, agency of adviser 11 Adviser under pressureWas the adviser under pressure from their organization to deliver an output? Structure of adviser 12 CandidWere the responses to the questioning candid? Agency client 13 Agreed actionsWas the outcome of the meeting a set of agreed actions? Outcome

21 CriteriaDefinitionRelated to Concept in table 1 14 Adviser Influential Did the client believe that the advisers conversation make a difference to the way that the client thought about their business Outcome 15 PowerWas the power in the hands of the client, the adviser or shared equally? Agency of adviser and client 16 AirtimeThe proportion of time that the client and adviser talked in the meeting. Agency of adviser and client (Swift trust, Meyerson et al. 1996) 17 Previous performanceDid the firm seeking advice have a successful previous performance? Structure of client

22 What constitutes a good meeting? 1 BreadthWas the meeting wide-ranging enough to uncover the major needs and check for problems in the key functions? 2 DepthDid the adviser user deeper question when a topic merited it and develop a view of causes? 3 Data sufficiencyWas the adviser soliciting factual performance and market data to supplement opinions by the client? 4 Quality of Questions Were the questions penetrating when they needed to be? Were they phrased and sequenced effectively? 5 EngagementTo what extent was the client engaged? Demonstrated by: active participation in the conversation, asking the adviser questions, expressions of enthusiasm and tone of voice. 6 ActionsTo what extent were actions described in SMART terms? What firm verbal agreements were made? How enthusiastic was the client about these agreements (indicated by the client adding or modifying details and by tone of voice)? 7 Reported Satisfaction It was customary for the client either volunteer or be asked whether they were happy with the meeting.

23 Criteria Met? NumberPercentage Met all criteria for a good meeting921.95 Met more than half the criteria2868.29 Met fewer than half the criteria49.76 Total4199.99

24 Particular differences were found in the way in which the process of the meeting was managed. Preparation for the meeting Preparation by the client Managing the meeting Managing the conversation

25 Growing or struggling firm made little difference to the advisers influence Adviser Influential Adviser Not influential Total Growing firm91221 Struggling firm51015 Total142236

26 When the client had power the adviser was not influential Adviser Influential Adviser Not influential Total Adviser or balance of power 13720 Client has power 41721 Total172441

27 Ragins Qualitative Comparative Analysis (QCA) Ragin (2006) argues that much of our concepts in social science are composed of sets: the set of males, the set of experienced managers, the set of business owners. The primary objective is to show how an outcome is the result of a combination of causal conditions

28 Ragins Qualitative Comparative Analysis (QCA) Ragin (2006) argues that much of our concepts in social science are composed of sets: the set of males, the set of experienced managers, the set of business owners. The primary objective is to show how an outcome is the result of a combination of causal conditions

29 Crisp set QCA Causal conditions (as variables are known) are categorised with values of either 1 or 0. These categories are developed into a truth table, which lists all the combinations that are possible Having identified all the possible outcomes, QCA uses a Boolean algorithm to reduce the causal conditions to those that are necessary and those that are sufficient to result in the outcome (Ragin, 1987).

30 Sufficient combinations for an adviser to be influential Raw coverage Unique coverage Consistency Pressing problem, client prepared for meeting, meeting well structured, adviser NOT under pressure.5294.29411.0 Pressing problem, client prepared for meeting, meeting well structured, and the meeting was deep.2941.11761.0 High social rapport, client prepared for meeting, meeting well structured and deep meeting.2941.11761.0 Pressing problem, with high social rapport, meeting well structured, adviser NOT under pressure.2941.05891.0 Solution coverage.8235 Solution consistency1.0

31 QCA Four ways to the influential adviser The Influential Adviser Pre Well-structured meeting Adviser not under pressure Social Rapport Candid Responses Pre Pressing Problem Client Prepared Social Rapport Pre

32 What happens in the first meeting The adviser can be influential when there are a combinations involving a pressing problem, client being prepared advisers not under pressure, a well-structured meeting, social rapport and candid responses

33 Discussion How does business adviser gets to the heart of a business problem in 67 minutes? – Those meetings that went well were where the client had a pressing problem and the adviser conducted a business-like meeting What is not important is of as much interest as what is – The relative power of the client was better kept in check – Advisers were as influential with high growth businesses as with struggling start-ups

34 Conclusion The way to good outcomes from advice is for organizations to let the private information work with the programme – Only the SME managers know whether they have a pressing problem – Once you are working with a firm then they may work on other elements more deeply Outcomes from advice are produced by changes in the way SME managers behave


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