Cranfield Masters In Management Lecture
On the 1st Nov I was fortunate enough to walk through a few slides on exit with a great bunch of full time MBA students at Cranfield.
What was super value adding, certainly for me, was a great discussion about liquidating the business and the thoughts of what drove, psychologically, this decision. The cohort had just done some term sheet work for additional funding and this flowed rather nicely into exit, with the principals being broadly the same. Especially in negotiation with PE or VC’s.
We chatted primarily around the harvesting and stewardship models and the really good exit definition by DeTienne, “the process by which the founders of the privately held firms leave the firm they helped to create; thereby removing themselves; in varying degree, from the primary ownership and decision-making structure of the firm” (DeTienne, 2010 p. 203).
As an exercise we had a chat about that black box above and came up with two schools of thought. The first school was a gradual process of activity that may lead to exit and burnout was a highly popular answer amongst the students! Also in that school was planning, as in it was part of a process, declining into poor health, a retirement option and an MBO, amongst other great ideas. The second school looked at things that may be considered to falling outside the planning and gradual process mechanics. Suggestions such as a death, a resignation, a serious sudden illness, a global pandemic, a recession and a government intervention were all schools of thought regarding a shock mechanic. Which was helpful for my ongoing research!
Time wasn’t overly our friend but we did start to explore internal and external factors that might influence the different schools of thought. As a group we identified that it was far more likely that external factors were more likely to result in a decision to exit than internal. Certainly an avenue for Exit Motivations and Cranfield University SoM is to look to design education programmes that may prepare an entrepreneur for unexpected factors that may expedite the exit process and how these could play a part in motivations for exit.
I’m certainly already looking forward to our next session and the help it gives my personal thought process in my favourite subject area.