Enterprising thinking: US vs UK

At a time when major global markets are shifting, Exec Digital looks at how each Western business approach is adapting with it.

What are the differences between the US and UK entrepreneurial approaches? The answer is clearly rooted in generalisation, however keen we are to adhere to stereotypes. But at a time when most nations are united in the collective woe of a turbulent economic climate, it is perhaps more relevant than ever to home in on ways each nation thinks about business; to pool the intellectual resources from each side of the Atlantic to put us in a position to weather the varying storms of recession.

And weather them we will, according to Ross Wilson, of business advisors Tenon. “Any recession is going to come to an end – it always does,” he says. “Those companies that continue to invest in marketing, training, and getting best value for money will still do well.”

Wilson’s years of dealings with UK entrepreneurs has created for him a generic, catch-all profile of the British tycoon. Advising so many faces has produced a montage of profiles but a singular national business identity. The principle characteristic of this identity, however, demonstrates the shortcomings of the UK education system compared to the US rather than a culture of encouraging an enterprising outlook.

“I don’t think young people in Britain have any exposure whatsoever to entrepreneurship at an early age,” he says. This point is supported by Hiscox’s recent DNA of an Entrepreneur study, which found that 61 percent of small business owners in the UK felt that the education system does not encourage individual ideas and dreams – against just 35 percent in the US.

Wilson continues: “In America, entrepreneurs establish themselves sooner because of the whole American culture. They push public speaking at a young age. They learn to communicate better, sooner – and they have great role models. Aside from Richard Branson and a couple of others, there are much fewer entrepreneurs in the UK who are recognisable names.”

ROLE MODELS

Perhaps, but there is an argument that the big business names in the UK are more understated. For role model status, John Leigh, Managing Director of Europcar UK and National Car Rental, fits the bill. A legendary figure in the industry, Leigh has manoeuvred the brand into the global arena through dedication and graft. With the former Eurodollar being acquired by Florida-based car rental giant A and C Rental Corporation, Leigh was exposed to an expansion plan born of intrinsically American values – and saw the whole enterprise begin to soar to new heights.

“At the time of the takeover the Americans were driven by a fast-track vision – perhaps unlike what you see in Europe,” says Leigh. “They saw a window of opportunity in expanding and looked to do it within a certain space of time. From a UK and Europe perspective, however, I think there is more due diligence and more time taken before completing deals.”

This rather British trait of cautiousness is an observation of American venture capitalist and entrepreneur Vinit Nijhawan, former CEO of Kinetic Computer Corporation and telecoms businesses, and an academic at Boston University. “The one place I would fault British and European entrepreneurs is they have a real fear of coming into the US; somehow they feel that breaking into America is costly and difficult and they are always hesistant to do it until they’re strong in their home markets.”

Expansion plans of American enterprise in general show no such signs of caution – the Hiscox study found that 69 percent of US entrepreneurs state they will continue to grow their businesses despite the economic downturn, compared with just 52 percent of UK firms.

So are British leaders more hesistant to take risks in this uncertain climate, or are they just prudent? Leigh continues: “Even if you have companies with plans to grow, most of that would have required some additional funding. Some companies have a cash mountain to draw on – but usually that is not the case. Especially now, you have got this anxiety of trying to grow while simultaneously trying to protect the profitability of what you’ve already got.”

EASIER ACCESS TO CAPITAL

The ‘cash mountains’ of which Leigh speaks can be said to be more prevalent in the US, where there is much easier access to capital by way of venture capital, angel funding and public financing.

Serial entrepreneur Suneet Singh Tuli has done business in both countries. He says: “The ability to raise capital, and to re-start if you fail gives entrepreneurs better opportunities in America.”

But Tuli sees a different side to the aspirations of each nationality. He continues: “My experience, having worked both in the UK and US, has been that British entrepreneurs have a much more global outlook. The US market is so large, that many companies grow to very large sizes without ever venturing out. Successful entrepreneurs in the UK thrive because they have the ability to function in many more markets.”

But over the last few years a shift in attitudes has been occurring. As Nijhawan acknowledges, US firms have begun to realise that theirs is no longer the biggest market for every commodity. “A startup today, from day one, has to be thinking about markets outside of the US,” he says. “In telecom, the reason I started looking at Europe was because America wasn’t the biggest market for innovation in the field. It lost that first to Europe and now to Asia. Even if you’re not selling globally, your next big competititor could come from overseas, so the companies that I’m involved with are all global today and, as a result, I don’t think are going to have significant impact from the US downturn.”

The consensus on both sides of the Atlantic, then, is that thinking global is a major priority – it is the manner in which this is executed that defines the approach. Each country has different stumbling blocks – hampering tax issues for the British, Americans perhaps being too aggressive with their growth strategy at a time when restraint may be more appropriate. But the reason the two countries enjoy a strong relationship is their interaction between and influence of each other to cater for the increasingly challenging global entrepreneurial arena.

Written by Ben Lobel
http://www.execdigital.co.uk/