The secret of conjuring local enterprise

I must admit that McKinsey is my least favourite management consultancy. I’ve got nothing against their very clever staff and consultants, but they seem to me to be let down by the culture and tradition of the place, which gets in the way of seeing the world as it really is.

On one hand they are always chasing after the latest fads and buzzwords (a failing of all management consultants). On the other hand they remain locked into an archaic framework for understanding the way organisations work, including the so-called McKinsey Fallacy (Everything can be measured and what can be measured can be managed: false, see my book The Human Element).

But I read their latest offering with great interest – because it is relevant to the question at the heart of the project I am now running through the New Weather Institute. It is about how cities can create an entrepreneurial culture of start-ups and small business.

There is a basic contradiction in their coverage. They say that Berlin is an example of a city which is doing it right without government intervention, but then devote the next article to an interview with the mayor to hear how he did it.

They then articulate a very interesting idea – the start-up delivery unit – run from a mayor's office and designed to work closely with entrepreneurs and to bust barriers for them. It is flexible, imaginative and fast-moving, everything that an organisation re-designed using the McKinsey Fallacy tends not to be. And it is one of the ideas behind Berlin's entrepreneurial success.

These units are usually linked to venture capital. We suggested something along similar lines in the last Lib Dem policy on sustainable jobs – a new kind of institution, linking local finance with local entrepreneurial support, mentoring and coaching. 

But that obscures the perennial problem with the McKinsey approach. It doesn't see any further than the trendy world of tech start-ups, important as they are.

In fact, this is an approach that needs to be tested out much more widely, certainly in regional cities rather than just capital cities – wherever there is entrepreneurial potential (everywhere) and wherever there are problems to be solved (everywhere).

The late, great Anita Roddick used to define entrepreneurs as people who could see the world differently. She was overwhelmingly right.  The difficulty is that these kind of people are not always very adept at starting businesses or social enterprises - and they need more personal support than the ubiquitous tick-box approach of Business Link favoured by the last Labour government.

As the McKinsey article suggests, these units need to be extremely small and very flexible.  Like the BizFizz enterprise coaching scheme, they need to be active in the poor areas as well as the tech hubs. 

Like Community Catalysts achieved in Nottinghamshire, it needs to be the right person in the right place to encourage new micro-enterprises to carry out social care contracts in a more humane way.

This is the new localism question: what kind of institutions do we need locally to encourage entrepreneurs at local level?

It isn't about the latest silicon roundabout, for goodness sake.  It is about how to inject new life into moribund economies and moribund outsourcing.