Now that The Apprentice has shifted its format from hiring employees to finding a business partner, I find it impossible to not draw comparisons with Dragon’s Den. Most of you will be familiar with Dragon’s Den: it consists of a panel of self made millionaires/budding venture capitalists who look to identify, fund, and support the growth of an entrepreneurial start-up business. Over the course of each episode, the ‘Dragons’ as they are known are faced with a cross section of hopeful entrepreneurs, who are seeking investment. The Dragons question, probe, rebuke, refuse and on some occasions invest.
With The Apprentice having moved into a venture capitalist as opposed to an employer format, it is interesting to note that Lord Sugar has not substantially changed the selection process from that which was used to recruit employees. This approach is what we in the HR trade might call an ‘Assessment Centre’. In assessment centres, the potential candidates are observed and rated while performing a series of competitive individual or group tasks usually based on real working situations that they might face in the course of the job.
At first, I was critical of The Apprentice producer’s decision to continue with assessment centres, but on reflection I see the advantage of this approach over the Dragon’s Den approach. Lord Sugar basically gets to see how his future candidates will perform in a range of pressurized but pre-engineered business situations over a 3 month period, which provides him with insight into an employee’s potential future behaviour. We can see the benefits of this foresight in week 5 of The Apprentice.
Take Team Venture led by Glenn; they took calculated risks with the money available to them based on commercial data. Their marketing thesis was based on research data which suggested that nearly half (43% according to the telegraph) of UK cats are overweight. They then used this market research to design a dietary pet food product, called Catsize.
Team Logic led by Vincent (and Jim) on the other hand appeared to take uncalculated risks with the available money. They ignored the insight provided by focus groups which recommended strongly against a one size fits all dog food products, and in fact created a one sized fits all dog food product called Everydog. Their decision to go against the specialist advice was made worse by the fact that they had no supporting evidence or relevant professional experience to refute the advice they had received or to support or substantiate their own position.
The Dragons, however, are denied this foresight into the potential behaviour of the entrepreneurs in business situations, because the format of their show requires them to assess the viability of a candidate as a business partner, based on an hour pitch and interview. They don’t know if the winning entrepreneur will show the same high level commercial composure and decision making capacity they they did at interview when placed in a real pressurized business scenario.
The Dragon’s Den approach does counter this problem by favouring entrepreneurs who have risked a substantial amount of their own money into their ventures, prior to approaching the Dragons. The thesis here (adopted by lenders in general), is that entrepreneurs who have risked their own money in the venture, will behave much more like Team Venture (taking calculated risks) and less like Team Logic taking blind and uncalculated risks. It is not clear if Lord Sugar is insisting that the Apprentices need to have stumped up their own money in the business, but the format does not suggest this is the case.
So, for me it is not a case of either or. I think that the ability to actually see prospective candidates in real business situations such as in The Apprentice’s assessment centre approach, would enhance the Dragon’s Den process. Equally, however, introducing a greater element of genuine financial risk to The Apprentice selection process, both during the series and prior to the start of the actual venture would enhance The Apprentice’s selection process, increasing both the Dragon’s and Lord Sugar’s chances of finding an effective and true risk-taking entrepreneur.
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