According to entrepreneurship expert Dr. Jeff Cornwall, there’s a lingering notion that “entrepreneurs do not make good managers”.
Serial entrepreneurs with a penchant for going from one project to another, who thrive in the uncertainty and creativity required to start a company from scratch, fuel the stereotype. But the label is just that – a label. Building a company from scratch under extremely uncertain conditions requires not just grit and hard work but leadership skill. Lots of it.
What is entrepreneurial leadership?
Several definitions have been proposed for entrepreneurial leadership since it was first used. But in a nutshell, it’s the kind of leadership that uses entrepreneurial approaches such as risk optimisation, innovation, accountability, and sudden change management to develop employees who can eventually stand on their own in a volatile and dynamic work environment.
In contrast, conventional corporate leadership focuses on systems, processes, and risk minimisation. Especially now that modern businesses must agilely adapt to the demands of a fast-changing market to stay relevant and competitive, traditional, hierarchical management strategies are no longer enough. Business leaders would do well to adopt the mindset of the entrepreneur.
Qualities of entrepreneurial leaders
Research conducted by the Harvard Business School on entrepreneurs revealed three prominent characteristics that distinguished them from traditional managers:
- They thrive in uncertainty.
- They desire to own and author their own projects.
- They can persuasively sell their vision.
They thrive in uncertainty.
Rapid technological innovations affecting just about any industry are the new normal. Where once were phone lines and fax machines are now call centre and communication software installations. Where once were employees in cubicles are now remote workers working from home or in co-working spaces. Where once were constant trips to the library are now Wikipedia and Google Search.
It’s exciting to see what the future holds. But for business organisations, the constant innovation creates a volatile and more demanding market that can prove catastrophic to their very existence.
As such, entrepreneurial leaders recognise that they must be flexible and change with change, gather and listen to feedback, and create and foster a learning environment where employee inputs are valued.
One trait leaders can learn from Bill Gates, for instance is to not “let a core strength turn into a core rigidity”.
They desire to own and author their own projects.
This trait is generally rooted in entrepreneurs’ belief in themselves, a strong sense of confidence brought about by non-stop learning, the ability to embrace failure, and the willingness to assume full responsibility for the negative outcomes of their decisions.
Who doesn’t hate that ‘leader’ who credit-grabs or disappears when things go haywire? Owning your projects, in this sense, is the entrepreneurial leader’s ability to humbly say “It’s my fault”, while finding all means possible to rectify the situation. As business author and speaker Jeffrey Hayzlett puts it, leaders must avoid the victim trap and instead “use every situation as a teachable moment”.
They can persuasively sell their vision.
They may not be aware of it, but entrepreneurial leaders are great salesmen. A good example is Tony Hsieh of Zappos. He introduced the management scheme ‘holacracy‘ in his company in 2013 – or self-management, largely because he “worried that Zappos was becoming more bureaucratic and losing some of its spark”. While the initiative sent shockwaves across the Zappos workforce, leaving some employees confused and demoralised, everyone had a choice. Those who failed to see the merits were free to leave the company.
Hsieh still gets flak for the radical shift but remains steadfast in his vision of “upending the traditional top-down corporate structure”. John Bunch, Zappos’ holacracy implementation lead, insists that holacracy makes people more productive because they can choose work from a well-defined work chart, instead of select a job description or role from an organisational chart.
Bottom line: entrepreneurial leaders possess the ability to effectively communicate their vision and rally their troops toward a common goal.
While the idea of entrepreneurship in the workplace seems to present a dichotomy, the overall effect is a more dynamic, committed workforce ready and willing to help the company navigate through the most turbulent economic periods. That is what great leaders inspire, after all.