 "The challenge for new leaders")
Entrepreneur: a person who organises and manages any enterprise, especially a business, usually with considerable initiative and risk.
Leader: a person who guides or directs a company.
These are just meanings from the dictionary. But are the two roles so different from each other? Why do entrepreneurs think that leading the operations of someone else's company is so much easier or different?
Whether you are an entrepreneur or a corporate leader (let's call them E and CL) the competencies required are pretty similar to be successful business heads. The good news is that leadership is almost 100 per cent about people. If you don't motivate and manage your people to give their best to the business all your strategies and implementation plans will come to naught. This holds true for not just your employees but also all stakeholders. It's all about charisma, so whether you are an E or CL, how you challenge, negotiate, communicate, influence and motivate is what really matters. One critical aspect CLs need to recognise is that in this ever-changing VUCA (volatility, uncertainty, complexity and ambiguity) world they cannot lead their businesses as an "employee" - they have to act and think like an entrepreneur. It's far too competitive and challenging to expect someone else to lead from afar. Similarly, the Es need to realise that running businesses without the right kind of strategic thinking, process-based execution and people leadership will make it harder to sustain and build growth.
So, what are those essential competencies that set you apart as a leader? A lot has been written about the obvious skills - being a visionary, driving strategy, being innovative, etc. So, why do some leaders really struggle or fail? Well, there are some very core competencies that go beyond all this.
So if leaders in both environments need to display similar competencies to drive success, why do some professionals prefer entrepreneurial set ups over the more structured corporate set-ups? When we think of an entrepreneurial environment we visualise a fast-paced, somewhat chaotic, ever-changing set-up where the energy is palpable and innovation is in the air. If you had a great idea and the company saw merit in it you were given the space, money and freedom to innovate. That's how some of the great tech products are born. The risk and failure appetite of these companies is huge and they are willing to go all out for the next big idea. The other star quality of the entrepreneurial culture is change, agility and speed - whether it's the speed at which decisions are made or to market, these cultures understand the importance of speed to stay ahead.
Large, structured organisations can also specialise roles in silos leading to a rather narrow focus which can be problematic for professionals who like a broad focus and a variety of things. While some amount of "narrowness" is required, it's important to provide action-learning opportunities that keep professionals engaged in a variety of strategic opportunities and thereby build ownership. It is also imperative that review mechanisms are managed in a way that professionals have wiggle room to take key decisions within the framework.
Like any organism, organisations will grow in size and build a personality. The trick is not to lose the youthful good looks and ideas with age and remain fresh forever.
Leader: a person who guides or directs a company.
These are just meanings from the dictionary. But are the two roles so different from each other? Why do entrepreneurs think that leading the operations of someone else's company is so much easier or different?
Whether you are an entrepreneur or a corporate leader (let's call them E and CL) the competencies required are pretty similar to be successful business heads. The good news is that leadership is almost 100 per cent about people. If you don't motivate and manage your people to give their best to the business all your strategies and implementation plans will come to naught. This holds true for not just your employees but also all stakeholders. It's all about charisma, so whether you are an E or CL, how you challenge, negotiate, communicate, influence and motivate is what really matters. One critical aspect CLs need to recognise is that in this ever-changing VUCA (volatility, uncertainty, complexity and ambiguity) world they cannot lead their businesses as an "employee" - they have to act and think like an entrepreneur. It's far too competitive and challenging to expect someone else to lead from afar. Similarly, the Es need to realise that running businesses without the right kind of strategic thinking, process-based execution and people leadership will make it harder to sustain and build growth.
So, what are those essential competencies that set you apart as a leader? A lot has been written about the obvious skills - being a visionary, driving strategy, being innovative, etc. So, why do some leaders really struggle or fail? Well, there are some very core competencies that go beyond all this.
- Communicate: Most leaders, especially the Es, lose sight of this very important aspect. The wish to be externally focused is so strong that communicating internally takes a back seat. To get the internal stakeholders engaged and involved in every step, it's very important for leaders to be transparent and share what's going on in the business, both good and bad.
- Get the right talent and build capable leaders: This is true for all business leaders. It's important to surround yourself with talented people who are smarter than you. It is also equally important to empower them so that they find the freedom to innovate and are not be afraid to challenge.
- Openness: Leaders, mainly Es, need to understand that they do not have answers to all the questions and scenarios they could possibly encounter. Add to this the complexity of the ever-changing economic environment and you can lead your business to stress or even failure. It's important to be open to counsel and advice from a coach, expert or a mentor, no matter what stage the business is in. There is someone with a better, bigger idea and to stay ahead of the game it's important to keep an open mind to expert advice. For an E, it is very easy to overlook some weaknesses in the business and a fair assessment of strengths and weaknesses will keep them grounded and close to reality.
So if leaders in both environments need to display similar competencies to drive success, why do some professionals prefer entrepreneurial set ups over the more structured corporate set-ups? When we think of an entrepreneurial environment we visualise a fast-paced, somewhat chaotic, ever-changing set-up where the energy is palpable and innovation is in the air. If you had a great idea and the company saw merit in it you were given the space, money and freedom to innovate. That's how some of the great tech products are born. The risk and failure appetite of these companies is huge and they are willing to go all out for the next big idea. The other star quality of the entrepreneurial culture is change, agility and speed - whether it's the speed at which decisions are made or to market, these cultures understand the importance of speed to stay ahead.
Large, structured organisations can also specialise roles in silos leading to a rather narrow focus which can be problematic for professionals who like a broad focus and a variety of things. While some amount of "narrowness" is required, it's important to provide action-learning opportunities that keep professionals engaged in a variety of strategic opportunities and thereby build ownership. It is also imperative that review mechanisms are managed in a way that professionals have wiggle room to take key decisions within the framework.
Like any organism, organisations will grow in size and build a personality. The trick is not to lose the youthful good looks and ideas with age and remain fresh forever.
Anita Belani
Partner, BMR Advisors
Partner, BMR Advisors