Manage-Wise

Breaking the entrepreneurship code

Leadership requires passion, vision, focus, and the ability to inspire others. Entrepreneurial leadership requires all these, plus a mindset and skill set that helps entrepreneurial leaders identify, develop, and capture new business opportunities. The leadership part comes in showing vision and passion for the opportunity, focusing people on the opportunity, and then inspiring them to go after it. But, the key for entrepreneurial leaders is the opportunity. Their focus is not general. Instead it is laser-like, pinpointed on an opportunity, usually one that has emanated from their own gray matter and from their hearts. What differentiates entrepreneurial leaders from their brethren is this passion—some would say obsession—to go after new, innovative, out-of-the-box, different, unusual, against-the-grain, often counterintuitive new business opportunities. They take the pursuit of these opportunities personally, due to their emotional stake in them, and they hold themselves both responsible for the opportunity’s success and accountable for its failure. They are willing to take the heat, and sometimes bet their jobs on their ideas. They also have the discipline to differentiate good ideas from good opportunities.

Entrepreneurial leaders

Some entrepreneurial leaders seem to come with the entrepreneurial mindset already hardwired. Others don’t. The good news is that managers who are not already so wired can develop the wiring. Some leaders already have the desire or mindset, but not the skill set. Here again, the entrepreneurial skill set can be developed.

Entrepreneurial leaders seem to have an inherently entrepreneurial bent, whether latent or expressed. So, as with the discussion of leadership, it makes some sense to take a little tour of what we know about this entrepreneurial bent. In some respects, entrepreneurial leaders have the entrepreneur’s lineage, but not in all aspects. While most of us think we know what it means to be entrepreneurial, it has been my experience that significant misconceptions exist concerning this concept. For example, few people know that 80 percent of new business start-ups fail or that successful entrepreneurs are not great risk takers. Instead, they are excellent risk managers. They are also not lone rangers, at least not the successful and serial ones.

Understanding the territory

One of the big challenges working with the large companies seeking greater entrepreneurial orientation was getting an answer to the question “Why do you want this?” The second challenge was answering the question “What is the this?” Trying to agree on the answer to this question has not only been a great learning experience, it has provided a few laughs, albeit ones of frustration, along the way.

As an example of why this is so important, Colonia Insurance, a German subsidiary of AXA Insurance, was working closely with me and a colleague from McKinsey & Company, trying to change its culture to become entrepreneurial. McKinsey asked us to create a program on corporate entrepreneurship for it through which traditional insurance managers could learn to lead in more entrepreneurial ways and uncover new business opportunities. The program was entitled the Unternehmer Program. Unternehmer is German for undertaker. Think about the potential confusion about this title, let alone the meaning on entrepreneurial. Undertaker can mean “under the ground taker (mortician),” “shopkeeper,” or “one who undertakes a task.” In working on this program, I interviewed a number of Colonia managers to better understand the company and their understanding of what we were trying to do. One of my most difficult interviews was with a middle manager, who insisted that corporate entrepreneurship was about cost cutting.

I don’t think I ever convinced him that entrepreneurial leadership was not about cost cutting. He was not alone in his view. I also spent a year with a large European company that had its primary roots in the hospitality industry. This company was very successful, but the executive team believed they needed an infusion of entrepreneurial thinking. While they understood start-up entrepreneurship, it was not clear to them what entrepreneurship meant when practiced by managers inside an already established business. We literally spent a year trying to define the concept for them before they would commit to partnering with us on an educational intervention.

So, some confusion still exists around the general notion of entrepreneurship, let alone entrepreneurial leadership. We have learned a very important lesson over the years: If you ask a manager to think and act like an entrepreneurial leader, then you better be very careful about what you mean by entrepreneurial. One of my colleagues is fond of saying, “Be careful what you wish for—you might just get it.” This is true of entrepreneurial leadership.

Focus on opportunity

One thing is certain: Whether you are talking about start-up entrepreneurs or entrepreneurial leaders in a large corporation, their focus, passion, and expertise is in the identification, development, and capture of significant new business opportunities. The word significant is key. It is not business as usual; it is business as unusual. And these opportunities, when captured, represent a significant increase in economic value either for the start-up entrepreneur and his investors or for the already established enterprise and its shareholders and employees—and finally society.

Creativity is a human condition. We demonstrate it when we are children. Depending on what paths we take in life and where we work, we may use more or less of it, but we always retain the capacity for creative thinking.

Most managers come up with great ideas to improve their business and, with the right stimulation, most of these people can come up with really creative or innovative new business ideas. The problem is that very few of these ideas represent opportunities. Ideas are literally a dime a dozen (probably a dollar now, due to inflation), but a great idea is not necessarily a great opportunity.

Excerpt from ‘Lead Like An Entrepreneur’ by Neal Thornberry. Reproduced with permission © 2006, Tata McGraw-Hill Publishing Company Limited. Price: Rs 399. Vishwanath_Ghanekar@mcgraw-hill.com