Whether or not we are now emerging from recession, the shock and anxiety of it all has made armchair economists of us all. Terms such as ‘derivatives’ ‘quantitative easing’, ‘toxic banks’, and ‘sub-prime’, have eased themselves into the vocabulary. We may not know for sure whether we are Keynesians or Monetarists, but we all have a view on what went wrong and what needs to be done to get it right. Two of the most favoured candidates for economic salvation are ‘leadership’ and ‘entrepreneurism’. Globally, governments, think tanks, economists, religious leaders and educationalists have all added their voices to the clamour for more of both. Visions of dynamic and charismatic saviours of civilization as we know it are easily conjured up by such rhetoric. But, what do these terms really mean? When you get down to it, is leadership and entrepreneurism really so different?
The first difficulty with the master plan is that both ‘leadership’ and ‘entrepreneurism’ are terms that mean different things to different people. We may think ‘we know one when we see one’ but it’s quite another matter to reach any agreement about what exactly it takes to become one. Surprisingly, given their wide popular usage, there is very little consensus when it comes to formal definitions. We recognize, of course, that both are associated with achievement and business success and most people can recall an example of a high profile celebrity who started poor, pulled themselves up by the boot-straps, got stuck in, and ended up running a vast business empire. But usually these terms are applied retrospectively; awards bestowed by an admiring public to high profile figures after the event.
Defining ‘leaders’ and ‘entrepreneurs’
To side step all the contradictory notions that furnish the interminable internet debate about these two terms, it is essential to consider what someone actually needs to do to be described as leader or an entrepreneur. This will put us into a better position to speculate about what attributes might be necessary to achieve that.
Leaders must rely on their team to deliver the required results. They cannot achieve anything on their own. So, the first requirement is that they maintain the trust and commitment of others to ensure that they will stay onside. High performance employees are motivated and this implies that leaders need to communicate a vision and to enthuse others. These are the essentials then; that a leader is able to articulate a compelling vision, sell it to others, maintain trust and loyalty and inspire commitment and high performance at the front end. It all adds up to the ability to build and maintain high performing teams.
Returning to the vexed question about the personal qualities required; the most effective leaders see the big picture; they also communicate well and they inspire. All these qualities would be of little value without self-awareness and an understanding of how they come across to others. Without this, the chances of winning commitment and loyalty are slim.
Taking the same approach; what must entrepreneurs do to earn that designation; what must they achieve? Firstly, they need to have identified a business opportunity. Secondly, they have to convince backers, employees and potential clients and put it into action. Thirdly, they need to persist with it, probably through challenging times, and see it through to realise its potential.
For entrepreneurs, the key is opportunism, seeing a possibility that others have missed, grasping the moment and being prepared to take the risk. It doesn’t necessarily imply creativity in the sense of being entirely original, but it does imply innovation; seeing something in a completely different way. However, the idea has to make commercial sense, and be capable of scaling up to significant prospects of growth and profitability, so they need a keen sense of business.
An intrinsic link?
Astute readers will have spotted the overlap and the point where one may morph into the other. There clearly are similarities between leaders and entrepreneurs, but there are also distinctive differences in what they have to achieve and the personality characteristics required. Thankfully for the individual, there are also innumerable potential routes out of obscurity and up the ladder of success. A further important distinction is whether such talents are being practiced within an established organisation, with its structures, culture and pension scheme, or within a start up situation with no safety nets or parachutes. An individual who succeeds in one may indeed be a disaster in the other.
Forget the labels, be clear what you want
45 years ago, Gifford and Elizabeth Pinchot coined the term ‘intrapreneur’ to describe those who apply entrepreneurial talents as employees within the context of an established business rather than independently. This further differentiation is useful in clarifying the challenges presented to would-be leaders or entrepreneurs in each situation and the talents likely to be important to success. Risk taking, decision making, dealing with people, internal politics and managing change all have very different meanings and implications as an employee and as an entrepreneur
Distinguishing between a leader, an entrepreneur or an intrapreneur when seeking to appoint the best people for different roles will be less important than knowing precisely what you are looking for. Ultimately, these ‘portmanteau’ titles may be useful as broad concepts and in ‘big picture’ rhetoric but they are very imprecise. As with all generalisations, they fail to reflect the issue of variability and personality. A lot of detailed clarification is required to make them helpful in talent management terms. As ever, the first requirement is to focus on what has to be achieved by an appointment within a particular industry or situation, what the challenges are and what specific talents and competencies might be required to deal with them. Different personality characteristics can be an asset, a limitation or a liability in one situation but play out very differently in another, and success will depend on getting the priorities right at this level and accurately assessing those particular competencies.
Maybe leader, entrepreneur and intrapreneur are all terms that are most effective when we are in ‘armchair expert’ mode, but the reality is it requires detailed personality profiling tailored to competency frameworks to identify and recruit saviours from recession.