Transcript Entrepreneurial Leadership

Entrepreneurial
Leadership
Presentation to:
Leadership Symposium
KU Edwards Campus
Wally Meyer
November 19, 2008
Premise
Entrepreneurial leadership will
accelerate achievement of
organizational goals, enhance
organizational performance
Proof
At one time or another, all successful
organizations were new ventures
 New ventures, to succeed, must surpass
the most arduous hurdles: mortality rates
of 65%+
 New venture success is largely dependent
on entrepreneurial leadership
And if that impeccable logic doesn’t
convince you….

How would you like to have the net worth or
track record of these entrepreneurs?
http://www.youtube.com/watch?v
=5xNA8seaqGQ
Was the Scarecrow an entrepreneur?
What do each of these successful
entrepreneurial leaders have in common?
Entrepreneurial leadership starts with having
an entrepreneurial mindset.
Agenda

Entrepreneurial Mindset
 Characteristics
of Entrepreneurial Leaders
 Entrepreneurial Mindset Scorecard

Leadership Types
 Transactional
 Transformational
 Entrepreneurial
 Entrepreneurial


Leadership Behavior Checklist
Leadership Values
Leadership Success: Measuring Self Performance
Entrepreneurial Mindset

Leading like an entrepreneur requires:
 Internal
locus of control
 Tolerance for ambiguity
 Willingness to hire people smarter than oneself
 Consistent drive to create, build or change things
 Passion for an opportunity
 Sense of urgency
 Perseverance
 Resilience
 Optimism
 Sense of humor about oneself
Characteristics of
Entrepreneurial Leaders
Internal Locus of Control

“In the hands of the Gods”

Fate is in charge

“Go with the flow”

More in control than controlled 
Tolerance for Ambiguity








Leading in the midst of chaos and
uncertainty
See opportunities others don’t see
Offsets:
Leadership of the self 

Knowing the process
Knowing which way is north
Embracing the vision
Opportunity identification,
development and capturing a new
venture concept = messy affair
Chaos ≠ problem; chaos = fun.
Characteristics of
Entrepreneurial Leaders
Willingness to Hire Smarter
People

Hire to complement self identified
weaknesses

Challenge to accept ‘outside’
leadership

McDonald’s as franchisor

Kim Smith: New Schools Venture Fund
Manager
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=615&fi
leID=2473
Consistent Drive


Set the pace for leading the business
Energy to change (not invent) things:



Most entrepreneurial leaders change,
not invent, things
Change requires motivation and
leadership
Self imposed momentum

Mailbox money
Kim Smith, Co-Founder and CEO New Schools Venture Fund
(educational venture investments) on working with smart people.
Characteristics of
Entrepreneurial Leaders
Willingness to Hire Smarter
People

Hire to complement self identified
weaknesses

Challenge to accept ‘outside’
leadership

McDonald’s as franchisor

Kim Smith: New Schools Venture Fund
Manager
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=615&fi
leID=2473
Consistent Drive


Set the pace for leading the business
Energy to change (not invent) things:



Most entrepreneurial leaders change,
not invent, things
Change requires motivation and
leadership
Self imposed momentum

Mailbox money
Characteristics of
Entrepreneurial Leaders
Passion
Sense of Urgency

Not so much mindset as emotional
setup

Impatience/wanting to ‘just do it’.

Missing full objectivity; but
energizes others with
demonstration of devotion

Self imposed deadlines

Natured or nurtured?

Cash flow
 Equity ownership
Characteristics of
Entrepreneurial Leaders
Perseverance

Freebie: generally a by-product of:

passion
 sense of urgency
 fear the consequences


Henry Ford: 6X attempts to start
Intel: 14X attempts to fund
Resilience
Characteristics of
Entrepreneurial Leaders
Optimism
Sense of Humor

Did you hear the one about the two
businessmen and the entrepreneur?
http://eclips.cornell.edu/search?querytext=optimism&id=i
d&clipID=8465&tab=TabClipPage
Source: Jeff Timmons, New Venture Creation
Daniel Stein, President JDS Capital (venture capital investments)
on entrepreneurial leadership optimism
Characteristics of
Entrepreneurial Leaders
Optimism
Sense of Humor

Did you hear the one about the two
businessmen and the entrepreneur?
http://eclips.cornell.edu/search?querytext=optimism&id=i
d&clipID=8465&tab=TabClipPage
Source: Jeff Timmons, New Venture Creation
Entrepreneurial Mindset Scorecard
1
(FugetaboutIt)
2
(Sometimes)
3
(Metza Metz)
4
(It’s Me Baby)
5
(Da Man!)
Control
Ambiguity
Hiring
Drive
Passion
Urgency
Perseverance
Resilience
Optimism
Humor
Totals
• Rate yourself on each key entrepreneurial mindset component
• Develop an action plan to help improve self assessed areas of opportunity
Leading Like an
Entrepreneur
Leadership vs. Management
 Leadership Types

Entrepreneurial Leadership

Leading like an entrepreneur:
 Always
involves creation of value through
change of assets to develop a new business
 Always involves inspiring employees to
capture that business opportunity

“Employees won’t be managed, but they can be
led.”
Ewing Kauffman
Management or Leadership?
Management = Administration
 Leadership = Change and Transformation

J. Kotter, ‘What Effective Managers Really Do/ (HBR, 1999)
Management
Leadership
Stay on course
Totally different direction
Smooth operations
Changing crew
Even keel
Refitting ship
Leadership Types
Leadership Type
Organization Level
Function
Technical
1st Level Supervisor
Fix it
Transactional
Middle Management Motivate it (behavioral)
Transformational
Senior Managers
Create it or Change it
Entrepreneurial
Senior Managers
Create it or Change it
Transformational vs.
Entrepreneurial Leadership

Transformational:
 Bring


about a change in existing order
Change is the key
Entrepreneurial:
 Bring

Create something which did not exist before


about a new order
New learning is always involved
Destroy, disrupt, reinvent
Differences in Leadership Types
Difference in Leadership Styles
Transactional
Focus

Approach

Investment

Communications

Strategy

Transformational
Entrepreneurial
Day-to-day
activities

Organization
 Change

Development
of tasks

A stake in the ground
 Creative rearrangement

Immediate
payback
Committed

Staged investment
As
conditions
demand


Intimate, personal
Situational
analysis


Medium term, exit strategy
investment
Symbolic
Long term, stay the
course
Opportunity
 Building/creating
A moving stake
 Creative destruction then
rearrangement
Transformational and
Entrepreneurial Leadership
But:
 Transformational leaders and entrepreneurial leaders
are linked in leadership qualities:





passion
vision
stubbornness
Transformational leadership may become
entrepreneurial leaders
Transformational leaders productively co-exist with
entrepreneurial leaders, particularly in corporate
environments
Transforming into an
Entrepreneurial Leader
Corporate Case Study
Large southeastern utility
 Privatization forced adoption of new
approaches by transformational leadership
to:

 Reverse
inefficiencies
 Improve customer satisfaction ratings
Source: Journal of Business Venturing, 1997
Corporate Case Study

Pre-privatization:
 Change


is externally achieved:
“If we need more revenue, we’ll raise the rates.”
Post-privatization:
 Change
must be internally generated
 Transformational managers asked
subordinates to adopt entrepreneurial
leadership behaviors
Corporate Entrepreneurial
Leadership Behaviors





Overcomes
bureaucracy
Displays enthusiasm
Changes course
quickly when needed
Encourages others’
initiatives
Inspires others to
pursue own ideas





Devotes time to help
others
Supports others’ good
ideas
Moves boldly ahead
with new ideas
Futuristic vision
Rallies others efforts
to meet challenges
Case Study Results
Achieved:
 Increased customer satisfaction
 Improved operating profit margins
 Higher employee satisfaction
 Particularly
behaviors
among those implementing the
Put the research to work for you:
Entrepreneurial Leadership Checklist

Adopt and apply the entrepreneurial leadership behaviors:
Behavior
Overcome bureaucracy, implemented
changes
Display enthusiasm for acquiring skills
Change course as needed
Encourage others’ initiatives
Inspire others to pursue own ideas
Devote time to help others’ develop
new ideas
Support others’ new ideas
Move boldly ahead with new ideas
Demonstrate futuristic vision
Rallies others to meet new challenges
Date When
Applied
Situation
Leadership Values
Value Centered Organizations
Start at the Top
Leadership Values

Financial performance of companies with
defined value statements: net income 23X vs.
GDP 2.5X over same 10 years (Garfield, Peak Performers,
1986)

“Management values are primary source of
corporate identity (Jack Welch) (Nanus, Visionary Leadership,
1992)

“Single most important factor in organization’s
success is leaders’ adherence to core values
(Thomas Watson, Ideas That Helped Build IBM, 1986)
Leadership Values



Leaders may be forgiven for inefficiencies, lack
of accomplishment, missing the business marks
Leaders will not be forgiven for immorality and
lack of principles
Entrepreneurial environments need well defined
values; entrepreneurial led organizations are:
 Opportunity
based
 Structure evolving
 Resource challenged
Leadership Values

Honesty:


Consideration:


tenacity for repeated attempts
Excellence:


life is what you make it, choosing to make a difference
Persistence:


‘ treating others as you would want to be treated’ (Ewing Kauffman)
Responsibility:


knowing oneself; in dealing with others
‘anything worth doing is worth doing right’
Commitment:

essentials of life are someone to love and something to do
(Bertrand Russell, What I Have Lived For)
(Source: Sagie and Elizur, Journal of Organizational Behavior17, 1996)
Leadership Values

Lack of leadership value red flags:
 Members
lack clear understanding regarding how to
meet organizational goals
 Different individual/groups have different value
systems
 Top leaders send mixed messages
 Day-to-day life is disorganized
 Members complain about organization to family,
friends
 Organization has values, even written, but doesn’t
practice them
Leadership Success:
Measuring Self
Performance
How do you know when
you’ve arrived?
Leadership Success:
Measuring Self Performance

Leadership requires competency in three
overall areas:
 Statesmanship:

Ability to work with and through other people
 Entrepreneurship:

Ability to achieve results, regardless of obstacles
 Innovation:

Ability to generate new and usable ideas
Statesmanship
Ability to work with and through other people

Rx:
 Let
people know where they stand
 Give credit where due
 Tell people as soon as possible about
changes that will effect them
 Make the best use of each person’s ability
Entrepreneurship
Ability to achieve results, regardless of obstacles

You know you’re an entrepreneur when:
 You’re
one of the top producers of results
 Most jobs you have worked on have resulted in
significant contributions
 You will gamble on good odds anytime
 You plan work and hold performance to schedule
 If you want something done, you find a way to get it
done.
Innovation
Ability to generate new and usable ideas



Keep an open mind
Have a questioning attitude
Use a new-ideas system

Ask six simple questions:
I keep six honest serving men;
They taught me all I knew;
Their names are What and Where and When,
And How and Why and Who.
Rudyard Kipling

Answers to six simple questions, applied creatively, usually identify
the solutions to most challenges
Leadership Success:
Measuring Self Performance




Conduct self
appraisal
Evaluate results
Develop
improvement plan
Execute
Source Materials





Richard Huges, Robert Ginnett, Gordon Curphy: Leadership,
Enhancing the Lessons of Experience, McGraw-Hill, NY 2009
George Manning, Kent Curtis, The Art of Leadership, McGraw-Hill,
NY 2007
Neal Thornberry, Lead Like An Entrepreneur, McGraw-Hill, NY 2006
Richard Daft, The Leadership Experience, Thompson SouthWestern, Mason, OH 2008
Jeffrey Timmons, Steve Spinelli, New Venture Creation, McGrawHill, 2007
‘Live what you talk, make
your actions match your
words. You must live what
you preach and do it right
and do it often.
As an entrepreneur, you
really need to develop a
code of ethics, a code of
relationships with your
people because it’s the
people who come and
join you. They have
dreams of their own. You
have a dream of the
company. They must
mesh somewhat.’
Ewing Marion Kauffman
For every person who’s a
manager and wants to
know how to manage
people, there are 10
people who are being
managed and would like
to figure out how to make
it stop.
Scott Adams, creator of Dilbert
Entrepreneurial
Leadership
Presentation to:
Leadership Symposium
KU Edwards Campus
Wally Meyer
November 19, 2008