Entrepreneurs and effective leadership
There’s no doubt that having an entrepreneurial streak is a benefit, in today’s companies and organisations. As competition grows, and as fewer ‘trails’ are ‘blazed’, it’s often innovation, of an existing product or service, for example, that gives businesses the edge against their competitors.
But the entrepreneur in us isn’t restricted to product development or creative strategy, it can also have a direct influence on leadership. Typically, entrepreneurs are confident of their own abilities, and are proactive to boot, taking the initiative if they see opportunities before them. Having certainty of their actions allows entrepreneurs to follow ideas and plans that are high-risk. And it’s important to recognise that competitive business, limited resources and demanding markets produce high-risk situations, even to the most predictable, risk-averse companies. Therefore, being able to react quickly to challenges and threats, and making decisions without a wealth of facts at hand, are desirable traits.
Attributes of an effectual leader
Entrepreneurs seek feedback and effective coalition with others. They don’t attempt to predict the future – instead, they focus their energy on adapting to the current situation; quite different to management styles often taught in business schools, where decision-making is based on facts and predictability. Their leadership style is aspirational, based on action and example. They encourage their team to calculate affordable loss and to use the tools and resources around them. Projects are often underway more quickly, and any crises dealt with the same speed.
Effectual leadership is as adaptive and also looks for synergy. Like the entrepreneur, effectual leaders focus on:
- Identity – who they are
- Expertise – what they know
- Networks – who they know
Surprises are not threatening to the effectual leader – conversely, they’re often exciting, due to the perception that they bring a raft of new opportunities. Their attitude to competition is not to batten down the hatches and keep everything top secret; instead, they collaborate and work in partnership with suppliers, customers and potential competitors.
Neither the entrepreneurial decision-maker, nor the effectual leader, makes foolhardy, reckless decisions. They only risk what they can afford to lose. Causation, a factor of traditional leadership is swapped for effectuation. The future is not the effectual leader’s whole focus as they recognise it can’t be controlled; what they have to hand and how things can be adapted warrants their attention instead.
Driving the effectual leader is a vision of success. Like the entrepreneur, they have highly-developed communication skills and an advanced sense of judgement. Take such as Henry Ford – he envisaged a future where everyone could afford to drive a car, not just the wealthy or famous. His proposals were criticised yet he ploughed on with his plans. People were, at first, nervous and reluctant to buy into his vision…..but we all know of the outcome.
It’s not ‘pie in the sky’ thinking…
Effectual leaders encourage the ‘de-risking’ of ideas and plans, just as entrepreneurs would gauge any innovation with a SWOT assessment. By sharing their visions and encouraging collaboration, they motivate those working with them. They recognise their team’s individual qualities and work at matching skills and ideas, towards a common goal. They’re good at garnering support, just as entrepreneurs look to do at the outset of new ventures, and are able to clearly enunciate their vision or innovation, at a time when it’s at its least tangible. Rather than enforcing exclusive control, they look at team members more as equal colleagues in their network.
When to employ effectual leadership
Traditional leadership places the leader as the one with the control, where team members fall in line behind them. This style is common for short-term goals, where predictability features more heavily, and problems are more immediate. In contrast, the entrepreneurial leader looks to starting projects that could continue long after they’re gone, that may have more influence on the company and its future direction.
It’s important to remember that the same person can employ either traditional leadership or effectual leadership. Much depends on the circumstances – such as the means available and whether the goal is inherently apparent, or whether it will develop/refigure over time. An effective leader looks at which approach would the best to take in that situation.
Next week, I’ll talk about how you can develop your effectual leadership. In the meantime, if you’d like my help with this, or you’ve another issue that executive coaching could help you move past, contact me on 01302 220021, or via email@example.com.