Do Entrepreneurs Need To Be Leaders?
I found something missing in our Mindset research results. It surprised me. As entrepreneurs, we are recognized for our vision, disruptive thinking, and perseverance – getting people to see new solutions to old problems. But when asked what skills would help them succeed, almost none of our survey respondents included leadership.
When my partner and I first started our business, I never considered leadership a priority. It seemed too corporate or political. I was focused on the ‘real’ priorities – getting clients, building revenues, and growing profits.
In hindsight, I think my attitude was behind a lot of the troubles we faced. Sure, the company was profitable and financially successful but we had a load of turnover and turmoil. More attention to leadership might have been a game-changer.
But that’s me. I thought you would consider leadership fundamental to developing and supporting your vision. However, less than 5% of you believe leadership matters as you build your business. Maybe you’ll focus on it later, when you are wildly successful, but not now.
So it makes me wonder, Do entrepreneurs really need to be leaders?
In my opinion, the answer is a resounding Yes! The common language of successful entrepreneurship includes creativity, vision, and growth. So much attention is given to the ideas you bring, the drive you show, and the passion you commit to the venture. While all of these aspects are important, they are not actually enough to make you a truly successful entrepreneur.
You might think that’s just crazy talk – it’s all about start-ups and pitches and great exits. I totally disagree. The traits I mentioned above are essential to an entrepreneur’s capacity to succeed but what brings it all together is your ability to lead.
So, to succeed, what type of leader do you need to be? Initially, I was a terrible leader. With most of my focus on managing (read controlling), I lead by default. I was a selling leader – I sold people on what they needed to see and do, without creating any engagement. I had to find a new route, and it took me a few years – maybe even a decade. By being intentional in your leadership now, you can make your own path much smoother.
More than anything, an entrepreneur needs to be a strategic leader – to make sense of the world and translate it, so others can see the opportunity and commit to the vision of a bigger future.
However, this isn’t as easy as it sounds. I think we talk about strategy all the time without really knowing what it is. It’s a great word but is so easily misinterpreted.
Strategy used to be associated with planning, which is a very linear exercise. But today nothing is linear. The need to be strategic has greatly increased due to the rapid pace of change, increased complexity, and the speed of connectivity. Great strategic leaders combine two skills really well – the ability to think through a situation, and then make deliberate decisions that translate into action. But how do we learn to develop these skills?
Successful entrepreneurs display strategic leadership at the core of what they do – solving complex problems by making sense of the world to create an opportunity that will benefit others. The entrepreneur makes decisions, shows people the way, and inspires others to take action towards the goal. Entrepreneurship without leadership is simply being self-employed.
To become a strategic leader and build a high-growth business you must pass through two transitions:
- As the founder of your business, you generally do everything at first. You probably have some control issues at this beginning stage, with a good dose of perfectionism thrown in. Only you can do the job right. But to scale the business, you must transition from a solo performer to being a manager, ensuring the processes are in place to support growth.
- With the systems in place, the next transition you make is from manager to leader, bringing people together as a team to grow the company to its potential.
If you fail to make these transitions, you (yes, you alone) will limit the growth of the business. I know because I did it for years. My business was challenged to grow beyond a certain level because, despite the systems in place, I couldn’t let go of control, and stifled people’s ability to contribute and help grow the company.
To become more skilled as a strategic leader you need to develop in six key areas:
- Anticipate – being aware of what’s happening around us
- Challenge – always questioning how we are doing and why
- Interpret – analyzing situations and making sense of what is at hand – a problem or an opportunity
- Decide – confidently and with commitment, sometimes without enough information but from a gut insight into what needs to be done
- Align – bringing people together around the decision and actions needed
- Learn – understanding your progress and feedback – staying focused but always flexible
Leadership is a big part of the entrepreneurship equation. Being strategic matters more now than at any other time. We are connected globally to a hyper-competitive world, always subject to change. Problems are more complex and opportunities become more disruptive. As entrepreneurs, we must be able to make decisions quickly within the context of what is happening around us. Otherwise, we will be left behind. It is essential that as entrepreneurs we develop our strategic leadership skills to build smart-growth companies. Great products and brilliant innovations are not enough.
Starting a business is easy. Staying in business is the real challenge. Translating a product idea into a thriving business requires entrepreneurs to be strategic leaders. Investing in developing these skills is an essential use of time for all entrepreneurs who hold a bigger vision.