Entrepreneurial leadership

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Entrepreneurial leadership is (as per Roebuck's definition) "organizing a group of people to achieve a common goal using proactive entrepreneurial behavior by optimising risk, innovating to take advantage of opportunities, taking personal responsibility and managing change within a dynamic environment for the benefit of [an] organisation". [1]

Contents

Such leadership aims to cultivate entrepreneurial individuals and teams that fully leverage their creative potential in creating value for an organisation. [2] Entrepreneurial leadership does this by employing leadership practices that "develop the ability in employees to self-generate, self-reflect, and self-correct in their workplace". [3]

Within a sub-division of a large organisation, entrepreneurial leadership can involve effectively using the skills associated[ by whom? ] with successful individual entrepreneurs and applying those within the environment of the larger organisation. This may seem especially relevant within an organisation where those skills have been lost and replaced with a "corporate" mindset that focuses on process, systems and risk minimization rather than on entrepreneurial behavior. [4]

Definitions and theories

Other definitions of entrepreneurial leadership have also emerged:

An entrepreneurial leader will proactively identify opportunities to gain advantage through creativity, innovation and market understanding and then hold themselves responsible for delivering what customers need via the effective management of risk to optimise outcomes for both the organization and the customer. [5]

Attributes of an entrepreneurial leader

The entrepreneurial leader will work within a formalized organizational structure, but use the approaches normally expected of an entrepreneur to identify opportunities. Once an opportunity has been identified, they work towards creating a value proposition that will enable rapid testing of their key assumptions. Next to effective management of risk (rather than the minimization of risk often sought within corporate environments), they are required to operate with contextual awareness in order to create a value proposition that delivers value to the customer while taking into account the organizational requirements and strategic aims. The entrepreneurial leader must have the ability to learn fast and within environments of ambiguity and change while providing clarity and coherence for those around them. [6] [7] [8]

The entrepreneurial leader takes responsibility for their actions and those actions must be more proactive than reactive. They think about achieving organizational outcomes in an innovative way and working with a diverse group of people and resources to achieve these goals. [8] [9] [10] [11]

Notable examples

Perhaps the best known and most widely considered example of an entrepreneurial leader is Steve Jobs, [12] but there are many real life examples in the world of business and other industries, such as Whitney Wolfe, Huda Kattan, Vera Wang and Diane Hendricks.

History

Research into entrepreneurship and leadership is not new, but has expanded rapidly in recent years. Much of the early interest in and use of the term ‘entrepreneurial leadership’ was outside the field of entrepreneurship or management studies more generally. This includes, for example, research into the semi-piratical entrepreneurs of the late nineteenth century, and the role of not-for-profit organizations in community entrepreneurship. Within the entrepreneurship and management literatures, the term has been more alluded to in passing than systematically defined and explored. ‘Entrepreneurial leadership’ has, accordingly, been defined as a particular entrepreneurial style, as a correlate of corporate performance in different types of firms, as a missing element in entrepreneurship curricula, as an identifiable trait, and as an important feature of contemporary society. However, there have been some salient early papers focusing specifically on entrepreneurial leadership as a prerequisite for organizational development, on the importance of the entrepreneur being a (visionary) leader, and on the parallels between leadership and entrepreneurship as fields of research and practice. [13]

The search for the characteristics or traits of leaders has been ongoing for centuries. History's greatest philosophical writings from Plato's Republic to Plutarch's Lives have explored the question "What qualities distinguish an individual as a leader?". Underlying this search was the early recognition of the importance of leadership and the assumption that leadership is rooted in the characteristics that certain individuals possess. This idea that leadership is based on individual attributes is known as the "trait theory of leadership".

The concept of entrepreneurial leadership was introduced in 2000 by McGrath and MacMillan who suggested that in dynamic markets where there is increased uncertainty and competitive pressure a new type of leader is required. They described this as the "entrepreneurial leader". These fast-changing markets or situations give those with an "entrepreneurial" approach the ability to exploit opportunities to gain an advantage for their organization faster than others. [14]

A number of organizations have sought to develop the concept of entrepreneurial leadership within the business world. A good example is UBS, the global bank, which in the period 2002 to 2006 proactively developed entrepreneurial leadership amongst its top 500 leaders. The success of this was demonstrated by improvements in individual, team, and financial performance, the project becoming a key element in the Harvard Business School Case study, "UBS Aligning the Integrated firm". The bank was subsequently awarded the title Best Company for Leaders (Europe) 2005. [15] The implementation of this project over a multi-divisional bank spread globally was complex and took a number of years. This is reviewed in a case study by Chris Roebuck, Visiting Professor of Transformational Leadership at Cass Business School in London. [16] Roebuck was one of the leaders of the team who implemented entrepreneurial leadership in UBS.

The principles of entrepreneurial leadership can be applied to a number of sectors and to a wide variety of organizations. The success of this approach has confirmed the compatibility of entrepreneurial leadership to the majority of organizations seeking to improve client/customer service and overall performance.

Prof Chris Roebuck notes that in recent examples of applying entrepreneurial leadership to organizations, the link to employee engagement has increasingly become as a key success factor. [17] This has also allowed development of the concept of entrepreneurial support functions, such as Entrepreneurial HR and Entrepreneurial IT, to support the customer or client facing parts of organisations. [18]

Entrepreneurial Leadership is not so much a style of leadership as a focus of leadership and employees' efforts on specific actions that either maximize the effectiveness of service delivery currently or seek to improve it in the future.

Styles of leadership

Leadership style refers to a leader's behavior. It is the result of the philosophy, personality, and experience of the leader. Rhetoric specialists have also developed models for understanding leadership (Robert Hariman, Political Style, [19] Philippe-Joseph Salazar, L'Hyperpolitique. Technologies politiques De La Domination [20] ).

Participative or democratic style

The democratic leadership style favors decision-making by the group. Such a leader gives instructions after consulting the group. They can win the cooperation of their group and can motivate them effectively and positively. The decisions of the democratic leader are not unilateral as with the autocrat because they arise from consultation with the group members and participation by them. [21]

Autocratic or authoritarian style

An autocratic leadership style is one which provides full control for one person. This leader will hold all authoritative power with all decisions and takes near to no contribution from other members of the group. Decisions are not up for discussion by the group and the leader can make these decisions based on their own thoughts. This style is mostly seen within relatively small companies with few employees and is only effective if the work culture needs to make quick decisions. However, this leadership style can be seen as outdated with a lot of businesses using the democratic style. This in turn increases motivation of employees because by having an input they can be recognised and rewarded for their suggestions and ultimately provides a boost in employee morale and thus, help the company flourish and succeed. [22]

See also

Other types and theories

Contexts

Related Research Articles

A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses, including self-employment and businesses that do not intend to go public, startups are new businesses that intend to grow large beyond the solo founder. At the beginning, startups face high uncertainty and have high rates of failure, but a minority of them do go on to become successful and influential.

<span class="mw-page-title-main">Leadership</span> Quality of one individual or group influencing or guiding others based on authority

Leadership, both as a research area and as a practical skill, encompasses the ability of an individual, group, or organization to "lead", influence, or guide other individuals, teams, or entire organizations.

A mindset is an established set of attitudes of a person or group concerning culture, values, philosophy, frame of mind, outlook, and disposition. It may also arise from a person's worldview or beliefs about the meaning of life. A person can have multiple mindsets, whilst the two most common ones are often cited as the growth and fixed mindset, a person also has a money mindset which can be more deeply described as a poverty mindset or a wealth mindset. There are also: abundance mindset, positive mindset, negative mindset, victim mindset, protector mindset, poverty mindset, rich mindset, wealth mindset, losing mindset, and winning mindset among others that form the make up of a person's overall mindset based on the various values, beliefs, experiences and opinions that comprise the thinking on a conscious and unconscious level regarding these things.

Organizational culture refers to culture related to organizations including schools, universities, not-for-profit groups, government agencies, and business entities. Alternative terms include corporate culture and company culture. The term corporate culture emerged in the late 1980s and early 1990s. It was used by managers, sociologists, and organizational theorists in the 1980s.

Servant leadership is a leadership philosophy in which the goal of the leader is to serve. This is different from traditional leadership where the leader's main focus is the thriving of their company or organization. A servant leader shares power, puts the needs of the employees first and helps people develop and perform as highly as possible. Instead of the people working to serve the leader, the leader exists to serve the people. As stated by its founder, Robert K. Greenleaf, a servant leader should be focused on "Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants?"

Founder's syndrome is the difficulty faced by organizations, and in particular young companies such as start-ups, where one or more founders maintain disproportionate power and influence following the effective initial establishment of the organization, leading to a wide range of problems. The syndrome occurs in both non-profit and for-profit organizations or companies.

Transformational leadership is a theory of leadership where a leader works with teams or followers beyond their immediate self-interests to identify needed change, creating a vision to guide the change through influence, inspiration, and executing the change in tandem with committed members of a group; This change in self-interests elevates the follower's levels of maturity and ideals, as well as their concerns for the achievement. it is an integral part of the Full Range Leadership Model. Transformational leadership is when leader behaviors influence followers and inspire them to perform beyond their perceived capabilities. Transformational leadership inspires people to achieve unexpected or remarkable results. It gives workers autonomy over specific jobs, as well as the authority to make decisions once they have been trained. This induces a positive change in the followers attitudes and the organization as a whole. Transformational leaders typically perform four distinct behaviors, also known as the four Is. These behaviors are inspirational motivation, idealized influence, intellectual stimulation, and individualized consideration.

Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization. Intrapreneurship is known as the practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship. Corporate entrepreneurship is a more general term referring to entrepreneurial actions taking place within an existing organization whereas Intrapreneurship refers to individual activities and behaviors.

Entrepreneurship education seeks to provide students with the knowledge, skills and motivation to encourage entrepreneurial success in a variety of settings.

A team leader provides guidance and instruction to a working group about a project or portfolio of projects. They are in charge of delegating work, overseeing progress towards goals, and coaching team members as needed. Team leads often serve as de-facto mentors for the team, even if they don't have a manager title

Organizational ethics is the ethics of an organization, and it is how an organization responds to an internal or external stimulus. Organizational ethics is interdependent with the organizational culture. Although it is to both organizational behavior and industrial and organizational psychology as well as business ethics on the micro and macro levels, organizational ethics is neither organizational behavior nor industrial and organizational psychology, nor is it solely business ethics. Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws.

Chris Roebuck is a British economist, focusing on leadership and organisational performance. He is an honorary visiting professor of transformational leadership at Cass Business School in London, a position he has held since 2009. He advises organisations on maximising performance through effective leadership, in particular developing entrepreneurial leadership.

Business acumen, also known as business savviness, business sense and business understanding, is keenness and quickness in understanding and dealing with a business situation in a manner that is likely to lead to a good outcome. Additionally, business acumen has emerged as a vehicle for improving financial performance and leadership development. Consequently, several different types of strategies have developed around improving business acumen.

Entrepreneurship is the creation or extraction of economic value in ways that generally entail beyond the minimal amount of risk, and potentially involving values besides simply economic ones.

An internal entrepreneur is a type of entrepreneur who operates inside the confines of an organisation such as a business unit or a government body.

Innovation leadership is a philosophy and technique that combines different leadership styles to influence employees to produce creative ideas, products, and services. The key role in the practice of innovation leadership is the innovation leader. Dr. David Gliddon (2006) developed the competency model of innovation leaders and established the concept of innovation leadership at Penn State University.

Raphael H. Cohen is a Swiss professor, lecturer, author, serial entrepreneur, former business angel and academic director at MBA programs. He has a PhD in economics from University of Geneva, Switzerland.

Narcissism in the workplace involves the impact of narcissistic employees and managers in workplace settings.

Entrepreneurial orientation (EO) is a firm-level strategic orientation which captures an organization's strategy-making practices, managerial philosophies, and firm behaviors that are entrepreneurial in nature. Entrepreneurial orientation has become one of the most established and researched constructs in the entrepreneurship literature. A general commonality among past conceptualizations of EO is the inclusion of innovativeness, proactiveness, and risk-taking as core defining aspects or dimensions of the orientation. EO has been shown to be a strong predictor of firm performance with a meta-analysis of past research indicating a correlation in magnitude roughly equivalent to the prescription of taking sleeping pills and getting better sleep. Still, some research has argued that EO does not enhance the performance for all firms. Instead, EO can be argued not to be a simple performance enhancing attribute but rather enhancing if it is applied under the right circumstances of the firm. In some cases, EO can even be disadvantageous for firms, if the situation of the firm does not fit with applying EO. Different situations can be the environment that the firm is situated within or internal situations such as structure and strategy.

Personal initiative (PI) is self-starting and proactive behavior that overcomes barriers to achieve a goal. The concept was developed by Michael Frese and coworkers in the 1990s.

References

  1. ↑ Roebuck, Chris (2011-12-22). "Critical need for Entrepreneurial Leaders during turbulent times". Chris Roebuck. Retrieved 2017-07-24. Definition : Entrepreneurial Leadership is organizing a group of people to achieve a common goal using proactive entrepreneurial behavior by optimising risk, innovating to take advantage of opportunities, taking personal responsibility and managing change within a dynamic environment for the benefit of the organisation. (Roebuck 2004)
  2. ↑ Compare: "Entrepreneurial Leadership – A Primer". Institute for Integral Entrepreneurship. 2016-12-12. Retrieved 2016-12-20. Entrepreneurial Leadership is an emerging leadership paradigm that has grown out of the challenges and opportunities presented by the ongoing digitalisation of society and its workforce. Its aim is to cultivate entrepreneurial teams that fully leverage their creative potential in creating value for the organisation.
  3. ↑ "Entrepreneurial Leadership – A Primer". Institute for Integral Entrepreneurship. 2016-12-12. Retrieved 2016-12-20. It does this by employing leadership practices that develop the ability in employees to self-generate, self-reflect, and self-correct in their workplace.
  4. ↑ Compare: Roebuck, Chris (2011-12-22). "Critical need for Entrepreneurial Leaders during turbulent times". Chris Roebuck. Retrieved 2017-07-24. Inherently, the large organizational mindset is somewhat contradictory to the entrepreneurial mindset.
  5. ↑ "Entrepreneurial Leadership and HR – the future for HR and business | Chris Roebuck". Archived from the original on 2012-05-03. Retrieved 2011-12-22.
  6. ↑ "ENTREPRENEURIAL LEADERSHIP. Leading Innovation, Leading Change, Pursuing Opportunities - a New Managerial Task in the New Economy".
  7. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2012-05-03. Retrieved 2011-12-22.{{cite web}}: CS1 maint: archived copy as title (link)
  8. 1 2 "Traits of Successful Entrepreneurs".
  9. ↑ "What Makes a Good Entrepreneurial Leader? Ask Middle Managers".
  10. ↑ Archived at Ghostarchive and the Wayback Machine : The New Entrepreneurial Leader: Developing Leaders Who Shape Social & Economic Opportunity. YouTube .
  11. ↑ Archived at Ghostarchive and the Wayback Machine : Colin Turner - Entrepreneurial Leadership. YouTube .
  12. ↑ "Steve Jobs – a true transformational leader | Chris Roebuck". Archived from the original on 2012-05-03. Retrieved 2011-12-22.
  13. ↑ Leitch, Claire M.; Harrison, Richard T. (2018-01-26). "The evolving field of entrepreneurial leadership: an overview". Research Handbook on Entrepreneurship and Leadership: 3–34. doi: 10.4337/9781783473762.00006 . ISBN   9781783473762.
  14. ↑ McGrath, R. G. & MacMillan, I. C. 2000. The entrepreneurial mindset: strategies for continuously creating opportunity in an age of uncertainty. Boston, Mass.: Harvard Business School Press.
  15. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2015-09-16. Retrieved 2013-02-15.{{cite web}}: CS1 maint: archived copy as title (link)
  16. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2012-04-25. Retrieved 2013-02-15.{{cite web}}: CS1 maint: archived copy as title (link)
  17. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2014-07-23. Retrieved 2013-02-15.{{cite web}}: CS1 maint: archived copy as title (link)
  18. ↑ http://chrisroebuck.co/files/2011/08/Different-Slant-Chris-roebuck-1.pdf%5B%5D
  19. ↑ Robert Hariman, Political Style, U of Chicago Press, 1995
  20. ↑ Philippe-Joseph Salazar, L'Hyperpolitique. Technologies politiques De La Domination, Paris, 2009
  21. ↑ Lewin, K.; Lippitt, R.; White, R.K. (1939). "Patterns of aggressive behavior in experimentally created social climates". Journal of Social Psychology. 10 (2): 271–301. doi:10.1080/00224545.1939.9713366.
  22. ↑ "Definition of 'Autocratic Leadership'". The Economic Times. 2021. Retrieved 20 April 2021.
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