What Leadership Characteristics Do Entrepreneurs Need?
It is one thing to create a new enterprise; it is another to sustain and continue to grow an enterprise to be successful. There are too many examples of individuals with great ideas who successfully started up an enterprise, only to see it fail over time. To be able to sustain a successful enterprise not only do you need to have basic leadership skills, but you need some additional ones specifically germane to successful entrepreneurial leadership. This article explores what some of those skills, leadership characteristics are and why they are important.
There are countless theories and ideas on what leadership is and what the characteristics are that define great leaders. A quick Google search for Leadership theory will give you almost 60 million results. So where to start? Maybe we should look at general leadership characteristics first, then look to see if there any gaps when looking specifically for entrepreneurial leadership characteristics.
There continues to be significant research and agreement that leadership comes from a combination of both genetics and learned behaviour. In other words, leaders are not just born leaders — although some people are born with strong leadership instincts — leadership is also learned. One of the best books on practical leadership, one that takes this theory to heart is, The Leadership Challenge by Kouzes and Posner (Wiley). This work, which has just had its 7th revised update refers to Exemplary Leaders and postulates that it’s not about what leaders do or do not, its how often they do, or demonstrate, certain behaviours and that these behaviours can be learned. Kouzes and Posner break down exceptional leadership into five practices.
- Model the Way – Leaders clarify values by finding their voice and affirming shared values. They set the example by aligning actions with shared values.
- Inspire a Shared Vision – Leaders envision the future by imagining exciting and ennobling possibilities. They enlist others in a common vision by appealing to shared aspirations.
- Challenge the Process – Leaders search for opportunities by seizing the initiative and by looking outward for innovative ways to improve. They experiment and take risks by constantly generating small wins and learning from experience.
- Enable Others to Act – Leaders foster collaboration by building trust and facilitating relationships. They also strengthen others by increasing self-determination and developing competencies.
- Encourage the Heart – Leaders recognize contributions by showing appreciation for individual excellence and celebrate the values and victories by creating a spirit of community.
Kouzes and Posner take these five practices and assign six behaviours for each practice. Each of the five practices can be compared to characteristics in that leaders who consistently demonstrate them are perceived by their manager, colleagues, and direct reports as exemplary leaders who get things done.
Looking at the above five practices we can develop a select listing of leadership characteristics. With these, along with the work done at Santa Clara University and the Tom Peters Group, we can outline the following as key leadership characteristics:
- Honesty —Display sincerity, integrity, and candor in all your actions. Deceptive behavior will not inspire trust.
- Competent —Base your actions on reason and moral principles. Do not make decisions based on childlike emotional desires or feelings.
- Forward-looking —Set goals and have a vision of the future. The vision must be owned throughout the organization. Effective leaders envision what they want and how to get it. They habitually pick priorities stemming from their basic values.
- Inspiring —Display confidence in all that you do. By showing endurance in mental, physical, and spiritual stamina, you will inspire others to reach for new heights. Take charge when necessary.
- Intelligent — Read, study, and seek challenging assignments.
- Fair-minded —Show fair treatment to all people. Prejudice is the enemy of justice. Display empathy by being sensitive to the feelings, values, interests, and well-being of others.
- Broad-minded —Seek out diversity.
- Courageous —Have the perseverance to accomplish a goal, regardless of seemingly insurmountable obstacles. Display a confident calmness when under stress.
- Straightforward —Use sound judgment to make good decisions at the right time.
- Imaginative —Make timely and appropriate changes in your thinking, plans, and methods. Show creativity by thinking of new and better goals, ideas, and solutions to problems. Be innovative!
While the above is as solid list of leadership characteristics, I would suggest that there are some others uniquely tied to the needs of entrepreneurship. While all the above are necessary there are four other characteristics that I have found to be critical for the entrepreneur. They are:
- Creative thinking — Creative thinkers are excited about the freedom to come up with big ideas and to let those ideas percolate to become reality. They take advantage of being allowed to think outside the box. Critical thinking allows us to think through problems by getting to the real root of a given situation and to find solutions. This is often the initial seed that germinates into an enterprise idea. It’s not unusual to see entrepreneurs build something out of nothing and once that is done move on to something else, becoming ‘serial entrepreneurs.
- Time management — Time management is a critical characteristic of entrepreneurs. Starting a new enterprise requires a focused attention to detail, in a timely way. Setting timelines and road maps to reach a final service or product, pushing though the roadblocks that will inevitably show up. Time management is also about recognising when one needs help and understanding that at some point responsibilities must be delegated to others, trusting in those others’ expertise.
- Networking — Networking is another critical characteristic for entrepreneurs as they make connections, either to source ideas, resources and/or markets. Networking is time consuming but has the potential to pay big dividends. Success is not just using social media platforms but actually getting out there and making in-person connections with people. Finding out who knows who and who knows what can create opportunities to build relationships.
- Communication — I refer here to interpersonal communications. An entrepreneur’s ability to connect with others and build relationships has to be the number one key characteristic. Understanding first how you tend to behave and communicate with others and then to recognize and understand how others tend to behave and communicate is a skill set that goes beyond being an entrepreneur and becomes about life in general. It is the root to developing strong Soft Skills.
As stated in the article Leadership Competencies (SHRM, March, 2005) Leadership competencies are leadership skills, characteristics and behaviors that contribute to superior performance. There may well be others to add to the list above, but I believe these are foundational. As a leadership coach I work with my clients to identify where their gaps are above and then developing a plan to strengthen those characteristics. Over a period of time clients report that not only do they feel a shift in how they are leading but that others notice and point it out too.
As I stated at the top of this article, it is one thing to create a new enterprise; it is another to sustain and continue to grow an enterprise to be successful. It is not enough to have basic entrepreneurial skills to be successful in the long run: you need additional ones that are specifically geared toward being a successful entrepreneurial leader.