Entrepreneurs have replaced general managers as the stars of the business world. But spotting a truly entrepreneurial leader is not always a simple matter, writes Timothy Butler for Harvard Business Review.
Post-World War II, Robert McNamara and his nine fellow Ford Motor Company “whizz kids” elevated the status of management science and made the general manager the star of the business world. In the past three decades entrepreneurial leaders such as Apple’s Steve Jobs and Facebook’s Mark Zuckerberg have become heroes to the leaders of the future.
“Entrepreneurialism is highly valued in today’s labour market,” writes Butler. But when all candidates are trying to sell themselves as entrepreneurs, how do you avoid falling back on stereotypes and spot the real deal?
DO YOU NEED AN ENTREPRENEURIAL LEADER?
Before you start the hiring process, ask yourself what you’re looking for in a leader and create a leadership profile.
Entrepreneurial leaders do not thrive in all environments or with all tasks. For example, entrepreneurs like to have complete control over a project, so if you are looking for a candidate who is comfortable working in a matrix organisation structure where the sharing of information between different working groups is required, you might want to think again.
DISPELLING THE MYTHS
Butler compared the psychological testing results of more than 4,000 successful entrepreneurs with 1,800 business leaders who instead identified as traditional general managers. He found that on 28 of the 41 “dimensions of leadership” there was no difference, but he was able to dispel several myths about entrepreneurs and identify several key characteristics.
If you’re going to hire a truly entrepreneurial leader, look beyond the stereotype and build a more accurate picture of the candidate you are looking for.
STEREOTYPE ONE: ENTREPRENEURS ARE MORE CREATIVE
There is no evidence that entrepreneurs are more creative than more traditional leaders, but they do possess six unique characteristics connected with the concept of creativity:
1) They are open to new experiences. Entrepreneurs “thrive on uncertainty” and have a “restless need to explore”. They are motivated by the unknown.
2) They are willing to defy convention. Entrepreneurs always believe that things can be done better and relish dreaming up new ways of doing things.
3) They love the early stages of a project. Entrepreneurs will be passionate about a project if it remains fresh and unpredictable, but when things become more routine and stable they start to lose interest.
4) They are comfortable with risk. Entrepreneurs, like all good business people, will do everything they can to minimise risk. But they are more comfortable with risk and they are motivated by “unpredictable and ambiguous environments”.
STEREOTYPE TWO: ENTREPRENEURS ARE MORE AMBITIOUS
Entrepreneurs do have a need for power and control, but not because they want to dominate subordinates. They don’t want to sit in their top-floor corner office with the door shut admiring the view; they want to be “hands-on”, controlling every aspect of the creative process and the finished product.
“Entrepreneurial leaders do not see themselves as exerting power from above,” writes Butler. “They see their role as being at the centre of a circle rather than the top of a pyramid.”
Think Steve Jobs. For Jobs and other entrepreneurial leaders, “a venture is an expression to the world of who they are”.
STEREOTYPE THREE: ENTREPRENEURS ARE SALESPEOPLE
This is true. Entrepreneurs are salespeople: confident and persuasive. “Entrepreneurs must be able to sell their vision to prospective team members before they have anything else to offer.”
Lee Iacocca is a prime example. Iacocca was an engineer by training, but he is famed for persuading the Ford Motor Company to develop the Ford Mustang, a more affordable sports car, in the 1960s, and for persuading the United States Congress to provide a loan guarantee to Chrysler Corporate when he was CEO of the struggling automobile manufacturer in 1979.
ASSESSING ENTREPRENEURIAL ABILITY
Understanding the subtler truths behind the myths of the entrepreneurial leader means you can assess your potential candidate according to these three core abilities:
1) Ability to thrive in uncertainty. In order to assess this, look to their past decisions. Has he or she chosen new experiences and the opportunity to learn, over the well-trodden, risk-free path?
For example: did he or she choose to attend a less celebrated university in order to pursue a passion? Did he or she chose to work for an innovative startup rather than an established blue-chip company?
When asking your questions, e.g. Which is more valuable: instinct or wisdom?, assess the candidate’s desire to learn and willingness to tackle problems in a new way and to take risks in order to achieve the desired outcome.
“When interviewed, entrepreneurial managers will ask bold questions, take the initiative in the conversation, exhibit little anxiety about fitting in or providing the desired responses, and exude sheer, almost impatient, enthusiasm.”
2) Ability to lead. Look at the candidate’s past behaviour. He or she should always have been “in charge” of their life and always on the hunt for leadership roles of any kind; a “founder” not a “joiner”.
Ask questions such as: Which business leaders do you admire? Why? To what extent does your work define who you are as a person?
The perfect candidate should “own” the interview and the problem, and be eager to discover how much freedom he or she will have to find a solution.
3) Ability to persuade others. Spotting a salesperson is much easier than spotting the other attributes of an entrepreneurial leader. What experience does the candidate have with sales? Is he or she justifiably confident? Has he or she convinced you they can get the job done?
LOOK FOR THE EXCEPTION, NOT JUST THE EXCEPTIONAL
“Exceptional leaders have much in common, and most can adapt to the demands of whatever organisational challenges they face.” But truly entrepreneurial leaders – those who desire complete ownership of a problem, are motivated by uncertainty and have the ability to persuade others to follow their lead – are rare.
You might not even need one. “But if your organisation needs someone to turn innovative ideas into full-blown, standalone enterprises – or invent and bring to life completely new models – it may be time to hire an entrepreneurial leader,” Butler concludes.