Skills and Behaviors that Make Entrepreneurs
Successful PART I
Research at Harvard Business School by
Lynda Applegate, Janet Kraus, and Timothy Butler takes a unique approach to
understanding behaviors and skills associated with successful entrepreneurs.
What makes a successful entrepreneurial leader?
Is it the technical brilliance of Bill Gates? The obsessive
focus on user experience of Steve Jobs? The vision, passion, and strong
execution of Care.com’s Sheila Lirio Marcelo? Or maybe it’s about previous
experience, education, or life circumstances that increase confidence in a
person’s entrepreneurial abilities.
Like the conviction of Marla Malcolm Beck and husband Barry Beck
that high-end beauty retail stores and spas, tightly coupled with online
stores, was the business model of the future, while other entrepreneurs—and the
investors who financed them—declared such brick-and-mortar businesses were
dinosaurs on their way to extinction. The success of Bluemercury proved the
critics wrong.
Despite much research into explaining what makes entrepreneurial
leaders tick, the answers are far from clear. In fact, most studies present
conflicting findings. Entrepreneurs, it seems, are still very much a black box
waiting to be opened.
A Harvard Business School research team is hoping that a new
approach will enable better understanding of the entrepreneurial leader. The
program combines self-assessments of their skills and behaviors by
entrepreneurs themselves with evaluations of them by peers, friends, and
employees.
Along the way the data is also allowing scholars to study
attributes of entrepreneurs by gender, as well compare serial entrepreneurs
versus first-time founders.
“We’ve always had a hard time being able to identify the skills and
behaviors of entrepreneurial leaders,” says HBS Professor Lynda Applegate, who
has spent 20 years studying leadership approaches and behaviors of successful
entrepreneurs. “Part of the problem is that people usually focus on an
entrepreneurial ‘personality’ rather than identifying the unique skills and
behaviors of entrepreneurs who launch and grow their own firms.”
Complicating this understanding are the many types of
entrepreneurial ventures that exist, says Applegate. These can include small
“lifestyle” businesses, multi-generational family businesses, high-growth,
venture funded technology businesses, and new ventures designed to
commercialize breakthrough discoveries in life sciences, clean tech, and other
scientific fields.
“These types of ventures seem to both appeal to and require
different types of entrepreneurial leaders and we are hoping that our research
will help us understand those differences—if they exist,” says Applegate, the
Sarofim-Rock Professor of Business Administration at HBS and Chair of the HBS
Executive Education Portfolio for Business Owners & Entrepreneurs.
The answers are already starting to come in, thanks to initial
results from a pilot test of “The Entrepreneurial Leader: Self Assessment”
survey taken by 1,300 HBS alumni. Results allowed the researchers to refine the
self-assessment and to create a second survey, “The Entrepreneurial Leader:
Peer Assessment.” Both are being prepared for launch in summer 2016.
The team included Applegate; Janet Kraus,
entrepreneur-in-residence; and Tim Butler, Senior Fellow and Senior Advisor to
Career and Professional Development at HBS and Chief Scientist and co-founder
of Career Leader.
Dimensions of
entrepreneurial leadership
A literature review combined with interviews of successful
entrepreneurs helped the team define key factors that formed the foundation for
the self-assessment. These dimensions were further refined based on statistical
analysis of the pilot test responses to create a new survey instrument that
defines 11 factors and associated survey questions that will be used to
understand the level of comfort and self-confidence that founders and
non-founders have with various dimensions of entrepreneurial leadership.
These 11 dimensions
are:
1. Identification of
Opportunities. Measures skills and behaviors associated with the ability
to identify and seek out high-potential business opportunities.
2. Vision and
Influence. Measures skills and behaviors associated with the ability to
influence all internal and external stakeholders that must work together to
execute a business vision and strategy.
3. Comfort with
Uncertainty. Measures skills and behaviors associated with being able to
move a business agenda forward in the face of uncertain and ambiguous
circumstances.
4. Assembling and
Motivating a Business Team. Measures skills and behaviors required to
select the right members of a team and motivate that team to accomplish
business goals.
5. Efficient Decision
Making. Measures skills and behaviors associated with the ability to make
effective and efficient business decisions, even in the face of insufficient
information.
6. Building
Networks. Measures skills and behaviors associated with the ability to
assemble necessary resources and to create the professional and business
networks necessary for establishing and growing a business venture.
7. Collaboration and
Team Orientation. Measures skills and behaviors associated with being a
strong team player who is able to subordinate a personal agenda to ensure the
success of the business.
8. Management of
Operations. Measures skills and behaviors associated with the ability to
successfully manage the ongoing operations of a business.
9. Finance and
Financial Management. Measures skills and behaviors associated with the
successful management of all financial aspects of a business venture.
10. Sales. Measures
skills and behaviors needed to build an effective sales organization and sales
channel that can successfully acquire, retain, and serve customers, while
promoting strong customer relationships and engagement.
11. Preference for
Established Structure. Measures preference for operating in more
established and structured business environments rather than a preference for
building new ventures where the structure must adapt to an uncertain and
rapidly changing business context and strategy.
CONTINUES IN PART II
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