Divine Word College of Legazpi

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SCHOOL OF BUSINESS, MANAGEMENT, AND ACCOUNTANCY
Legazpi City

GE Elec 14
Entrepreneurial Mind

Lesson 7 - - Entrepreneurial Leadership

Leadership is the ability of an individual or a group of individuals to influence and

guide followers or other members of an organization.

Entrepreneurial leadership involves organizing and motivating a group of people to

achieve a common objective through innovation, risk optimization, taking advantage of
opportunities, and managing the dynamic organizational environment.
Some of the common entrepreneurial leadership characteristics are as follows.

1. Communication skills

The leader is able to clearly articulate their ideas, and the plan to achieve
common goals. They encourage communication between departments and across
levels. They avoid ambiguities and generalizations and are able to avoid conflict and
misunderstanding due to poor communication. It is a two-way process. In other words, it
involves both the sending and receiving of information.

It, therefore, requires both speaking and listening, but also—and perhaps more crucially
—developing a shared understanding of the information being transmitted and received.

 If you are the ‘sender’ of information, this means communicating it clearly to start
with (whether in writing or face-to-face), then asking questions to check your
listeners’ understanding. You must also then listen to their replies, and if
necessary, clarify further.

 If you are the recipient, it means listening carefully to the information, then
checking that you have understood by reflecting back, or asking questions to
ensure that you both have the same understanding of the situation.

It is, therefore an active process. There is nothing passive about communication, in

either direction.

Types of Communication in Organization

Internal Communication. Internal communication takes place within the

organization or group–among people within, among different groups of employees and
between employers and employees. It could be oral or written, visual or audio-visual,
formal or informal, and upward or downward. Internal communication serves to inform,
instruct, educate, develop, motivate, persuade, entertain, direct, control and caution
people in the organization.

External Communication. Unlike internal communication, external

communication flows outward. It addresses people outside the organization, like the
prospective customers, competitors, public, press, media and the government. External
communication can take place in various ways and through different channels. Letters,
notices, brochures, demonstrations, telephone calls, business meetings, press releases,
press conferences, audio-visual presentations, publicity films product launch events and
advertisements are all examples of external communication. There may be some
communication, which would move both upward and downward. A typical example of
this is performance budgeting, which is a two-way process. It is a top to bottom as well
as bottom-to-top exercise
 Upward Communication. Large organizations have different hierarchical levels
or tiers. Banks, finance companies, insurance businesses, railways, and such other
people-oriented organizations have typically a 3-tier or a 4-tier structure. The process of
communication to be complete and effective should encompass all these levels and
tiers. Upward communication is one which moves upward, i.e., from bottom to top levels
in the hierarchy. Any communication that moves from employees to supervisors,
supervisors to managers, managers to executives, regional manager to general
manager and so on, maybe categorized as upward communication. Similarly,
communication from branches to regional offices, regional offices to zonal offices, zonal
offices to head office is referred to as upward communication. Employee suggestions,
market reports, performance reports, feedback on new products and requests for
facilities or instructions are all examples of upward communication in the organizational
context.

Downward Communication. Downward communication moves from top to the

bottom, i.e. from the CEO downwards. It travels through senior executives to junior level
functionaries, from the controlling office to the branch, from the head of the division to
the head of the unit. Corporate goals, business priorities, motivational letters, work-
related instructions, newsletters, letters from the CEO/General Manager’s desk are all
typical examples of downward communication. There may be some communication,
which would move both upward and downward. A typical example of this is performance
budgeting, which is a two-way process. It is a top to bottom as well as bottom-to-top
exercise

Formal Communication. Towards ensuring communication on an on-going

basis, organizations develop formal systems. Staff meetings, union-management
meetings, branch managers’ conferences, periodical sales review meetings and
customer meets are examples of forums that facilitate formal communication. Formal
communication generally follows a well-defined hierarchical pattern and periodicity.
Memos, circulars, instructions, guidelines, clarifications, agreements and reports are
some of the channels that facilitate the flow of formal communication in business
organizations.

Informal Communication. This type of communication takes place in an

unstructured manner and outside the formal forums. There is an element of spontaneity
in this communication. Informal communication works well in smaller, loosely knit
organizations. It is used more often in situations where there are no rigid hierarchical
tiers. While the formal structure of communication is a must in large organizations, it is
the informality that helps sustain goal orientation in small well-knit units. Informal
communication takes place through chats, conversations, informal talks and the like.

Lateral Communication. Lateral communication generally takes place in an

organization and is neither upward nor downward. It proceeds in a horizontal manner
and takes place among equals and at peer level. It may also be described as peer-level
communication. Any communication that takes place, orally or in writing, from one
branch head to the other, from one division head to the other, from one group head to
the other, maybe described as lateral communication. An important point worth noting in
any such lateral communication is that there is not much difference in terms of the
hierarchical levels or positions of the sender and the receiver.

Interactive Communication. Interactive communication is essentially a two-

way process. It takes place through meetings, conferences, teleconferencing,
multimedia presentations, group discussions, and other such active two-way exchanges.
Interactive communication is most appropriate when the message or subject is to be
presented at length, e.g., in practical sessions, case study discussions, and strategy
formulation. When many speakers are involved, there may be a need for a moderator
who will facilitate the effective flow of communication from different speakers.

Mass Communication. Mass communication is distinctive in view of its scale.

Essentially, it addresses a large mass of people. Public speaking, newspapers,
magazines and journals, radio, television, dotcoms, etc. are channels of mass
communication. Mass communication has developed into a specialized area of study.
 Grapevine. Grapevine is a kind of informal communication that prevails in
organizations and businesses. The source of such communication may not be clear. It
spreads by way of gossip and rumors. It travels through informal networks and quite
often travels faster than the formal messages. Sometimes, it gets more powerful and
becomes more receptive than formal communication.

The prevalence of this type of communication in an organization has to be recognized

and accepted. A skilled communicator can derive benefits from such communication as
well. It may not always be possible to control the grapevine, but, nevertheless, an able
communicator knows how to influence it. Like any other type of communication, this one
has its own merits and demerits.

2. Vision
A successful entrepreneurial leader has a clear vision. He knows exactly where he
wants to go and how to get there. They communicate their vision to the team and work
with them to make the vision a reality. A vision statement is a declaration of an
organization's objectives, intended to guide its internal decision-making. A vision
statement is not limited to business organizations and may also be used by non-profit or
governmental entities.

3. Supportive
Entrepreneurial leader realizes the importance of initiative and reactiveness, and they go
out of their way to provide all the support that the team needs to achieve their goals. The
leader usually does not punish employees when they take a calculated risk which
misfires. Instead, they sit down with employees to analyze what went wrong and work
with them to correct the mistakes. Supportive leadership styles are defined by their
approach to emotions, training and time. Supportive leaders then train employees to
deal with issues themselves, as they arise, relying on the manager when necessary but
dealing with the problems themselves as much as possible.

4. Self-belief

The leader has tremendous belief in themselves and has confidence gained from years
of experimenting, at times failing, and learning. They are aware of their strengths and
weaknesses and demonstrate their skills without hubris. An entrepreneurial leader is
very self-assured. As a leader of self, others, and a business – self belief in the kind of
leader you want to be is so important.
Yet too many current business leaders invest far too much energy into either fitting in or
looking good.
It takes courage, discipline and consciousness to develop into the kind of leader you
want to be, the kind of leader that enables you to feel good about yourself everyday.
This is what self belief creates.
Instead we have too many leaders embroiled in playing politics, fearful of backstabbing
and the lack of trust that ensues. Too many leaders who talk about others behind their
backs and far too many who fear retribution.

5. Shares success

When the team or the organization succeeds at something, the leader does not hog the
limelight or take all the credit. They acknowledge the contribution of others and shares
the accolades with them. Shift the focus onto others (using YOU and WE) to share
success

Start with others when sharing a collective success. Share what went well with
individuals directly (“your report was very well articulated”). Then acknowledge everyone
for their efforts using “we” (“we accomplished our goal”). Share the success without
shifting the focus onto what you did well (even if you did a lot). If you receive a
compliment from your team, don’t embellish or downplay the complement, simply thank
them. Even when your team is not present, avoid the urge to shower yourself with
praise. Instead, state how proud you are of leading a winning team.

6. Involved

You will not find an entrepreneurial leader cooped up in the office. Leaders like to spend
time among employees, walk around the factory or department, interact with everyone,
and see them doing their job. This leader will usually take some time out to informally
chat with employees, and understand their work and personal challenges.

7. Create an atmosphere conducive to growth

With a deep understanding of the importance of other people’s contributions to

organizational success, the entrepreneurial leader creates an atmosphere that
encourages everyone to share ideas, grow, and thrive. They actively seek others’
opinions, and encourages them to come up with solutions to the problems that they face.
The entrepreneurial leader also provides positive feedback when employees come
forward with an opinion.

8. Honesty

Honesty is the most important quality of an exceptional leader. Entrepreneurial leaders

who are honest are able to quickly win the trust of their employees. People respect
leaders to come across as honest, and are more likely to accept positive or negative
feedback and also work harder.

9. Perseverance

When the going gets tough, the entrepreneurial leader perseveres. True entrepreneurs
simply don’t quit, they keep going till they find what they’re looking for.

10. Learning

The leader not only invests significantly in learning and updating their knowledge, but
they also create a learning environment in the organization encouraging others to
improve their knowledge, widen their experience, and tackle multiple challenges. They
encourage employees to think outside the box and come up with creative solutions to
problems.

Discharging Entrepreneurial Leadership Responsibility

1. Framing. lFraming is the process of explaining a concept, situation, or idea so

clearly that others can paint a mental picture of it. ... This is often achieved by using
certain words or pictures to help persuade someone to feel the way we want them to feel
about an idea, concept, or situation. For example, option one offers a $50 gain. Option
two offers a $100, but a $50 loss. Now the two options lead to a $50 gain, but the first
option is favored because a loss is not presented.

2 Absorbing Uncertainty.
What are ‘uncertain times’?
• Pace of change more rapid.
• Its not only economic but even social changes that have their impact.
• Factors impacting outcome – Seemingly unrelated events impact outcomes
more than ever before.
– Impact felt faster.
How to prepare for uncertain times
The traditional approaches are
Anticipate. Things you can foresee
Adapt. Things that you cant foresee. (In either case, ACT and act fast).
Uncertain times
 • The millennials.
• Impact of technology.
• Information overload.
• Globalisation.
• Social media.
How to prepare for uncertain times
• Contingency planning. Remember - No plan survives contact.
• Stay connected- communicate.
• Informal approach.
• Exploit technology.
• Manage information.

What do leaders need to do

A strong effective skill sets of others to get more done in the leader in today’s
uncertain economy shares the leadership role with others members of the team.
Stepping out from the formal leadership role, it is an informal team approach where the
lead role shifts by the subject at hand. It allows the organization to tap the excitement a
way that drives an even better outcome.
By building trusted relationships within an organization through accessibility,
transparency, communications and actions the shared leadership concept achieves a
much higher sense of commitment and meaning to those involved. Colleen Brown
President / CEO Fisher Communications
There are lots of effective styles. Yet they should be enabling in order to
succeed and generate leverage. Leaders need to demonstrate a steady hand. It’s easy
to worry and lose focus in a bad economy. Hiring the right people really matters, and
really counts. After that, as a leader, you need to stay out of the way. Surround yourself
with people who are smarter than you, and then just lead through the team. In a sense,
the whole organization must lead together.
Transformative Leadership Transformative leadership occurs when one or more
people engage with others in such a way that leaders and followers raise one another to
higher levels of motivations and morality.
Transformational leadership is defined as a leadership approach that causes change
in individuals and social systems. In its ideal form, it creates valuable and positive
change in the followers with the end goal of developing followers into leaders.

3. The Gravity of Leadership

In Star Trek and Star Wars they have artificial gravity. In Babylon 5 they had technology
that replicated the gravitational properties of Earth. What really keeps the crews of Sci-Fi
shows grounded? Leadership.

In Star Trek Voyager, Captain Janeway destroyed the only means of getting her crew
back home so that it wouldn’t fall into the wrong hands and be used as a weapon. While
some of the crew disliked her for that decision, over time they understood that it was
necessary. Over time they all happily followed her and the decisions that she made.

Leadership is like a gravitational force that attracts people to follow you along your path.
It provides clarity on why they should follow you and paints a vision of how their life will
be better as a result of that. The gravitational force of leadership removes any doubt
they may have about following you. The gravitational force of leadership keeps
employees focused and stable. The right leadership style at the right time helps
everyone keep their feet on the ground and prevents them from floating up into the
atmosphere. When the leader is calm and collected so shall they be. It is OK to have
fear but in times of crisis you cannot show it. You have to project certainty in the face of
adversity.

Everyone encounters the attractive force of leadership gravity whether it is good, bad or
indifferent. Make sure the gravitational force you exert is a positive one. Employees
become grounded by your leadership gravity when you help them make sense of the
world around them. The gravitational force of leadership provides the why’s of what they
are doing and it gives them a sense of purpose and value. Your leadership style should
provide a win-win relationship.

The gravity of your leadership needs to be present, strong and consistent. It needs to
keep employees grounded and act as a force that draws them along your chosen
journey. The gravity of leadership is validated by achieving the expected outcomes for
all involved. We know gravity is what keeps us on the ground but in leadership
employees may never really figure out the attractive force that draws them to you. The
more mass your leadership style has the stronger the force of leadership gravity you will
exert.y

4. Path Clearing
In 1971, Robert J. House, Ph. D., of the Wharton School of Management, developed an
organizational management theory referred to as path-goal leadership. This method of
guiding employees stresses that the leader is responsible for clearing a "path" for his
subordinates so they are able to achieve their goals.
Path–goal theory assumes that leaders are flexible and that they can change their style,
as situations require. The theory proposes two contingency variables, such as
environment and follower characteristics, that moderate the leader behavior-outcome
relationship. In these settings, path–goal theory suggests that it is the leader's
responsibility to help followers by removing these obstacles or helping them around
them. Helping followers around these obstacles will increase followers' expectations that
they can complete the task and increase their sense of job satisfaction. An example of
this style would be when a sales leader sets a high goal for the number of sales a team
must make in one day. The leader builds up the team's confidence during the sales
event, encourages, and supports each employee to do their best to reach the high sales
goal they set.

Guidelines for Path-Goal Theory

 Determine what outcomes subordinates are trying to obtain in the workplace
 Reward subordinates for performing at a high level or achieving their work goals
by giving them desired outcomes
 Make sure subordinates believe that they can obtain their work goals and
perform at a high level
Leadership Behaviors
 Directive leadership
 Supportive Leadership
 Participative Leadership
 Achievement-Oriented
Leadership Note: House assumes leaders are flexible, can display any behaviors
depending on the situations
Path-Goal Theory Pros
 Helps understand how leader behavior effects subordinates satisfaction and
work performance
 Deals directly with motivation – one of the only theories to address this
 Provides a very practical model – make a clear path and follow it
Path-Goal Theory Cons
 This is a very complex theory that incorporates many aspects of leadership
 Research only partially supports the theory
 Fails to explain adequately the relationship between leader behavior and
subordinate motivation
 Treats leadership as a one way street, places a majority of the responsibility on
the leader