Chapter 5

Leading the entrepreneurial organization

LEADERSHIP AND MANAGEMENT
Leading and managing an entrepreneurial organization is a distinctive
challenge that requires some specific skills and capabilities.
Leadership and management are different and distinct terms, although
the skills and competencies associated with each overlap and are
complementary.
According to Bennis (2009): ‘Managers are people who do things right
whilst leaders are those people who do the right thing’. However, the
reality is that the two concepts overlap.
DEFINING THE ROLE OF LEADER
Leadership is more about guiding vision, culture and identity than it is
about decision-making. Nevertheless, they are also strategic thinkers
and effective communicators. Most leaders also need to be good
managers – or have good managers working with them. At the very
least they need to be able to monitor and control performance. If there
were ever a job description for a leader, therefore, it would probably
include five elements:
DEFINING THE ROLE OF LEADER
• Having a vision for the organization
• Being able to develop strategy
• Being able to communicate effectively, particularly the vision
• Creating the culture for the organization
• Managing and monitoring performance
PERSONAL ATTRIBUTES OF LEADERS
• Strategic thinker. Someone who sees the broad, strategic,
organizational perspective – the big picture. This involves taking a
longer-term, holistic view of the organization
• Strategic learner. The learning from a ‘strategy thinker’ – looking at
the big picture, trying to find patterns over time and looking for
complex interactions so as to understand the underlying causes of
problems
• Emotional intelligence. An appreciation of yourself, your different
circumstances and an ability to adapt your behaviour to meet them
and relate to people
EMOTIONAL INTELLIGENCE
Emotional intelligence derives from four personal qualities:
➥ Self-awareness – This is the ability of leaders to understand themselves,
their strengths, weaknesses and emotions.
➥ Self-management – This is the ability to adapt their behaviour to meet
different circumstances, and requires control, integrity, initiative and
conscientiousness.
➥ Social awareness – This is the appreciation of different circumstances,
both of people and the environment or context in which they find
themselves, and requires empathy, sensing other people’s emotions.
➥ Social skills – This is the ability to relate to people and collaborate with
them and, above all, build relationships with them.
Authentic leadership
To sustain leadership, a leader needs to be ‘authentic’ – to believe in and act out
these ethical underpinnings.
‘Authentic leadership’ coming from those individuals who follow their real values
and beliefs – their internal compass.
Authentic leaders:
➥ Have strong values and beliefs that they practice at work and at home – they
‘pursued purpose with passion’. They had ethical foundations and boundaries and
lead with their hearts as well as their heads.
➥ Build a support team of people with whom they have a close relationship
(spouses, family members, mentors etc.) and have a network of professional
contacts to provide counsel and guidance. Th ese were people with whom they
could reflect honestly on the issues they faced.
➥ Establish enduring relations with staff because they listened to them and
demonstrated that they can.
BUILDING SHARED ORGANIZATIONAL VALUES
The first task of a leader is to develop a vision for the organization that
is built on shared values that are truthful and ethical. The values of the
organization are an essential ingredient of its culture.
A culture of creativity and innovation originates from the shared
organizational values and control, and coordination structures within
an organization.
The values of an organization should endure in the long term. They
should be consistent and reflected in its mission and its vision.
Mission. The formal statement of business purpose – what the business
aims to achieve and how it will achieve it
BUILDING A SHARED VISION AND BELIEF SYSTEM
A vision is a shared mental image of a desired future state – an ideal of what
the enterprise can become – a new and better world. It must be sufficiently
realistic and credible that people believe it is achievable but at the same
time be an attractive future that engages and energizes people.
Vision is seen as inspiring and motivating, transcending logic and contractual
relationships. It is more emotional than analytical in nature, something that
touches the heart.
Building a shared vision is important early on because it fosters a long-term
orientation and an imperative for learning . . . In a learning organization,
leaders may start by pursuing their own vision, but as they learn to listen
carefully to others’ visions they begin to see that their own personal vision is
part of something larger.
STRATEGIC INTENT
Sometimes leaders know what they want to achieve but not how they might
achieve it. Ambitious goals might exceed the obvious resources available to
achieve them. In other words, there is no obvious, logical way of achieving
the vision and creative tension is stretched to breaking point.
When this happens vision is replaced by strategic intent, a framework for
achieving ambitious goals by energizing the organization into learning how
to reach them.
Strategic intent is not wishful thinking – which leads to terrible decision-
making. It is more purposeful: identifying potential obstacles and how they
might be overcome; setting staged goals that are achievable; and creating a
route to a destination that followers see as both desirable and attainable.
STRATEGIC INTENT
Kotter (1996) recommended seven principles for successfully
communicating a vision (or strategic intent):
1.Keep it simple – Focused and jargon-free.
2.Use metaphors, analogies and examples – Engage the imagination.
3.Use many different forums – The same message should come from as
many different directions as possible.
4.Repeat the message – The same message should be repeated again, and
again, and again.
5.Lead by example – ‘Walk-the-talk’.
6.– Small changes can have big effects if their symbolism is important to staff
.
7.Listen and be listened to – Work hard to listen; it pays dividends
LEADERSHIP STYLE AND CONTINGENCY THEORY
However, leadership is not just about communication and must be more
than just charismatic leadership if it is to perpetuate itself.
Charismatic leaders deal in visions and crises, but little in between.
Entrepreneurial leadership is about the systematic and purposeful
development of leadership skills and techniques at all levels within an
organization.
It (Entrepreneurial leadership) is about developing enduring relationships
based on trust and self-interest.
It is about creating long-term sustainable competitive advantage by making
the organization systematically entrepreneurial. All of which is dedicated,
hard work and can take a long time.
LEADERSHIP STYLE AND CONTINGENCY THEORY
Three broad styles of leadership have been popularized, each involving
different degrees of freedom or control for the employees.
➥ Authoritarian – This style focuses decision-making powers in the
leader. It is most appropriate in times of crisis but usually fails to win
‘hearts and minds’.
➥ Democratic – This style favours group decision-making and
consensus-building. It is more appropriate in circumstances other than
crisis.
➥ Laissez-faire – This style allows a high degree of freedom for
followers. However, a leader adopting this style is often perceived as
weak.
Leader and task
Leaders have to work through others to complete tasks. Th e style they adopt will determine, in part, the
degree of concern for the people they are leading compared to the task in hand.
Leader and group
Successful leaders are likely to adopt different styles with different
groups approaching the same task. Leadership style also depends on
the relationship of the leader with the group they are leading.
Leader and situation or context
The Thomas–Kilmann Conflict Modes instrument gives us an insight into how conflict might
be handled. It shows how a person’s behaviour can be classified under two dimensions:

➥ Assertiveness – The extent to which individuals attempt to satisfy their own needs.
➥ Cooperativeness – Th e extent to which they attempt to satisfy the needs of others.

These two dimensions led the authors to identify the five behavioural classifications:
1.Avoiding
2.Competing
3.Accommodating
4.Compromising
5.Collaborating