Recruitment of entrepreneurial leaders
BY Jayashantha Jayawardhana
It’s no secret that the world of business idolises entrepreneurs in the same way that people idolise film stars and pro athletes. Entrepreneurialism is a hot topic that’s discussed in earnest among corporate academia, in the press and at a variety of forums.
Leaders want their employees to cultivate entrepreneurial skills and believe it’s a panacea for all their corporate woes. Hundreds of best-selling self-help books dispense critical advice on how we can develop our entrepreneurial skills, and there are reality TV shows to encourage and promote fledgling entrepreneurs.
Senior Fellow and Director of Career Development Programmes at Harvard Business School Timothy Butler penned an insightful article in the Harvard Business Review (HBR) titled ‘Hiring an Entrepreneurial Leader – What to Look For.’
“Entrepreneurs have become the new heroes of the business world. In the same way that Robert McNamara and his fellow Ford Motor Company whiz-kids elevated general managers to star status, figures like Mark Zuckerberg and Steve Jobs have made entrepreneurs the latest business icons,” he wrote.
Today, all types of corporates wish to be seen as being highly innovative, nimble and agile; qualities that are typically associated with entrepreneurs.
However, when it comes to recruiting entrepreneurial leaders, most companies don’t have a clear-cut formula for telling true entrepreneurs apart from other talented candidates. And so they resort to broad stereotypes.
In a bid to understand what makes entrepreneurs special, Butler compared the psychological testing results of more than 4,000 successful entrepreneurs from multiple countries against those of some 1,800 business leaders who described themselves as general managers rather than entrepreneurs.
He observed: “Unsurprisingly, the two groups had much in common. On 28 of 41 dimensions of leadership, there was little or no difference between their skills. Yet, when I looked more closely, combining their skill assessments with data on their life interests and personality traits, I discovered that entrepreneurs had three distinguishing characteristics – the ability to thrive in uncertainty, a passionate desire to author and own projects, and a unique skill at persuasion.”
“I also found that many of the traits commonly associated with entrepreneurial leaders didn’t truly apply. For instance, entrepreneurs aren’t always exceptionally creative. But they’re more curious and restless. They aren’t risk seekers but they find uncertainty and novelty motivating,” he added.
Another crucial matter Butler sheds light on is the fact that despite the trend of hiring entrepreneurial leaders, not all organisations need them. Butler says his research revealed that successful founders as a group had scored extremely high on a scale that measured the desire for power and control, and significantly higher than non-entrepreneurial leaders.
This can engender conflict or at least serious friction in situations where the sharing of information and power is vital to organisational performance.
Further, it often won’t work well in organisations that have established matrix structures, need porous boundaries between working groups or require high levels of collaboration. Get this wrong and you will easily undermine performance rather than enhance it.
Therefore, recruiting managers should carefully evaluate the particular leadership challenge they’re recruiting for.
If it’s a greenfield project, a turnaround or any other circumstance that calls for intensive initiative on a contained project, an entrepreneurial style is likely to add value. But where the situation calls for a highly interdependent matrix of working units, you’d better be looking for a different leadership profile.
Entrepreneurs are typically open to new experiences because they find the novelty motivating and possess an innate ability to thrive in uncertainty, for the simple reason that the unknown and untried are sources of excitement rather than anxiety.
Like every good businessperson, they seek to minimise risk at every opportunity. But when accepting risk is necessary to reach a desired goal, entrepreneurs are better at living with it and managing the anxiety that might be disabling to others.
Rather than being more personally ambitious, entrepreneurs are driven by a need to own products, projects and initiatives.
They have more in common with authors and artists than dictators. They’re also remarkably good at selling their vision to other people whether they be their people, potential customers or venture capitalists – even when it’s still quite inchoate.
Here’s hoping that this will help you read your team members better and discern the entrepreneurial leaders from among them.