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Friday, March 29, 2024

Could you be an entrepreneur?

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This week, I had breakfast with a friend and conversation turned to entrepreneurs and business. It is a topic much on everyone’s mind these days. As the new government gets underway, much thinking is going into nurturing entrepreneurs. 

In a market economy such as ours, business is the primary engine of economic growth. Businesses fulfill market needs in order to make a profit. In the process, businesses create jobs, drive production, and create wealth. 

And where do businesses come from? Why, every business began with an entrepreneur or a group of entrepreneurs, the founders. In fact, many analysts agree that economies depend on entrepreneurs because entrepreneurs drive the creation of new products, markets, and industries.

But here’s the kicker, as my friend recounted. He was apparently in discussion with his boss concerning business education in the country and this was their observation: Just think about all of the students who graduate with a bachelor’s degree in business every year. How many of them actually go out and establish a business? When did business education become about preparing for employment?

Founders

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It’s a little like the chicken or the egg. Is it about the sorts of people we attract to a business degree or is it about the type of education we provide? Given desire, what else do individuals need in order to found a successful enterprise? Given only interest, is it possible to fan desire? Can anyone be an entrepreneur?

Now, for the moment, let’s set aside the obvious external factors such as availability of capital or ease of doing business. Let’s concentrate only on the entrepreneur. What is apparent is that there is no single type that is an entrepreneur. However, there are a few things entrepreneurs, especially successful ones have in common. Entrepreneurs have a high ambiguity quotient. They have the ability to survive in a state of flux and make decisions in the face of imperfect information. This allows them to take risks and guide the company through the early stages when there are many unknowns. Entrepreneurs persevere. They are able to elicit commitment to their goals. Highly successful entrepreneurs are able to build a personal reputation and a personal network of contacts. This allows them to secure the resources they need and allows them to keep the team on the job and moving the enterprise forward. Entrepreneurs tend to be self-confident, more specifically, they have high self-efficacy – they believe they have the skills necessary to complete the task at hand. Successful entrepreneurs are generally not fatalistic. They seize the day because they believe they can influence outcomes. In psychology we call this an internal locus of control. A successful entrepreneur is not a passenger sitting in a bobbing rudderless, oar-less boat. He is the captain and master of his ship. 

Now, while some of these traits can be learned, there are probably very few business schools that actually pay attention to these things. Business education tends to focus on the “what” and “how” of the enterprise. But entrepreneurs really need to begin with “who” they are and who they need to be for the enterprise.

Self

Entrepreneurs play many roles in an Enterprise. I tend to think of three ley roles. First, there is the role of innovator and visionary. This tends to be the founder’s first role in an enterprise. He creates a compelling picture of what the enterprise can be. Second, there is the organizer. The organizer sets up systems and procedures. He drives execution. Third, there is the connector. He is the one who brings resources and stakeholders to the company. This includes raising capital, bringing in key partners and customers, and attracting (and keeping!) key talent. Often, this is a matter of personal network but also, it is an outcome of track record, reputation, and the ability to tell a compelling story about the company’s vision.

Anthony Tjan uses different words. Where I say visionary and innovator, he says architect. The architect, Tjan says, sets “the vision, the romance, and culture around a big and daring goal.” What I call connector, he calls the storyteller – the fellow who can tell the story of the firm. What I call the organizer, Tjan calls the disciplinarian – the one who gets things done.

What is really important in all of this, is that, not all entrepreneurs are able to play all the roles. This, in fact, explains why so many founders, who tend to be innovators, eventually have to hire in a professional manager – the organizer. It is the organizer who puts in systems and policies and allows the company to scale. In the classroom, I use the old words I first learned in my first job. When an enterprise is small, policies are “personalized.” The founder makes all decisions and decision-making is a matter of “what the founder would do.” As the company grows, decisions need to be guided by formal policies. This is the point at which policies and procedures are institutionalized. That is the role of the organizer. In many cases, especially when the enterprise is built around an invention, the innovator needs a connector – someone who will help him tell his compelling story. 

One of the most important things entrepreneurs must understand is what role they are playing. It is a rare person who can play all roles. Good entrepreneurs know their strengths and play to those strengths. They then partner with, or hire individuals who can play the other roles.

And there, perhaps, is the missing link. Perhaps too many business schools have managed the person entirely out of the curriculum. Becoming and being an Entrepreneur is an intensely personal activity. Attempting to teach it in the sterile, third person environment of a traditional classroom takes the most essential factor out of the process – the entrepreneur himself. 

 

Readers can email Maya at integrations_manila@yahoo.com.  Or visit her site at http://integrations.tumblr.com.

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