Tuesday, January 6, 2009

Becoming an entrepreneurial leader.

Bill Gates says, “When I started Microsoft, I was so excited that I didn’t think of it as being all that risky. It’s true, I might have gone bankrupt, but I had a set of skills that were highly employable. And my parents were still willing to let me go back to Harvard and finish my education if I wanted to .... If you’re going to start a company, it takes so much energy that you’d better overcome your feeling of risk.“ Entrepreneurs have the innate ability to compartmentalize their fears and doubts. They believe in what they’re doing with a passion that overcomes doubt. They’re resilient, tenacious and have the guts to overcome some white-knuckle adventures, such as replenishing a bank account the day before the payroll is due. They’re very resourceful and operate mostly on instinct. They’re always rolling the dice. They have a powerful need to provide for their families and they have an overpowering urge to do it their way. If they’re too intent on the dream to recognize the risks, they often lack the experience and the resources to protect themselves. So, they take action, make the mistakes, pay the price and if they’re lucky enough to survive, a successful business emerges. Although much has been written about how the “entrepreneurial personality” is characterized by “a propensity for risk-taking,” successful entrepreneurs spend considerable time trying to define the risks they have to take and trying to minimize them.

Leaders, by definition, set standards and attempt things that “can’t be done.” So, in a startup, the CEO’s job is figuring out what the company stands for, pushing the company to understand what it’s really good at, and building mechanisms (preferably something dramatic) that will force people to pay attention, such as Granite Rock’s altered invoice that says, “If you’re not satisfied with something, don’t pay us for it. Simply scratch out the related line item ... and send your check for the remaining balance.”

An entrepreneurial leader focuses on three employee-management fundamentals to start building an innovative organization. The first step is to formally integrate innovation into the strategic-management agenda of senior executives. In this way, innovation is not only encouraged but it's also managed, tracked, and measured as a key element of the company’s growth. Second, executives make better use of existing (and often untapped) talent for innovation, without implementing disruptive new programs, by creating conditions that allow dynamic innovation networks to emerge and flourish. Finally, management fosters an innovative culture by developing and enhancing trust among employees. In this kind of culture, people understand that their ideas are valued, that it’s safe to express these ideas, and that everyone collectively shares the risks inherent in introducing and implementing new ideas. This environment will be more effective than just using monetary incentives to sustain innovation.

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