by Tebello Hlalele
Entrepreneurship has long struggled to identify a coherent theoretical and conceptual framework capable of explaining the phenomenon known as “entrepreneurship” and more importantly the role of the “entrepreneur.”
The field of entrepreneurship has long held that there is a symbiotic bond between the creation of the new venture and the role of the entrepreneurial leader-founder. This entrepreneurial leader lends his/her vision, leadership style and strategy to the very essence or the core of the business.
This individual is a major independent variable influencing the outcome and success of the business. Leadership is becoming more and more important as a process that enables teams to engage in collective creativity towards the best possible outcome.
Entrepreneurial leaders also exercise a visionary faculty we can call “fabulation”, the act of making manifest images of “what
could become” to motivate and inspire. Fabulation can be performed in words (i.e. a rousing speech, or verbal guidance or
feedback), or in action.
Fabulation calls into being a time of passion, in which we become affected by the other’s capacity, to affect the other; in other words, we allow ourselves to be changed by the other, and in doing so make the other more receptive to be changed by us in turn. In this relational space in which we affect one another–based on trust and curiosity for one another’s capacity.
The key to a leader’s impact is sincerity. Before he can inspire with emotion he must sway himself. Before he can move their tears his own must flow. To convince them he must himself
believe. — Winston Churchill (Manchester 1988)
The Dynamic Market
The word, “dynamic” connotes the energy, motion and constancy of changes in the market, as opposed to terms associated more with head-to-head competition between firms. In a dynamic market the pace, magnitude and direction of change continuously accelerates. Market boundaries are blurred, business models are unclear, and the players are ambiguous.
The Need for Entrepreneurial Leaders in Dynamic Markets
Conditions in a dynamic marketplace have an impact on the strategic behavior of entrepreneurs, leaders and organizations. An individual and corporate entrepreneur will assume a more powerful and prominent role in dynamic settings.
The confusion and the speed of change that intimidate many of today’s leaders have long been central to the theory of entrepreneurship. When disequilibrium is the norm, rather than a rare occurrence, entrepreneurial leaders can gain strategic advantage by developing strategies that proactively manage change and exploit opportunity.
Innovation is a specific function of entrepreneurship, it is how the entrepreneur either creates new wealth-producing resources or endows existing resources. One writer proposes four main categories of entrepreneurial strategies:
(i) Being “Fustiest with the Mostest”,
(ii) “Hitting Them Where They Aren’t”,
(iii) Finding and occupying a specialized “ecological niche”, and
(iv) Changing the economic characteristics of a product, market or industry. These four
activities are not mutually exclusive.
The term “Fustiest with the Mostest” refers to a business strategy that aims to achieve leadership, and may involve being the dominant player of a new market or industry. Cases such as DuPont, 3M, Hoffman-LaRoche and Apple computers are proposed to illustrate the difference between big business and dominant business.
Although these companies are well known and large, it is not the aim of “Fustiest with the Mostest” to make a company big, rather is a highly ambitious aim of creating something truly new and truly different. It is the continuing effort of retaining a leadership position that differentiates this entrepreneurial strategy from other forms of strategic objectives.
An approach centered on identifying and measuring the specific personal characteristics of leaders, under the assumption that great leaders are born, not made. This culminated in a host of research conducted under the assumption that there are certain, specific, measurable personal traits and characteristics that clearly distinguish such leaders.
Later, research showed, that no specific traits or personal characteristics stood out as strong, certain markers of leadership. Three specific sets of personal characteristics that were consistently associated with leadership;
A distinction to that of leaders and managers by using individuals such as Ghandi and Roosevelt as illustrative examples of leadership.
In contrast to transactional leadership (managerial), which entails an exchange between leader and follower, transformational leadership entails both leaders and followers raising each other’s motivation and sense of higher purpose. In other words, both the leader and follower are transformed.
Visionary Leadership Theory is built on the foundation of a formulation, “behavior is the function of the person and the situation.” There are three personal characteristics of leaders, i.e., self-confidence, the need for power, and vision.
Transformational leaders use power in a way that makes followers less dependent on the leader. This is an important distinction from charismatic leaders who use power to arouse charismatic affects in followers to get followers to identify with and obey the leader.
The final element to be added to Visionary Leadership Theory is that of culture building, or principled leadership. Principled leadership refers to the degree to which a leader is effective in inculcating values and beliefs designed to shape an organizations’ culture.
The popular belief that entrepreneurship originated from the science of economics alone must be qualified. Entrepreneurs were interested not only in the economy but also in the
managerial aspects of enterprises, business development and business management. However, launched the field of entrepreneurship by associating it clearly with innovation.
Entrepreneurs are innovators, independent people whose role as business leaders conveyed a source of formal authority. The behaviorists tend to dominate the field of entrepreneurship, their goal is to define entrepreneurs and their characteristics.
Entrepreneurial leadership tips
Leadership must be willing to listen to and recognize good ideas. Beyond listening, it is critical to enable people to see their own
ideas through, even if they must push themselves past any previous company achievements or organizational structure.
Cut the red tape
It is important to create an environment where anyone can come forward with an idea on how to improve any aspect of the
business. It should not matter where that person fits on the organizational chart.
Freedom to fail
Many entrepreneurial careers are built on a succession of minor failures, with the accumulated lessons learned from each leading to ultimate success. It is important for companies to allow for a degree of inevitable failure around new projects and initiatives
without sending the message that failure is not tolerated.
It doesn’t do any good to encourage team members at all levels to bring innovative ideas to company leadership if the leaders then
take those ideas and make them their own. Recognition is a key driver for us all.
Be willing to break precedent
Differentiate between rules needed to guide and perform within the current business and rules which may restrict success.
For social media platforms, people can follow me on twitter @Panda_Hlalele and Tebello PandaPrenuer Hlalele on Facebook.
Until next week, bye-bye for now.
Tebello “PandaPreneur” Hlalele
Business Collumnist: FS News Online
Tebello is writing featured articles for FS News Online, weekly. He covers various Business related topics and answer relevant questions.
About the Author: Tebello Hlalele, a 22 year old entrepreneur, student and future leader from Meloding Virginia, currently residing in Bloemfontein. He is currently leading a programme called “Hustle on the move”. He aim is to get entrepreneurs in the Free State to reach their desired destinies. He also has a 30 minutes slot with Ace Moloi on Kovsie FM every Friday that interacts with entrepreneurs regarding their challenges.