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Entrepreneurship as a leadership style

Previously I explored entrepreneurship through the lens of trait theory. Unfortunately, the "trait" model does not always fit with observed entrepreneurial activity.

Many academics have made the point that activities of entrepreneurship are transitory (e.g. Stace & Dunphy, 2001; Venkataraman & Shane, 1997; Ward, 2003).

Sometimes otherwise normal people can have an "entrepreneurial fit" - a temporary state of entrepreneurialism where an idea takes hold and drives them to create a new venture - and then, once in the day-to-day operation of the business venture, entrepreneurial thinking dissipates and is replaced by their original (and often introverted) behaviour - leading Gerber (1995) to name this style of entrepreneurism an "e-myth".

It is also well-known that organisations require different management styles as they grow (Quinn & Cameron, 1983; Smith & Miner, 1983; Ward, 2003), and accordingly "the entrepreneur must either undergo a style change to become a true manager, or be replaced by someone more congenial to bureaucratic managerial systems" (Smith & Miner, 1983).

So while it is true that some entrepreneurs are always seeking out the next venture, it is also true that other leaders can change their behaviour to take on and later suppress their entrepreneurial traits, in line with the needs of their business. This indicates that the leader's behaviours are not driven by hard-coded "traits", but instead the leader has selected a leadership style most appropriate to the conditions.

Stace and Dunphy (2001) define four styles for leadership along with volumes of work on selecting the right style for the task at hand. Although Entrepreneurial Leadership is not strictly one of Stace and Dunphy's styles, they do define Charismatic Leadership and describe it as being good for organisations "radically redefining their business strategies [...] or with start-up organisations". This fits with the style of an entrepreneur, and adds further weight to the concept of entrepreneurism as a leadership style rather than a trait.

Ward (2003) maps leadership styles to organisation phases, and posits that as each organisation will goes through its different phases of Creation, Growth, Maturity, Turnaround and Decline, the organisation will require a different leadership style at each phase. The Creator is his version of an entrepreneurial leader who is responsible for bringing life to the organisation, laying out the "heroic mission that is the organisation's rasion d'être", and bringing an intense passion for that mission. Ward's Creator has common attributes with the commonly accepted attributes of an entrepreneur - a sense of urgency, vision, passion, comfort with uncertainty, and an unyielding focus on the prize. The Creator may also have the technical skills needed to create the new product or service (Ward, 2003) - in other words, the creator may be a craftsman entrepreneur (Smith & Miner, 1983).

As an organisation grows, Ward's model introduces an Accelerator leadership style, and suggests that this role has a very different skillset to the Creator. When considering the leadership skills Ward puts forward as an Accelerator, it is clear this person is not an entrepreneur, but instead is a professional manager.

There are a multitude of real-world examples to back up this model - for example, Google's Larry Page and Sergey Brin hired Eric Schmidt as the CEO after the company's initial creation, and Schmidt then grew the company from 200 employees to over 30,000 employees (Google, 2012), a task that was beyond the skills and interests of the entrepreneurial craftsmen, Page and Brin.

However, equally there are examples where a creator has evolved to encompass the skills to maintain leadership of the organisation well beyond creation - one has to look no further than Bill Gates of Microsoft, Steve Jobs of Apple (Cruikshank, 2006), Larry Ellison of Oracle, or Andrew Grove of Intel (Grove, 1996). All founded their companies as entrepreneurs, and all later became effective leaders in the growth and maturity phases of their companies.

So it seems that while some leaders are indeed entrepreneurial as part of their nature, others temporarily embrace the style of the entrepreneur when required by their circumstances, and turn to other leadership styles at other times.

Perhaps it is not what they think, but what they do that defines them as entrepreneurial leaders?

Continue reading: Entrepreneurship as an activity

This is the part of a series of articles exploring the relationship between entrepreneurship and leadership, adapted from research I performed for my Master of Business.

The complete series is listed below:

  1. Is Entrepreneurship merely a special case of leadership?
  2. Entrepreneurship as a personality trait
  3. Entrepreneurship as a leadership style
  4. Entrepreneurship as an activity
  5. Entrepreneurship as a skill
  6. Entrepreneurship as corporate culture
  7. The rise of the Entrepreneurial Leader