The interface between

Entrepreneurship, Management and

Leadership

Ingrid le RouxMarius Pretorius

Ingrid.leroux@up.ac.za

Background

• Train and consult widely

• Our business positioned as: “switch on”

• Alternative perspective

2

What we know

• Entrepreneurship is important – early life cycle stage

• Management – later

3

What we don’t know

• Where does leadership fit in, if at all?

• Is it important at all?

4

Why important to know

• We need entrepreneurship but it is only the first step on the way to business

• Management is the next phase – so the questions is: how is management different?

5

6

The logic of failure (Probst & Raisch)

GROWTH

RATE

CHANGE

LEADERSHIP

CULTURE

Burnout syndrome

Failure

Success

Premature Aging syndrome

Failure

7

What is an Entrepreneur?

• Someone who sees an opportunity that can bring value about and then takes the risk of finding the necessary resources to create value for potential customers. Now he creates and grows a venture to profit from the opportunity.

8

Entrepreneur - elements

• Opportunity

• Resources application

• Take risk to make profit

• Create value – unique combination

• Creates and

• Grows a venture

9

Entrepreneurship vs management focus

Start-up

stage (Infancy)

Time

Growth stage

(breakthrough)

Maturity stage

Decline stage

Pre-launch stage

(Incubation)

Managerial phase

1st Entrepreneurial phase

2nd Entrepreneurial phase ?

First trade

10

Entrepreneurial thinking

• Creative

• Innovative

• Opportunity driven

• Different

• Challenging

• Effectiveness – doing the right thing

• Different

• New

• Novel

• Find a way

11

High Expectation entrepreneurs

• Are individuals (nascent entrepreneurs and baby business managers) expecting to employ 20+ employees in the next 5 years

• Nascent – think of starting• Baby - < 42 months

12

Managerial thinking

• Planning• Organising• Leading • Control

• Efficiency – doing things right

• Better• Improvement• More of the same• Incremental• Giving direction

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Difference in approach

• Management – Incremental– Efficiency– Same– Same and better– Within system

Leadership???

• Entrepreneurial– Creative– Effectiveness– Alternatives– New and different– Changing value– No rules

14

Where Leadership can fit in

Start-up

stage (Infancy)

Time

Growth stage

(breakthrough)

Maturity stage

Decline stage

Pre-launch stage

(Incubation)

Managerial phase

1st Entrepreneurial phase

2nd Entrepreneurial phase ?

First trade

Leadership

The differenceManagement• ST• Things• Structure• Control• Efficiency• Program• Expense• Techniques• Transaction• Utility• Measurement• Doing things right• Speed• Bottom line• Methods• Practices• In the systems• Climbing the ladder fast

• (Covey, 2004)

Leadership• LT• People• Spontaneity, Serendipity• Release, empowerment• Effectiveness• Programmer• Invest• Principles• Transformation• Principle-centered power• Discernment (judgment)• Doing the right things• Direction• Top line• Purposes• Principles• On the system• Is the ladder against the right wall

ResultsDevelopment

Management versus Leadership

• Manager has a position

• Manage through control and demand

• Authority through position

• Command performance

• Leader does not necessarily have a position

• Lead by example more than authority

• Involve• Influencer• Create willing

followers

16

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The possible interface

Start-up

stage (Infancy)

Time

Growth stage

(breakthrough)

Maturity stage

Decline stage

Pre-launch stage

(Incubation)

Managerial phase

1st Entrepreneurial phase

2nd Entrepreneurial phase ?

First trade

Leadership

18

Interface

Leadership

Management

Entrepreneurship

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Conclusion 1

• Different thinking is required for different phases of business life cycle

• How many business owners are aware of the changes over the VLC?

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Conclusion 2

• More often than not:• Entrepreneurs = bad managers

• Managers = bad leaders and not entrepreneurial

• Why - Because it requires different focus in thinking

• So, is it clear in your selection of personal development focuses (reading, training etc)

Example

• Our latest research showed the following interesting outcome

• It confirms that interface thinking is of crucial importance to the entrepreneur and should be a deliberate focus point in development of a sustainable business

• If the leadership component is neglected you may end up in an organisation with the following attitude in employees

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Leader failure-consequence model

No goal alignment

Less EngagementI

Team disintegration

Individualistic CultureT

Under Performance

Skills lossO

ULG not achieved

Legitimacy erosionL

ConsequencesFollower ActionsFollower Feelings

• Demotivated

• Dissatisfied

• Unhappy

• Misunderstood

• Frustrated

• Confused

• No direction

• No passion

• Demoralized

• Incompetent

• Pressured

• Disgruntled

• Angry

• Stress

• Negative

• Inaction• Hide• Act confused• Don’t trust• Intolerant• Unsupportive• No risk taking• No innovation• Conflict• No buy-in• Resist change• Opt-out• Back-bite / stab• Move on• Fraud• Sabotage• Revenge

L ead

to

L ead

to

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Conclusion 3

• Growth is a lot about human issues

• Need to find a balance / awareness of the different issues

Questions

24