h1

The Entrepreneurial Manager

November 23, 2009

Two businesses were started about six years ago. One was founded by an engineer, the by other a craftsman. Both entrepreneurs were intelligent, competent, and hard working.

Both enterprises got off to a successful start. Today one flourishes, employing nearly sixty people with sales approaching ten million dollars per year, while the other no longer exists.

At a minimum, these and all new ventures go through several crucial transitions from start up to stability. In order for the emerging business to successfully navigate these transitions, the founders, owners, and managers must likewise make significant personal transitions.

There has long existed a misconception that entrepreneurs don’t make good managers and that managers don’t make good entrepreneurs. It was assumed that if an individual possessed one set of skills, they lacked the other. As evidenced by the increasing number of founders that have guided new ventures into stable enterprises, the truth is that entrepreneurial skills and good managerial skills aren’t mutually exclusive.

The start up phase is the first challenge faced by the entrepreneurial manager. Depending on the venture, it can last from several months to several years. It is the most perilous period and successfully navigating it depends on the energy, drive, and talent of the entrepreneurial leader.

The start up environment is characterized by constant change and uncertainty. The “management” of a start up involves far more “doing” than “managing”. Despite a frequent lack of organization, control, and experience, the enterprise succeeds as a result of the efforts and commitment of a few people.

Once the new venture has proved its viability by surviving the start up phase, the business and its founder must make the transition to becoming a “real company” if it wants to reach its full potential. Sustained growth and longevity are dependent on the entrepreneur developing managerial competencies to compliment his or her personal skills and determination.

There is no bell that rings to signal that that it’s time for change. When the founders are doing so much that they’re not doing it as well or enjoying it as much as they used to, it’s usually time to start considering some changes.

What are some of the other symptoms that it’s time for a change? Burn out and frustration. The entrepreneur’s creativity and drive begin to be questioned. The informality that initially enabled flexibility, now fosters confusion, waste, and resentment.

When there has been more than one entrepreneur involved in starting an enterprise, it is not uncommon for conflict among the founders to appear at about the time it’s necessary to begin the transition to a more professionally managed company. The company’s growth has usually created a need for delegation and specialization, but the absence of organization and control dooms the early efforts to failure.

For a business to make the transition from start up to stability, its founders must make the transition from being entrepreneurs to being entrepreneurial managers. How does the founder make the change from “doing” to “managing’?

No one individual can possibly possess all the skills required to start and build an enterprise by themselves. One of the greatest assets of the entrepreneurial manager is to recognize what they know and what they don’t know.

The skills that separate the entrepreneur from the entrepreneurial manger are “people skills”. When the business requires more than the entrepreneur can do, the entrepreneurial manager must be able to recognize the additional expertise that is needed, be able to recruit the right human resources, be willing to listen to others, and to create an environment where others can work productively.

Initially, the engineer’s technical expertise contributed to a successful start up. As the business grew, so did the problems, the inevitable problems with finances, employees, and customers. Problems the engineer was ill equipped to deal with, but was unwilling to let go of. The growing business became burdensome to its founder as he was unable to release the stranglehold that restricted its growth.

As the craftsman approached that sensitive point where his business developed both problems and promise, he began to delegate responsibilities to those he had hired. He sought the advise of others in areas where he and his staff lacked experience. He enlisted support and concentrated on “doing” what he did best, while managing the contribution of others and as a result he has built a satisfying and productive enterprise.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: