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Leadershipfinal v2 2
The document discusses entrepreneurial leadership and different leadership models for startups. It explains that entrepreneurial leadership requires having a vision and motivating employees, but that different entrepreneurs may have different leadership styles. Successful startup teams are characterized as having a product that solves customer problems, a tight collaborative culture, relentless customer focus, strong operations, and an early focus on sales.
Leadershipfinal v2 2
- 1. ENTREPRENEURIAL LEADERSHIP If you area block ahead of the parade you are leading it. If you are two blocks ahead of the parade, you aren’t even in it Dr. Lawrence Kratza
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- 3. WHAT IS ENTREPRENEURIAL LEADERSHIP? All entrepreneursdo not lead their ventures the same way. Entrepreneurs have a vision of the company they want to build and that includes images of a growing business, fame and personal wealth (Bird, 1989)
- 4. Authentic Shared TransactionalTransformational Vertical LEADERSHIP MODELS
- 5. Confident, hopeful, transparent, andgives priorities to developing employees to be leaders Luthans and Avolio, 2003 AUTHENTIC A motivated workforce is essential for survival in the global marketplace (Hamel, 2000; O’Reilly and Pfeffer, 2000)
- 6. Motivation, decision making,task management, goal setting are done as a team SHARED Follet, 1924 The situation not the individual provides the basis for leader New venture top management team's performance is highly dependent on building a unified vision of the firm's mission
- 7. TRANSACTIONAL The situation, notthe individual provides the basis for leadership . Leaders assess the situation to a number of factors: potential outcomes, linkage between behavior and outcome and the likelihood of the effort to obtain the result. Yukl, 1998
- 8. TRANSFORMATIONAL Leadership is dependentupon charisma, articulation of goals and definition of roles, communication of high expectations and engage in behavior to arouse appropriate follower behavior Weber, 1946 Transformational leaders inspire and excite their employees with the idea that they may be able to accomplish great things with extra effort.
- 9. gain extraordinary commitment and focusfrom their employees VERTICAL Transformational and empowering types of vertical leadership are essential for leading new ventures toward high growth Covin & Slevin, 2002
- 10. LEADER AS COMMANDER Taylor,1911 Scientific management movement in the early 20th Century Shift to a more collective model not a singular leader Bass, 1985; Burns 1978
- 11. ENTREPRENEURSHIP According to Schumpeter(1934) the primary function was innovation An entrepreneur organizes, manages, and assumes the risks of a business or enterprise
- 12. Assumed to bethe leader who relies on people (e.g. venture capital, fiananciers, employees, customers) to accomplish purposes and objectives. ENTREPRENEUR a leader with the ability to define a vision of what is possible, and to attract people to rally around that vision and transform it into reality
- 13. Becker-McKinney In 1957 thisteam did a series of interviews and identified two types of entrepreneurs. Focuses on the past and present with specialized technical education. This style also tends to have low level of confidence and flexibility CRAFTSMAN Orientation to the future, advanced education and social awareness. OPPORTUNISTIC The results supported the hypothesis that an adaptable firm lead by and opportunistic entrepreneur will see the highest growth in terms of sales Smith, 2009
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- 15. Founding teams leadbecause no standard operating procedures or organization structures are available to fall back on as there are in large corporations THE START UP TEAM Bryant, 2004 Founding top management will imprint a culture into the company. The team creates a vision necessary to attract resources (Baum, Locke & Kirkpatrick, 1998). Founding management sets the initial goals and reward structures.
- 16. CHARACTERISTICS OF NEW The leadershipbehavior of top management is likely to have a greater and more direct impact on a firms performance. The teams face more discretion and less bureaucracy All ventures are not led the same way. Entrepreneurs have a vision yet there is also a risk that the absence of formalization may end up harming performance. “ VENTURE TEAMS
- 17. ENTREPRENEURIAL ENVIRONMENT Many new venturesfail because they are unable to make adjustments quickly enough Stinchcombe, 1965 Clean slate, new strategy formed, survival and nimbleness is key.
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- 19. SOLVE A CUSTOMER PAIN POINT WITHYOUR PRODUCT 1 If Henry Ford listened to his customers they would have ended up with faster horses” Ability to deliver a positive customer experience and to be flexible and strike at the right point to continue market share and revenue growth
- 20. TIGHT TEAM ENVIRONMENT 2everyemployee also needs to be part of an innovative and collaborative culture Need to scale and replicate the success to retain the same culture through nurturing, training and retaining employees 3 key elements that create a positive energy Leadership Trust Strong Opinions
- 21. RELENTLESS CUSTOMER FOCUS 3 DiscussProduct, People, Prospects and Profits to give the entire team the big picture and take customers opinion
- 22. OPERATIONS AS A COMPANYBACKBONE4 Prevent future errors by learning from previous errors through the learning cycle system Link operations into tech support, manufacturing, logistics, and tie it closely to new product introductions
- 23. START SELLING EARLY 5 Early focuson sales is critical to future funding and revenue growth
- 24. CONCLUSION The focus ofleaders in the business should be to build a strong company that can stand on its own, rather than planning a specific exit strategy. The right product, a tight team and a focus on customers, combined with strong operations and sales is a solid foundation for success. There is no one-size-fits-all leader, but they do all invariably have to be authentic to themselves and to the team to achieve success with any venture.
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Editor's Notes
- #2 What is entrepreneurial leadership? “ If you are a block ahead of the parade you are leading it. If you are two blocks ahead of the parade, you aren’t even in it.” Dr. Lawrence Kratza
- #3 There are a number of leadership models leaders can use and even change during their growth but there should be someone who understands the styles so the employees, nurture the culture and be aware of the pros/cons. So many entrepreneurs miss an opportunity to build a great company with a great culture as they are focused on the exit strategy. The founding team leaves a lasting cultural imprint on a company whether they understand that or not and if steps are not taken to have the employees get support they need to survive then the venture has issues.
- #4 All entrepreneurs do not lead their ventures the same way. Entrepreneurs have a vision of the company they want to build and that includes images of a growing business, fame and personal wealth (Bird, 1989).
- #5 Most frequently cited types of leadership Authentic Shared Transactional Transformational Vertical
- #6 Confident, hopeful, transparent, and gives priorities to developing employees to be leaders (Luthans and Avolio, 2003)
- #7 Motivation, decision making, task management, goal setting are done as a team (Follet, 1924) The situation not the individual provides the basis for leader
- #8 The situation, not he individual provides the basis for leadership (Yukl, 1998) Leaders assess the situation to a number of factors: potential outcomes, linkage between behavior and outcome and the likelihood of the effort to obtain the result.
- #9 Leadership is dependent upon charisma, articulation of goals and definition of roles, communication of high expectations and engage in behavior to arouse appropriate follower behavior (Weber, 1946)
- #11 Scientific management movement in the early 20th Century. (Taylor, 1911). Shift to a more collective model not a singular leader (Bass, 1985; Burns 1978)
- #12 According to Schumpeter (1934) the primary function was innovation.
- #13 Assumed to be the leader who relies on people (e.g. venture capital, fiananciers, employees, customers) to accomplish purposes and objectives.
- #14 In 1957 this team did a series of interviews and identified two types of entrepreneurs. Craftsman—focuses on the past and present with specialized technical education. This style also tends to have low level of confidence and flexibility Opportunistic-orientation to the future, advanced education and social awareness. The results supported the hypothesis that an adaptable firm lead by and opportunistic entrepreneur will see the highest growth in terms of sales (Smith, 2009).
- #15 On the other hand, once the ball gets rolling and the startup begins to grow, it is apparent that entrepreneurial leadership is require to lead venture teams successfully.
- #16 Founding top management will imprint a culture into the company. The team creates a vision necessary to attract resources (Baum, Locke & Kirkpatrick, 1998). Founding management sets the initial goals and reward structures (Williamson, 2000). Founding teams lead because no standard operating procedures or organization structures are available to fall back on as there are in large coporations (Bryant, 2004).
- #17 The leadership behavior of top management is likely to have a greater and more direct impact on a firms performance. The teams face more discretion and less bureaucracy (Hambrick & Abrahamson) All ventures are not led the same way. Entrepreneurs have a vision yet there is also a risk that the absence of formalization may end up harming performance.
- #18 Clean slate, new strategy formed, survival and nimbleness is key. Many new ventures fail because they are unable to make adjustments quickly enough (Stinchcombe, 1965).
- #19 Why did these two companies prosper when so many others fail? Here are the top five characteristics of winning startups, based on what I’ve learned and witnessed over my career:
- #20 Solve a Customer Pain Point with your Product – Build a product that customers can use. Sure, it sounds simple, but you need to balance listening to your customers with keeping an eye on new technology. There’s an old adage that if Henry Ford listened to his customers they would have ended up with faster horses. This does have some truth to it – sometimes customers don’t know how new technologies could solve their current problems – but they do know the result they want. So, listen to their pains, and see if you can think of new ways to solve them. Companies also need to balance adding technological features with usability. Most customers won’t use every bell and whistle that is included in the product, but they do want the product to be easy-to-use and intuitive. The bottom line is that you need to deliver a positive customer experience. An advantage I had with both startups was that as we were developing the right product at the right time, we had the ability to change course as needed – or to “pivot” in today’s terminology. The ability to be flexible and strike at the right point to continue market share and revenue growth was essential.
- #21 Tight Team Environment – It is vital to build a good core group of people early. The leadership team is important, of course, but every employee also needs to be part of an innovative and collaborative culture to help the company thrive. In the early phases of building a company, I found that the first 50 employees were a very tightly knit core group. But then we needed to scale and replicate that success, so that when we doubled our staff that same culture survived. Nurturing, training and retaining employees were fundamental elements to our success, as was confidence in the company’s leadership. Leadership, trust and strong opinions are key elements that create a positive energy and personal commitment to the company and to each other. Sure, a strong opinion can sometimes cause conflict, but it exemplifies the passion of the company’s employees. As long as there is a forum for communication, this can be a constructive force for growth.
- #22 Relentless Customer Focus – In addition to ensuring that your product solves a customer pain point, you need to focus on your customers as your number one priority. One of the ways we listened to our customers was to bring them into our company-wide meetings to share their experiences. In our weekly “Pizza Meetings,” we discussed Product, People, Prospects and Profits to give the entire team the big picture, and customers would often join us. It was important to hear the good and bad about the product and what our customers hoped to do with our solution in the longer term. This had profound effects on the developers to develop more modules and tight code, because it let them see how their work directly affected the people who used our products.
- #23 Operations as a Company Backbone – Although it’s not always seen as the most glamorous function, Operations is the workhorse of any startup. From the beginning, we linked Operations into tech support, manufacturing, logistics, and tied it closely to new product introductions. That way, if a customer had a problem with a product, we not only fixed that problem, we tried to figure out why this issue happened and make an operational fix within the company so that the larger problem would be solved long-term. When small companies are growing rapidly, a learning cycle needs be put into place to feed “lessons learned” back into the organization. This prevents repeated errors and was a major factor for our success.
- #24 Start Selling Early – I can’t overemphasize the importance of establishing an excellent sales force, and the need to start selling as early as possible. At one company, we needed to get customers on board before we could get funding. It was really a leap of faith, but our early sales team delivered. We couldn’t get Series A funding until investors saw that we had customers. There was little angel investing at that time and early stage investors were very conservative. Therefore, our early focus on sales was critical to our future funding – as well as our revenue. These companies were led by authentic leaders that many of the attributes of shared leadership as well as transactional leadership. It was clear that the bottom line in these successful companies was that they built the business as a strong company that can stood on its own, rather than planning a specific exit strategy. The right product, a tight team and a focus on customers, tied together with strong operations and sales will be a solid foundation for success.
- #25 Summary , the focus of leaders in the business should be to build a strong a strong company that can stand on its own, rather than planning a specific exit strategy. The right product, a tight team and a focus on customers, tied together with strong operations and sales will be a solid foundation for success.