ms3024 new venture creation week 7 from entrepreneur to leader 8: from entrepreneur to leader...

MS3024 New Venture CreationWeek 7

From Entrepreneur to Leader

8: From Entrepreneur to Leader

Entrepreneurship and Small Business



You start the business as a dream, you make it your passion

for a while, and then you get experienced managers to run it because it’s not as much fun as

starting.

Stelios Haji-Ioannou



Stage Growth ModelsStage Growth ModelsSize

Large

Small

YoungAge

Mature

STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5



Existence

Size

Large

Small

YoungAge

Mature


Spiders-webInformalDirectsupervision

Opportunitydriven

Stage Growth ModelsStage Growth Models

The Spider’s Web





Large

Small

YoungAge

Mature


Existence Survival


Opportunitydriven

Spiders-webInformalSupervisedsupervision

Generaterepeat sales


Size

The Spider’s Web






Large

Small

YoungAge

Mature


Existence Survival


Opportunitydriven



Relationship based management

BasicsystemsSomeformalityMaintainstatus-quo

SuccessDisengagement

Size




Large

Small

YoungAge

Mature


Existence Survival SuccessGrowth


Opportunitydriven



ImprovingsystemsIncreasingformalityStrategy

Obtainresources forgrowth

Relationship based management

Size




Large

Small

YoungAge

Mature




Opportunitydriven





Take-off

Strategy

Systems & controlsDelegationDecentralisation

Increasing formalityRelationship based management

Size



YoungAge

Mature



Large

Small

BigcompanyProfessionalSystems &controlsReturn oninvestment



Opportunitydriven





Take-off

Strategy

Systems & controlsDelegationDecentralisation

Maturity

Increasing formalityRelationship based management

Size

Big Company Hierarchical Structure



Big Company Matrix Structure





Size

Large

Small

YoungAge

Mature


Evolution stages

Revolution stages

Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model



Size

Large

Small

YoungAge

Mature


Crisis of:

1: Leadership

1: Creativity

Evolution stages

Revolution stages


Growth through:



Size

Large

Small

YoungAge

Mature


Crisis of:

1: Leadership

2: Autonomy

1: Creativity

2: Direction Growth through:

Evolution stages

Revolution stages




STAGE 2 STAGE 3 STAGE 4 STAGE 5

1: Creativity

Size

Large

Small

YoungAge

Mature

STAGE 1

Crisis of:

1: Leadership

2: Autonomy

3: Control

2: Direction

3: Delegation

Growth through:

Evolution stages

Revolution stages




Crisis of:

Growth through:

Size

Large

Small

YoungAge

Mature


1: Leadership

2: Autonomy

3: Control

4: Red Tape

1: Creativity

2: Direction

3: Delegation

4: Co-ordination

Evolution stages

Revolution stages




Growth through:

Size

Large

Small

YoungAge

Mature


Crisis of:

1: Leadership

2: Autonomy

3: Control

4: Red Tape

5: ?

1: Creativity

2: Direction

3: Delegation

4: Co-ordination

5: Collaboration

Evolution stages

Revolution stages


The Growth Process



GROWTH CRISIS

CONSOLIDATION



Eff

ecti

ven

ess

High

Low

ShortTime

Long

STAGE 1 STAGE 2 STAGE 3

Getting used to the new

circumstances

ImmobilisationImmobilisation

Change and EffectivenessChange and Effectiveness

Relearning Becoming effective

DenialDenial

DepressionDepression

Letting goLetting go

Testing new Testing new realityreality

Putting it Putting it togethertogether

CHANGE EVENT

The Leader’s Job

• Having vision and ideas

• Long-term, strategic planning

• Communication: Internal and External

• Creating the culture by example

• Monitoring and controlling performance



Vision

A shared mental image of a desired future state:• Provides a sense of meaning and purpose• Inspirational• Aspirational• Motivating• But must be realistic, credible and attractive• Often includes core values



The Mission Statement

The (business) aims to use its (competitive advantage) to achieve/maintain

(aspirations) in providing (product scope) which offers (benefits) to satisfy the (needs)

of (customer scope). In doing this the company will at all times strive to uphold

(values).

Wickham



Kotter’s Seven Principles

1. Keep it simple2. Use metaphors, analogies and examples3. Use many different forums4. Repeat the message5. Lead by example6. Address small inconsistencies7. Listen and be listened to



Values, Vision, Strategy and Tactics



Enduring

Long-term

Changing

Short-term

VALUES VISION TACTICSSTRATEGY

Constructing Culture



CULTURE

Cognitive processes• Ethics, values, beliefs attitudes, etc.

• Norms & rules of conduct

Behaviours• How things are actually done

• Vocabulary

organizational processes• Leadership styles

• Structures

• Empowerment

• Controls & rewards

• Routines, rituals etc.

• Stories, symbols & myths

Values

Dimensions of Entrepreneurial Culture

• Clarity of goals, tasks, procedures etc.• Expectation of high standards• Commitment to organizational goals• Feeling of personal responsibility towards these

goals• Feeling of recognition & reward for high

performance• Sense of cohesion & team working

Timmons



The Contingency Theory of Management



Situation

Task

Group

Leader

Leadership Styles



High

Low

Group autonomy in

decision-making

Participative Consultative

Paternalistic Autocratic

Leader’s Authority

Low High




Situation

Task

Group

Leader

The Leadership Grid



High

Low

Concern for People

Poor ManagementPoor Management

Firm but FairFirm but Fair

Team ManagementTeam ManagementCountry ClubCountry Club

Task ManagementTask Management

Concern for Task

HighLow




Situation

Task

Group

Leader

Thomas-Kilmann Conflict Modes



Compromising

Accommodating

Collaborating Competing

Avoiding

Assertiveness

Cooperativeness

High

Low

LowHigh




Situation

Task

Group

Leader



The Belbin Team Role ModelThe Belbin Team Role Model

Shaper

Plant

Co-ordinator

Resource Investigator

Monitor-Evaluator

Team-Worker

Implementor

Completer-Finisher

Specialist



Usually the self-elected task leader - dynamic, outgoing, highly strung, argumentative, a pressuriser, seeks ways around obstacles

Allowable weakness:Tendency to bully, not always likeable

Examples:Tony Blair, Margaret Thatcher, Bill Gates

The ShaperThe Shaper



The PlantThe Plant

The team's vital spark and chief source of ideas – creative, imaginative, unorthodox

Allowable weakness:Bit of a handful and/or head in the clouds

Examples:Prince Charles, Edward de Bono, Lisa Simpson



Team's natural chairman & enabler - mature, confident, talks easily, listens well, clarifies

goals, promotes decision-making - not always the team-leader but has quiet charisma

Allowable weakness: A touch manipulative

The Co-ordinatorThe Co-ordinator

Examples:Obi Wan Kenobi, Steve McClaren



Essentially a fixer - extrovert, amiable, six phones on the go, a wealth of contacts - and an

explorer of opportunities – the typical entrepreneur

Allowable weakness:Undisciplined and/or a short attention span

The Resource InvestigatorThe Resource Investigator

Examples:Anita Roddick, Richard Branson, Peter

Mandelson, 'Del Boy’



The Monitor-EvaluatorThe Monitor-Evaluator

Team's rock - strategic, sober, introvert, discerning, capable of deep analysis of huge

quantities of data - rarely wrong – often second in command

Allowable weakness:An unexciting plod

Examples:William Hague, Walin Smithers (Mr Burns’

assistant)



The Team-WorkerThe Team-Worker

A counsellor-conciliator - mildly social, perceptive, accommodating, aware of

undercurrents and others' problems, and promotes harmony - most valuable at times of

crisis

Allowable weakness:Indecisive

Examples:Gary Lineker, Marg Simpson



The ImplementerThe Implementer

The team's workhorse - turns ideas into practical actions and gets on with them logically and loyally - disciplined, reliable, conservative

Allowable weakness:Can only adapt if told precisely why

Examples:The Queen, James Dyson, Clive Sinclair



The Completer-FinisherThe Completer-Finisher

The team's ‘worryguts’ - a stickler for detail, deadlines and schedules, and has relentless follow-through - chief catcher of errors and

omissions – another good second in command

Allowable weakness:Can't let go

Examples:Any civil servant



The SpecialistThe Specialist

The team's chief source of rare knowledge and skill - a single-minded loner, self-starting,

dedicated, and makes the occasional dazzling breakthrough

Allowable weakness:Contributes on a narrow front

Examples:Trevor Baylis, Geoff Boycott



The Belbin Team Role ModelThe Belbin Team Role Model

Shaper

Plant

Co-ordinator

Resource Investigator

Monitor-Evaluator

Team-Worker

Implementor

Completer-Finisher

Specialist



Team-Development WheelTeam-Development Wheel0STAGE FOUR

STAGE THREE STAGE TWO

STAGE ONE

TESTINGPoliteImpersonalWatchfulGuarded

39

6

4

5

8

7

2

111

10



STAGE FOUR


STAGE ONE0


INFIGHTINGControlling conflictsConfronting peopleOpting outDifficultiesFeeling stuck

39

6

4

5

8

7

2

111

10

Team-Development WheelTeam-Development Wheel



STAGE FOUR


STAGE ONE0


GETTING ORGANISEDDeveloping skills

Establishing proceduresGiving feedback

Confronting issues


39

6

4

5

8

7

2

111

10




STAGE FOUR


STAGE ONE0

MATURECLOSENESS

ResourcefulFlexible

OpenEffective

Close and Supportive


GETTING ORGANISEDDeveloping skills

Establishing proceduresGiving feedback

Confronting issues


39

6

4

5

8

7

2

111

10


The Role of the Board of Directors



Provide accountability

Monitoring & supervision

Strategy formulation

Policy-making

Past & present orientation

Outward looking

Inward looking

Future orientation

MS3024 New Venture CreationWeek 7

From Entrepreneur to Leader - continued



From yesterday

• Growth is the goal of new businesses• Growth is problematic as it produces crises

and/revolution before growth and evolution• For the entrepreneur/founder one ongoing

issue is how to control the business• Management

– Or

• Leadership?





Growth through:

Size

Large

Small

YoungAge

Mature


Crisis of:

1: Leadership

2: Autonomy

3: Control

4: Red Tape

5: ?

1: Creativity

2: Direction

3: Delegation

4: Co-ordination

5: Collaboration

Evolution stages

Revolution stages


Leadership Defined

Leadership is a process whereby an individual

influences a group of individuals to achieve a common goal.

Components Central to the Phenomenon of Leadership

• Is a process• Involves influence• Occurs within a group context• Involves goal attainment

Leadership

Leaders Are not above followers Are not better than followers Rather, an interactive relationship with followers

The process definition of Leadership:

• Leadership is a property or set of properties possessed in varying degrees by different people (Jago, 1982).– Observed in leadership

behaviors– Can be learned

LEADERLEADER

LeadershipLeadership

(Interaction)(Interaction)

FOLLOWERSFOLLOWERS

Assigned vs. Emergent Leadership

• Leadership based on occupying a position within an organisation– Team leaders– Plant managers– Department heads– Directors

• An individual perceived by others as the most influential member of a group or organisation regardless of the individual’s title – Emerges over time through

communication behaviors• Verbal involvement• Being informed• Seek other’s opinions• Being firm but not rigid

AssignedAssigned EmergentEmergentThe entrepreneur James Dyson

Leadership & Power

• The capacity or potential to influence.– Ability to affect others’

beliefs, attitudes & actions

• Referent

• Expert

• Legitimate– Trevor Baylis

• Reward

• Coercive

PowerPowerBases of Social Power

French & Raven (1959)

Bases of Social PowerFrench & Raven

(1959)

Power is a relational concern for both leaders and followers.

Leadership & Power

Five Bases of Power

Five Bases of Power

Leadership & Power

• Power is influence derived from being seen as likable & knowledgeable

– Referent

– Expert

Position PowerPosition Power Personal PowerPersonal Power

• Power derived from office or rank in an organisation

– Legitimate

– Reward

– Coercive

Types and Bases of Power

Leadership & Management Kotter (1990)

ManagementActivities

LeadershipActivities

“Produces order and consistency”

• Planning & Budgeting

• Organizing & Staffing

• Controlling & Problem Solving

“Produces changeand movement”

• Establishing direction

• Aligning people

• Motivating / Inspiring

Major activities of management & leadershipare played out differently; BUT, both are essential

for an organisation to prosper.

Leadership & Management Kotter (1990)

Leadership & ManagementZaleznik (1977)

ManagersUnidirectional Authority

LeadersMultidirectional Influence

• Are reactive

• Prefer to work with people on problem solving

• Low emotional involvement

• Are emotionally active & involved

• Shape ideas over responding to them

• Act to expand available options

• Change the way people think about what is possible

Entrepreneurial Leadership Skills

• Visionary• Communicator• Influencer• Motivator• Strategist• Change manager• Conflict resolver• Confidence builder

• Team working• Relationship builder• Trust generator• Delegator• Builder of cohesion• Clarifier of ambiguity• Firm but fair• Flexible but consistent

Exceptional leaders• Providing a clear focus on key issues and concerns, on the right

things• Getting everyone to understand this focus through effective

communication practices• Acting consistently overtime to develop trust• Demonstrating through actions that they care for and respects the

organisation’s members• Creating ‘empowering opportunities’ that make individuals believe

the right thing for the organisation is their priority• Can we say is there a relationship between the entrepreneurial

leader and business growth?

The Leader’s Role• Management is doing things right; leadership is doing the

right things. Peter F. Drucker• Don't tell people how to do things, tell them what to do and

let them surprise you with their results. George S. Patton• Delegating work works, provided the one delegating works,

too. Robert Half• The very essence of leadership is that you have to have

vision. You can't blow an uncertain trumpet. Theodore M. Hesburgh

ms3024 new venture creation week 7 from entrepreneur to leader 8: from entrepreneur to leader...

Documents

spiders web

small business slide

leader entrepreneurship

management size slide

growth relationship

formality strategy

management basic systems

repeat sales relationship