ms3024 new venture creation week 7 from entrepreneur to leader 8: from entrepreneur to leader...
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MS3024 New Venture CreationWeek 7
From Entrepreneur to Leader
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Stage Growth ModelsStage Growth ModelsSize
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Existence
Size
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Spiders-webInformalDirectsupervision
Opportunitydriven
Stage Growth ModelsStage Growth Models
The Spider’s Web
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Existence Survival
Spiders-webInformalDirectsupervision
Opportunitydriven
Spiders-webInformalSupervisedsupervision
Generaterepeat sales
Stage Growth ModelsStage Growth Models
Size
The Spider’s Web
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Stage Growth ModelsStage Growth Models
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Existence Survival
Spiders-webInformalDirectsupervision
Opportunitydriven
Spiders-webInformalSupervisedsupervision
Generaterepeat sales
Relationship based management
BasicsystemsSomeformalityMaintainstatus-quo
SuccessDisengagement
Size
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Stage Growth ModelsStage Growth Models
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Existence Survival SuccessGrowth
Spiders-webInformalDirectsupervision
Opportunitydriven
Spiders-webInformalSupervisedsupervision
Generaterepeat sales
ImprovingsystemsIncreasingformalityStrategy
Obtainresources forgrowth
Relationship based management
Size
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Stage Growth ModelsStage Growth Models
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Existence Survival SuccessGrowth
Spiders-webInformalDirectsupervision
Opportunitydriven
Spiders-webInformalSupervisedsupervision
Generaterepeat sales
ImprovingsystemsIncreasingformalityStrategy
Obtainresources forgrowth
Take-off
Strategy
Systems & controlsDelegationDecentralisation
Increasing formalityRelationship based management
Size
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Stage Growth ModelsStage Growth Models
Large
Small
BigcompanyProfessionalSystems &controlsReturn oninvestment
Existence Survival SuccessGrowth
Spiders-webInformalDirectsupervision
Opportunitydriven
Spiders-webInformalSupervisedsupervision
Generaterepeat sales
ImprovingsystemsIncreasingformalityStrategy
Obtainresources forgrowth
Take-off
Strategy
Systems & controlsDelegationDecentralisation
Maturity
Increasing formalityRelationship based management
Size
Big Company Hierarchical Structure
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Big Company Matrix Structure
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Size
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Evolution stages
Revolution stages
Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Size
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Crisis of:
1: Leadership
1: Creativity
Evolution stages
Revolution stages
Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model
Growth through:
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Size
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Crisis of:
1: Leadership
2: Autonomy
1: Creativity
2: Direction Growth through:
Evolution stages
Revolution stages
Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Crisis of:
Growth through:
Size
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
1: Leadership
2: Autonomy
3: Control
4: Red Tape
1: Creativity
2: Direction
3: Delegation
4: Co-ordination
Evolution stages
Revolution stages
Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Growth through:
Size
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
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
Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model
The Growth Process
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
GROWTH CRISIS
CONSOLIDATION
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Values, Vision, Strategy and Tactics
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Enduring
Long-term
Changing
Short-term
VALUES VISION TACTICSSTRATEGY
Constructing Culture
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
The Contingency Theory of Management
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Situation
Task
Group
Leader
The Contingency Theory of Management
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Situation
Task
Group
Leader
Leadership Styles
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
High
Low
Group autonomy in
decision-making
Participative Consultative
Paternalistic Autocratic
Leader’s Authority
Low High
The Contingency Theory of Management
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Situation
Task
Group
Leader
The Leadership Grid
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
The Contingency Theory of Management
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Situation
Task
Group
Leader
Thomas-Kilmann Conflict Modes
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Compromising
Accommodating
Collaborating Competing
Avoiding
Assertiveness
Cooperativeness
High
Low
LowHigh
The Contingency Theory of Management
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Situation
Task
Group
Leader
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
The Belbin Team Role ModelThe Belbin Team Role Model
Shaper
Plant
Co-ordinator
Resource Investigator
Monitor-Evaluator
Team-Worker
Implementor
Completer-Finisher
Specialist
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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’
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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)
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
The Belbin Team Role ModelThe Belbin Team Role Model
Shaper
Plant
Co-ordinator
Resource Investigator
Monitor-Evaluator
Team-Worker
Implementor
Completer-Finisher
Specialist
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Team-Development WheelTeam-Development Wheel0STAGE FOUR
STAGE THREE STAGE TWO
STAGE ONE
TESTINGPoliteImpersonalWatchfulGuarded
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8: From Entrepreneur to Leader
Entrepreneurship and Small Business
STAGE FOUR
STAGE THREE STAGE TWO
STAGE ONE0
TESTINGPoliteImpersonalWatchfulGuarded
INFIGHTINGControlling conflictsConfronting peopleOpting outDifficultiesFeeling stuck
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8
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Team-Development WheelTeam-Development Wheel
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
STAGE FOUR
STAGE THREE STAGE TWO
STAGE ONE0
TESTINGPoliteImpersonalWatchfulGuarded
GETTING ORGANISEDDeveloping skills
Establishing proceduresGiving feedback
Confronting issues
INFIGHTINGControlling conflictsConfronting peopleOpting outDifficultiesFeeling stuck
39
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4
5
8
7
2
111
10
Team-Development WheelTeam-Development Wheel
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
STAGE FOUR
STAGE THREE STAGE TWO
STAGE ONE0
MATURECLOSENESS
ResourcefulFlexible
OpenEffective
Close and Supportive
TESTINGPoliteImpersonalWatchfulGuarded
GETTING ORGANISEDDeveloping skills
Establishing proceduresGiving feedback
Confronting issues
INFIGHTINGControlling conflictsConfronting peopleOpting outDifficultiesFeeling stuck
39
6
4
5
8
7
2
111
10
Team-Development WheelTeam-Development Wheel
The Role of the Board of Directors
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
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?
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
8: From Entrepreneur to Leader
Entrepreneurship and Small Business
Growth through:
Size
Large
Small
YoungAge
Mature
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
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
Greiner’s Five Stage Growth ModelGreiner’s Five Stage Growth Model
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