Entrepreneurs: the ‘Rock Stars’ of the business world?
Relishing a reputation as courageous, risk-taking eccentrics; vast differences have often been drawn between entrepreneurs and traditional managers. ‘Rock stars’ with a level of freedom most business people could only dream of, entrepreneurs are often perceived as being far removed from the standard corporate life. It seems however, that the parallels between these innovative individuals and conventional managers are much greater than often assumed. Using similar leadership characteristics and business disciplines to turn their ideas into successful and thriving companies, entrepreneurs’ balanced behaviour is much more like the traditional managers’ than once thought.
Ernst & Young’s recent report, ‘Nature or nurture? Decoding the DNA of the Entrepreneur’ begins to break down the behaviour and typical traits of entrepreneurs; comparing and contrasting them to traditional managers and employees. From their survey of 635 of the world’s most successful entrepreneurs, Ernst & Young, concluded that entrepreneurs are in fact made, not born and that external factors such as; business experience, cultural background and their environments influence their success just as much as innate personality traits. In particular, most surveyed entrepreneurs stated that higher education and previous employment had been key to their success.
Regardless of this fact, vision, passion and drive were still rated by surveyed entrepreneurs as the most important qualities to have. Ernst & Young’s research showed that most entrepreneurs have an, ‘internal locus of control’ – an ability to intelligently assess risk combined with a willingness to take them. It is an entrepreneur’s locus of control that allows them to see opportunity where others may only see disruptions, their drive and tenacity is what ensures that these ideas become successful business ventures.
The one downside of being an entrepreneur is something Harvard Business School Professor Noam Wasserman calls the ‘rich-versus-king’ choice. Whilst it doesn’t sound too terrible; choosing between being king and being rich? It is something Professor Wasserman says it is the downfall of many entrepreneurs and their businesses. He says, ‘if the desire for wealth (being rich) drives the entrepreneurial leader, he or she should accept outside capital, give up the reins and enjoy a piece of a bigger pie. [However,] if the desire to run a successful business (being king) is a stronger motivator, the choice should be to rely on debt financing or self-funding, continue to control the company, and accept that growth may be constrained.’ It is entrepreneurs who insist on being both rich and king that struggle to succeed, making inconsistent decisions because they are unclear what it is their truly value.
Like anyone, entrepreneurs face obstacles in life. Whether these are attributed to their business ventures or not, their opportunistic outlook and great levels of persistence are what ensure they overcome them. The idealistic notion that entrepreneurs are born with a ‘success gene’ is greatly inaccurate. Ernst & Young’s report presents an intelligent insight into the real reasons behind an entrepreneur’s success, concluding, that it is in fact a combination of often different personal characteristics and behaviours as well as external factors and past experience.