By definition, entrepreneurs must be transformational
leaders or our organizations will soon hit the brakes when it comes
to fast growth.
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Characteristics of Successful Entrepreneurs and Business Leaders
Certain leadership characteristics allow leaders, especially entrepreneurs, to experience greater success. Many of these are psychological chacteristics are innate, not easily observable, but are important none-the-less.
This page contains: 9 Leadership Characteristics
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"Success is going from failure to failure without loss of enthusiasm."—Sir
keep going despite set backs, is the hallmark of all
successful entrepreneurs and business leaders. While much has
been written about the managerial challenges of running a business, less has been written about the characteristics underlying great leadership. This article
describes nine psychological characteristics of great leadership.
everything, is a high sense of one's own self-worth.
Without that, individuals will never undertake tough
challenges. If one does not have it, it's important
2: Need to Achieve
need has been associated with entrepreneurs and leaders
who constantly seek to perform at their best. For example,
this leadership characteristic would have described Oliver Cromwell
(1599 to 1658) the Lord Protector of England, who once
remarked, “He who stops being better, stops being
good.” The great Harvard psychologist David McClelland
is most associated with need for achievement, a need
learned by children primarily from their parents (McClelland,
high in this need are open to feedback, are goal oriented,
seek to be unique, and strive for accomplishments based
on their own efforts—characteristics important
to effective leadership. They also take risks, not
extreme risks, but moderate ones.
what is moderate risk? Moderate risk means you have
the ability to influence events, but don’t have
complete control. The key is that individuals believe
they will be successful, but it is not a sure thing.
3: Screening For Opportunity.
all individuals, leaders screen incoming information
to separate the useful from the useless. However, successful
entrepreneurs and business leaders screen incoming information to constantly seek new growth opportunities.
They act like gold miners who must shift through tons
of dirt to find those a few precious golden nuggets.
the vast majority of business people seem blind to
new opportunities and so continually miss new ways
to grow the business. Some would argue that it is not
really finding opportunity, but getting lucky. Of course
there are individuals who seem to have the knack of
being in the right place and the time. For example,
I have a good friend George who had escaped communist
Romania in the early 1960s and made his way to the
being here for a while, he decided to start a leather
goods business. Putting together a few samples, he
then went out to talk to buyers about the possibility
of getting started. Getting an appointment with the
very first buyer, he showed his samples and got this
response, “I’ll buy everything you can
sell me.” He asked why he was so fortunate and
the buyer responded, “I wanted to drop our previous
vendor since he was ripping us off” From this “lucky” start,
George went on to develop an extremely successful business—becoming
a millionaire many times over. One could argue that
he was lucky or that he capitalized on an opportunity
missed by competitors.
4: Locus of Control
leaders and entrepreneurs typically show a high internal
locus of control (Lee, 2001). In many different studies
done over the years, those with a high internal locus
of control are more likely to experience success, than
individuals who are high on the external locus of control.
When someone perceives events as under the control
of others, fate, luck, the system, their boss, etc.
they have an external locus of control. Individuals
high on the internal locus of control have a different
assumption about how the world works. They assume that
any success they experience is due to their personal
efforts and that they have the ability to influence
events. Interestingly, internal also assume failure
was also their fault.
5: Goal Orientation
come and go, but those that last always share a common
characteristic with their founder—a relentless
drive to accomplish goals. They understand what the
priorities are and continue to work at toward that
goal, day in and day out.
many, leadership characteristic of staying focused on a goal is a very difficult
thing to do since life in the world of business tends
to distract us. McKinsie in this book “The Time
Trap” put it this way, “A man was struggling
to cut down enough trees to build a fence. An old farmer
came by, watched for a while, then quietly said, “Saw’s
kind of dull, isn’t it?” “I reckon,” said
the fence builder. “Hadn’t you better sharpen
it? Said the farmer. “Maybe later," said
the man, "I can’t stop now—I got all
these trees to cut down.” Our goal should be to continue to perfect ourselves, something we rarely have time for.
Leadership Characteristic 6: Optimism
successful entrepreneurial leadership is a boundless
font of optimism that never seems to end. When faced
with a problem, they view it as a challenge. When faced
with a setback, they view it as a new direction, when
told no, they say, “Maybe not now, but I know
you’ll change your mind later.” This characteristic
contrasts sharply with the vast majority of people
who project a more pessimistic, defeatist quality. It’s
this belief in the positive that serves as the foundation
for dealing with the many set-backs one will inevitably
encounter in the world of business.
children naturally have a positive view which seems
to turn more negative as they age. Parents can easily
test this in children by asking the question, “What
will you be when you grow up?” Young children confidently
say, exactly what they want to be. However, ask a teenager
the same question and they aren’t so sure.
professors talk about entrepreneurs as risks takers. But this leadeship characteristic is like saying snow is cold—it's
accurate but missing something. Another way is to say
the same thing is that one must have guts. It requires
a great deal of courage to build a company from the
once explained that large organizations function like “womb” protecting
employees from a harsh and unforgiving environment.
It takes a great deal of courage to leave a corporate
or government womb and strike out by oneself into the
cold, cruel world of business. When one first starts
a business, one is alone.
Leadership Characteristic 8: Tolerance to Ambiguity
term refers to a person’s tolerance to uncertainty
and risk. Entrepreneurs generally score high on this
scale (Entrailgo, 2000).
we age, we have a tendency to be more comfortable repeating
a relatively small set of behaviors. For example, we
eat pretty much the same food, shop in the same stores,
watch the same programs, have lunch with the same people,
listen to the same music. etc. One may change jobs,
but rarely does one change industries. Its’ amazing
how many people end up retiring in the same industry
in which they got their first job
one’s tolerance for ambiguity is low, one will
gravitate toward large, established organizations—better
still, work for the government where things change
little if at all. In contrast to older, established
organizations, entrepreneurial start-ups exist in an
environment where almost everything is new and many
things have not been done before. For example, no policies
exist to guide action and start-ups typically lack
the old timers who serve as the voice of experience.
The motivation that drives our behavior comes
from two sources: internal (intrinsic) and external
(extrinsic). Intrinsic factors include constructs like
needs, desires, motives, and will power. Extrinsic
factors include any type of motivational influence
from the environment such as rewards and punishments.
entrepreneurs, the most important motivational factor
is the intrinsic one. Entrepreneurs keep going despite
the fact that employees tell them they are foolish,
friends say they are wasting their time, and family
tells them to get a real job. When the intrinsic drive
goes away, so does any chance of success.
few years ago, we put together a 160-hour program to
teach very bright scientists and engineers how to put
together an investor quality business plan. The thinking
was that with the right knowledge and coaching, these
future entrepreneurs would be able to get a seed round
from investors and go on to build a fast growing organization.
However, a number of these individuals never opened
the doors. Why you might ask? It wasn’t that
they lacked knowledge and brilliance—it was a
lack of desire, what we called the “fire inside.”
good news is that many of these leadership characteristics are
learnable. For example, one can train the mind to recognize
opportunity, optimism is a controllable state of mind
(Seligman, 1988), and even the need for achievement
can be increased (McClelland, 1983).
bad news is it’s not easy to do so. After all,
one can’t make a house strong with a good foundation
and one can’t be successful in business unless
one possesses certain personal characteristics. But
where there is the will, there will be a way.
Montserrat, Fermandez, Estaban & Vazquez, Camilo
(2000). Characteristics of Managers as Determinants
of Entrepreneurial Orientation, Enterprise & Innovation
Management Studies, 1(2):187-2005
Don & Tsang, Eric (2001). The effects of entrepreneurial
personality background and network activities on Venture
Growth, Journal of Managerial Studies, 38
David (1955). Need achievement and entrepreneurship:
a longitudinal study, Journal of Personality and
Social Psychology. 1:289-392.
David (1983). Human Motivation. New York:
Martin (1988). Learned Optimism: How To Change
Your Mind and Your Life. New York: Pocket Books.
Easy to To Do Nothing, How Hard to Do Anything. — Winston
Great entrepreneurs, by definition, have to be transformational leaders if their organizations are to grow. This video presents five principles(entrenpreneurs and transformational leaders must keep in mind.
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Characteristics of Successful Entrepreneurs: More
in Business. Success and failure is not just a matter
of hard work and long hours, it also requires having
the right knowledge and skills.