Do Entrepreneurs make Great Leaders?

Leadership is about making things happen. Entrepreneurs are great at reacting to gaps in the market, seeing market opportunities and building businesses from nothing. Surely the entrepreneurial characteristics of driving, initiative, visionary, strategic are the very essence of great leadership and therefore entrepreneurs should be highly effective leaders?

However, the research shows that although two thirds of business owners want to grow their business, the majority don’t achieve their aspirations.  This suggests that many entrepreneurs are less successful at making the shift towards the leadership approach which is required for sustained business growth. 

What are the key leadership traits for business growth and how do entrepreneurs shape up against these? At Matrix we work with the leaders of growing companies – entrepreneurs. Over the past 10 years we have developed a set of competencies for leadership in the growing business. Our 360 degree profiling tool; Spectrum, has allowed us to assess over 250 entrepreneurs and benchmark them against each other. The result is a comprehensive assessment of the leadership effectiveness of the leaders of growing companies, as scored by their teams. 

Entrepreneurial leaders score highly in the following areas;

• Management of Change

• Commercial Awareness

• Strategic Focus

• Analysis and judgement

• Leadership

• Achievement/motivation

These are classic entrepreneurial traits and it should come as no surprise that these areas score high. The lower scoring areas are more interesting;

• Time Management

• Communication

• Managing Staff

• Delegation

Unfortunately, for entrepreneurial leaders these are core skills for which enable business growth. As a business grows the role of the business leader has to change. From doing to delegating; from working in the business to working on the business and from operational to developmental; these are the significant transitions in the leader’s role as they seek to grow and develop the business. Effective leadership is about stepping back from the day to day operations and concentrating on the strategic actions which are necessary to grow the business. Delegation and Time management are critical in achieving this change.

In addition, Communication and Managing Staff are critical in getting the most from your people. Effective growth to the next level requires a move away from a dependence on the entrepreneur and the development of the breadth and depth of management. The development of a strong senior team and leadership behaviours at all levels of the company is a prerequisite for growth. Leadership involves getting things done through other people and Coaching and managing staff are key competencies to deliver this.

In essence, great leadership is about a wide range of skills. Great leadership requires the ability to be visionary, strategic and entrepreneurial; combined with effective personal organisation and the ability to get the most from your people. For entrepreneurs to become truly great leaders and achieve their own aspirations and the growth potential of their business, they need to build on their natural strengths and augment them with some of the leadership traits necessary for business growth.

David McKeran