In the early days of a new business the most valuable skill a founder can have is entrepreneurship the vision to identify opportunities, and the willingness to take risks. But as the business grows, demands change. Disciplined management skills and corporate expertise are required to coordinate a growing enterprise. Some entrepreneurs are able to make the transition to leadership successfully, while others struggle.
An Ernst & Young report in 2011 identified entrepreneurs as people who are nonconformist, driven and tenacious, passionate and focused, with an opportunist mind set Other studies report entrepreneurs as mavericks, unafraid of failure and driven by a passion for success. While there is some overlap, absent from these findings are the traits that define good leaders and managers: organization, an eye for detail, communication, emotional intelligence, and the ability to delegate. And as Indian executive Vineet Nayar advised, effective leadership involves encouraging others within the company to realize their potential, and excel.
Making the transition
Canadian business guru Professor Henry Mintzberg proposed that management can be broken down into three categories: managing by information, through people, and through action. Many entrepreneurs have difficulty managing through information they often lack the skills to build the systems and communication networks on which large businesses are built.
Cyprus born Stelios HajiIoannou, entrepreneur and founder of easy Group, is known for rarely staying still. His company launched in 1998 with a low-cost airline, easyJet, and now includes more than 20 “easy” businesses that operate on a similar low-cost model. Haji-Ioannou has shown an aptitude for strategy, and an eye for detail; but he has also been criticized for lacking leadership skills, for micromanaging, and, common to entrepreneurs, for an inability to delegate and let managers manage.
US professor Larry Greiner identified leadership the ability of a start-up founder to transition from entrepreneur to leader as one of the major crises that businesses face as they grow. Greiner suggests that successful growth often requires the employment of professional managers who bring to the business an understanding of the requirements of financial markets, banks, and most importantly have the leadership skills needed to manage complex organizations. Entrepreneurs may possess bountiful ideas, but it takes management discipline to turn those ideas into successful
US professor Larry Greiner identified leadership the ability of a start-up founder to transition from entrepreneur to leader as one of the major crises that businesses face as they grow. Greiner suggests that successful growth often requires the employment of professional managers who bring to the business an understanding of the requirements of financial markets, banks, and most importantly have the leadership skills needed to manage complex organizations. Entrepreneurs may possess bountiful ideas, but it takes management discipline to turn those ideas into successful ventures, and leadership skills to move the start up beyond its entrepreneurial roots.
Start-ups require the spark of entrepreneurship; but growth requires a different set of skills: a founder must transition from being sole decision maker to being a disciplined manager and a successful leader. Those who are unable to make this transition often need to step aside and let the professionals take over. But this is often easier said than done.
Zhang Yin
Chinese entrepreneur and paperrecycling tycoon Zhang Yin was born in Guangdong in 1957. Recognizing that the Chinese export sector faced a shortage of paper-packaging materials, Zhang (her Cantonese name is Cheung Yan) opened a paper-trading business in Hong Kong in 1985.
Quickly moving from entrepreneur to established business leader, Zhang moved to Los Angeles, US, where she co-founded the paper exporting company America Chung Nam in 1990. The business quickly became the leading paper exporter in the USA, and the largest overall exporter to China. In 1995, after returning to Hong Kong, Zhang cofounded Nine Dragons Paper with her husband and her brother. The company went on to become the world’s largest maker of packaging paper.
In 2006, at the age of 49, Zhang became the first woman to top the list of richest people in China, according to the magazine Hurun Report. The following year, Ernst & Young awarded her “Entrepreneur of the Year in China 2007.”
