Entrepreneurial leadership has become a highly sought-after commodity in businesses. Young people looking for careers in business seek to be considered “entrepreneurs”, and “start-up” is fast moving into everyday language as the market for new ideas grows.
According to recent statistics by AngelList, Silicon Valley alone has almost 30,000 start-ups. Entrepreneurship is budding, and valued. To many companies, the qualities associated with entrepreneurs are qualities they hope to embody in their own business. Entrepreneurs are often seen as innovative, risk-forward, and flexible. However, by looking solely at the stereotypical ideals of an entrepreneur, companies can hire the wrong person.
Timothy Butler researched such entrepreneurial qualities, and how companies could better identify them in prospective job applicants. He examined the psychological tests of 4,000 entrepreneurs across the globe. He then compared these to 1,500 business leaders who didn’t see themselves as entrepreneurs.
What businesses need entrepreneurial leaders?
In an article for the Harvard Business Review, he discussed the similarities and differences between these two groups. In the beginning, he qualifies that companies must ensure they are looking for an entrepreneur. On measures of power and control, entrepreneurs score higher than regular leaders. In other words, in organisations where information-sharing or high levels of collaboration are required, they may not be cohesive.
In cases such as this, it would be better to hire an ordinary general manager. If you’re looking for someone to fill a position where initiative is required, an entrepreneurial leader would be better suited.
The article further explains that the traits we often think of in relation to entrepreneurs don’t always apply. As such, there are a few specifics to look for when hiring an entrepreneurial leader.
The belief: entrepreneurs are creative people
When discussing the entrepreneur traits to seek out, many articles often cite creativity. However, the facts are more complex. In truth, ‘creativity’ is too broad a word. More specifically, entrepreneurs are curious.
One of the personality dimensions entrepreneurs scored highly on was openness. What this means is those of an entrepreneurial mindset are more open to new experiences. They like trying new things, they are curious about the way things are done, and don’t see themselves as constricted in continuing in that way.
Entrepreneurs have the most fun in the first stage of a process, where they can do things their own way. They are allowed to innovate and invent, to do things as they haven’t been done before. Where others would see risk, entrepreneurial leaders see opportunity. However, as things progress to more organised and routine, they can become bored. This can be seen as a propensity for risk, however this is another stereotype which does not ring true.
The belief: entrepreneurs are risk seekers
This stereotype suggests that entrepreneurs are reckless, enjoying the thrill even when the reward is not worth the effort. This is not true. More realistically, entrepreneurs are better at handling the anxiety that befalls those taking necessary risks. In a sink or swim situation, where there is unpredictability, entrepreneurs will always swim.
- How to hire people comfortable in unfamiliar territory
It’s easy to confuse this particular entrepreneurial trait with being tough or strong – both good qualities in a leader. But what makes this trait important is that when there is uncertainty, an entrepreneurial leader will not shut down. This allows them to learn and grow. Discovering if your candidate has this trait, you can look at places where they have not followed convention.
“Has the candidate travelled solo, perhaps to a difficult area? Have they followed their gut and studied a particular degree or studied at less well-known school? In previous roles, have they taken a safe bet, or did they work at a start-up? Perhaps they studied abroad somewhere unconventional, or worked at a company that was small and risky but reflected their interests. In an interview, does the candidate exhibit confidence and enthusiasm, as well as ask questions? “
Some of the questions you can ask yourself include “do you prefer the sure bet or the potential?” “Would you rather have knowledge or instinct?” “We have marketed a product this way. How would you change it?” Look for a pattern of responses that fit with enthusiasm for the unknown and willingness to learn and explore.
The belief: entrepreneurs are cutthroat and ambitious
Entrepreneurs do score higher on dimensions of power and control than general managers. However, this is not about dominance. Entrepreneurial leaders don’t need power to control everyone below them. They prefer to work amongst their peers, giving out direction, and handling each section of a project, so they know what is occurring.
The need for power stems from the desire to be able to claim a project as their own. Much like artists, entrepreneurs want to be able to say, “this is mine.” The idea behind this is not about pride or greed, and differs from the power of rank or personality. Instead, the need for ownership is about creating something that others see as valuable, and being able to say that you helped make it.
- How to hire people with a desire for ownership
In this case, you want to find someone who is keen to be “in the trenches” as it were. They wish to be hands on at every stage of a project. How to assess this is by looking at their past experience. Have they had creative control before? Have they put their name to other projects that they’re proud of? Did they take initiative to create their own group in university, or run something they created themselves? Is their career path varied and adventurous, or have they tried to be an entrepreneur in the past? In this you can ask questions such as “who do you admire as a business leader and how so?” “Which makes more sense to you: owning or managing a project?” “What is something you’re proud of?”
The belief: entrepreneurs can sell you anything
This stereotype fits with the facts. The research by Timothy Butler also suggests that a good entrepreneur is also a great salesperson. Entrepreneurs must be good at selling both themselves and their vision, because when they start from the bottom, themselves and their image is all they have. They must sell to investors, to venture capitalists, and customers. Even when in a larger company, entrepreneurial leaders must maintain this in order to give people faith in their new projects.
- How to hire good salespeople
A good salesperson must be persuasive, so in hiring, you must look for someone who is confident. Without being sleazy or inauthentic, the person must genuinely convince you that they have the skills to succeed and achieve your goals. While there may be issues that will arise, they will honestly assess the situation and be able to tell you what they can do. The most telling way to pick a persuasive employee is through the interview, but while asking questions, check for things like their experience in sales. Try questions like “When was a time that you had to change someone’s mind, and how did you do it?” or “How would you change your tactics in selling an idea to customers compared to executives?”
There are many good leaders who exhibit qualities of organisation, creativity, and strength. These are good qualities for a leader, however when hiring for entrepreneurial leadership, you need a specific kind of person. These people should be comfortable with the unknown. They should want to take initiative, so they can claim a project as their own, and lastly, they should be able to sell to any kind of person you want them to. Find these qualities, and for the right position, you will have an entrepreneurial leader.