In a previous article, we have identified how business culture is key to innovation, and specifically how business owners have a responsibility to create a culture that allows innovation to thrive, whilst driving a long-term competitive advantage for the business. Distinctions are commonly made between the roles of leaders and managers. At Destined, we believe that a third key role is essential in the culture of sustainable businesses: the role of entrepreneur. Let’s look at the distinctions between the three roles and the part they each play over the course of a business’ life cycle.
Entrepreneurs are excited by novelty. Their focus lies in the future rather than the day-to-day. They are not always the best communicators and due to their drive to create new things, they are not best placed to create profit from their inventions.
Leaders are revered in society for their ability to connect and communicate with everyone. They are naturally people-focused and have a talent for creating a clear vision for tomorrow to engage everyone in the business. They are a natural bridge between entrepreneurs and managers.
Managers focus on today – on the business and its processes. They provide the rigor and attention to detail that ensures the business runs smoothly. In short, managers make you money.
Interestingly, whilst leadership is revered in business, as demonstrated by the thousands of books and blogs written on the subject, managers rarely receive such accolades. At a recent dinner for a well known bank, where one of our team was a guest speaker, they asked, “How many of you are leaders and how many are managers?” Most people identified themselves as leaders and very few claimed to be managers, for fear of being seen as a poor relation. He then offered Destined’s definition – that entrepreneurs are concerned with vision and the future; leaders are concerned with people and tomorrow; and managers are concerned with process and today. He asked the audience to state their role using this fresh definition and the picture changed. Approximately 1 in 20 people said they were entrepreneurs and the split between leaders and managers was around 60:40.
At Destined, we believe businesses grow faster and more profitably when the right people are in the right roles and when the management skill mix aligns with the business’ position in its life cycle.
In the early stages, entrepreneurial skills are essential to innovate great product. Without that, the business would not exist. As the business moves from a conceptual stage into growth, a leader is required to build a great team of motivated people to take the product to market. As the business grows in size and complexity, management skills are essential to implement processes and to drive profit from the activities in the business. We can probably all think of great businesses that have been around for years but eventually foundered through a lack of innovation and failure to keep pace with a changing market. So the role of the entrepreneur will take a mature business through to advanced growth, by developing a stream of innovative products that provide a consistent source of future profits.
In summary, entrepreneurs, leaders and managers are key roles in business culture, each playing their part to enable companies to deliver sustainably against their strategic objectives.