Five Leadership Characteristics That Entrepreneurs Need
In my role as Associate Professor at the University of Wollongong in Dubai, heading up the institution’s MBA program and with a keen research interest in entrepreneurship, I often get asked two questions: “What exactly is leadership?” and “What characteristics do I need?” If I was given a dirham for every time somebody asked me these questions, I’d be a very rich woman indeed! The answer to “What is leadership?” is a relatively simple one in my book- it’s an innate ability to motivate, influence and lead people in an organization towards a common goal or purpose. Leadership as a quality, however, is a much harder subject to broach as it’s a constantly evolving phenomenon. My overriding opinion is that there are different answers to “What characteristics do I need to be a successful leader?” depending on which stage of business growth an entrepreneur is currently facing.
It’s imperative that as an entrepreneur you focus on each area in turn, taking time to update your leadership skills as your company grows and develops. The results for those that don’t make the effort to do this are clear: research has shown that very few founders were successful as CEOs once their companies went public, hinting that the leadership skills that are required to be successful change as a company grows in size. To help budding entrepreneurs navigate their changing business environments, here are my top five leadership characteristics that you should take time to develop over the course of your career:
LEADERSHIP STAGE ONE
All successful entrepreneurs have something in common: creativity. Sure, maybe other people have had a similar idea to yours, but how you make it work, convince others of its potential and get people to fall in love with its possibilities is an extremely creative process. Many entrepreneurs find that early on in their idea’s lifecycle, creativity is the biggest trait they need to be a successful leader. You have to be creative in your use of limited resources, have the ability to catch a potential investor’s eye -especially if you’re looking further than their circle of friends and family for funding- and see things that other people can’t, including having faith in your own vision when others may not.
LEADERSHIP STAGE TWO
As your business starts to enter its first stage of growth, you need to be able to articulate your direction in measurable goals. As one venture capitalist told me, “There is no formula for investment at the seed stage because there are no numbers and tractions for us to look at- but the team is everything. If you can measure what the entrepreneur is speaking about and express it in numbers, then they are up to something.”
Although financial goals are of course extremely important, direction is not limited just to money matters. It also includes having a clear idea about your target market, articulating your vision in a sentence which is measurable, inspiring and achievable and communicating effectively with key stakeholders. Focus on being fluid in your direction too- it may need be redefined as circumstances change, more investors come on board, resources change, or indeed, you change!
LEADERSHIP STAGE THREE
As your business grows, you may find yourself getting increasingly inefficient as you handle more responsibilities. The key to combating this is delegation, delegation, delegation! Hiring the right team who you trust to believe in and respect your vision is of upmost importance at this stage. Knowing your weaknesses and hiring people for their competencies, concentrating on building up a diverse workforce made up of different genders, background and skills, developing mutually agreed goal posts and investing in good governance to track finance and business relationships have all been proven to contribute to successful growth. What’s more, you shouldn’t be afraid to take tough decisions as the organization evolves. Be clear about your own accountability and role within the business too.
LEADERSHIP STAGE FOUR
As your organization grows further, silos might develop within your business which could lead to inefficiencies, miscommunication and loss of trust. If this happens, you should focus on effectively and skilfully coordinating between various personalities, expertise and management levels. Concentrate on creating a strong corporate culture where the business’ vision and values for the future are deeply embedded. A recent survey by McKinsey & Company suggests that those leaders who create a sense of ownership amongst their frontline staff fare better during periods of change. Work closely with other stakeholders to develop a structure to help to manage decision-making too– try to avoid the paralysis that sets in through too many meetings that have no outcome except frustration!
LEADERSHIP STAGE FIVE
Research by ESI International proposes that 65.5% of teams feel that if they worked more collaboratively, they would be more successful. As your startup matures, attempt to collaborate more both with your internal team and external agencies, working to build strategic alliances and seek external advice on business strategy and staff recruitment from suppliers, customers, legal teams and other business sounding-boards. Focus your energies on effectively networking too, building strong relationships which might help you to discover opportunities, source resources and get that all important foot-in-the-door with potential customers, clients and future opportunities.