Wednesday, January 7, 2009

Business Lessons – a few thoughts on Employees vs Entrepreneurs

I was talking with an associate today and we were discussing company and the roles in the organization as well as organizational structure. That conversation inspired to me post this information and contrast an employee vs entrepreneur as well as a leader vs a manager.






What many do not realize is that being a C level executive does not make you an entrepreneur. True you can be an entrepreneur who happens to be a C level executive but the majority of executives are merely well and sometimes over paid employees. 

Allow me to elaborate – Steve Jobs, Bill Gates, Michael Dell, Richard Branson, Walt Disney, Henry Ford, etc are true entrepreneurs and business owners. What makes an entrepreneur – simply stated they have an ability to see what others do not and take a vision and concept and develop it to maturity through others to some level of maturity. True entrepreneurs comprise less than 1% of society. 

Wise Geek words it like this: An entrepreneur is an individual who accepts financial risks and undertakes new financial ventures. The word derives from the French "entre" (to enter) and "prendre" (to take), and in a general sense applies to any person starting a new project or trying a new opportunity.


Characteristics of an entrepreneur include spontaneous creativity, the ability and willingness to make decisions in the absence of solid data, and a generally risk-taking personality. An entrepreneur may be driven by a need to create something new or build something tangible. In the Austrian school of Economics, entrepreneurs are described as being engaged in the creative destruction of existing products and services. As new enterprises have low success rates, an entrepreneur must also have considerable persistence.


Entrepreneurs are generally highly independent, which can cause problems when their ventures succeed. In a small company the entrepreneur is able to personally manage most aspects of the business, but this is not possible once the company has grown beyond a certain size. Management conflicts often arise when the entrepreneur does not recognize that running a large stable company is different from running a small growing company. The problem is often resolved by the entrepreneur either leaving to start a new venture, or being forced out by shareholders. At Apple Computer, for example, one founder, Steve Wozniak, left to pursue other interests, while the other, Steve Jobs was ultimately fired and replaced with a CEO from a much larger company. Note that many years later, Jobs returned to the helm


Here is the best way to explain in some cases. Granted the challenge of running a small company is different from running a large and Entrepreneurs tend to be idea people who love control and creating new things. Business owners tend to be leaders – people who say follow my example and sometimes to their demise I will do it myself. Employees (which many CEOs are especially those that rose through the ranks) tend to be managers. A manager is not a visionary or leader rather this is a person who relies on control instead of inspiration and truthfully strictly managing to achieve short term objectives with out vision, growth or a new product development initiative one can expect this company to soon cease to exist. 

Manager vs. Leader (Judy Parsetti - Cincinnati, OH)


Emphasize rationality and control; are problem-solvers (focusing on goals, resources, organization structures, or people); often ask question, "What problems have to be solved, and what are the best ways to achieve results so that people will continue to contribute to this organization?"; are persistent, tough-minded, hard working, intelligent, analytical, tolerant and have goodwill toward others.


Perceived as brilliant, but sometimes lonely; achieve control of themselves before they try to control others; can visualize a purpose and generate value in work; are imaginative, passionate, non-conforming risk-takers.


Managers and leaders have very different attitudes toward goals.


Adopt impersonal, almost passive, attitudes toward goals; decide upon goals based on necessity instead of desire and are therefore deeply tied to their organization's culture; tend to be reactive since they focus on current information.


Tend to be active since they envision and promote their ideas instead of reacting to current situations; shape ideas instead of responding to them; have a personal orientation toward goals; provide a vision that alters the way people think about what is desirable, possible, and necessary.


Managers' and leaders' conceptions of work.


View work as an enabling process; establish strategies and makes decisions by combining people and ideas; continually coordinate and balance opposing views; are good at reaching compromises and mediating conflicts between opposing values and perspectives; act to limit choice; tolerate practical, mundane work because of strong survival instinct which makes them risk-averse.


Develop new approaches to long-standing problems and open issues to new options; first, use their vision to excite people and only then develop choices which give those images substance; focus people on shared ideals and raise their expectations; work from high-risk positions because of strong dislike of mundane work.


Managers and leaders have very different relations with others.


Prefer working with others; report that solitary activity makes them anxious; are collaborative; maintain a low level of emotional involvement in relationships; attempt to reconcile differences, seek compromises, and establish a balance of power; relate to people according to the role they play in a sequence of events or in a decision-making process; focus on how things get done; maintain controlled, rational, and equitable structures ; may be viewed by others as inscrutable, detached, and manipulative.


Maintain inner perceptiveness that they can use in their relationships with others; relate to people in intuitive, empathetic way; focus on what events and decisions mean to participants; attract strong feelings of identity and difference or of love and hate; create systems where human relations may be turbulent, intense, and at times even disorganized.


The self-identity of managers versus leaders is strongly influenced by their past.


Report that their adjustments to life have been straightforward and that their lives have been more or less peaceful since birth; have a sense of self as a guide to conduct and attitude which is derived from a feeling of being at home and in harmony with their environment; see themselves as conservators and regulators of an existing order of affairs with which they personally identify and from which they gain rewards; report that their role harmonizes with their ideals of responsibility and duty; perpetuate and strengthen existing institutions; display a life development process which focuses on socialization...this socialization process prepares them to guide institutions and to maintain the existing balance of social relations.


Reportedly have not had an easy time of it; lives are marked by a continual struggle to find some sense of order; do not take things for granted and are not satisfied with the status quo; report that their "sense of self" is derived from a feeling of profound separateness; may work in organizations, but they never belong to them; report that their sense of self is independent of work roles, memberships, or other social indicators of social identity; seek opportunities for change (i.e. technological, political, or ideological); support change; find their purpose is to profoundly alter human, economic, and political relationships; display a life development process which focuses on personal mastery...this process impels them to struggle for psychological and social change.

Just something to think about!

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