The entrepreneurial mindset

Objectives
Explore the entrepreneurial mindset Differentiate traditional managers from entrepreneurial leaders Evaluate influences of personalities, stress, and teaming on entrepreneurs

The entrepreneurial mindset

Entrepreneurial Mindset
Describes the most common characteristics associated with successful entrepreneurs as well as the elements associated with the dark side of entrepreneurship.

Who Are Entrepreneurs?

Independent individuals, intensely committed and determined to persevere, who work very hard. They are confident optimists who strive for integrity. They burn with the competitive desire to excel. They use failure as a learning tool.

Entrepreneurs cause entrepreneurship

Entrepreneurship is a function of the entrepreneur Entrepreneurship is characterized as the interaction of skills related to
innovation, planning and goal setting, risk taking, use of feedback, decision making, human relations, and independence.

Entrepreneurs: Type A personalities?

Chronic and severe sense of time urgency? Constant involvement in multiple projects subject to deadlines? Neglect of all aspects of life except work? A tendency to take on excessive responsibility, combined with the feeling that Only I am capable of taking care of this matter? Explosiveness of speech and a tendency to speak over most people?

The entrepreneurial ego

Self-destructive characteristics
An overbearing need for control Sense of distrust Overriding desire for success Unrealistic optimism

Entrepreneurial motivation
Quest for new-venture creation & the willingness to sustain the venture.
Personal characteristics, personal environment, business environment, personal goal set (expectations), and the existence of a viable business idea.

Common characteristics of entrepreneurs

Commitment, determination, and perseverance Drive to achieve Opportunity orientation Initiative and responsibility Persistent problem solving Seeking feedback Internal locus of control Tolerance for ambiguity Calculated risk taking Tolerance for failure High energy level Creativity and Innovativeness Vision Self-confidence and optimism Independence Team building

2007 Thomson/South-Western. All rights reserved.

Managers vs. Entrepreneurs

The Manager
Planner Coordinator Organizer Supervisor Staffer Budgeter Evaluator Strategist Motivator

The Entrepreneur
Visionary Opportunity-seeker Creator Innovator Calculated risk-taker Resource leverager Change agent Adaptive

The Entrepreneurial Manager

Attitudes of managers & entrepreneurs

Attitude toward Organizational resources and capabilities The firms business and purpose Business strategy Organizational architecture Meeting customer needs Traditional Managers Resources and capabilities should be protected Definitions of business and purpose are relatively enduring Play the game better than competitors Designed to optimize implementation of the strategy Stay close to the customer Entrepreneurial Leaders Resources and capabilities should be valued but challenged Definitions of business and purpose should be periodically reexamined Play the game better than competitors or play your own game Designed to allow for strategic flexibility Stay close to the customer, but also invest in promising innovations that dont currently meet expressed needs Entrepreneurial activity should lead to as well as follow from strategy Institutionalize a questioning attitude such that learning and unlearning can coexist

Entrepreneurial activity within the organization Organizational learning

Entrepreneurial activity should follow from strategy Institutionalize knowledge to avoid having to relearn business lessons

The dark side of entrepreneurship

The Entrepreneurs Confrontation with Risk
Financial risk versus profit motive varies in entrepreneurs desire for wealthbeware of throwing good money after bad money Career riskloss of employment security Family and social riskcompeting commitments of work and family Psychic riskpsychological impact of failure on the well-being of entrepreneurs

Stress and the entrepreneur

Entrepreneurial Stress
The extent to which entrepreneurs work demands and expectations exceed their abilities to perform as venture initiators, they are likely to experience stress.

Sources of Stress
Loneliness Immersion in business People problems Need to achieve

Dealing with stress

Networking Communicating with employees Delegating Finding satisfaction outside the company Getting away from it all Exercising

Teaming?
Which is best?
1. 2. The extraordinarily competent and passionate individual acting alone Team

The individual
1. The extraordinarily competent and passionate individual acting alone?
Keep all of the profits Have all of the glory Make fast decisions Reduce conflict Serve your own needs and interests Do exactly what you want, when you want, and how you want Be your own boss

The founding team

2. A complete team
Complete = complementary competencies Brings deeper knowledge than individuals Expands network of potential investor, partners, advisors, customers, etc. Typically required for high potential companies Offers improved legitimacy Allows for continuity
In the event of one persons absence

Complimentary competencies
Technology Expert
Cutting edge, never satisfied In search of continuous improvement Customer orientation

Business Person
Big picture Bottom line/finance Organization Sales and marketing Resource efficiency

The extended team

Board of Directors/Advisors
Required if you are incorporated Owners or advisors Insiders or outsiders

Accountants
Taxes Planning

Attorneys
Corporate formation Intellectual property Contracts and employment law

Suppliers Distributers Others

Summary
Entrepreneurial mindset is central to success in new venturing. Traditional managers significantly differ from entrepreneurial leaders. Personalities, stress, and teaming are key influencers on entrepreneurs.