BEING AN ENTREPRENEUR VERSUS MANAGING A BUSINESS
The issue of the transition from being an entrepreneur to managing a business is similar to the transition from being a fired up teenager to an adult who has to adjust to middle age.
At an early stage of a social enterprise, visionary zeal, conviction and passion carry the enterprise forward. As the enterprise grows, or if it wants to grow, the way the enterprise is managed has to change. The passion of the founder is not sufficient to motivate ever increasing numbers of employees and it won’t be enough to convince stakeholders that the enterprise is serious about its sustainability or scaling its activities and social impact.
Growth and maturity demand discipline. There need to be systems, procedures and policies in place. These are internal and external reference points and frameworks against which employees and stakeholders can purposefully engage and navigate their own activities. That is not to say that small enterprises do not have processes and procedures – they exist, but usually only in the head of the founder. But this is not a sustainable position when you are seeking long-term operations and impact. Accordingly, we highly recommend you read this section of the toolkit in conjunction with the discussion around establishing operational processes and systems.
In his book “Gods of Management,” Handy uses the analogy of the starter enterprise being “Zeus” centric. Everything revolves around the founder – his or her whims, prejudices and ways of doing things are the reference for the other “mortals” employed in the enterprise. Zeus can make snap decisions without reference to anyone else or following any established policy or procedure and indeed in complete disregard of contrary decisions made in the past. The mortals in the enterprise are always a bit scared of making decisions for themselves and all decisions are referenced back to “What would Zeus want?”1
For many entrepreneurs this way of managing an enterprise is wonderful – they shine – often the enterprise is a projection of their own personality. However to evolve into a larger organisation that needs structure and where the founder’s ego and personality starts taking a back seat is a difficult transition. Many entrepreneurs cannot and do not make that transition; those that do not will rarely survive beyond the medium term.
Handy uses the analogy of “Apollo” as the style of management that has structures and order in place 2. Staff members are defined by their job descriptions. There are set policies and procedures and systems in place. A new employee can quickly understand how the enterprise works and what is expected of him or her. The structure allows growth to take place and for the recruitment of managers with a clear career path to enable this. A Zeus culture stops good managers joining – there is no space for them when they are competing with the fiery energies and passion of Zeus and where strategy can be changed on a whim.
Interestingly enough, it is the entrepreneur that has to trigger and maintain the change in structure and culture. This is either because they quickly come to realise their own limitations, or because they are ambitious and impatient for the enterprise to grow. If the structure is imposed on the entrepreneur by stakeholders then it is unlikely that there is a future in the organisation for the entrepreneur.
A successful entrepreneur has to be serious about growth and constant improvement and should not be afraid to be challenged. Similarly, a successful entrepreneur is open to recruiting specialists and indeed clever people to ensure succession and sustainability of the enterprise beyond the involvement of the founder. You have to decide what is more important; your cause, i.e. the enterprise, or your ego!
A properly managed and structured enterprise will allow the founder to bask even more brightly in its success. One only has to look at Richard Branson. Though closely entwined with the Virgin brand the truth is that his recruitment of a very professional management team has grown Virgin beyond anything he could have done on his own. Yet the structure allows him freedom to chase new ideas and promote himself shamelessly.
A starting point for the transitional journey is to understand what skills are required to grow the enterprise and what systems and procedures need to be embedded so that enterprise can function without reference to the founder. Then go and find the skills and set the recruits to create and embed the policies and procedures. Most importantly, give them the space and scope to grow and progress themselves – this will help create a long term commitment to the enterprise. The trick for any enterprise is to carry this change through without losing the very spirit and ethos that created the enterprise in the first place. That means you need to have a very strong culture established prior to the change and reinforced through the change – this is the responsibility of the founder entrepreneur.
The use of external facilitators such as consultants or mentors can assist you with mapping out the structural changes that are required and then how to implement them. Assistance with change can also be facilitated through the use of non-executive directors.
The founder needs to find a new role or a new way of engagement within the enterprise. The changes will certainly mean different ways of operating – you will be more accountable for your actions. Your role and responsibilities may change. You may indeed have to step away from being the chief executive in preference to someone better suited to grow and sustain the enterprise.
You have to be brave enough to let go of total control so that your baby can grow in its own right.
BEING AN ENTREPRENEUR VERSUS MANAGING A BUSINESS
The issue of the transition from being an entrepreneur to managing a business is similar to the transition from being a fired up teenager to an adult who has to adjust to middle age.
At an early stage of a social enterprise, visionary zeal, conviction and passion carry the enterprise forward. As the enterprise grows, or if it wants to grow, the way the enterprise is managed has to change. The passion of the founder is not sufficient to motivate ever increasing numbers of employees and it won’t be enough to convince stakeholders that the enterprise is serious about its sustainability or scaling its activities and social impact.
Growth and maturity demand discipline. There need to be systems, procedures and policies in place. These are internal and external reference points and frameworks against which employees and stakeholders can purposefully engage and navigate their own activities. That is not to say that small enterprises do not have processes and procedures – they exist, but usually only in the head of the founder. But this is not a sustainable position when you are seeking long-term operations and impact. Accordingly, we highly recommend you read this section of the toolkit in conjunction with the discussion around establishing operational processes and systems.
In his book “Gods of Management,” Handy uses the analogy of the starter enterprise being “Zeus” centric. Everything revolves around the founder – his or her whims, prejudices and ways of doing things are the reference for the other “mortals” employed in the enterprise. Zeus can make snap decisions without reference to anyone else or following any established policy or procedure and indeed in complete disregard of contrary decisions made in the past. The mortals in the enterprise are always a bit scared of making decisions for themselves and all decisions are referenced back to “What would Zeus want?”1
For many entrepreneurs this way of managing an enterprise is wonderful – they shine – often the enterprise is a projection of their own personality. However to evolve into a larger organisation that needs structure and where the founder’s ego and personality starts taking a back seat is a difficult transition. Many entrepreneurs cannot and do not make that transition; those that do not will rarely survive beyond the medium term.
Handy uses the analogy of “Apollo” as the style of management that has structures and order in place 2. Staff members are defined by their job descriptions. There are set policies and procedures and systems in place. A new employee can quickly understand how the enterprise works and what is expected of him or her. The structure allows growth to take place and for the recruitment of managers with a clear career path to enable this. A Zeus culture stops good managers joining – there is no space for them when they are competing with the fiery energies and passion of Zeus and where strategy can be changed on a whim.
Interestingly enough, it is the entrepreneur that has to trigger and maintain the change in structure and culture. This is either because they quickly come to realise their own limitations, or because they are ambitious and impatient for the enterprise to grow. If the structure is imposed on the entrepreneur by stakeholders then it is unlikely that there is a future in the organisation for the entrepreneur.
A successful entrepreneur has to be serious about growth and constant improvement and should not be afraid to be challenged. Similarly, a successful entrepreneur is open to recruiting specialists and indeed clever people to ensure succession and sustainability of the enterprise beyond the involvement of the founder. You have to decide what is more important; your cause, i.e. the enterprise, or your ego!
A properly managed and structured enterprise will allow the founder to bask even more brightly in its success. One only has to look at Richard Branson. Though closely entwined with the Virgin brand the truth is that his recruitment of a very professional management team has grown Virgin beyond anything he could have done on his own. Yet the structure allows him freedom to chase new ideas and promote himself shamelessly.
A starting point for the transitional journey is to understand what skills are required to grow the enterprise and what systems and procedures need to be embedded so that enterprise can function without reference to the founder. Then go and find the skills and set the recruits to create and embed the policies and procedures. Most importantly, give them the space and scope to grow and progress themselves – this will help create a long term commitment to the enterprise. The trick for any enterprise is to carry this change through without losing the very spirit and ethos that created the enterprise in the first place. That means you need to have a very strong culture established prior to the change and reinforced through the change – this is the responsibility of the founder entrepreneur.
The use of external facilitators such as consultants or mentors can assist you with mapping out the structural changes that are required and then how to implement them. Assistance with change can also be facilitated through the use of non-executive directors.
The founder needs to find a new role or a new way of engagement within the enterprise. The changes will certainly mean different ways of operating – you will be more accountable for your actions. Your role and responsibilities may change. You may indeed have to step away from being the chief executive in preference to someone better suited to grow and sustain the enterprise.
You have to be brave enough to let go of total control so that your baby can grow in its own right.
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