Hiring an Entrepreneurial Leader

1 March, 2017 / Articles
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Entrepreneurs have become the new heroes of the business world. In the same way that Robert McNamara and his fellow Ford Motor Company “Whiz Kids” elevated general managers to star status, figures like Mark Zuckerberg and Steve Jobs have made entrepreneurs the latest business icons. At Harvard Business School, where I advise the career development program, even students who plan to join blue chip firms and have no intention of ever launching start-ups would be insulted if someone told them they weren’t “entrepreneurial.” I understand why: Entrepreneurialism is highly valued in today’s labor market. Companies of all shapes and sizes aspire to be seen as highly innovative, nimble, and agile—all qualities traditionally ascribed to entrepreneurs.

Yet in their recruiting efforts, companies do not have a scientific way of separating true entrepreneurs from other talented candidates. Instead, they fall back on broad stereotypes.

In my research I’ve explored how firms can address that problem. In an effort to understand what makes entrepreneurs special, I’ve compared the psychological-testing results of more than 4,000 successful entrepreneurs from multiple countries against those of some 1,800 business leaders who described themselves as general managers but not as entrepreneurs. Unsurprisingly, the two groups had much in common. On 28 of 41 dimensions of leadership, there was little or no difference between their skills. Yet when I looked more closely, combining their skill assessments with data on their life interests and personality traits, I discovered that entrepreneurs had three distinguishing characteristics: the ability to thrive in uncertainty, a passionate desire to author and own projects, and unique skill at persuasion. I also found that many of the traits commonly associated with entrepreneurial leaders didn’t truly apply.

For instance, entrepreneurs aren’t always exceptionally creative. But they are more curious and restless. They aren’t risk seekers—but they find uncertainty and novelty motivating. In this article I’ll tackle some of the myths about entrepreneurs and explain the more nuanced reality. I’ll also offer evidence-based, practical advice on interview questions and résumé screening that hiring managers can use to distinguish entrepreneurial candidates from other high-potential talent.

Know Your Requirements

Before looking to hire entrepreneurial leaders, managers must answer an important question: Does the company really need one? Not all organizational challenges call for an entrepreneurial approach. In my research successful founders as a group scored extremely high on a scale that measures the desire for power and control—and notably higher than the nonentrepreneurial leaders. This quality can cause conflict in situations where the sharing of information and power is vital to organizational performance. What’s more, it will often not play well in organizations that have established matrix structures, need porous boundaries between working groups, or require high levels of collaboration.

Hiring managers should carefully consider the particular leadership challenge they’re recruiting for. If it’s a greenfield situation, a turnaround, or any other circumstance that demands intensive initiative on a contained project, then an entrepreneurial style is likely to add value. But if the situation involves a highly interdependent matrix of working units, you might well do better looking for a different leadership profile.

If you do conclude that an entrepreneurial leader is what your organization needs, then it’s important to understand the entrepreneurial character in a nuanced, sophisticated way. Let’s take a look now at the popular perceptions about entrepreneurship and at what the research indicates really drives the people who are good at it.

One popular notion is that entrepreneurs and people who enjoy constantly changing, innovative environments are more creative than others. But there are many types of creativity in business. Some managers, for instance, are highly creative at fixing things that are broken and enjoy the challenge of returning a system to a previous state of optimal functioning. While it’s certainly true that entrepreneurs excel at original thinking, so do many nonentrepreneurs. In reality, what sets entrepreneurial individuals apart is something slightly different—something both broader and deeper than what is typically evoked by the word “creativity.” It’s the ability to thrive in uncertainty.

A critical aspect to this dimension is openness to new experiences. In my research, I’ve found that it is the single trait that most distinguishes leaders who are entrepreneurial from their more conventional peers.

The science man and innovator, Fernando Fischmann, founder of Crystal Lagoons, recommends this article.

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