Is there a ‘type’ of person that is entrepreneurial and creates start-ups?
In established businesses we find defined processes, systems and cultures: Consider the way in which an established business manages payments and invoices – I for one used to just raise a ‘PO’ and everything else just happened! Contemplate how performance is managed in an established business – whether the key measurement is profit, volume or service is pre-defined by the business model. And how people interact will have a set form – with a precedent set for celebrating individual achievements over team ones, or having formal or informal meetings.
In a start-up or new venture (such as a new division or product within an existing business) all these elements are undefined:
– It is more than likely that the team will have to multitask – many founder entrepreneurs start out doing sales, finance, marketing, admin and the rest!
– Regarding performance, tough decisions need to be made to prioritise exactly what is important to the business model. If your business model is based on scale then volume will be the key performance indicator. If it is about being more premium than the competition but offering the best customer experience, then customer service and feedback becomes the vital indicator.
– And culture does not just evolve. Often the founder has a set values and beliefs that underpin the way the business operates. For example they might prefer to be open and transparent in style. But as a team grows there is a need to define and then spread a vision, and a compelling ‘way of doing thing’ through the wider team.
It is widely accepted that there is an element of ‘all-rounder’ required to run a start-up – often out of necessity. But there seems to be fundamental characteristics that seem to bubble in certain people, that makes them more driven towards being entrepreneurial.
There is a level of flexibility and tenacity required by those leading start-ups. They need to be comfortable assessing situations and making speedy decisions with only the available information, and be prepared to reassess and check course based on results. They need to be able to create a vision and motivate others behind that vision, with the self-confidence that this is the ‘best course of action’ – without the endorsement of a board sign off or a wealth of data. And above all, there seems to be a consistent and healthy disregard for the status-quo.
Harvard business writer Michael Watkins identified 4 different organisational stages1: Start-up (business or new venture / product); Transformation (failing and needing to reform); Realignment (in need of revitalisation); and Sustaining Success (where the challenge is to continue success). With each comes different challenges and opportunities for new leaders – and leader characteristics that are dialled up or down for each. Start-up and Transformation demand very similar characteristics.
Speaking recently at the Platform evening (where some of the leading business innovators are asked to speak) was Anne Murphey managing director of VC owned Bird’s Eye. Bird’s Eye needed dramatic transformation when it was bought from Unilever. You can read the synopsis of Anne’s journey here.
In the same week I had the privilege of talking in detail with Thomas Delabriere – Marketing Director at Innocent. Both inspiring characters have a plotted history of successes either creating new businesses, transforming failing ones or driving entrepreneurial innovation within existing businesses.
Interestingly, both make ‘people’ their number one starting point in creating or turning around a business. Anne started with the old adage of ‘getting the right people on the bus’ and shared Thomas’ belief that ‘great people can make an average business idea successful, and average people can make a great business idea fail’.
Innocent is up there as one of my all-time inspirational businesses. They have grown from 3 London boys with an idea, into a brand worth well over £100m – yet they have lost none of their customer-centric focus or entrepreneurial speed. They still act like a start-up despite their size – and that is down to the people, and the culture that those people create.
The people that they bring in are entrepreneurs at heart. They are happy making decisions on the information that they have; they are obsessive with being customer focused, which is what makes them different; their brand is lived and breathed by everyone in the organisation; and they are never satisfied with the status-quo.
This team and culture means that regardless of size and share ownership they do not move into Watkins’ ‘sustaining success’ stage – instead they seem to reinvent the model by keeping the people and their entrepreneurial traits at the heart of the business, and constantly striving to be better.
Please comment with your views on the characteristics of those successfully running start-ups or leading in an entrepreneurial way.