An entrepreneur must be a good leader
Ravi Kiran says an entrepreneur should be able to lead well to be able to take an organization into a high growth phase
February 08, 2013 / 15:31 IST
By Ravi Kiran
The driver number one for growth is leadership. In my business, I meet many business owners, promoters and founders in Middle India. Most carry a title of CMD [chairman and managing director] or director and that indeed aptly describes the position they hold in their company. In the absence of many senior managerial people in their organizations, these entrepreneurs are often expected to perform many roles. One such role is that of the leader. We often hear the owner of a mid-sized business lament the fact that the business has been stuck in some sort of a time warp and is not being able to break the growth barrier. The first thing we try to do is assess whether the owner has developed the right leadership qualities. Ownership is primarily a legal status; leadership is a process and a set of qualities. Ownership need not be learnt and leadership can and must be. The earlier entrepreneurs realize that these are two different things, the more elbow room they give themselves for maneuver.Where the heart beats
If we liken the organization to a human body, then leadership is its heart, its single most important organ. As the heart varies the quantity of blood it pumps during various activities we perform, so must the leader modify his style, approach and behavior during various lifestages of the organization, from existence to survival to success to take-off to maturity. As the business starts entering a high-growth stage, it creates four special challenges the owner-leader must confront for the first time since start of business.1. A new power structure emerges, as new people who didn’t ‘grow’ with the owner from day one start joining the company, some at levels very close to that of the leader.2. New situations present themselves and decisions become ‘riskier’ and carry more ‘impact’.3. The business’s path and pace need to be first defined and then explained to people and it has to come from the top.4. Organizational focus is on attraction, not retention, of people.
If the owner-leader isn’t prepared for this or has not created the right support system, he undergoes a stage of personal ‘anxiety’ he can hardly share with anyone.-> With many new people in the organization, he feels an apparent loss of control, something he is not quite used to.-> The owner’s perspectives on the business appear open to challenge, particularly if he has been able to attract high-performing senior managers, who are not ‘yes-men’.-> Tension between ‘old loyalists’ vs ‘new innovators’ appears to tear the company apart and create a politically charged atmosphere, especially as the number of new employees grows.In real life, this anxiety often becomes too big for the owner, as his ‘ownership privileges’ clash with his ‘leadership responsibilities’. As he feels disturbed by this ‘new order’ he created, he starts retracting, finds fault with the hard-driving approach of some new employees and wants harmony back. The old guard gets a bigger share of the leader’s ears and new employees start leaving, complaining of ‘suffocation’.Some new employees, usually mediocre performers, adapt to the old guard and survive. This is the biggest mistake an owner-leader can do, viz. failing to understand and hold on to high-performers. I learnt seven useful lesson, when we were about to take my previous organization into a high-growth phase. I will share them with you in the next column.© Entrepreneur India December 2012
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