Why Are Entrepreneurs Such Authoritarian Leaders?
By Bruce Johnstone, Director of the Business Growth and Development Programme at Cranfield School of Management
If you have watched television programmes such as The Apprentice, or Dragons Den, you may have noticed that successful entrepreneurs seem to practice a tough, authoritarian style of leadership, and have unreasonably high expectations of other people.
They also engage in breaking the old to create the new, according to Joseph Schumpeter, the Austrian economist who identified creative destruction as the important role of entrepreneurs in the economy. He described them as having unternehmergeist — a German word which might translate as wild spirits, suggesting a lack...
...of respect for the status quo and a willingness to take risks.
One of the early scholars in the field of entrepreneurship, David Birch, observed that entrepreneurs need to be able to deal with terror. The terror of not knowing what will happen. Will you succeed or fail? Will you win that vital big order? Will you find the finance you need? Will you make payroll this month? Entrepreneurs have to cope with the sort of terror that keeps them awake at night, and then get up in the morning and project an upbeat and positive face to the world.
More reasonable people might prefer to avoid the terrifying situations faced by entrepreneurs and opt for a nice safe profession. In comparison, entrepreneurs often seem to be unreasonable people. They don’t accept things the way they are, they want to change them. They don’t mind taking risks and taking on challenges, and they set high goals for themselves and others.
Entrepreneurs running start-ups and fast growing businesses are in a very different environment from that enjoyed by the managers of large established organisations, and they need quite different leadership styles. To put this in military terms, the leader... continued on page two >