27/03/2012

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 of a large established organisation is a bit like a general who inhabits a comfortable HQ bunker, surrounded by support officers, backed by resources, and at a safe distance from the front lines.

But entrepreneurs are the tough infantry sergeants of the business world, who must lead a small platoon of supporters into dangerous unknown territory. As leaders they need to inspire and persuade other people to support them while they take on these unreasonable risks and challenges. So it is perhaps not surprising that entrepreneurs tend to be rather autocratic leaders.

As an organisation matures and grows, the qualities of being unreasonable and able to cope with terror become progressively less important, and more democratic management skills are needed. If a new venture succeeds and becomes a big established organisation, entrepreneurs need to consider how to adapt their management style.

Of course some entrepreneurs to exit or step back from the business once it has become established, and may prefer to devote their time to starting more new ventures, or appearing in television shows.


The Business Growth Programme at Cranfield School of Management is aimed at established businesses, usually with a turn-over in excess of £2m, and the capacity to grow. Over 1250 owner managers have completed the BGP which now runs three times a year at the Cranfield School of Management in Bedfordshire. Designed specifically for the development of owner-managers, the BGP helps you create the future you want for your business and for yourself. Find out more, and attend a special briefing event, by visiting www.som.cranfield.ac.uk

Dr Bruce Johnstone is a director of the Business Growth and Development Programme at Cranfield School of Management. He can be reached on bruce.johnstone@cranfield.ac.uk