Few roles in business attract as much interest and attention as entrepreneurship. Often characterized as the “rock stars” of the business world, entrepreneurs enjoy a reputation as freewheeling, innovative mavericks.
This romantic vision of entrepreneurship is appealing but, like most stereotypes, wide of the mark. The overlap between entrepreneurial leaders and traditional managers is much larger than is often assumed. Creative, innovative individuals may possess copious excellent ideas, but it takes leadership and business discipline to turn them into successful ventures.
The following five findings summarise the key insights into the minds of today’s most successful entrepreneurs. Taken from the Ernst & Young survey of 685 entrepreneurial leaders, read the full report here.
1. Entrepreneurial leaders are made, not born.
The concept of the young, dynamic entrepreneurial leader who starts a venture fresh out of university is one that persists. But although many entrepreneurial leaders start at a reasonably young age, the experience they gain through education and time spent in a more traditional corporate environment is vital to their future success. Indeed, more than half of the entrepreneurs describe themselves as “transitioned” entrepreneurs — in other words, they have previously spent time in traditional employment before setting out on their own
2. Entrepreneurship is rarely a one-off decision.
The majority of respondents to this survey are “serial entrepreneurs” who have launched at least two companies. Entrepreneurial leaders who embark on more than one venture gain valuable insight and lessons into how to make a new business successful. As such, they perform a vital role in the economy and, among them, start a significant proportion of all new ventures.
3. Funding, people and know-how are the biggest barriers to entrepreneurial success.
Among the 6 out of 10 respondents who experienced obstacles in their ventures, the most common barrier is lack of funding or finance. This is particularly pertinent in the current environment, when many entrepreneurs continue to experience problems with accessing finance, despite a gradual easing of credit conditions in many countries. The two other most-cited obstacles are people and expertise. As a result, entrepreneurial leaders are well–advised to build “ecosystems” — networks of resources — to address these three areas.
4. Entrepreneurs share common traits.
Entrepreneurs may be made rather than born, but our research has found that entrepreneurs will typically exhibit a combination of behaviours and attitudes. At the heart of this model is a strong internal locus of control — a belief that events result directly from an individual’s own actions or behaviour. This is complemented by a mindset that sees opportunity where others see disruption, along with an acceptance of calculated risk and a tolerance of failure.
5. Traditional companies can learn from entrepreneurial leaders.
Employee incentives and fostering innovation are good places to start. It is no coincidence that fast-growing entrepreneurial companies tend to place larger amounts of share ownership in the hands of employees. And in terms of innovation, traditional companies have few incentives to disrupt their own business models with game-changing innovations. But companies that can are richly rewarded.