Leadership and Entrepreneurship: What is the difference? ~ by Thomas Zurbuchen

These notes summarize a talk to representatives of the Division of Student Affairs and the Order of Angells on the relationship of leadership and entrepreneurship. The previous posts are provided here, here and here.

My final post relates to the relationship of leadership and entrepreneurship. To me, they are deeply linked at the hip. Great entrepreneurs have to be great leaders – in fact, there are very good scholarly assessments supporting this. There are some aspects and skills of entrepreneurship that go beyond the typical leadership training.

Whether I would call leaders entrepreneurs relates very much more to their vision and purpose than it does to any other academic detail.  So, again it’s about vocabulary.

The leader of a group that raises the funds and volunteers to go build a school  in Brazil is a Social Entrepreneur in my book, and I suspect to many around the country. The same is true for almost any impact-driven student organization. They have leadership challenges identical or almost identical to social entrepreneurship ventures. A leader who builds an entity to take a Michigan invention and translate it for use in the entire world is an Entrepreneur in my book, needing to address all the entrepreneurial challenges a company has to address.

Thus, I don’t think the concepts are identical, but it would be a huge mistake to not recognize the substantial overlap in all of this. We would be a better campus, if we empowered our leaders with entrepreneurial visions and leadership aspirations and if we did so by focusing on student organizations.

To compare leadership and entrepreneurship, we may want to do so in four dimensions already addressed before (and following Cogliser and Bringham, Vecchio): Vision, Influence, Leading in the Context of Innovation/Creativity, and Planning.

Vision (followers/larger constituency)

Vision is the main component when inspiring followers toward exemplary performance or other goal-directed behavior as well as organizational performance.

Vision attributes (brevity, clarity, abstractness, challenge, future orientation, stability, and desirability or ability to inspire) and content (growth imagery) are related to new venture growth. Followers need to be motivated through involvement, participation, and a professionally meaningful mission.

Influence

A commonality across many of the various definitions of leadership is the ability to influence others toward a goal. Rational persuasion is widely used for both upward, lateral, and downward influence.

Entrepreneurs not only see opportunities (understand the ways and means), but are able to marshal resources to carry out their vision. Use of rational persuasion and inspirational appeals are likely to be effective when the request is legitimate and in line with the entrepreneur’s values and the constituencies’ needs.

Leading in the context of Innovation

Leading creative people requires technical expertise and creativity, employing a number of direct and indirect influence tactics.

Entrepreneurial leadership should involve idea generation, idea structuring, and idea promotion.

Planning

In complex, dynamic environments where people must coordinate their activities, planning represents a key influence on performance.

Entrepreneurs have a clear need for the mental awareness of future actions to anticipate potential reactions to strategic choices.

In summary, there is tremendous overlap of lessons of entrepreneurship and leadership.

Comments (7)
  • Mihaela Fras

    April 30, 2012

    The leadership always follow the entrepreneurship, but they are not the same. When you are entrepreneur, this doesn’t mean that you have done something and than you are free to lay on your printed towel on the beach. This means that you have created something and now this “something” should be navigated, controlled…you should be leader.

  • Harsh Kotak

    May 1, 2012

    Nice Article! 🙂

  • Carley

    May 9, 2012

    I agree that there is a distinction between leadership and entrepreneurship, but I also think that they tend to go hand-in-hand. You really touch on this where you mention the importance of “leading in innovation” where you basically say that entrepreneurs must lead the creative process to a great extent. Very thought-provoking post. I’m glad I found it.

  • Phillip

    May 21, 2012

    However every good entrepreneur will become a leader, sooner or later. But not vice versa.

  • Nina

    September 17, 2012

    A successful entrepreneur doesn’t necessarily have to be a good leader as long as they recognize how they deliver the greatest value to their organization and successfully execute on that. In fact, most successful entrepreneurs have hired or delegated to others the role of leadership.

    However, a successful leader must be entrepreneurial, as well as innovative, as they need to undertake innovations, finance and business acumen in their social influence effort to transform activities into economic goods and or results for their organization, with innovation being a critical component in order to achieve continual renewal and or improvement when achieving predefined business outcomes.

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  • Avtomati

    January 25, 2013

    Thanks for sharing this. We are always looking for great resources to share with clients and my colleagues, and this post is definitely worth sharing! Thanks.

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