9 Essential Qualities of Entrepreneurial Leadership
Do you have what it takes to be an entrepreneur? You might have a solid idea for a new product or service, and maybe even a strong business plan to back it up, but if you want your startup to have a chance at long-term success, you also need to have the leadership qualities necessary to take your vision from dream to reality.
Leaders serve multiple roles. Ideally, leaders motivate, act as role models, and serve as figureheads for their companies. Note, that you don’t have to have employees to be a leader. Leadership qualities in home business are essential in how you deal with your contractors, customers, clients and the general marketplace.
The Essential Qualities of Business Leaders
Most qualities of a leader are qualitative, in that they can’t be measured, captured, or reviewed concretely. In other words, we can’t say a business leader scored 98 in leadership. The best we can do is look to anecdotal examples or psychological studies to see which qualities good leaders possess. Here are traits that are good indicators of a leader’s potential:
- An Eye Toward the Future: A successful leader will always have one eye toward the future. He thinks several steps ahead on every problem and is always looking for new opportunities for growth. This future-focused mentality is useful for multiple reasons. For starters, it limits the temptation for instant gratification; rather than taking the easy, short road, these entrepreneurs are willing to make sacrifices for a brighter long-term future. They’re also more inclined to apply long-term fixes to problems, rather than relying on patchwork fixes, which are often unstable. For example, Amazon founder Jeff Bezos is notorious for continually reinvesting in the company, ignoring short-term profitability in favor of long-term growth channels.
- Self-Confidence: Good leaders also project self-confidence. People who appear confident attract others and make them feel secure. Confidence will help you win clients, customers, joint ventures, and even investors because you’ll have an easier time convincing people you’re worth doing business. Plus, there’s objective evidence to suggest that confident people make better entrepreneurs. One study in Applied Psychology found that successful entrepreneurs showed significantly higher levels of confidence than entrepreneurial students and students not interested in business.
- Communication: Ask any successful leader to tell you the top ten concepts that helped make them successful, and there’s a good chance they’ll mention communication. Richard Branson, for example, describes communication as the “most important skill any leader can possess.” Communication is an important skill because it has the power to enhance all your other skills. You’ll need communication skills to make sales, to rally the team, to resolve issues, to negotiate deals, to recover from PR disasters, and to make pitches to media or investors. Speaking, knowing your audience, and choosing your words carefully can avoid miscommunications, saving you time and money.
- Self-Care: While most of these traits focus on how entrepreneurs engage with their surroundings, it’s also important to note how strong leaders take care of themselves. If you develop insomnia and make unhealthy eating choices, for example, your productivity is going to suffer, and you won’t be able to lead as effectively. The best entrepreneurial leaders understand that the health of their bodies and minds are crucial to success, and they’re willing to spend a few extra hours each day getting enough sleep, eating the right foods, getting exercise, and reading new materials. Many successful entrepreneurs go so far as to have a morning routine they follow that helps them feel centered and set the right mindset for the day.
- Adaptability: Some of the biggest startup successes in the world were only possible because their founders were willing to pivot. For example, it’s hard to believe now, but YouTube originally started as a dating site. No matter how much you research your business idea, or how sure you are that it’s going to be successful, unforeseen developments and market changes can compromise your chances of success. You need to be able to adapt and make changes on the fly, sometimes making big adjustments to your business plan. If you cling too much to old ideas, you may not be able to survive. You could achieve this by using the principles of adaptive leadership in the workplace.
- Calculated Risk-Taking: Successful leaders also aren’t afraid to take risks, as long as they’ve calculated the odds of success and are comfortable moving forward. Starting a business is a risk, so naturally, there is a level of risk-taking inherent in entrepreneurs. That can be a good thing if controlled because it can allow you to do things other entrepreneurs who play it safe won’t do and therefore set you apart. Of course, that doesn’t mean you should take more risks for the sake of doing something risky. Assessing risks and having the courage to take a calculated risk is part of successful leadership.
- Education and Continual Learning: We know the stories of Bill Gates and Steve Jobs who drop out of college to start their businesses, but that doesn’t mean they gave up learning. A study from the Kauffman Foundation indicates that 95.1 percent of founders have an educational equivalent of a bachelor’s degree or higher, with 47 percent having even more advanced degrees. Like it or not, many of the greatest leaders throughout history, and in business, have been formally educated. Those extra years of learning equip you with the skills and knowledge you need to make better decisions, but also give you more diverse experiences that make you a better-rounded individual. However, learning isn’t just done on college campuses. Leaders are also readers, they listen to podcasts, and continue to learn about their industry, marketing, and other aspects of businesses to keep up on trends and to stay relevant.
- Decisiveness: As a leader, one of your biggest responsibilities is going to be that of a decision-maker. You won’t always make the “right” decisions, and sometimes, there won’t be a “right” decision to make. But you’ll be the one who needs to make decisions and the one who’ll experience the results and to be held accountable for them. If you procrastinate on decision-making, or if you tend to defer hard decisions to other people, you won’t perform well in stressful situations that demand your immediate attention, and action.
- Passion: Being passionate is another essential trait for leaders. It’s more fun to build a business based on what you’re passionate about than simply focusing on money. When you look at successful leaders and entrepreneurs, there is no doubt they’re passionate about what they’re doing. Your energy and enthusiasm will fuel your efforts, and your employees, partners, and customers will take notice. Passion is contagious, so if you’re naturally enthused about your business, the people around you probably will be too. Also, passionate leaders tend to be more charismatic lending themselves to greater visibility in the media.
There are, of course, other factors to consider when applying these traits to home business owners:
- Leadership Styles: There are different types of leadership, and no single approach is the “correct” one. Much depends on what your employees expect, the culture you’re trying to build, and how you work best. For example, some companies perform extraordinarily well with a boss who’s demanding, who doesn’t take no for an answer, and who pushes their employees to be their best. Others perform equally well with a boss who’s lenient, who makes compromises whenever possible, and who lets employees flourish on their own.
- The Industry: You should also consider the industry you’re trying to break into, and the size of your business. A law firm, for example, will require a leader who’s stern and speaks formally, while a company that makes video games for children will require a leader who’s more playful and laid-back. Big corporations need leaders who distance themselves from the majority of workers and take care of business, while small businesses tend to do better with ground-level oversight and interaction.
- Changing Environments: Leaders should also factor in changing trends and perspectives on leadership. For example, a few decades ago, it was nearly unthinkable for the CEO or boss to walk into a meeting wearing jeans and a hoodie, but today, Mark Zuckerberg and his Silicon Valley peers have made it fashionable presumably to alleviate decision fatigue.
Whether You're a Leader
If you don’t fit the mold of a leader as outlined above, you might feel like it’s impossible to build a successful business. However, the real takeaway here shouldn’t be an evaluation of whether or not you’re currently fit for leadership, or even which qualities you need develop to become a leader. Instead, you should use this information as a guide to sort out your key characteristics, decide what’s important to you as a leader, and move forward from there. You’re going to have weaknesses, as all leaders do.
The question is, can you find a way to make up for them? Or can you compensate for them by having mentors, partners or employees who complement those weaknesses?