Entrepreneurship drives success

Entrepreneurs create more value

The economist and philosopher Peter Schumpeter described entrepreneurship, in his 1947 paper in The Journal of Economic History, as, ‘the doing of new things or the doing of things that are already being done in a new way’. The entrepreneur wants to change things for the better, creating more value for customers, employees and society by improving, innovating, reinventing business models and changing the rules of the game.

Entrepreneurs have a strong vision. In the early 1980s for example, Steve Jobs was already seeing a computer in every household.

Entrepreneurs are visionary and creative, a powerful driving force creating successful businesses: studies show that companies led by entrepreneurs are on average more successful compared to companies led by external management. So the question is, ‘What makes the difference?’

Feel for business and fast decision-making

Entrepreneurs build companies from scratch so have an excellent feeling for the business. They know exactly where markets and their customers are going, and have a realistic understanding of their own competences and capabilities. Most decisions just take seconds because they know intuitively what is right. Where managers who frequently change jobs and industries need reams of paper, calculations and complex decision-making processes, entrepreneurs just decide by themselves. And that makes them business move ahead quickly.

Long-term thinking for the next generation

Let’s talk about incentive schemes. What is your incentive? A year-end bonus, stock options, the next three year contract? An entrepreneur’s incentive is to secure the long-term future of the company. They want to create long-term value and see the business transferred to the next generation. That gives them a long-term perspective, way beyond any five years business plan. It means entrepreneurs are able to invest in long-term business cycles, creating more value in the long run.

Courage and risk taking

Are you afraid of failure? If so, how can you innovate and expand investment in projects that have a certain risk of failure? Entrepreneurs take risks to grow the business, often putting part of the profit at risk. They can handle a dip. They don’t, of course, risk everything in a make or break decision, but they do take controlled risks. Think about your decision-making. Do you avoid risk or do you take risks?

Heart, blood and passion

Where managers often move from position to position and from industry to industry, entrepreneurs develop their life′s work. They invest their emotion, passion and blood in their company. And people can tell if you are working with passion or if you are looking at your work as an interim assignment until you hop to the next job. It isn’t hard to guess the implications on motivation, commitment and therefore company performance.

Are you, deep in your heart, an entrepreneur or a manager?

It goes without saying that not every manager can start up and run their own business. And that isn’t actually the right question. It doesn’t matter if you’re running your own business or managing one for someone else. What matters is attitude: do you think like a manager or an entrepreneur?