Seeking the entrepreneurial executive

The digital transformation that all industries and companies are currently undergoing is also changing the traits of the figure at the crux of modern companies: the manager. In the collective imagination of last century, the idea of the manager coincided with the great captain of industry, effectively represented at the global level by Jack Welch at General Electric. Managers were the undisputed bosses of multinationals with well-structured organizational charts, adapted from the military sector. There was a strong vertical hierarchy and the manager’s leadership imposed efficiency-oriented choices for its organization. They mainly grew at a geographic level, diversifying every so often into adjacent or related sectors.

In general, however, their mantra was management, as the name implies. The programs that trained them, whether degrees in Business Administration in Italy or internationally ranked MBAs, were indeed aimed at analyzing and understanding the running of businesses according to the top-down system described above.

In the C-suite, the value of this role has been challenged by the entrepreneurial wave we have been experiencing over the past 20 years. With the innovations they created and their management styles, Jobs at Apple, Bezos at Amazon, Zuckerberg at Facebook and Musk at Tesla and Space X have been the focus of the media. They are studied at business schools and are cult figures for students all over the world. The original sin of this encroachment – as the acute observer might maintain – is that this generation of corporate heads are the very entrepreneurs that founded the companies and still control them today. For that matter, they all run firms that created the digital industry and are based in Silicon Valley – a context that we have learned over the years is not exportable in and of itself. We should therefore ask what general significance these new leaders have for managers of the future.

Managers in the digital century have permanently lost their past traits as administrators and executors. Increasingly, they must drive innovation, regardless of whether or not they are actually an entrepreneur of a startup. Managers of the future (at large, medium and small firms regardless of geographic location or industry) will thus trend toward a hybrid role combining innovator and entrepreneur. They must present new qualities, with at least five hallmarks that differentiate them from the previous definition of manager.

First of all, there is a strong desire for growth. Unlike manager/executors who lived off synergies, efficiency and consolidation, manager/entrepreneurs must think about creating new markets, new products and new processes for production and distribution. They can do so because digital technologies allow new opportunities to be identified that were until recently unimaginable in every area of business. They must do so because determining value is now more than ever related to the growth of a company. It is no coincidence that the expressions “business development” and “market creation” have already become a part of business vocabulary and will increasingly be the litmus test for strategic business plans.

This desire for growth must be combined with strong analytical skills. The challenges associated with growth that companies must overcome rarely have a clear answer. In addition to on-the-job experience, only logic, reasoning skills and critical thinking can help. The digital century is synonymous with access to data and information: critical skills for processing this information are therefore key for managers who want to present themselves as ready for the times to come.

In addition to these analytical skills, there is also a need for economic and financial expertise. In a global world in which the impact of financial markets has become decisive, financial knowledge has become crucial. Moreover, modern growth results not only in equity but also in debt. Knowing how to cope with the growing dose of private equity, venture capital and investment banks that promote (and limit) growth in any company creates a need to master the subject in order to converse with anyone who possesses financial resources.

A fourth hallmark is to get involved in the recruitment and hiring of human resources consistent with the company’s aims, just as an entrepreneur does when creating and consolidating a startup. Human capital is indeed more than ever the most valuable resource in complex contexts, and in the future it will be crucial to assemble a high-quality team. But valuable players only advance when faced with a coherent plan and an incentive system that only a manager/entrepreneur can mobilize. This means democratic leadership, which derives from a leader who knows how to get involved and organize a team. Managers who know how to create empathy, who value human capital and who help their team overcome difficult situations with a human touch can manage growth in companies that are increasingly flat, lean and organized in terms of process.

One last essential hallmark of manager/entrepreneurs is their ability to focus on a company’s identity values and DNA and become its evangelist in a way. Unlike opportunistic managers, the managers of the future must build deep-rooted connections with the company, regardless of whether or not they have been with it since the beginning. This is the only way to become the director and screenwriter of honest storytelling, which is not the result of simple economic incentives, but of pure energy and passion.

Growth, analytic skills, financial skills, a focus on human capital and a symbiosis with the company are the ingredients that will lead to the new generation of manager/entrepreneurs that we are beginning to see in several companies in the most disparate sectors. Those who are able to train this new generation of managers, along with the companies that hire them, will benefit from a competitive advantage in the digital century. 

Italian version published by L'Economia del Corriere della Sera: