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Entrepreneurship in the 21st century

Many definitions of entrepreneurship can be found in the literature describing business processes. The earliest definition of entrepreneurship, dating from the 18th century, was considered to mean an economic term that described the process of taking the risk of buying at certain prices and selling at uncertain prices. The term was later expanded to include the concept of bringing together the factors of production. This definition led others to question whether there was a single business function or whether it was simply a form of management. In more recent times, the concept of innovation was added to the definition of entrepreneurship. Innovation would flourish in many categories: process innovation, market innovation, product innovation, factor innovation, and organizational innovation. The most recent definitions have described that entrepreneurship implies the creation of new companies, while the entrepreneur is the founder.

Considerable effort has also gone into trying to understand the psychological and sociological foundations of entrepreneurship. These studies have pointed out some common characteristics among entrepreneurs; Most entrepreneurs have a need for achievement, a perceived locus of control, an orientation toward intuitive rather than logical reasoning, and a propensity to take risks. In addition, many have commented on the common, but not universal, thread of childhood deprivation, belonging to minority groups and early economic experiences of adolescence as typification of the entrepreneur.

So, at first glance, we may have the beginnings of a definition of entrepreneurship. However, a detailed study of both the literature and actual examples of entrepreneurship tend to make a definition more difficult, if not impossible, to define precisely.

Consider, for example, the degree to which entrepreneurship is synonymous with taking risks, innovating, or even starting a company. Each of the terms described above focuses on some aspect of some entrepreneurs. If this is true, then people like IBM’s Thomas Watson or McDonald’s Ray Kroc will never qualify; Few academics would seriously argue that these individuals were not entrepreneurs.

Although risk taking is an important element of the entrepreneurial personality, many entrepreneurs have succeeded in avoiding risk by seeking out others to take that risk. As one highly successful entrepreneur put it, “My idea of ​​risk and reward is that I get the reward and others take the risks.”

Creativity is also not often a prerequisite for entrepreneurship. Many successful entrepreneurs have been good at copying others and somehow improve the idea; They will be remembered for innovating a part that was essential to the success of a product.

Many questions still arise about the psychological and social traits of entrepreneurs. How is it that successful and unsuccessful entrepreneurs share commonly identified characteristics? Additionally, certain studies often show a decline in “entrepreneurship” after a successful venture for the entrepreneur. This tends to refute the centrality of character or personality traits as a sufficient basis for defining entrepreneurship.

Therefore, we are left with a series of factors and behaviors that characterize entrepreneurship in some individuals. All of the above tends to reinforce the view that it is difficult, if not impossible, to define what an entrepreneur is. The word itself can best be used in the past tense to describe a successful business person.

Measuring entrepreneurship

Despite the murkiness of the current finding on the entrepreneur, there is still a powerful push, particularly among business development professionals, to measure entrepreneurship in some way. These measurement attempts can range from simple checklists to complex and detailed computer programs. The need for a definition and measurement of entrepreneurship is driven by the notion that it is the entrepreneur who is the agent of success in launching any business.

It is the person who perceives the market opportunity and then has the motivation, drive, and ability to mobilize resources to meet demand. The main characteristics of entrepreneurs that have been listed by many commentators include the following.

“Self-confident and versatile.

“Confident in the face of difficulties and discouraging circumstances.

“Innovative skills. Sees opportunities often invisible to others.

Results oriented. It requires the drive that only comes from achieving the goals you have set for yourself.

“A risk taker. Often times, the successful entrepreneur exhibits an incremental approach to taking risks, at each stage exposing himself to a limited amount and measure of personal risk and moving from stage to stage as each is tested. decision.

“Total commitment. Hard work, energy and determination are essential elements in the entrepreneurial profile.

However, two caveats need to be attached to this partial list of entrepreneurial qualities.

First, selecting individuals for business development training using such a set of attitudes and skills does not in any way guarantee business success.

Second, the business characteristics necessary to successfully launch a business are often not those necessary for a growing business. The situation becomes very different once it grows to any size, making the skill set a different organism. The role of the entrepreneur must change with the business as it develops and grows, but all too often it cannot transition.

Visionaries and Managers

In startups and startups, the person who starts the business is often an entrepreneur or visionary.

The visionary who starts a business with a new idea, to do something better or less expensive, to do it in a new way, or to satisfy a unique need, is often not primarily interested in making money. The visionary wants to do something that no one else has done because he can; it is interesting and exciting and therefore fulfills a need. Once the business begins to be somewhat successful, the nature and the processes change. Ultimately, this requires a different skill set than the person with the vision.

At this stage, the startup experiences its first set of challenges:

“How does the visionary entrepreneur transfer the skills and inspiration that made a successful small business into something bigger?

“How does the company handle cash flow limitations?

“How do you get the legitimacy you need to be able to borrow?

Often the visionary is not interested in these issues. Visionaries are notoriously bad at supervising staff, negotiating with investors, or training successors. The business now needs a professional management approach, requiring a different set of skills, to manage and sustain growth, which are distinct from the skills required to start a business and promote a vision.

The application of management skills allows the adolescent company to continue to perform well, but the company culture begins to change. The management emphasis is on structure, policies, procedures, and most importantly, profitability. Therefore, the company reaches the following challenge: the mature company now requires a management or governance structure to create checks and balances and ensure that the management approach does not become too powerful and overwhelm the entrepreneurial spirit necessary to create growth. fast and access new markets.

Companies in emerging industries go through these three stages characterized by vision, management and governance. By becoming an institutionalized company with adequate governance structures, the company faces a new set of challenges that are common to all industries:

“How does the company preserve its vision?

“How do you balance growth, risk and returns?

“How do you establish a governance system that holds management accountable without undermining its independence and flexibility?

conclusion

This business development cycle described above is common among successful companies. The cycle itself raises the question of what to focus on when trying to select a business idea to participate in a program like TKMPK. The real danger for those involved in recruitment activities is to select entrepreneurial qualities over managerial skills. This can therefore doom the company to uneven growth, poor management and eventual failure as the company does not respond adequately to new market and business conditions. Another danger is trying to select people over ideas.

The focus of any predicative element in the selection process, therefore, must be on a balance between entrepreneurial and managerial qualities. And the main determining factor in selecting a participant for business management training should remain the business idea itself.

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