4 Nov 2017

Tech entrepreneurs, leaders and managers


Tech entrepreneurs are important people. For example, visit CodeBase in Edinburgh and you’ll see some amazing individuals fronting brilliant start-ups. These developing businesses are invariably founded by what might be described as the old-fashioned inventor type: the tech entrepreneur.

The UK needs many more of these IT innovators if we are to continue to be ranked as a major economy in the future, yet it’s not the lack of entrepreneurs with ideas that holds us back.  In order to succeed, they need to develop management and leadership skills to complement their technological wizardy, or, more pragmatically, invest in those who have them. Ultimately, it will be a combination of their ideas, technical know-how and an acquired/hired ability to manage and scale their business that turns (a select few of) them into the next Skyscanner.

However, it’s important to note that tech entrepreneurs are not that different from entrepreneurs in any other area of business. Excited by the new, the (tech) entrepreneur often lacks the financial/business skills required to run a growing company. While a genuine enthusiasm for their pet project is enough to get them up and running, in the medium-long term, they need to make a profit to allow them to develop and grow their business.

These are highly talented people, occasionally geniuses, but that of itself does not guarantee the success they all crave.  While they want their ideas to live in the future, they need to learn how to develop and scale their business in the present. How they learn to manage and lead other people is key here, or putting it more prosaically, how do you let go and hand over responsibility for your “baby” to them? This requires recognising your employees’ skills to make sure you give the right roles to the right people.  And that requires the aforementioned leadership and management skills, which, as I noted, a lot of enthusiastic entrepreneurs lack.  To develop their business they need to develop themselves and/or hire in the people who can help them do so.

Some entrepreneurs will be able to step up to the plate as leaders and managers. Others, given the nature of the entrepreneurial mindset, may need help. The STAGES diagram below shows what is required as a new business develops.

Stages graphic

As the two arrows at the foot suggest, there is a tendency for the tech entrepreneur to try to do everything – innovate, lead and manage – as their company grows.  Leaders plan for the future, are great communicators and good with people, while managers are day-to-day, process-orientated and focused on what makes a profit. Thus, a blend of entrepreneurship, leadership and managerial skills is required.

While most business owners have all three skills to some extent, usually one dominates and is supported by a secondary skill. For example, you might describe yourself as an “LE” – a Leader first and an Entrepreneur second, or an EM – Entrepreneur first and Manager second.

This is where the ELM (Entrepreneur, Leader, Manager) Indicator can be very useful.  ELM is a powerful personal profiling tool that helps individuals understand how they engage with the process of change. In my experience, applying ELM can be really valuable to IT start-ups as they seek to make their way in the world. As the STAGES diagram suggests, there is a tendency for the founding entrepreneur to persist in his or her role, trying to plan as a good leader should, and then similarly trying to organise and structure their business efficiently and effectively, as a great manager does. That’s not easy and that’s why ELM indicator can help.

ELM is not a psychometric test; rather it will help you understand how your current outlook may affect your perspective in relation to your work, your colleagues’ and your organisation’s objectives. It helps identify where your strengths lie (e.g. EM, LE, etc.), and then, working with a leadership consultant if you find that helps, you can concentrate on improving the areas where you are weak, or identifying these skills in others, especially in relation to management and leadership.

I have helped many businesses which “get stuck,’’ not knowing how to move to the next stage of growth. In one organisation, the two owners were very strong entrepreneurs; however, their Leadership scores were low and that’s exactly what they needed to shift. We profiled the team and found the Leader they needed was already there…

Knowing which are your primary, secondary and tertiary skills is tricky. And all are equally important for scale. Ultimately, it’s down to you. Your ideas and technical skills may be beyond dispute, but on their own they might not be enough.

Kai Murray, NED, Be-IT