Hentschke (2009) posited that three characteristics define an entrepreneurial leader:
- 1. They have a unique idea which, at the extreme, may border on fixation. The idea may be a solution to a widespread problem, a way to meet a large, previously unmet need, or a significant improvement that can be made to upgrade a widely used product or process.
- 2. In order to translate their idea into reality they may have to be unconventional in terms of doing whatever is necessary to create a completely different organisation.
- 3. They are driven to grow a new business that is a concrete manifestation of their unique idea.
Van Zyl and Mathur-Helm (2007) posited that the entrepreneurial leadership construct consists of the key components of (1) pro-activeness (anticipating change before it happens), (2) a risk-taking propensity, (3) a willingness to accept the burden of responsibility for the accompanying uncertainty and (4) innovativeness to achieve the development of new ideas or to solve problems in new ways by exploiting new technological capability.
Gupta et al. (2004) perceived entrepreneurial leadership as consisting of ‘scenario enactment’ and ‘cast enactment’. In their view entrepreneurial leadership is distinguished from other types of leadership behaviours by the creation of visionary scenarios used to assemble a group of participants committed by the vision and the conversion of this vision into a commercially viable proposition. These researchers describe scenario enactment as envisaging possible opportunities that can be exploited through new, unconventional solutions. Cast enactment involves assembling resources, including committed employees, to deliver the identified scenario.
In developing a task model based upon Gupta et al.’s idea, Dimovski et al. (2013) identified five specific entrepreneurial leadership roles, three of which—framing the challenge, absorbing uncertainty and path clear?ing—are associated with scenario enactment and two—building commitment and specifying limits—with cast enactment. Cast enactment involves the two roles. In framing the challenge, entrepreneurial leaders run the risk of pushing their team beyond the limits of their capabilities. Hence the entrepreneurial leader will be forced to balance their desire for aggressive improvement with a pragmatic understanding of the capabilities of their team. This entails combining highly ambitious goals with insightful understanding of the limits of what can be accomplished by the team. To retain the loyalty of their team and external stakeholders, the entrepreneurial leader must be willing to accept responsibility for being wrong about the future. By absorbing the effects of uncertainty, the entrepreneurial leader builds confidence, enabling the team to believe it is possible to realise a vision despite problems that may emerge (Chen 2007).
Entrepreneurial leaders must be able to anticipate and overcome potential resistance to their ideas. This will involve maintaining support both from key stakeholders within the firm and from external constituencies. Path clearing will involve eliminating obstacles, ensuring key resources are made available and providing information capable of overcoming everybody’s concerns. The leader will require team-building skills to inspire and mould a team that is highly committed to accomplishing the scenario described by the leader. By specifying limits, the leader is able to reshape individuals’ perceptions of their own capabilities by removing any self-imposed personal ideas of limitation. Clearly describing constraints will further promote confidence building among team members. Goldsmith (2010) posited that to succeed in these roles, entrepreneurial leaders must avoid (1) the urge to win all battles, (2) excessive stubbornness, (3) punishing the messenger and (4) exhibiting goal obsession.
Swiercz and Lydon (2002) propose two phases of entrepreneurial leadership: the formative growth phase and the institutional growth phase. During the formative phase the firm thrives on the free-form energy characteristic of an emerging enterprise. The leader is concerned with inventing a product or service, establishing opportunity and building a viable business model. As the firm begins to grow and expand, daily operations will need to become more systematic. As the business enters this second phase, the leader is forced to focus on questions of long-term stability while still maintaining the innovative, entrepreneurial spirit that was the original reason for success.
Swiercz and Lydon also argue that the transition between these two phases can be difficult because the entrepreneurial CEO has to learn to depend upon other’s competencies. To sustain growth and achieve long-term business success, the leader must acquire and employ a new set of leadership competencies, which the researchers divided into ‘selfcompetencies’ and ‘functional competencies’. Self-competencies include intellectual integrity, promoting the company rather than the individual leader, utilising external advisers and creating a sustainable organisation. Functional competencies are essential for successfully performing the challenging tasks and roles of the leader in entrepreneurial venturing. According to Swiercz and Lydon, the biggest challenge for entrepreneurs is to be able to ‘stay in the saddle’ after their companies change from a start-up to a much larger, more complex organisation. The differences between the two roles are summarised in Table 3.1