At any rate, the story of Sony’s Walkman is a valuable business lesson and I like the way Peter Drucker put it:
“Every organization must be prepared to abandon everything it does to survive in the future.”

Wharton’s Knowledge Today has a good post about this: When the Walkman Roamed.

Change is a constant!

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My only critique of the strategy is that it overstates the impact of American oil consumption on Iran and disregards the consumption of other modern economies in Europe and particularly growth economies in India and China. I do agree that a green revolution in America could make significant strides in opening up freedom and reform in the Middle East and that America is still well positioned to lead this green revolution, but a critical requirement is that European and Asian countries must follow suit with their own green revolutions to produce the effect that Thomas Friedman writes about.

Other than this critique, I want to highlight a great quote that is used in this article. The quote is from Michael Mandelbaum, a foreign policy specialist at John Hopkins University:
“People do not change when you tell them they should; they change when they tell themselves they must.”

This is a great quote for leaders. Significant emphasis in leadership studies is the influence that leaders must have to drive change in their organization. This change also involves people. While a leader may seek to influence change, the best tool available is influence; coercion produces negative effects in attitude and motivation that hinder the positive effects of the change. Leaders need to practice the art of leadership to motivate people to change themselves.

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Now, this recession – credit crunch, financial crisis, and global meltdown – has cured my addiction. I went on a vacation for two weeks, overseas (I love to travel and visit different countries). And for the first time in my life, within the last decade, I spent the entire time NOT connecting to the Internet and NOT hearing, reading, or watching any news! I loved it and highly recommend it.

There is nothing inherently wrong with staying informed, but sometimes a break is healthy for the mind and the soul.

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Forget about panicking and stop the stupidity of worrying - this is my opinion on what to do about the worst recession since the Great Depression and the pending pandemic of swine flu. Once you recognize a problem, find a solution or better yet TEN solutions, and then focus on the solutions.

A while back I wrote an article about Creative Problem Solving for Leaders and I recommend that you read it. Thinking creatively about solutions is one of the most valuable skill sets to have. Continually exercising your creative mind to innovate produces substance that is above and beyond what most others produce.

But at the end of the day, don’t focus on the problems, find solutions and focus your energy and passion on the solutions.

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“Don’t mistake personality for character.” ~Wilma Askinas

So many times, we are attracted and follow leaders based on their personality. They may be charismatic, smart, engaging, passionate, or just simply likeable, but when it comes to leadership, nothing can replace character. Character is a key requirement, because in order to lead there needs to be trust and confidence in the leader. People who follow need to know without any question or doubt that the leader will not disappoint and let them down.

Too often, we hear about a leader who lacked character and did something that completely destroys the trust and confidence of the people who supported and followed him or her. After this, trust and confidence cannot easily be rebuilt. It takes time even when there is a strong bond such as marriage or family, but even in those circumstance once the trust is lost, it takes a long time and vary incremental steps to rebuild. One could even argue that trust is never restored to the same, full degree.

Character is a key requirement of leadership.

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On Monday, I shared the Forming – Storming – Norming – Performing Model of group development by Bruce Tuckman. This model is important for entrepreneurial and project teams; those teams that tend to form at about the same time rather than on a continual and incremental basis as day-to-day organizations.

The main problem is that too many teams try to avoid or mitigate what Bruce Tuckman identified as the Storming phase. It is in this phase that team relationships are formed and the team learns how to function as a unit. Those teams that mitigate or avoid the Storming phase tend not to be as innovative and tend to have more division than teams that do work through the Storming phase.

The Storming phase is difficult and tends to be uncomfortable in particular for those team members adverse to conflict. Conflict is not inherently bad. Conflict can be useful for developing a team, but conflict resolution is the key.

When conflict arises, the two best ways to resolve the conflict are confrontation and compromise. However, too often leaders try to smooth over the conflict, allow the team to withdraw, force them through without the investment of learning how to work as a team. While this may resolve the conflict is does nothing for developing the team and in the terms of Tuckman’s model, it doesn’t progress the team to the Norming and Performing phases.

So how does a leader lead the team to and through the Storming phase… use deadlines. Deadlines are great for setting objectives, setting goals, and progressing the team. Deadlines compel team members to work together, confront and compromise, to accomplish the goals for the deadline. Deadlines are a catalysts for group development and progressing the team from Forming to Storming and on to the greater achievements.

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Stepping back more than forty years ago to 1965 and we find a valuable model for group development introduced by a psychology researcher in group dynamics, Bruce Tuckman. Tuckman’s model, Forming – Storming – Norming – Performing, highlight the growth stages of a group or team. These evolutionary stages are the key blocks for building a team that performs with exceptional results.

Throughout the duration that the team operates, there may be many reiterations of the stages, but the concept is valuable to understand for day-to-day operations teams. It is CRITICAL for entrepreneurial endeavors and projects teams.

In this post, I am going to give an overview of this model, but in a post on Thursday, April 23rd, I am going to write about a key strategy for success in team development and what every leader should practice.

Forming

Obviously, forming is the beginning. “In the beginning,” there is an initiation of a team. Perhaps a charter is drafted and formal authority is given to a leader. The team may or may not have had clear objectives, but the idea is that in the forming stage the team comes together, gets to know each other, and begins to work together.

Storming

As time progresses, the team may face conflicts. The dynamics of personalities, leadership and management authority, and technical expertise will come to light with problems and issues that need be worked out before the team can progress.

Norming

After problems get worked out, the team becomes stronger. The team enters a period of normalcy. Team members understand each other and know how the team operates – the pecking order, the processes, how to interact and collaborate, etc.

Performing

The more the team works together, the better the team works. Efficiencies are developed. Expertise is improved. Innovation is commonplace.

This is when the success of a team is at the pinnacle. This is when team members break out the Champaign and celebrate what they create and produce. This is what every leader strives to lead the team to realize. This is the stage that every team hopes to achieve, but it is rarer that you may think.

Check back on Thursday, April 23rd, and I will share with you a key strategy in building a performing team.

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“Our chief want is someone who will inspire us to be what we know we could be.” ~Ralph Waldo Emerson

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Leaders and Entrepreneurship 

Entrepreneurship is a special skill set. Some great entrepreneurs are not-so-great leaders or managers, but successful leaders need to master some of the entrepreneurship skill set. There is a “new” word that is thrown around – Intrapreneurship – to represent the entrepreneurial activities internal to an organization. I don’t particularly like this term and think most businesses would be better off if leaders learn and adapt a bit of entrepreneurial focus as a part of being successful and enduring in business.

In my view, there are eight character traits of entrepreneurs – singular-focus, self-driven, ambitious, achievement oriented, imaginative, innovative, independent, and versatile. These traits are evident in notable entrepreneurs behind the success of major corporations and these traits are the complimentary strengths that provide the conduit for an entrepreneur to succeed in business.

Some differentiation is necessary to discuss social and business entrepreneurs. The differentiation in my view is based on two areas external to character traits. Those areas are motivations and outlook.

The Traits of Entrepreneurs

An entrepreneur has a singular focus about his business to the extent that a lot of the other facets of his life are sometimes treated as distractions. It allows him to concentrate on the business tasks for long hours and many days. It allows him to know his plan thoroughly and keeps him on track with his plan. His singular focus drives his activities, consolidates his time, and determines when and how he works.

An entrepreneur is self-driven, self-starting. He wakes up early in the morning and stays late at night with the attachment to the job of starting and running his businesses. He does not need external motivation and is even resistant to what may de-motivate other business people.

An entrepreneur is ambitious. His goals are set high and he works hard to achieve those goals. The old analogy of shooting for the moon is not enough. An entrepreneur shoots for the stars, so that at a minimum he will reach the moon.

An entrepreneur is achievement oriented which is closely related to his ambitious nature. It is the accomplishment and the achievement which are the object of the entrepreneur’s yearnings. He gains satisfaction and excitement from the achievement itself. Like an addict, any failures are merely treated as the down cycles while the entrepreneur seeks out the next high. He does not wait for someone to give him an opportunity, but is driven to create the opportunity.

An entrepreneur is imaginative. His perspective of his business and his market lead to creative problem solving, early recognition of emerging trends, and even the ideas to instigate the “next” trends. It is Albert Einstein who is often quoted with, “Imagination is more important than knowledge.” Imagination is important for an entrepreneur.

An entrepreneur is innovative. His innovation is the benefit of his imagination. He does not merely evaluate the business environment as it is, but is able to think about what it could be. An entrepreneur thinks outside of the constraints to which traditional business people are bound. His innovations are the products or services of his business.

An entrepreneur is independent. He is not influenced by other people’s opinions nor is he controlled by another’s ideas. His imagination benefits from his independence. He is able to remain focused, determined, and “on track” with his plans because of his independence.

An entrepreneur is versatile. He is able to adapt his business tactics to changes in the market as well as able to fill multiple roles within his business. He is not limited to the function of an operations manager, but also an accountant, marketer, logistician, and human resource manager. The versatility through multiple roles does not take away from his singular-focus, but forms the fibers that strengthen the singular-focus of starting up and running his business. This versatility for an entrepreneur is one of the most important characteristics.

Robert Moment wrote about seven characteristics that are inherent to successful entrepreneurs. He listed the successful entrepreneurs “gain the respect of their peers,” “believe and trust in themselves,” “follow a plan,” “think creatively,” “explore their exceptional skills,” “envision their success,” and “never give up” (Moment, 2004). From this list, you can determine a successful entrepreneur to be respectable, confident, knowledgeable, creative, experienced and determined, but I think this list is standard of any successful businessperson and not merely inherent to entrepreneurs.

There is a notable attribute that is specifically characteristic of entrepreneurs, “Entrepreneurs have a never-ending sense of urgency to develop their ideas. Inactivity makes them impatient, tense, and uneasy” (BusinessTown.com, 2003). This is the result of the combination of the entrepreneur’s self-driven and ambitious nature that is oriented on achievement.

The Social Nature of Entrepreneurship

There is another view of entrepreneurship which is too often overlooked or otherwise misconstrued and that is “entrepreneurship as a social endeavor” (Byers, Kist, & Sutton, 1997). Byers et al. state the social nature of entrepreneurship as “how people identify which relationships will be crucial to the success of their venture, and how they develop and maintain the relationships that enable their firm to obtain the information, funds, legitimacy, and help needed for their firm to survive and flourish” (Byers et al., 1997). The social nature builds on the independence of the entrepreneur to develop interdependence with investors.

The social nature of entrepreneurship does not take away from the independence of entrepreneurs, but, rather, leads to the emphasis on the value of the entrepreneur’s independence. In the volatile environment that surrounds a start-up, an entrepreneur will need to discover, meet, and negotiate with venture capitalists, angel investors, manufacturers, distributors, marketers, and other personal that may be needed to garner and sustain the success of the business. These relationships while social in nature and requiring a cordial skill-set are not the buddy-next-door friendships; there remains a professional element. A venture capitalist, angel investor, or any other business professional will still retain the ability to decline an offer. It is this potential for rejection that an entrepreneur’s independence will become an asset. An independent person will maintain the faith and confidence in his business idea and will stay focused on executing the plan for the start of the business. An independent person will drive on to the next possibility.

Examples from Entrepreneurs

Bill Gates is predominately touted as the example of the potential for entrepreneurs and who better than the guy who started his own company, built an industry giant, and amassed the largest personal net worth. The Wall Street Journal’s write up about Gates for Breakaway list his most significant attribute by stating he “refuses to be complacent” (Breakaway, 1999). His refusal to be complacent resonates with his ambitious and achievement-oriented character.

Jeff Bezos, the founder of Amazon, is another regarded entrepreneur whose independence and singular-focus have propelled his company through the Dot Com crash and on to being a highly profitable online retailer. Bezos’s traits are summed by Joshua Quittner, “Bezos, naturally enough, is unmoved by the nay saying…” (Quittner, 1999). Bezos maintains inherent characteristics to resist what may de-motivate other business leaders.

Steve Jobs – “an obsessive perfectionist who insists on having total control over the most minute product details” (Burrows, Green, & Grover, 2006) – is a versatile entrepreneur with a singular-focus on achievement. His obsessive nature is the evidence of his singular-focus, being a perfectionist is evidence of his self-driven characteristic, and taking control over minute details of a product while being the CEO of a major corporation is evidence of his versatility. Steve Jobs is the focused, driven, and versatile entrepreneur behind the success Apple.

Social vs. Business Entrepreneurs

There can be a differentiation drawn between social and business entrepreneurs. Business entrepreneurs are those individuals that one naturally thinks of when thinking of the word – entrepreneur. A business entrepreneur discovers an opportunity in the commercial market and builds a company to fill that opportunity. A business entrepreneur is motivated by financial success and other types of achievement.

A social entrepreneur is different. As Gina Vega and Roland Kidwell writes, “despite the fact that many social entrepreneurs are interested in effectively managing their ventures in a business-like manner, the biggest contrast between social entrepreneurs and private sector entrepreneurs is the nature of the immediate return each tends to seek” (Vega and Kidwell, 2007). Social entrepreneurs find innovative solutions to social problems. The return on their investment is the value to the social community in which they operate rather than in monetary returns; often times, the returns on their efforts are not even concretely measurable, but their value is still determinable.

Conclusion

Of the eight traits of the entrepreneur – singular-focus, self-driven, ambitious, achievement-oriented, imaginative, innovative, independent, and versatile – there are four most significant traits for entrepreneurs. The most significant traits for an entrepreneur are: to have singular-focus, to be self-driven, to be independent, and to be versatile. These traits are evident in Bill Gates, Jeff Bezos, and Steve Jobs and these traits are complimentary for the success of an entrepreneur.

These traits are the similarities social and business entrepreneurs while they differentiate on the opportunities they address and the returns on investment that they seek.

References

Breakaway (A Special Report): 20th Century Legacy — Bill Gates: the PC everywhere. Wall Street Journal. New York: November 29, 1999. P. 16.

Burrows, P., Green, H., & Grover, R. Steve’ Jobs Magic Kingdom. Business Week. New York: February 6, 2006, Iss. 3970, P. 62.

BusinessTown.com. (2003) Profile of an Entrepreneur. Retrieved from http://www.Businesstown.com/entrepreneur/article1.asp.

Byers, T., Kist, H., & Sutton, R. (October 27, 1997) Characteristics of the Entrepreneur: Social creatures, not solo heroes. Retrieved from http://www.stanford.edu/class/e145/materials/Characteristics.html

Einstein, A. (October 26, 1929) What Life Means to Einstein. The Saturday Evening Post.

Moment, R. (2004) 7 Traits of an Exceptional & Successful Entrepreneur. Retrieved from http://www.wahmconnections.com/entrepreneur.htm.

Quittner, J. An Eye on the Future. Time. New York: December 27, 1999. Vol. 154, Iss. 26. P. 56. 10 Pgs.

Vega, Gina, Roland E. Kidwell, (Fall 2007) Toward a Typology of New Venture Creators: Similarities and Contrasts Between Business and Social Entrepreneurs, New England Journal of Entrepreneurship, Fairfield, Vol.10, Iss. 2. pg. 15

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American’s Resilient Optimism

I was reading an interesting article from Reuters that was about a Pew Economic Mobility Project survey. The survey found that Americans still widely believe in the “American Dream” as success determined by one’s own effort and not external factors or birthrights.

The nationwide survey of 2,119 adults found that:

• 79 percent said it is still possible to get ahead in the current economy;
• 72 percent said they believed they will personally be better off 10 years from now;
• 74 percent said they were at least somewhat in control of their economic situation, but only 43 percent said that other people were in control;
• 71 percent said personal ambition was a more important determinant of success than external conditions.

The survey has a margin of error 3.4%.

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