Tech Entrepreneurs Need Leadership & Management Skills

The UK needs more Tech Entrepreneurs if we are to continue to be ranked as a major innovation player the future. Yet, it’s not the lack of entrepreneurs with ideas that is holding us back, it is our ability to scale these businesses.

These entrepreneurs need to develop leadership and management skills to complement their tech wizardry, or at the very least 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 an innovative idea into a sustainable business with a long-term future.

It is important to recognise that tech entrepreneurs are not that different from entrepreneurs in other sectors or industries. Excited and driven by the new, the entrepreneur often lacks the financial and business skills required to successfully run a growing company. While a genuine enthusiasm for their pet project is sufficient to get them up and running and create some traction, to develop and grow their business in the medium to long term they need to make a profit. This requires specific sets of skills.

All entrepreneurs want their ideas to live on into the future and for this to happen they need to learn how to develop and scale their businesses in the present. Learning how to lead and manage other people or learning to let go and hand over responsibility for their “baby” to others is key.

To ensure that they give the right roles to the right people, entrepreneurs must be able to recognise their employees’ skills and abilities, and this can only be achieved if they possess the appropriate leadership and management skills themselves. Given that this is what they are lacking, this creates a vicious circle; 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 following Shirlaws Stages diagram shows the role that the person heading up a business is required to play as a new business develops. 

As the two arrows at the bottom suggest, the tendency is for the tech entrepreneur to try to do everything (innovate, lead, manage) as their company grows. There is a substantial difference in these roles. Leaders plan for the future, are great communicators, and good with people. Managers are focused on the day-to-day, making revenue/profit today and are process oriented. For a business to be successful, a blend of all three types of skills is required – entrepreneur, leader and manager.

While most business owners have all three skills to some extent, usually one dominates and is supported by a secondary skill. For example, someone might be a Leader first and an Entrepreneur second (an “LE”), or Entrepreneur first and Manager second (an “EM”). What does this mean? To gain insight into these different types of roles or skill sets, it’s worth taking a look at the ELM (Entrepreneur, Leader, Manager) Indicator.

ELM is a powerful behavioural profiling tool that helps individuals understand how they engage with the process of change. Experience has shown that applying ELM can be extremely useful to IT start-ups as they seek to make their way in the world. As the Stages diagram illustrates, there is a tendency for the founding entrepreneur to persist in their 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 would. This is not easy for a single individual to do and ELM is able to help.

ELM is not a psychometric test. It helps individuals understand how their current outlook may affect their perspective in relation to their work, their colleagues’ and their organisation’s objectives. It helps identify where strengths lie, making it possible to concentrate on improving weaker traits, especially in relation to management and leadership.

Knowing one’s primary, secondary and tertiary skills is difficult. Managing is one thing, leading is another, being an entrepreneur a third. That’s where ELM is so useful. Ultimately, it’s down to the entrepreneur. Ideas and technical skills may be beyond dispute, but on their own they might not be enough.

Click here to find out more about the ELM indicator or to dive straight in and purchase, click on ‘My Compass’ to create an account.

For more information on Compass indicators and Shirlaws methodologies take a look at the range of courses available on Training by Shirlaws.

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