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Five Essential Leadership Skills for Entrepreneurs

Leaders Written on Chalk Board

Becoming a great start-up leader takes work. Every entrepreneur faces a unique set of hurdles. Regardless of the type of enterprise, the five underlying leadership skills required for success are the same.

Today’s post is by Derek Lidow, author of Building on Bedrock (CLICK HERE to get your copy).

Every entrepreneur faces a unique set of hurdles, depending on whether they want to sell sausages, software, services, smartphone apps, or whatever. But regardless of the type of enterprise, the five underlying leadership skills required for success are the same. No one is born with them and each requires work. They include:

Self-Awareness

The students to whom I teach entrepreneurship and the entrepreneurs who seek my advice are almost always surprised to hear that self-awareness is a skill. They assume it’s a trait you’re born with. But the fact is you can learn it—learn how to identify your capabilities and your personal modes of learning and self-improvement.

Mastering self-awareness requires that you understand what you are capable of achieving, given your combination of traits, motivations, and skills, all of which are interdependent. You cannot change your traits, but you can change your skills and some of your motivations.

Once you understand your traits, motivations, and skills you can adopt straightforward strategies for leveraging your strengths and mitigating your weaknesses. For instance, if one of your traits is headlong risk-taking you might hire a second-in-command who is by nature more cautious and analytical. Further, you need to understand your deepest motivations (and that what drives you may not drive the people who work for you). Confidence based on a clear understanding of yourself is empowering; delusional self-confidence is hubris, and it’s likely to be fatal to your business.

Build Relationships

Entrepreneurial leaders virtually never act alone in getting the world to adopt their ideas—they build strong relationships with the people who can help them. Unfortunately, relationship building is rarely taught in school, though you can read about in many places. Some life skills coaches know how to help people practice relationship building. One way to master it is to deliberately practice with people from whom you want cooperation. Set a goal of getting to know somebody, make contact, and then figure out how you can do it better the next time.

Motivate Others

Relationship building and motivating others are different skills. Motivation is to groups as relationship-building is to individuals. Initially, you may need to motivate only a handful of people, but as your business grows you will increasingly need to know how to motivate scores of people in the organization to align their actions with your desires.

Relationship building is not about charisma—exuding some magical combination of charm and fire that makes people blindly follow because they feel good about you. In fact, it’s not about how your people feel about you; it’s about how they feel about themselves. That means creating roles and responsibilities that make them feel autonomous, masterful, and purposeful—not controlled, insecure, or inconsequential.

Lead Change

As an enterprise grows and changes so must its people. But most people don’t like change. They will often passively-aggressively or covertly resist it, and leading such change is something few leaders know how to do. Many leaders themselves fear change and resist it. And most change is poorly envisioned and poorly aligned with what people think of as important, and so is viewed as confusing.

Entrepreneurial leaders must embrace change, let people know that they can expect change, and prepare them for it. How? Explicitly let them know why each change is important, what is expected of them, and how they will benefit from it. Provide each and every person with the support and resources to make the changes happen efficiently and successfully.

Don’t fall into the management sin that many leaders fall into, which is asking somebody to change something, change it perfectly, and change it without getting any support and without using any additional resources. When people know that leader has their backs it’s remarkable how much change they will embrace.

Understand Enterprise Basics

Implementing your ideas or ideas that come from your team requires an understanding of how value can be created from ideas. It happens in one of two ways: either through a project or through a process. A project is a one-at-a-time exercise performed by a team assembled specifically for that task – building a better mousetrap, a new software program, or a driverless car. A process accomplishes tasks repetitively, reliably, efficiently, and cost-effectively, as when a project or product goes into full-scale production.

In addition, ideas and the enterprises that house them go through stages of maturity, like infants becoming children, then adolescents, and then adults. In brief, those stages are: 1) validating a “customer” for the idea, 2) validating the value proposition around the idea, and 3) scaling up to deliver that value widely and reliably. Each stage requires applying a different mix of the leadership skills described here.

The payoff for producing value from good ideas is enormous: happy teams, individual fulfillment, financial success, high status, and well-being. The risk, too, is large and it’s not just financial. A leader who fails to create value from a manifestly good idea forfeits trust, feels frustration, and may lose confidence. What is the chief difference between those who succeed at the task and those who don’t? Those who succeed know that great leadership is a good idea that, like every other good idea, requires work if it is to become a reality.

Building on BedrockDerek Lidow is the former CEO of International Rectifier and the founder of iSuppli, a leading market research firm, which he sold in 2010 for $100 million to global information leader IHS. He has written two books on entrepreneurship: Startup Leadership: How Savvy Entrepreneurs Turn Their Ideas Into Successful Enterprises (2014), and most recently, Building on Bedrock: What Sam Walton, Walt Disney, and Other Great Self-Made Entrepreneurs Can Teach Us About Building Valuable Companies (CLICK HERE to get your copy). He is currently a professor at Princeton University, where he teaches entrepreneurship, innovation and creativity.

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Photo: Leaders by thinkpublic

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