Entrepreneurial Leadership: From Romanticizing Entrepreneurial Heroes to the Hard Work of Systems Building

When you think about entrepreneurial leadership, what immediately comes to mind? As I have raised this question with aspiring entrepreneurs across the last decade, I have been struck by how quickly and how frequently these individuals want to point to other various well-known entrepreneurs as top-of-mind examples of entrepreneurial leadership. Let’s call them entrepreneurial celebrities - individuals like Steve Jobs, Elon Musk, and Jack Ma, whose charisma, foresight, and entrepreneurial good fortunes have catapulted them into stratospheric levels of renown.

However, what explains our tendency to equate entrepreneurial celebrity with entrepreneurial leadership, and are we right to do so? In trying to ascertain the qualities of an entrepreneurial leader, one of the challenges that we face is that we tend to be bombarded with information about entrepreneurial success stories and their founders but generally lack information about entrepreneurial failures. This skewed availability of information tends to result in two different biases which scientists often refer to as “availability bias” and “survival bias”, logical errors in which our conclusions are being drawn on the basis of a narrow and non-representative set of cases (e.g., successful IPOs, “unicorns”). A classic example which illustrates such bias is that of the U.S. military, in which after examining all of the planes that had successfully returned from battle in World War II, wrongfully concluded the need to reinforce those areas of the plane which had taken the most artillery fire.  In fact, it was the opposite.  Those were the most resilient areas of the plane and required the least reinforcement, as evidenced by the fact that they had been shot and yet still returned home. Yet because the military did not have access to those planes which had failed to return, they were missing a key part of the story.  What I would like you to consider is that the same thing may be happening in the context of our understanding of entrepreneurial leadership. We have a lot of information on entrepreneurial successes and even more information on the biographies of those individuals who founded the corresponding ventures. Yes, Steve Jobs was charismatic, yes, he was a perfectionist, and, yes, he was resolutely committed to a particular vision. But for every Steve Jobs who has exhibited such characteristics, we could likely find 50 startup founders who exhibited the same traits and yet failed. Stated simply, while celebrity and the “cult of personality” have tended to inform our understanding of entrepreneurial leadership, it would be preferable instead if a deepened understanding of entrepreneurial leadership informed our celebration of particular entrepreneurs.

So, how are we to gain such a deepened understanding of entrepreneurial leadership? With this in mind, I would like to propose to you an alternative to the celebrity-informed and personality-centred approach to entrepreneurial leadership. When we conceptualize leadership as having to do with individual personality traits like charisma, we tend to minimize the task to one of inspiring employee motivation. While such inspiration is indeed part of the task of entrepreneurial leadership, it is certainly not the entirety of the task. As I have studied entrepreneurial leadership, I have found that the central task of such leaders is to architect and build integrated systems that are capable of bringing together heterogeneous elements in order to co-create new value. Inventors focus on building new products, entrepreneurial leaders focus on building and mobilizing new systems.