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Why is it so important for business leaders to be able to distinguish between the roles of entrepreneur, leader and manager? Successful entrepreneurs focus on vision and strategy; they guide their employees and remove obstacles from the path to success, much as an athletic coach does.

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Why is it so important for business leaders to be able to distinguish between the roles of entrepreneur, leader and manager? The search for the correct answer likely has to do first and foremost with the deductions we make from observing our own thinking and actions. The larger and more complex the business and, thus the company itself becomes, the greater the extent to which staff and systems interact in different workflows, and the more that external stakeholders are involved, the more significant these deductions become. In practice, it can be observed that companies that grow successfully are usually managed by executives who consistently focus on their appropriate, sustainable role within the company.

Successful entrepreneurs focus on vision and strategy; they guide their employees and remove obstacles from the path to success, much as an athletic coach does. In contrast, managers typically focus more on the execution of tasks within the business. Leaders, on the other hand, deal with the staffing, equipping, empowerment, motivation and development of staff and business units. When managers also act like entrepreneurs, with a corresponding far-reaching scope of action and decision-making, they are also referred to as ‘intrapreneurs’. For the sake of simplicity, in what follows, no distinction is made between intrapreneur and entrepreneur.

Executive leadership involves providing a compelling vision and clear direction. Successful entrepreneurs clarify priorities and expectations, define employee roles and ensure that the structures and resources employees need to accomplish their tasks are in place.

The presence and authenticity with which entrepreneurs lead are crucial to employee job satisfaction. To engage today’s workforce, entrepreneurs must focus more on leading than managing. Many employees are seeking coaches who can help them develop their strengths and capitalise on them to provide added value for the company. This is especially true when it comes to the younger generation. Entrepreneurial success is also determined by the will and ability of the individual to carry out this role within the company.

Leading an effective company means gaining distance from the day-to-day business and focusing on a clear strategy and vision – the "whats" and "whys". The "hows” should be left to the management and the team. If you’re used to triaging problems, putting out fires and managing from a reactive standpoint, this can be challenging. But, as I’ve learned the hard way, the ability to proactively light the way is a learnable skill.

Managers Execute, Leaders Lead and
Entrepreneurs Inspire the Larger Picture

One fundamental aspect of leadership is directing people’s attention. To do so effectively, entrepreneurs first need to focus their own attention. Only once they have done this should they turn their focus to others, eventually concentrating on the big picture.

Self-awareness is the basis of emotional intelligence. Listening to our inner voice and paying close attention to internal physiological signals is critical. This also includes our gut feelings, the so-called “somatic markers” or sensations that tell us whether something feels right or wrong.

One decisive criterion is authenticity – being the same person to others as you are to yourself. This makes it important to pay attention to others’ views of you – especially those people whose opinions you value and whom you trust to give you honest feedback – and assess your own authentic impact.

Another decisive factor is cognitive control. This enables you to pursue your goals regardless of setbacks and distractions. Effective cognitive control is exhibited by entrepreneurs who can stay calm in a crisis, resist becoming agitated, and bounce back from disappointments and failures.

Empathy is an essential element for being able to successfully perceive other people. Entrepreneurs who can effectively focus on others are those whose opinions carry the most weight. They are able to find common ground and make people want to work with them.

We can distinguish three types of empathy that are important for effective leadership: cognitive empathy (understanding someone else’s perspective); emotional empathy (feeling what someone else feels); and empathic concern (sensing what someone else needs from you).

Finally, having an outward focus will help an entrepreneur become a good listener and a good questioner. Strategic thinking involves looking for ways to exploit your current advantages while exploring new ones.

An often-mentioned challenge for entrepreneurs is the mastering and continual adjustment of the never-ending balancing act between operational constraints and the targeted tasks for the larger picture. It can be exhausting and energy-draining to constantly have to direct your attention to this "outer, upper corner" of the action matrix.

Simple things can often be helpful in becoming and remaining successful:

  • Establish core values and follow them. Many companies speak publicly about their core values, but these can be hollow words if the decision-makers at the top of the company are not authentically exemplifying these values and if they are not being operationalized in any way. The magic happens once core values are ingrained into employees’ daily work lives and are driving more autonomous decision-making.
  • Nurture your own professional development. Too often, entrepreneurs assume responsibility for everyone else on their teams except themselves. Although there are times when all of us need to manage, entrepreneurs are usually proactive; managers are reactive. To be an effective entrepreneur, proactively set aside time for your own professional development.
  • Delegate consistently and professionally, actively protecting yourself from burn-out. If you try to do everything yourself, you will inevitably see diminishing returns on the time you invest. Successful entrepreneurs spend most of their time on tasks that utilise their own unique skills and abilities and leave the rest to others who are more competent in those areas.
  • Beware of toxic people and structures. Actively cultivate a cooperative, people- and success-oriented corporate culture. Eliminate negative situations and possible sources of toxic developments as early as possible. Give appropriate priority and resources to active development of the corporate cultural.
  • Ensure that your company has an integrated and operationalised strategy and implement it. Make the meaning and purpose of the company as well as the value of every person who works there transparent.
  • Measure performance and success and regularly look to the "outer, upper corner" of the action matrix.

If you need support or training in some of the areas described above, don’t be afraid to admit this. Seek out appropriate support and multipliers from within your company. These tasks are simply too critical and momentous to be managed with less than complete success.

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