Entrepreneurship is the act of being an entrepreneur, which can be defined as “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods”
Entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes.
Entrepreneurial leadership is organizing a group of people to achieve a common goal using proactive entrepreneurial behavior by optimizing risk, innovating to take advantage of opportunities, taking personal responsibility and managing change within a dynamic environment for the benefit of the organization.
Entrepreneurial leadership is effectively using the skills associated with successful individual entrepreneurs and applying those within the environment of the larger organization. This especially means within an organization where those skills have been lost and replaced with a “corporate” mind set that focuses on process, systems and risk minimization rather than entrepreneurial behavior.
The concept of Entrepreneurship evolved for the use in profit-sector. Many definitions have been written in the literature earlier which highlights different attributes- recognizing and acting on opportunities, risk taking, initiating ventures and plans to meet up with the daily change. These attributes also explains what entrepreneurial leadership is not: Persons who only give orders and are managers, persons who are investors. At most general level: entrepreneurship is equated with innovation, which goes beyond discovery or invention, includes implementation and/or commercialization (Schumpeter, 1979)
Three characteristics mainly describe entrepreneurial leadership to a large extent. First, they have a unique idea that borders on a fixation. It can be a solution to mostly faced problem, unmet need. Second, in order to transform their ideas into reality, they need to take initiative their self and go their on way. Third, they then operate and seek to grow the business as the concentrate manifestation of their unique idea.
The entrepreneurial leader will work within a formalized organizational structure, but use the approaches normally expected of an entrepreneur to identify opportunities to gain advantage. They also have the ability to then manage change to deliver that advantage. Key to this is the effective management of risk rather than the minimization of risk often sought within corporate environments. The entrepreneurial leader must have the ability to learn fast and within environments of ambiguity and change, while providing clarity and coherence for those around them.
The entrepreneurial leader takes responsibility for their actions and those actions must be more proactive than reactive. They think about achieving organizational outcomes in an innovative way and working with a diverse group of people and resources to achieve these goals.
By John Barney