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08/11/2017
I-FACTOR • THE DIFFERENCE BETWEEN ENTREPRENEURS AND MANAGERS

Franco Marzo info@smartmanagement.it Author and management coach.

 

 

In the Book I-factor, I interviewed 7 first-generation and 5 second-generation entrepreneurs. The difference is significant and helps us to understand some of the key skills of these two professional identities.

I noticed during these interviews and in my personal experience.

In reality, the two figures are not interchangeable as they belong to different business approaches. The beginning that ends with "success" and the consolidation that results in continuity or making things happen over a period of time.

Entrepreneurs are a bit like artists, the greatest among them are also the most humble. They think they can learn a lot from managers, while managers are generally a bit bossy and opinionated. In any case, it is difficult to imagine a true meritocratic ranking among them. The businessman, on the other hand, won’t fall for it, he is too humble and experienced to dare. During the Interviews you can perceive deep respect for those who have studied, although the shrewdness of the self-made man is apparent at first glance. Second generation businessman  are a mix between the two identities. They have studied but have also directly  experienced the factory life or the market. In Italy, managers are often identified with book-smart, brilliant professional. In other countries, where more street-smart professionals are found at the helm of many companies, managers are considered to be closer to the identity of an entrepreneur.

 

Taking the initiative

Any entrepreneur has to survive the first business stage: getting the “machine” to move.  As you all know, more power is needed to move a static body. That's why, in a car, the first gear is much more powerful than  4° or 5°. Starting an entrepreneurial adventure requires more action than thinking. The Alemagna brothers, "grandchildren" of the famous panettone brand, unable to use the family brand, previously sold to Nestlé, thought of starting to produce chocolate from scratch. Before founding "T'A Milano" they examined the business plan with some of the best advisors available. The verdict was negative, the project simply wasn’t feasible. Alberto and Tancredi, however, were very determined and opened their business all the same. And now, nearly ten years later, with a turnover of 5.5 million euro and the recent purchase of a bar (ex Victory) in via Clerici in the centre of Milan, it is quite clear that they made it. I still recall when, a little more than a year after they started their business, an American manager asked them how long the start-up phase lasted, and they answered without hesitation "the start-up phase never ends!", meaning that when you start a business adventure you never know when it will end.

Entrepreneurs, especially in their early years of activity, are driven mostly by their willpower. Little planning, so much improvisation. Those who start an enterprise from scratch know that the “life expectancy” of many newly formed companies is short indeed. Those able to survive the early years, do so more out grit and determination than careful evaluation.

Passion or reason?

“An enterprise stems from an idea, but the real feat comes from finalizing it”

The leadership of the average Italian entrepreneur is based on passion and innovation. The emotional side works more than the rational one, more practice than grammar. Emotion is fuelled by dreams, by the challenges ahead, the "mission impossible". Many entrepreneurs succumb to their emotions, they remain victims of them, on the other hand without a strong idea, without a deep belief you’ll never get anywhere. Giorgio Minarelli, second generation entrepreneur and creator of the brand that bears his name, subsequently sold to Yamaha, said that his father, like many former motorcycle riders who became motorcycle makers (about 80 in Emilia Romagna alone) were far too passionate. "Engines and motorbikes didn’t mean much to me, they could have been dolls," the important thing was to produce lots of them, sell them and make a profit. He spoke as a true manager.

But during the first phase of the business, confidence is a major driving force affecting financial partners, suppliers, customers, and employees. Working,  for a committed businessman, is a pleasure and those who work with him share the adventure, the emotions, risks and uncertainties. That’s because his vision of the future is certain: it will work, people will like it and buy it. Entrepreneurs have no doubts, only certainties, they blindly believe in what they are doing and are willing to gamble everything they have on it.

The entrepreneur’s pragmatic approach

A businessman once told me: “prepare, shoot and aim!”. I found it rather confusing at first and told him so. “Anyone can see the apparent misunderstanding, and yet this is precisely how it works”, he said: “if you expect to hit the target immediately, you’ll never start and the winning solution is rarely the one you imagine at the beginning.” 

The entrepreneur lives in the present "here and now", he makes no forecasts and knows that figures must add up at the end of the day. The "here and now" allows him to fit perfectly into his time and territory, to be concrete, practical, and realistic. In a competitive environment, it is increasingly difficult to plan success on paper. There’s no certainty about the future, what worked yesterday might not work tomorrow. In the '80s and' 90s it was different, successful businesses provided useful case histories. Yet even then, one had to be careful, but today, more than ever, yesterday is hystory. There are no magic formulas, you need to get your hands dirty and see what happens from a day to day basis. The entrepreneur must "shoot" every day and keep aiming.

Forecasting the future of managers

Once success is reached , the approach changes completely. The powerful and explosive initial thrust is no longer necessary.

If you keep driving in first gear, before too long the engine will seize.

The emotional part, what motivates and moves people to action, leaves room for reasoning, programming, planning, and organizing. When reaching a certain size, for example over 100 employees, it becomes important to think about processes, roles and functions, delegating tasks, objectives, and forecasts. At this stage, abstract thinking can be of help, knowing how to foresee what isn’t here yet. To do so requires clear thinking, rationality, detachment as well as sophisticated tools and technologies; the ability to involve collaborators and team work are equally useful. Managers are very good at this because they have confidence in numbers, diagrams, paper presentations and simulations. In order to see what is not here yet, there is a need for  the kind of abstract thinking, that entrepreneurs lack, that one developed on books, computers, listening to people, comparing and analyzing ideas. This is the consolidating phase, putting down the roots, produce fruit and reap the benefits over time.

 

Two opposing leaderships

In my latest newsletter (if anyone wishes to receive it, please write to info@smartmanagement.it) I illustrated , a little provocatively, 20 golden rules about leadership. Many entrepreneurs have improved  thanks to these teachings. For managers my advice would be the exact opposite.

  1. Your interests come before the company;
  2. You make the decisions, always! If you don’t know what to do, make sure someone else will decide. If they are right the credits will go to you, if they are wrong you know whose fault it is!
  3. Create an everyone against everyone atmosphere! “Divide and rule” , it always works!
  4. If you really have to set up a meeting, first decide how it will end. Never allow anything to make you change your mind! It’s a sign of weakness;
  5. Ask the impossible and never explain what the goal is, everyone has to sleep worried!
  6. Always do the exact opposite of what you say! People should not be able to read  you.
  7. Remember that the best collaborators are those who always say yes! who says no sooner or later will stab you in the back!
  8. Fire anyone who says  "I think ..." People should not think, but do what you say;
  9. surround yourself with people who execute, with little dynamism and no initiative; they are the best guarantee for your success!
  10. When you meet talented people, shatter their self-esteem; they must never realize how important they are!
  11. People hate those who are successful, so surround yourself with spies and cheaters, prevention is better than a cure;
  12. Never give any help; if anyone cannot cope alone it’s better if he fails immediately and leaves!
  13. always scold the person, never what he does, that will give them a sense of responsibility!
  14. in doubt, scold even without a real reason! The world is unfair, might as well get used to it!
  15. always reproach in public in front of everyone; example is worth more than a thousand words!
  16. speak badly of people in their absence! everyone will know what they can expect when they are absent and will try to do their best not to let it happen to them!
  17. Always seek for reasons to blame, never give credits! People will think too much of themselves.
  18. Always make it clear that successes is yours and failures belongs to the staff!
  19. Always seek to blame the weaker, the stronger ones can create trouble!
  20. If you have to praise someone, do it in public; it fosters competition, foments jealousy and conflict! Put people in competition, if they fight it’s even better, you will finally understand the truth about them!

 

 

 

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