I’ve been speaking with business leaders recently about the difference between entrepreneurship and managing a company. It’s funny how the two are often conflated when they aren’t the same thing at all.
Yes, many entrepreneurs successfully manage their businesses, and the consummate manager has been known to come up with a brilliant entrepreneurial idea.
At the same time, we all know serial entrepreneurs who move on to the next startup as fast as they can possibly sell their current company. And, many business leaders make a career of finding troubled companies and straightening them out.
Gauging the differences
According to the Merriam-Webster dictionary, an “entrepreneur” is a) a person who starts a business and is willing to risk loss in order to make money, and b) one who organizes, manages and assumes the risks of a business or enterprise.
It’s interesting that “risk” shows up in both definitions. Maybe that’s the beginning of the true difference — an appetite for risk.
Last year, I spoke with a serial entrepreneur who said that true innovators operate like they’re trying to get to the hospital to have their firstborn child. They’ll switch lanes rapidly in order to get through a green light, and generally take risks that would make the corporate world balk.
(And on the topic of risks that make you balk — don’t miss this month’s Uniquely Pittsburgh on the Andy Warhol Museum. Andy Warhol is one of the best examples of a risk taker you can think of.)
Other people who identify themselves as entrepreneurs have told me they have trouble taking advice. The same drive that lets them throw everything behind an idea makes them believe they always know best, especially when it comes to their “baby.”
When I looked up the definition of “businessman” (or woman), risk was nowhere to be found. It is defined as a person who works in business, especially in a high position, who is good at dealing with business and financial matters, and who transacts business.
This seems to suggest stability and a caretaking ability.
A need for both
In any organization’s lifespan, it goes through stages that call for different types of leaders. To be successful, you definitely need both personalities, even if one may be more important than another in a given year or phase. In fact, some large corporations create separate divisions that mimic startups in order facilitate idea generation and innovation.
There are no right answers to how founding CEOs and professional CEOs should act, but it is interesting to keep in mind that they aren’t the same thing at all.
