Entrepreneurial Mindset1.The entrepreneurial Company in the new millennium:

The pace and magnitude of change will continue to accelerate in the new millennium. Having the evolution and transformation of entrepreneurial firms match this pace will be critical. Innovation and entrepreneurial thinking are essential elements in the strategies of growing ventures.It has been noted that entrepreneurs

(1) perceive an opportunity (2) pursue this opportunity, and

(3) believe that success of the venture is possible.This belief is often due to the uniqueness of the idea, the strength of the product, or some special knowledge or skill the entrepreneur possesses. These same factors must be translated itself as the venture grows.

2. The Entrepreneurial Mindset:It is important for the venture’s manager to maintain anentrepreneurial frame of mind. The following figure

illustrates the danger of entrepreneurs evolving intobureaucrats who in turn stifle innovation.

Future Goals

Change Status Quo

Possible Entrepreneur Satisfied manager

Perceived Capability

Blocked Frustrated manager Classic bureaucrat

The table provides a delineation of the differences betweena managerial versus an entrepreneurial mindset from the perspective of decision-making assumptions, values, beliefs, and approaches to problems.Success will affect an entrepreneur’s willingness to change and innovate. This is particularly true when the enterprise has developed a sense of complacency and the entrepreneurlikes this environment. The person does not want to change. In fact, some entrepreneurs will create a bureaucratic environment where orders are issued from the top to downand change initiated at the lower level is not tolerated. As aresult, no one in the venture is willing or encouraged to become innovative or entrepreneurial because the owner-founder stifles such activity.The entrepreneur directly affects the firm’s growthorientation as measured by profitability, product/market,HR, and flexibility goals. If he wants to maintain the climatethat helped launch the venture, specific steps must be taken.

Managerial Mindset Entrepreneurial Mindset Decision-making The past is the best A new idea or insight from aassumptions predictor of the future. unique experience is likely

Most business decisions to provide the best estimate can be quantified of emerging trends.

Values The best decisions are New insights and real-worldthose based on experiences are more highlyquantitative analyses. valued than results based onVigorous analyses are historical data.highly valued forcritical decisions.

Beliefs Law of large numbers: Law of small numbers:Chaos and uncertainty A single incident or severalcan be resolved by isolated incidents quickly systematically analyzing become pivotal for making the right data. decisions regarding future.

Approach to Problems represent an Problems represent an problems unfortunate turn of opportunity to detect

events that threaten emerging changes andfinancial projections. possibly new business Problems are solved opportunities.analytically.

Building the Adaptive Team:It is important for entrepreneurs to establish a business remains flexible beyond start up. An adaptive firm increasesopportunity for its employees, initiates change, and instills adesire to be innovative. They can build an adaptive firm in several ways. The following are not flexible rules, but they do enhance a venture’s chance of remaining adaptive and innovative both through and beyond the growth stage.

1. Share the Entrepreneur’s Vision2. Increase the Perception of Opportunity3. Institutionalize Change as the Venture’s Goal4. Instill the Desire to Be Innovative

A Reward System An Environment that Allows for Failure Flexible Operations The Development of Venture Teams

The Transition From an Entrepreneurial Style to a ManagerialApproach:

The transitions between stages of a venture are complemented or retarded by the entrepreneur’s ability to make a transition in style. A key transition occurs during the growth stage of a venture when the entrepreneur shiftsinto managerial style. Among the different transitions that are possible, probably themost difficult and also the most important for organizational development is that of moving from a one-person, entrepreneurially managed firm to one run by a functionaryorganized, professionally management team.A number of problems occur during transition, if the entrepreneur is characterized by factors such as 1. A highly centrally decision-making system2. An overdependence on one or two key individuals,3. An inadequate repertoire managerial skills and training4. A paternalistic atmosphere

These characteristics inhibit development during the growthstage. In order to bring about the necessary transition, theentrepreneur must carefully and then gradually implementthe process. The key factor in this process is found initially:the entrepreneur. Entrepreneurial self-management is themajor area of concern.

Balancing the Focus(Entrepreneur and Manager):Remaining entrepreneurial while making the transition tosome of the more administrative traits is vital to the successful growth of a venture. Comparison of theentrepreneurial and administrative characteristics is related to five major factors:(i) Strategic orientation(ii) Commitment to seize opportunities(iii) Commitment of resources(iv) Control of resources(v) Management structure

Each of these five areas is critical to the balance needed for

managing entrepreneurially. At the ends of the continuum (entrepreneurial focus to administrative focus) are the specific points of view. These are characterized as under:(developed by Stevenson and Gumpert)

The Entrepreneur’s Point of View• Where is the opportunity?• How do I capitalize on it?• What resources do I need?• How do I gain control over them?• What structure is best?

The Administrative Pont of View• What resources do I control?• What structure determines our organization’s relationship to its market?• How can I minimize the impact of others on my ability to perform?• What opportunity is appropriate?

The Self-Management Concept:To help entrepreneurs manage the growth stage better, aself-management concept has been proposed by a group of researchers. The major focus of this approach is the concept of “self” applied to the action part of the process. The key steps in this process are:1. Self-observation

2. Self-established goals3. Cueing strategies4. Rehearsal5. Self-applied consequencesEntrepreneurs can apply the self-management concept to improve their management abilities. It is the way for entrepreneurs to analyze their managerial styles, to realignbehaviors and time allotments, and to reinforce effective management techniques. Self-management can be specially useful for entrepreneurs whose enterprises are in growth stage.