Entrepreneurial Management 101: Entrepreneurs, Managers and Leaders (Part 1 of 3)

Note: This column, and the associated video clips, were derived from a presentation from 12 to 200, a KPCB conference on growing entrepreneurial businesses, held in Stanford, California on July 16, 2013. This is the first of a three-part series on entrepreneurial management by Randy Komisar, KPCB Partner.

Clip 1: Entrepreneurs, Managers and Leaders

So much gets muddled up as we talk about entrepreneurship, management and leadership, that it’s important to tease it apart. When you do, you find a whole new way to think about management and leadership in entrepreneurial organizations.

I’m going to start with my definition of an entrepreneur – which you need to distinguish from the definitions of managers and leaders.

- Entrepreneurs are first and foremost about creativity. They’re not about leading or managing. The role of the entrepreneur is about creation. They see a better future and strive with minimal resources to achieve it.

- Managers enable teams to achieve objectives. They see a goal, and they empower people to reach it.

- Leaders are about harnessing the power of people. They see a greater purpose and inspire others to achieve it.

These are three separate roles. We celebrate them when they are unified in one person, but that’s not always the case.

Clip 2: Minimally Invasive Management

Entrepreneurs should consider adopting a concept I call “minimally invasive management.”

People think about management and imagine adding dead wood on top of productive people. That’s a reflection of a time when managers were supervisors. People were the means of production. They needed to be clocked, and tracked in a Frederick Taylor-like way. Time and motion drove success. People did jobs that machines weren’t smart enough to do yet. But we’re now in a different world, where people are not the means of production – they’re the means of creation.

And management has a different role.

You need to think about management differently. Managers are not the boss. They’re a service. They serve the people doing the work. Nobody is more important in an organization than the people doing the work. Management’s role should be to remove the impediments that are in front of the people doing the work so that they can do it well – and so they can be satisfied, rewarded and motivated in their work.

If you think of managers as being accountable not just to leadership, but also to the people doing the work, you begin to come up with a different concept of management.

Clip 3: When Do You Add Managers?

An oft-asked question is, “When do you add managers?” You start your company with a half-dozen people in a room, and every job is important. Everyone is involved in every decision. Everybody is empowered. Everybody feels like a stakeholder. But then you add another half dozen people …. and another half dozen … and another half dozen.

And then you start to see chinks in the armor of the company. Priorities aren’t being set. Conflicts aren’t being resolved. Communications isn’t clear. People don’t know what decisions are being made or why they’re being made. Morale starts to fade – and things slow down. That’s bad: in the world we all operate in, speed is everything.

So those are the signs that you need management. Not because people need a boss, but because people need someone to resolve the issues that are stopping them from doing their work.

If you wait for your organization to run into trouble before hiring the people who will keep it streamlined, keep it focused, and help people do their work, you have waited too long. And so the idea of minimally invasive management is to add managers as your people need them to do the work.

Clip 4: A Manager’s 3 Primary Jobs: Hiring, Training, Firing

I think about a manager’s role as having three parts: they need to hire; they need to develop their people; and they need to fire.

Let’s talk about hiring first. It’s quite clear that hiring the best people is the easiest way to build a high functioning competitive organization. If you spend most of your time as a manager dealing with personnel issues, you will find that 75% of your time is dealing with your problem children. You are investing your time and energy in the problems, rather than the successes. If you hire well, you can change that. If you hire well, you can invest 75% of your time into your successes.

So everything starts with hiring the right people into the jobs. One of the things that you often hear from hard-working people in these organizations – an indication that they need management – is that we don’t have time to hire great people, we’re too busy doing the work. That’s a red flag. That’s a clear sign that you need managers, to make sure you can hire the best team possible.

Bluntly, if you hire great people, and you develop them, then you can win. So hiring is job one. You can change the focus of the way management spends time in the organization from problems to success.

Job two is the development of people. That’s equally important. Management can spend the bulk of its time taking a B- player and turning him into a B player, or they can take an A- player and make them into an A player. Where would you want them to spend their time? The answer is obvious, and it starts with the hiring, but ultimately managers have got to empower individual contributors to make decisions on their own and to do that quickly and in unison.

We need managers that don’t make people cogs in a wheel but instead get all the wheels spinning together. That starts with giving people clear priorities, and communicating well what’s going on in the organization. What decisions are being made and why they are being made. It’s about taking individuals and making them 10% or 20% or 50% better than they ever thought they could be. This is where the bulk of management’s time should be spent.

If you do that well, then you have an organization that can operate with minimally invasive management.