Tech Entrepreneurs Need Leadership and Management Skills

Kai Murray
Tech Entrepreneurs Need Leadership and Management Skills

Tech businesses are invariably founded by what might be described as the old-fashioned inventor type: the tech entrepreneur. Tech entrepreneurs are special people and the UK needs more of these IT innovators if we are to continue to be ranked as a major player in the future. Yet, it’s not the lack of entrepreneurs with ideas that is holding us back, it is our ability to scale these businesses. These entrepreneurs need to develop leadership and management skills to complement their tech wizardry, or at the very least invest in those who have them. Ultimately, it will be a combination of their ideas, technical know-how and an acquired/hired ability to manage and scale their business that turns, a select few, into sustainable businesses with a long-term future.

It is important to recognise that tech entrepreneurs are not that different from entrepreneurs in other sectors/industries. Excited and driven by the new, the entrepreneur often lacks the financial and business skills required to successfully run a growing company. While a genuine enthusiasm for their pet project is sufficient to get them up and running and create some traction, to develop and grow their business in the medium to long term, they need to make a profit. This requires specific sets of skills.

All entrepreneurs want their ideas to live on into the future and for this to happen they need to learn how to develop and scale their businesses in the present. Learning how to lead and manage other people is key, or to put it more prosaically, they may have to learn to let go and hand over responsibility for their “baby” to others. To ensure that they give the right roles to the right people, entrepreneurs must be able to recognise their employees’ skills and abilities, and this can only be achieved if they possess the appropriate leadership and management skills themselves. Enthusiasm they have in spades, yet these skills are usually lacking. To develop their businesses, they need to develop themselves and/or hire in the people who can help them do so. 

Some entrepreneurs will be able to step up to the plate as leaders and managers. Others, given the nature of the entrepreneurial mindset, may need help. The following Stages diagram shows the role that the person heading up a business is required to play as a new business develops.

 Source: Shirlaws Group Ltd

As the two arrows at the bottom suggest, the tendency is for the tech entrepreneur to try to do everything – innovate, lead, manage – as their company grows. There is a substantial difference in these roles. Leaders plan for the future, are great communicators, and good with people. Managers are focused on the day-to-day and making revenue/profit today and are process-oriented. For a business to be successful, a blend of all three types of skills is required – entrepreneur, leader and manager.

 While most business owners have all three skills to some extent, usually one dominates and is supported by a secondary skill. For example, someone might be a Leader first and an Entrepreneur second (an “LE”), or Entrepreneur first and Manager second (an “EM”). What does this mean? To gain insight into these different types of roles or skill sets, it is necessary to take a look at the ELM (Entrepreneur, Leader, Manager) Indicator.

ELM is a powerful personal profiling tool that helps individuals understand how they engage with the process of change. Experience has shown that applying ELM can be extremely useful to IT Start-Ups as they seek to make their way in the world. As the Stages diagram illustrates, there is a tendency for the founding entrepreneur to persist in his or her role, trying to plan as a good leader should, and then similarly trying to organise and structure their business efficiently and effectively as a great manager would. This is not easy for a single individual to do and ELM is able to help.

ELM is not a psychometric test; rather it will help individuals understand how their current outlook may affect their perspective in relation to their work, their colleagues’ and their organisation’s objectives. It helps identify where strengths lie (e.g. EM, LE, or one of seven others), and then, working with a leadership consultant if that would be helpful, it is possible to concentrate on improving the areas where in which one is weak, especially in relation to management and leadership.

Knowing one’s primary, secondary and tertiary skills is difficult. Managing is one thing, leading is another, being an entrepreneur a third. That’s where ELM is so useful. Ultimately, it’s down to the entrepreneur. One’s ideas and technical skills may be beyond dispute, but on their own they might not be enough.

If you’d like to find out more about the ELM Indicator, contact us at Shirlaws Group or if you’d prefer to dive right into exploring the ELM indicator, click here to be taken to the Compass Indicator platform where you’ll find directions on how to access the indicator.

Stay tuned for more blogs and podcasts on Navigating Change in Uncertain Times over the coming year as we help leaders build business resilience with agility and speed.

Source: The ELM Indicator is one of the behavioural indicators in the suite of Compass Indicators developed by Shirlaws Group Ltd.

Kai Murray