Entrepreneurship and Strategic Development

ING DELOITTE CHAIR 

The word entrepreneur is derived from the French entreprendre, meaning “to undertake”. An entrepreneur is one, and the only one, who undertakes to organize, to set goals, to manage, and to assume the risks of a business. An entrepreneur is an innovator. However, an entrepreneur is also a strategic developer who recognizes and seizes opportunities. An entrepreneur turns those opportunities into workable, market driven ideas and… realizes the rewards from these efforts.

Entrepreneurs are individuals who recognize opportunities where others see chaos or confusion. Whatever their challenge entrepreneurs start companies and revitalize the economy. Entrepreneurs are contributors to economic growth and create jobs through their leadership, activities and development effectiveness.

Entrepreneurship can be understood by two connected perspectives: at first the importance of firms in our economy, at second the trends in research and education which reflect the importance of entrepreneurship in academic developments.

Nevertheless no single definition of entrepreneur exists. This situation makes it difficult to create a decisive paradigm to understand entrepreneurship and to do appropriate academic research. Notable a central theme of all existing theories about entrepreneurs has been their role of the “agents of change”.

Those agents of change were and are only been known as pioneers. The recognition of entrepreneurs dates back to the French eighteenth century when economist Cantillon associated the “risk-bearing” activities in the economy with the entrepreneurs. In England, during the Industrial revolution, entrepreneurs played a visible role in risk taking, the management and transfiguration of resources. In short, the interrelation between entrepreneurs and economics has been a long accepted concept of academic thinking. In fact, until the 1950s the majority of definitions and references to entrepreneurship had come from economists. They all wrote about entrepreneurship and its impact on economic development. That’s why in the 20th century the word has become closely linked with free enterprise and capitalism. Now a day, it is recognized that entrepreneurship also can be understood by focussing on the entrepreneurs, their specific behaviour skills, creativity and knowledge. In short, it is a human act.

Entrepreneurship can be seen as “pioneership”. So, not the routine, but like Schumpeter (1934) meant by breaking through the routine by finding “new combinations”. Timmons in New Venture Creation (1994) pointed out that entrepreneurship is the ability to create and built a vision or a dream from practically nothing. It is the application of energy to initiate and built an enterprise or organization, just doing it, rather than just watching and analyzing.

This paradigm requires a willingness to take calculated risks –both personal and financial- and then to do everything possible to reduce the chances of failure. Entrepreneurship also means leadership and in practices the ability to build an entrepreneurial or venture team to complement your own skills and talents (outside or even inside the venture). In short, free to Stevenson and Jarillo (1994), entrepreneurship is … a process by which individuals – either on their own or inside organizations – pursue opportunities without regard to the resources they currently control.

Although entrepreneurs tend towards action, they are also thinkers. Entrepreneurs are often methodical people who plan their moves very carefully. The emphasis today on the creation of clear and complete business plans can be seen as an indication that “thinking’ is as important as “doing”. This entrepreneurial perspective justifies the recognition of entrepreneurship as also a behavioral and psychological approach, as interrelated disciplines.

Finally, in the concept of Strategic Development the entrepreneur’s vision must be fully alive to the organization in order for employees to understand the company’s direction. And, an important business culture issue, employees have to share in the responsibility for the company’s strategic development, set backs and growth. Highly creative entrepreneurs sometimes are unable, or unwilling, to meet these administrative challenges and as a result they leave the enterprise and move on to new opportunities.

A focus on strategic development mostly means a shift from entrepreneurial one-person leadership to managerial team-oriented leadership. In managing growth the entrepreneur must recognize to important points: first, the enterprise needs to retain certain entrepreneurial characteristics in order to encourage innovation and creativity. Second, the entrepreneur needs to translate this spirit of innovation to his or her personnel. Personnel must make a move toward a more managerial style. Remaining entrepreneurial, while making the transition to a more administrative organization, is vital to a successful growth of a venture. That’s why a balance has to be found between questions as “Where is the opportunity” and “What resources do I need” on one hand to “What resources do I control” and “What opportunity is appropriate” on the other.

Let’s put it in this way… entrepreneurship and strategic development is the art of managing behavioral contradictions as routine and non-routine and the challenge of bridging conflicting concepts as mechanic and organic models, autonomous and formalized structures, bureaucratic and entrepreneurial processes.