French economist Jean-Baptiste Say was one of the first to study and define the entrepreneur as “one who shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.” With disruption from technology, leaders of professional firms must be more entrepreneurial and less focused on compliance in order to survive.
Gino Wickman, founder of the “Entrepreneurial Operating System,” defines an entrepreneur as someone who sees a need or an opportunity and takes the risk to start a business by creating something or improving upon an existing product or services. I believe both have just defined the required characteristics to transform the accounting profession.
Leadership has always been important but is critical during the transformation of a profession. Entrepreneurial leadership has its own characteristics, both good and bad depending upon your perspective. Entrepreneurs are also associated with innovation, and every accountant should realize that all innovation starts as a bad idea — at least to those it disrupts. Therefore, innovation management is becoming a required skill where a person has the unique ability to make things happen “from idea to making it real,” and then it requires an innovation team to make it scale.
One criticism of entrepreneurs is that they quickly lose interest when their ideas are not readily accepted or implemented. This should sound familiar in most accounting firms due to the recent amount of changes and automation of workflow and process management that strives to eliminate unnecessary steps and reduce cycle time, resulting in more efficiency. However, the firm’s time-based pricing models may not have yielded increased margins. (We will save that for a later article.)
Being an entrepreneurial leader is difficult. You must have the ability to adjust and change course as well as capitalize on the opportunities presented to you in the market. Too often entrepreneurship is associated with high-tech, billionaires and famous people. These traits apply to all firms, and you don’t have to be revolutionary or focused on the “next big thing” to take advantage and sustain success.
Let’s look at the six essential entrepreneurial characteristics that are transforming firms for the future and sustaining the success to which partners have become accustomed. People either have them or they don’t, and all six are required.
The fact that people have good technical skills does not ensure they possess these traits, yet continuing education requirements primarily focus on technical skills. Let’s define each of these traits and explore how they will have a positive impact on your firm today and into the future.
- Visionary. You get the big picture, can connect the dots, and believe the future is greater than the past. A good exercise for every firm is to take the time to define a shared vision for the next three to five years. What do you want to be, do, have, experience and create? This, along with core values, is the foundation of a strategic plan.
- Problem-solver. You are challenged by problems, especially those impacting your clients. You are an optimist and believe there is a solution. You have unlimited energy when you focus on an idea, a problem, a product, service, or something to build. You are willing to look to others for solutions and like connecting internal and external resources.
- Risk-taker. Joe Polish, a marketing guru and longtime member of Strategic Coach, states, “Entrepreneurs solve problems for a profit.” They are also willing to manage risk, and with risk there are rewards. Firms should learn to fail forward and fast if they want to take advantage of new service opportunities.
- Responsible. Entrepreneurs take responsibility for their actions and expect rewards. They do not expect entitlements, and take responsibility for their failures. They don’t need to be told what to do. They are accountable. They see the opportunity, own it, solve it, and do it.
- Passion. Passion and perseverance in pursuit of long-term goals is the definition of grit, according to Angela Duckworth in her book titled “Grit.” She makes the point that success rarely comes from simply IQ. Having the right unique-ability team is more important than a rugged individual in today’s market.
- Driven. Strong ambition with competitiveness often learned in team sports is essential. Entrepreneurs often know how to make money from an early age.
While summarization of these six characteristics is relatively easy, finding all six in a leader is challenging and firms should be more intentional in their identification and leadership development programs if they expect to remain successful and future-ready. People who have five of the six often make excellent chief operating officers. Many firms are managed by COOs and lack the entrepreneurial leader. The lack of an entrepreneurial leader in the future will make it more difficult to attract quality talent and clients.
Today’s entrepreneurial leadership must focus on technology, processes, talent and growth in order to reduce dangers, leverage strengths, and take advantage of the best opportunities. This requires building consensus through the visioning process, establishing priorities, and allocating resources through strategic planning. Identifying “who” will get things done on a timely basis is critical. This requires focus and harnessing the entrepreneurial spirit. Think — plan — grow!
