The Entrepreneurial Manager
Some Thoughts on Entrepreneurial Careers
Chris Bovaird
BA (Hons.), MBA, M. Sc.Lecturer, Division of Management
University of Toronto at Scarborough
“Careers Unlimited Exposition”
Dubai, U. A. E.7 December, 2004
Introduction
World of work much changed in past 25 years.
Before, well-educated young people could expect:
Stability - 40 year career with one employer.
Structure - Permanent, highly-structured environment
Upward mobility - career path, promotions.
Increasing pay, increasing responsibility.
Today:
Majority of students at N. American & European Universities:
Will not join large firms with stable structures.
Will not stay with one employer.
Will change functions and industries, many times.
Will probably face periods of unemployment.
Today - most will experience careers with:
Progress, regress, lateral moves.
Periods of intense activity, periods of under-employment;
Unemployment, and self-employment.
Why?
Downsizing and restructuring of 1990s.
Eliminated many mid-management jobs.
1991 to 1996 job tenure for U.S. workers fell 19%.
Job mobility, not stability, standard in today's workplace.
Significant developments in business over past 25 years:
1. Rise in self-employment
2. Decline of life long "career" and in job security.
Major Trends in the World of Work
Demographic changes – Bulge in population pyramid
Globalisation - Increasing competition
Technology – Eliminates need for infrastructure
These have all had impact on:
the nature,
the tenure,
the security,with which traditional “white-collar” managers do their jobs.
Demographic Trends – Impact of “Baby Boom”
Western world’s population contains huge bulge.
"Baby Boom" - 1947 to 1966.
"Baby Boom" - mid-point 1957, peak 959.
Average "Baby Boomer" - now 45 - 47 year old.
"Baby Boomer" now 25 years into career.
"Baby Boomer" reaching mid- and senior-management jobs.
"Baby Boom" means population resembles rectangle.
Traditional corporation resembles pyramid.
Too many managers for too few jobs.
Question
What to do when too many people looking for too few jobs?
Answer
Rethink nature and shape of corporation.
Rethink nature of “ job”.
Rethink traditional employer-employee relationship.
Globalisation – Increasing competitionInternational trade, not new phenomenon.
Question:
Why all the fuss about “globalisation”?
Answer:
Globalisation at end of 20th Century was acceleration of existing phenomenon, and widening of scope.
Technology Accelerated Trade
Technology makes communication cheaper, faster and easier.
Technology accelerates voice and data transmission.
E-mail, web, fax - entrepreneurs can speak to customers / suppliers - in real time.
Management info (sales reports, budgets) can be monitored instantanly and anywhere.
No need for large organisation.
No need for large infrastructure.
Easy to keep in touch with customers / suppliers.
Foreign firms can be as knowledgeable and informed as local firms.
Even small firms can compete, half a world away.
Services Became ExportableTechnology made services exportable.
Services don’t require physical plant or inventory.
Accountants, graphic artists, head-hunters, trainers, web-page designers can:
bid on contracts,
provide information or advice,
design products, graphics or courses,
Without having buildings, secretaries, janitors and mail-rooms.
Technology – Frees Businesses from Infrastructure
Technology has changed:
design of office.
structure of working day.
way we communicate with each other.
way we choose to use (or not use) our place of business.
Foremost technological developments:
Mobile telephony.
Personal computer, lap-top.
Fax machines.
Internet, world wide web, E-mail.
Palm pilots.
Effect of technology:
Facilitates remote working
Allows more flexible locations
Allow more flexible schedules and hours
Removes need for “head office”
Loosens physical bonds between worker and employer
Loosens psychological bonds.
Workers still have skills and responsibilities.
But - managers don't need to go “to work”.
Rather, from home, managers “work”
The Changing Nature of The Job
Implication - reconsider notions of “career” and “ job”.
“Traditional” form of work was structured, secure and permanent.
“New style” of work entrepreneurial, flexible, market driven, project oriented.
Individuals and small entrepreneurs can use lap-tops, mobile phones, world wide web:
to compete with anybody, anywhere, at any time.
Traditional Model Of Work
Corporations had formal procedures and standard products.
Corporations run by those who "took decisions".
Employees hired based on general skills and attributes.
Employees received elaborate initial training,
Career was internal to firm.
Benefit of traditional model: The Psychological Contract
White-collar and managerial employees expected lifetime careers.
The Demise of The “Job”
1980s and 1990s white-collar workers experienced sharp job loss.
Mid-level managers jobs eliminated due to "restructuring" and "downsizing".
US workers "frequently concerned about layoffs": 12% in 1981 37% in 1999.
Time-CNN poll (1993): “two-thirds thought job security worse than two years before”.
Survivors asked to do more with fewer resources.Not surprisingly, many managers feel less job satisfaction.
The Entrepreneurial Manager
Managers today more likely to seek new opportunities.
People seeking more freedom.
People seeking more control over their destiny.
Increasingly, managers becoming more entrepreneurial in approach to their careers
Managers becoming more self-directed, more risk oriented.
You will need to become - "Entrepreneurial" Managers
Last two decades: dramatic rise in self-employment.Canada - 1979-2002 - Average Annual Increase
Self employed workers: 2.25%
Self employed women: 3.23%
Total population: 1.00%Same trends in US, UK, Western Europe.
Temporary and Contract Workers.
To reduce overhead, increase flexibility, companies hire temporary managers.
1990s - US outsourcing and staffing industry grew by 20% p.a.
Growth of temporary workers highest at executive level.
Demand for interim executives tripled from 1996 to 1997.
Small Businesses Create Jobs1980s - small firms and self-employment created 85% of new jobs.
Large companies downsized - lay-offs exceed hires.
US in 1990s:
Micro-businesses (1-4 employees) created c. 35% of new jobs
Small firms (5-19 employees) created c. 32% of new jobs.
Conclusion
Young people increasingly likely to be self-employed.
Young people increasingly likely to work part-time.
Young people increasingly likely to work for very small firm.
Who Starts A Business? - Entrepreneur
“Individual who organises and co-ordinates activities required to start a new business”"Entrepreneur" from French: "entrer" to enter "prendre" to take
Implication: entrepreneurs seize initiative, recognise opportunities.
Entrepreneurs: Demographic Attributes
Children of EntrepreneursHaving entrepreneur in family: most telling indicator of successful entrepreneurs.
Importance of role models.
Immigrants and Children of Immigrants
Immigrants/children of immigrants make excellent entrepreneurs.
Immigrant Entrepreneurs: “Pull” factors
Immigrants are economic migrants.
Immigrants take risks to better their economic well-being.
Immigrants show confidence, take risks to achieve desired goals.
Immigrant Entrepreneurs: “Push” factors:
Immigrants may lack social contacts, networks.
Immigrants may lack recognized credentials for professional careers.
Therefore: immigrants must create their own economic success.
Entrepreneurs - Psychological Characteristics
The Need for Achievement"Need to achieve" associated with entrepreneurial behavior.
High achievers set challenging goals, require constant feedback.
High achievers set own standards of excellence.
High achievers continuously seek to improve performance.
Internal Locus Of ControlPeoples’ perceived ability to control/influence their own lives.
"Internals" believe in their own behavior.
No belief in “external” forces such as destiny or luck.
Entrepreneurs characterized by internality.
Tolerance Of Ambiguity
Ambiguity: dealing with new or complex situations.
Intolerance of ambiguity: perceive ambiguity as threat.
Tolerance of ambiguity: perceive ambiguity as opportunity.
Those uncomfortable with risk may not want entrepreneurial career.
Gender Issues
Women more conservative.
Women establish more realistic goals.
Women entrepreneurs' failure rate lower than men's.
Women better listeners, therefore better negotiators.
Women better collaborators, build better teams.