Last updated on May 13th, 2019 at 02:40 pm
In our recent survey, the winners of the Council of Small Business Executives 2006 Future 50 Awards were asked to rate how they believe they are perceived by their peers on several key management characteristics.
Their perceptions were based on various methods of feedback. That feedback indicates that they believe their peers rated the Future 50 companies highest for motivation to achieve, followed by ability to learn new concepts. They were rated lowest for development of staff, followed by management skills and relationship building.
I mentioned in my first article about this survey that these same entrepreneurs rated themselves highest for being achievement-oriented, with being determined second and self-motivated third. The lowest ratings were associated with being opportunistic and with a need for constant challenge.
It becomes clear when the two sets of ratings are compared that these gaps in perception are influenced by the size of the business. As the business grows, the entrepreneur is less apt to desire additional education, to learn new business models or to learn new approaches to managing a business.
Statements like “self-driven and highly motivated” and “I lead and motivate by example” support these consistently high ratings. Ability to learn new concepts was rated highest among entrepreneurs who were younger and had earned an MBA or Ph.D. The desire for continued education is perceived as a positive, and their peers believe that the younger entrepreneur is more open to learning new concepts.
The same can be said about “serial” entrepreneurs, those who have started and sold a number of businesses. Their peers see them as wanting to learn new concepts and new business models. This is demonstrated by their desire to start new business ventures. Interestingly enough, the larger businesses, (with more than 50 employees) perceive their entrepreneurs as being less open to new learning.
Those who received high ratings in new learning, stated, “There are always lessons to be learned every day. If we are smart, we learn by our mistakes.” Another respondent stated, “I have a willingness to ask questions of other owners in my field.” Finally, one respondent who received a high rating on ability to learn stated, “growth, improved understanding of financial statements and reports” were important.
Highly successful entrepreneurs are continually seeking opportunities to learn new concepts from their counterparts in similar industries, as well as pursuing additional formal education.
When the peer ratings on staff development were reviewed, a gap appears in two of the sub-groups: smaller businesses with less than 50 employees and those with up to $2 million in annual sales.
The level of agreement in this category is the lowest among all the respondents. Entrepreneurs who lead smaller companies may have less time to devote to the development of their employees and managers because they are more involved in managing the daily business activities and the challenge of growing sales.
These findings are supported by the entrepreneurs, who identified as areas of improvement, the coaching of their staff, delegation skills, the need for more teaching, developing leaders and developing deeper and stronger relationships with key employees. It appears from these statements that finding the time to train and coach is difficult when the entrepreneur is totally engrossed in the daily conduct of business.
Those who were rated high in this category saw themselves as leaders who leave “department managers to manage” and “I truly believe in my team and give them the time and resources to be the best they can be.” One entrepreneur stated that he “is never too proud to be wrong, to be involved with my managers and to work alongside them.”
Another highly rated entrepreneur stated that “transferring knowledge” was one of his greatest strengths. Succession is always a concern, and these statements indicate that these entrepreneurs are taking the necessary steps to provide for the entity to continue.
The entrepreneur who runs the smaller business, with less than 50 employees and sales of $2 million or less, is perceived to be lacking management skills, while the larger companies run by MBAs are rated significantly higher by their peers.
The ability to build lasting relationships is critical to being a successful leader and manager. Rated highest in this category were the serial entrepreneur, the younger entrepreneur and the entrepreneur with an MBA or higher degree. The older entrepreneurs who manage a smaller business were rated the lowest in this category. Comments in this category reflect the importance of building relationships. One respondent remarked that he needed to be “more sensitive to employee needs.” Another stated that he needed to “continue to work on my sensitivity to others.” One respondent stated he wanted to “develop deeper and stronger relationships with key employees.”
It appears that these entrepreneurs desire to cultivate the necessary relationships with their peers and employees to build a strong foundation for their growing business. The question is, do they have the necessary skills? In addition, do they have the time to devote to relationship building? It appears the more educated, experienced entrepreneur does a better job of relationship building. These entrepreneurs have more time, skill and experience needed to build lasting relationships.
It is apparent from this analysis that size does matter. The experienced serial entrepreneur who manages a larger business is rated higher in a number of these categories. It appears that a great deal of the education that these entrepreneurs have is based on real life experiences and trial and error. The serial entrepreneur who has started, sold or lost a previous business strives to be successful in their next endeavor.
In the third and final article about our Future 50 survey, the focus will shift to underlying strategies for closing the gaps in perception between entrepreneurs and their peers. I will also introduce the concept of EQ and provide a method for readers to compare themselves with the qualities, attributes and beliefs of the Future 50.
Cary Silverstein, MBA is the president and chief executive officer of Fox Point-based Strategic Management Associates LLC. He can be reached at (414) 352-5140 or via email at email@example.com.