A HANDBOOK FOR ENTREPRENEURS TAKING CARE OF BUSINESS: THE ENTREPRENEUR VERSUS THE MANAGER

East Texas wisdom tells us there are three kinds of businessmen: them that puts up the money, them that spends it, and them that tries to save it. We know these types as the capitalist, the entrepreneur, and the manager. The capitalist and the entrepreneur are interchangeable roles in the marketplace: A successful entrepreneur is often putting up his own money one day, spending someone else’s the next.

The entrepreneur and the manager, however, do not trade places quite so easily. They are two distinct personality types, sharing only the most general tag of “businessman.” Entrepreneurs make lousy managers and managers make lousy entrepreneurs. They are not cut from the same cloth. The difference begins with self-image: The entrepreneur, as Harvard psychologist David McClelland says in The Achieving Society, is “an agent of his own progress.” He is a broad conceptual thinker, an idea man who conceives a business proposition, raises the capital for it, and assumes the risk. Not only does he assume the risk, says McClelland, he is motivated by the risk: The entrepreneur needs to see some uncertainty of outcome in a business proposition to receive any satisfaction from making it succeed.

The manager, on the other hand, is the company man: Anything but an “agent of his own progress,” he perceives his career as the climb through an already established corporate structure. His progress is based on the skill with which he follows the rules of the game. Risk is of no interest to the manager: His job, in fact, is to eliminate any uncertainty from the decisions he makes in his work.

This basic difference in orientation can be better understood by comparing the findings of an American Management Association survey of the traits of the successful “corporate executive,” and the Caruth Institute of Owner Managed Business’s study of the successful entrepreneur’s profile. Both the manager and the entrepreneur are intelligent, highly ambitious, and driven by the need to control and direct. Their key differences break into three areas:

Need for status: The most interesting contradiction in the entrepreneur’s personality is that he has a high need to achieve, but a low need for “status.” He wants to succeed, but only on his own terms: some studies suggest that the entrepreneurs measure of success is the extent to which he “makes it” outside the bounds of traditional business practice. He is not interested in corporate politicking, and he is not a social climber. Trammell Crow and Ross Perot are involved to some extent in “Dallas society” and in the civic power game, but only on their own terms. The manager, like Texas Instruments president Mark Shepherd or Republic Bank head Jim Keay, is dedicated to playing the game.

Status – in the form of his title and the number and range of his social activities – is his only true measure of ’”making it.”

Decision-making: Business is basically the process of identifying problems, developing possible solutions, and applying one or more of those solutions. The entrepreneur is a creative problem-solver: His skill as a general-ist allows him to see both the forest and the trees. But he is not a decisive person: McClel-land’s study of entrepreneurs included extensive psychological testing of the problem-solving techniques of entrepreneurs and managers. The testing showed that entrepreneurs are facile, sometimes brilliant, at identifying business problems and generating solutions. But they have trouble selecting and applying a solution.

The manager, on the other hand, has little imagination. He works with a limited number of solutions with proven track records. His main object is to increase the efficiency of the problem-solving process. McClelland’s study indicated that managers have a tendency to substitute efficiency for ambition. As such, they are creatures of repetition. The entrepreneur cannot live with repetition. Once he’s solved a problem, he is bored by it.

Relationships with others: This is probably the major difference between the entrepreneur and the manager. The manager’s tasks, by definition, involve a high degree of interpersonal skill: He must be a delegator and a motivator: he must be willing to listen to the ideas of others. His idea of a successful day is to have completely cleared his desk through delegation of authority.

The entrepreneur is a much more solitary beast: He hears his own drummer and generally has little time for the ideas of others. Moreover, he tends to view employees as bothersome barriers between him and his “baby.” No matter how large his enterprise becomes, he still wants to have his hand in everything. His idea of a successful day is to have done everything from chewing out the janitor to rearranging the plants in the office.

Entrepreneur or Manager: Which One Are You?



Lunch



Entrepreneur: No more than 30 minutes; often in the office.

Manager: Precisely one hour; always at a restaurant.



Office



Entrepreneur: Generally a space without partitions or doors; you’ll most likely find the entrepreneur right in the middle of it – within shouting distance of everyone.

Manager: Usually in a corner, to connote power. Always has a door, which he closes often.



Meetings



Entrepreneur: Always called on the spur of the moment; seldom an agenda. Average length: one hour.

Manager: Announced by memo at least 48 hours in advance. Heavily structured. Average length: 15 minutes.

Memoes



Entrepreneur: Mainly instruments of self-expression. Always long, disorganized, like a letter home. Often typed on his own typewriter.

Manager: Always IBM-tight, both in prose and presentation. Tendency to short sentences and a lot of jargon. Example: “interface.”



Firing an employee



Entrepreneur: Generally long-winded and apologetic. Rarely uses the word “termination.”

Manager: Firm and direct, without being cruel. “Termination” – or at least “We’re going to have to let you go” – will generally be in the first sentence.



Conferences



Entrepreneur: Always in his office.

Manager: Always in the conference room.

Interpersonal ability



Entrepreneur: Minimal. Always on Cloud Nine, so he has trouble understanding employees. Generally needs to be reminded of raises. Doesn’t give many holidays. Doesn’t delegate authority.

Manager: A deliberate del-egator who considers a day successful when he’s completely cleared his desk.



Doodling



Entrepreneur: Single strokes connected into a free-form design.

Manager: Repeating geometric structures.



Office decor



Entrepreneur: Full of elements of self-expression: Paintings, mementoes, etc. Homey feeling.

Manager: Spartan and drab. Could be any other manager’s office.

Problem solving



Entrepreneur: Great at theory; poor in execution. Can generate dozens of possible solutions. Can rarely decide on one.

Manager: Efficiency-oriented. Applies small range of solutions to recurring problems. Very decisive.



Desk



Entrepreneur: Chronically cluttered. Twice as many things in the “in” box as in the “out.”

Manager: If he’s had a good day, his desk top will be completely clear, except fora neat stack of matters to handle the next day.



Idea of social status



Entrepreneur: Buying an entire table at the Beaux Arts Ball and not showing up.

Manager: Inviting favored employees to join him at the Beaux Arts Ball.