Jack Welch, chairman and CEO of General Electric between 1981 and 2001

Leadership Skill and Enterprise

Have you leadership skill and enterprise?

It is primarily the leader's skill and enterprise that will determine the success or otherwise of the organization. Leadership skills can be taught, but enterprise, arguably, cannot. Both are of the utmost importance. There is research evidence that demonstrates it is possible to identify the following types of leader:1

  1. Leaders that will ensure that their organization will survive (and possibly thrive), and
  2. Leaders that will ensure that their organization will fail.

The first type of leader above has a high enterprise tendency, whilst the second type has a low enterprise tendency.

Leadership skill and high enterprise tendency are essential attributes of the successful leader.

The leader must have good leadership skills and a high enterprise tendency if the organization is to survive, either growth or lifestyle. A leader with poor leadership skills and a low enterprise tendency will most likely lead to the death of the organization.

Research into the enterprise tendencies of team members in growth organizations has revealed that the main characteristics associated with enterprise are:2

  • need for achievement
  • need for autonomy / independence
  • locus of control
  • creativity
  • moderate / calculated risk taking

There are instruments available commercially that claim to measure enterprise tendency. The 'Job Choice Decision-Making Exercise' (JCE) by Michael J. Stahl and Anil Gulati measures need for achievement, power, and affiliation. It is based primarily on the work by D. C. McClelland. The 'Entrepreneurial Style and Success Indicator' (ESSI) by Howard L. Shenson, Terry D. Anderson, Jonathan Clark, and Susan Clark claims to assess variables thought to be related to entrepreneurial success and increase understanding of entrepreneurial style. It measures behavioural action, cognitive analysis, interpersonal harmony, affective expression, plus twenty-eight 'success factors'. The 'EQ Questionnaire' by Edward J. Fasiska is designed to measure entrepreneurial and executive effectiveness, and to be used as a personal and organizational development tool. It measures adaptability, managerial traits (risk tolerance, time management, creativity, strategic thinking, planning, goal-orientation), personality traits (extroversion, intuition, thinking, perceiving), and EQ (Entrepreneurial Quotient) index.

Characteristics associated with enterprise

None of the above instruments address all of the main characteristics associated with enterprise identified. In addition, there is little evidence in the literature regarding the use of these instruments and hence their validity and reliability is unproven.

Other possible instruments from the literature have been reviewed. One is by A. S. King3 and the other by J. Freeley.4 Comparison of these instruments against the main characteristics associated with enterprise above reveals that neither instrument meets the specified criteria. King's 'Behavioural Checklist' addresses locus of control and risk taking, and need for achievement is addressed by achievement and motivation measures. It could also be argued that creativity is addressed by the instruments measures of problem solving ability and manipulative skills. However, the instrument does not address need for autonomy. Freeley's 'Entrepreneurial Style' instrument measures risk taking, and it could also be argued that it addresses need for achievement with motivation, need for autonomy with independence and creativity with problem solving and variety, but it does not address locus of control.

However, there is one instrument in the literature, Sally Caird's 'General Enterprise Tendency' test, that relates closely to the main constructs associated with enterprise identified above. In addition, it has considerable support in the literature for its validity and reliability.5

It is, therefore, possible to measure enterprise tendency, but there are also other characteristics that are essential for growth leaders. Once you have established that your leader has good leadership skills and will keep the organization in business (has a high enterprise tendency), you may want to know if he or she is a growth leader or a lifestyle leader.

To read more about leadership skill and enterprise, read Narcissism: Behind the Mask.

1, 2 Thomas, D.K., Murphy, W.D. and Fearn, G. (2001), 'Analysis of senior management teams in growth and lifestyle SMEs', The 24th ISBA National Small Firms Policy and Research Conference, Leicester, Conference Proceedings, Vol. 1, pp. 433-452.
3 King, A.S. (1985), Self-analysis and Assessment of Entrepreneurial Potential, Simulations and Games, Vol. 16, No. 4, pp. 397-416.
4 Freeley, J. (1986), Entrepreneurial Style Profile, Long Island University, New York, NY.
5 Cromie, S. and Callaghan I. (1997) Assessing Enterprise Attributes - The Usefulness of Caird's General Enterprising Tendency (GET) Test, Small Business and Enterprise Development, Vol. 4, pp. 65-71.