Joining an entrepreneurial start-up straight out of college is a high risk for any individual to take, especially when you are that individual starting out. However, it would be worth looking into when the qualities of that leader or founder of that company can contribute, is worth the time and risk. The three most important qualities that leader must posses in order to take that leap of faith are commitment and determination, leadership, and motivation to excel.
Commitment and determination has been said to be the most important, key attribute an entrepreneur can posses. In other words he or she has “passion, tenacity, or stick-to-itiveness.” This attribute means that the leader has the tenacity and persistence in problem solving, as well as discipline. They have the ability to commit and de-commit quickly, so when they are able to find an opportunity, they can make a decision, and commit to that decision based on the information presented to them even when it is limited.
However, they never get “married” to that idea and they can adapt very quickly. This attribute also means they are willing to undertake personal sacrifice, with long hours and hard work with the contribution of their own money to get ideas off the ground. Without this attribute the business would have never existed.
Take for example FedEx founder, Fred Smith. Born into a wealthy Memphis family, Smith went to Yale and wrote a thesis in 1965 discussing the need for a more efficient service to move high-value mail like medicine and electronics. During that time the only existing solution to that problem was the “pilot pouch,” a pouch that commercial airline pilots carried on their routes. Smith’s paper discusses a more devoted, scalable system. After graduating, Smith spent two years in Vietnam and did further research on his service idea. He focused on overnight shipping of checks for the Federal Reserve, which did not have electronic fund transfers back in those days.
He managed to get a hold of $500,000 of his own money and buy two jets to convince the Federal Reserve that he was committed and serious about the idea. Eventually he received a contract from the Federal Reserve allowing him to obtain more jets, but the Federal Reserve backed out of the deal. In December of 1971, Smith commissioned a consulting study that estimated a $1 billion market.
The following year, he received regulatory approval, recruited management, purchased more refurbished jets, and hired pilots. In its first launch in 1973 the jets carried six packages. Smith decided that the company needed to expand its service to more cities and needed to further market the business. The year of 1975, Smith was indicted because he forged his sister’s name on a loan guarantee in order to continue the company’s debt. As a result the board tried to fire him, but the employee loyalty would not allow it since he was so well liked.
That year the company achieved profitability and today FedEx is a prosperous $40 billion public company and Fred Smith alone made $4.6 million last year in salary. Smith committed to his idea regardless of several obstacles and his passion allowed him to make the right decisions that allowed his company to flourish. Another quality the leader must posses is no other than leadership. Unlike managers who are respected, leaders are liked. Being a leader means they are self-starters and team builders. Rather than ordering people what to do they inspire others and achieve goals through teams. Knowing that they cannot do everything by themselves, they motivate others to accomplish goals.
They are superior learners and teachers, as well as good listeners. They ask their team members for feedback and in return learn from it. Instead of being driven by money they are driven by the desire to control their own destiny allowing them to be willing to share their wealth. Last but not least, they are able to exert influence without the need for formal power. This allows them to inspire other team members to buy into the business so through the use of the team, the business will be able to continue with or without the entrepreneur leading. As mentioned before leaders are liked. A prime example of this is Fred Smith, founder of FedEx. After being indicted, the board tried to fire him.
But because he had the attribute of presenting that leadership quality he was so well liked by his employees that they prevented the board from firing him and if not they would walk out with Smith. Another prime example of a leader is Sam Walton, the founder of Wal-Mart. His employees who he called “associates” displayed team spirit. Everything about Wal-Mart is about being part of a team or in other words a “family.” Employees at Wal-Mart are always enthusiastic and friendly, from the floor workers to the senior greeters at the door. All because they enjoy their job and they feel like they are part of a team.
Even Wal-Mart ads feature their employees and their families not because they request them too but they volunteer all on their own to be the models. Sam Walton achieved this by creating the “train the trainer” approach for Wal-Mart after seeing it used on playground as a young man. Under this approach, regional managers go to Wal-Mart’s headquarters every three months for training. Then every month, store managers meet with regional managers for training.
Then every week, store managers meet with department heads to establish weekly goals, which results in the department leaders to hold daily team meetings will all of Wal-Mart associates to explain the goals each day. In return managers learn how to treat people well and how to be successful under the Wal-Mart model. It has been said that Wal-Mart has produced more employee millionaires and wealth than any other American company. All of the employees earn above minimum wage and are given stock options and generous benefits.
Though Sam Walton has long been gone, Wal-Mart employees still feel like they know him and in return he has exerted influence in an informal way. He presented himself as leader by building teams, teaching, and his willingness to share the wealth. The final most important quality the leader must posses is their motivation to excel. This quality means they are goal and result-oriented. The goal is a dream with an objective, on a timeline. It does not matter how much they try, as long as they get the results at the end. They have low need for status and power, as long as the business flourish and ultimately succeed.
They also have perspective, which means they are aware of their own weakness and strengths, allowing them to create a business team to balance their weaknesses. A good example that exemplifies this quality is Charlie Munger. Most people do not realize that he was one of the founders of Berkshire Hathaway, a successful investment company with Warren Buffet. Buffet is more recognized as one of the best investors in the world. But Buffet would never make a move without the approval of Charlie Munger, considering he is his right-hand man and does most of the firm’s analysis.
If Buffet were to ever pass away, Munger would take over Berkshire Hathaway. Munger’s lack of need of status and power has still allowed him to be very successful and dominate his field in the market. These three qualities a leader must posses; commitment and determination, leadership, and motivation to excel allows for a business to succeed. It has been clearly proven from start up entrepreneurs Fred Smith and successful investors Charlie Munger who all succeeded in exemplifying these qualities.