ENTREPRENEURSHIP Manfred Kets de Vries – On the quirks and qualities of entrepreneurs

Manfred Kets de Vries is an internationally recognised expert on leadership and organisational behaviour. He is best known for his work exploring the darker side of organisational life, in particular, his use of psychoanalysis to understand and explain what happens when executives derail.
He studied economics in Holland before completing Doctorate in Business Administration at the Harvard Business School where he became member of the Harvard faculty. Later, while teaching at McGill University in Canada, he retrained as psychoanalyst, spending seven years working alongside clinical psychologists and psychiatrists – an experience that shaped his later work.
Now based at the French campus of the international business school INSEAD, Kets de Vries holds the Raoul de Vitry d’Avaucourt chair of leadership development. He is programme director of the top management seminar ‘The Challenge of Leadership: Developing Your Emotional Intelligence’ and the programme ‘Mastering Change: Developing Your Coaching and Consulting Skills’. His other areas of interest are entrepreneurship, family business, and corporate transformation and change. He has received INSEAD’s distinguished teacher award five times and is the author of 23 books and numerous scientific papers.
A fly fishing enthusiast and member of the illustrious New York Explorer’s Club, on his days off Kets de Vries can be found in the rainforests or savannahs of Central Africa, the Siberian taiga or perhaps the Arctic Circle.
He talked with James Nelson for Management about the traits and characteristics of entrepreneurship.

Entrepreneurs come in all shapes and sizes. Is there any single characteristic which you have observed in virtually all of them?
Entrepreneurs have this element of difficulty in working in structured situation. In dealing with authority. Quite few entrepreneurs break out on their own because they had hard time working for other people. It’s not always the case, but it is common characteristic. They have difficult time accepting authority figures.

Do the seeds of entrepreneurship show up early, even in childhood?
Take an entrepreneur like Larry Ellison of Oracle, he’s very good example. The most critical negative voice of his childhood was his stepfather who told him he’d never amount to anything. From that you get bit of what I call Monte Christo syndrome – getting even and showing the world that one really counts.

What is the major motivation of entrepreneurs. Is it the wish to create or the financial incentive?
Basically, it’s the wish to be noticed. They want to build something. When you look at the obvious characteristics of entrepreneurship you find things like high achievement and motivation, the need for power, and the need for independence. They are risk-takers, but not necessarily excessive risk-takers. Professional managers might take more risks because it’s not their money.
But basically, when you talk about human development it’s very complex. You have things like genetic predisposition, birth order, parents, the history of child successes and failures, family status, even serendipity – pure chance. All these play role. But at the heart of the inner theatre of the entrepreneur is the issue of control. They don’t like to be controlled.

Is there blind spot common to entrepreneurs that undermines their efforts?
There is tendency not to see certain things because they deny their problems. As group they are not good at reality testing. And while we all need psychological defences to function, if they become extreme you lose your sense of reality. Of course, if you have weakened sense of reality people become scared of you and tell you only what you want to hear. This is not helpful in building up an organisation. And given entrepreneurs’ need for control it might even destroy an organisation.

Do two or three entrepreneurs working together as team increase their chances of success?
Are you kidding? I wouldn’t hold my breath. In my experience this is very unstable situation, even though we see several high-profile examples such as Yahoo and Google. There is this element of who will be in control. More likely is when an entrepreneur has very strong, gifted and trusted deputy. Of course, you will always find exceptions where two co-entrepreneurs complement one another as with the Philips brothers in Holland.

How can larger companies foster the best traits of entrepreneurship to create new ventures?
You need to keep new ventures separate. Split them off from the mother company. If possible site them at another location. Then you need gatekeepers to protect the people, because there is often tendency to crush them. The protector should be the CEO or another very senior executive. Then you need mindset that encourages creativity, and this includes the freedom to make mistakes.
But it’s not easy for these internal new ventures to have the vitality of an independent start-up. Entrepreneurs are driven people and it’s unlikely the (new) venture’s team leader will possess all the traits found in good entrepreneurship. This isn’t something you can just put on like new coat.

Would many public company CEOs survive in an entrepreneurial environment?
No, they like structure. They have different life-anchors. The life-anchor for entrepreneurs is to create and build something, whereas for most professional executives it’s more matter of power, status and money. The whole issue of life-anchors is very important. Different people have different drivers.

Many business schools offer courses in entrepreneurship. How do your students benefit?
There has been rapid growth in the teaching of entrepreneurship. You can see it here in our programme at INSEAD. It’s gone from nothing to very substantial programme. I’m great advocate of entrepreneurship because when you look at where employment is created it’s by entrepreneurial firms. There’s next to no job growth coming from larger companies.
Obviously these courses in entrepreneurship teach predictable subjects like financial tools and preparing business plans. But the real benefit comes from the contagious effect it has on students when they are together with others with the same entrepreneurial mindset of high achievement and the willingness to take certain risks. The experience gives them confidence and motivation through mutual reinforcement.

Do government policies and cultural norms play major role in supporting entrepreneurship?
It’s combination of factors from government policies to cultural norms. Look at the Japanese culture which is high-achievement oriented but has not produced that many entrepreneurs because entrepreneurs are deviant. They don’t want to fit in, they want to be different. They want to break away from structure.
Government policies also play role. For example, in France it’s extremely difficult to be an entrepreneur. If I could be prime minister for just day the one thing I’d do would be to simplify what has to be done to set up business. In England and the USA it is much simpler. In France at the governmental level it’s mindset of centralisation and conformity, and it’s plainly stupid. It discourages entrepreneurship, which in turn drains the economy of vitality.

What one critical success factor do entrepreneurs need?
It’s difficult to select just one, but if you’re an entrepreneur who is going to succeed it’s very useful to have certain people who can help you in reality testing. Richard Branson of Virgin has an investment analysis committee. He puts all his new ideas to this group, and even though he may not listen to their advice, at least there is dialogue. This element of reality testing is critical, and you need to pick people who have healthy disrespect for their boss. This is very important for survival.

What about high-tech entrepreneurs. Is there anything about them that sets them apart?
The key traits of entrepreneurs are the same in whatever industry

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