Entrepreneurial leadership

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  Although Belgium still ranks among the European front runners according to the European Innovation Scoreboard 2024, it is no longer classified as an “innovation leader” but as a “strong innovator.” This is undoubtedly due to the increasingly complex context in which companies must operate. It is therefore appropriate, as stated in the Draghi Commission report, that Europe must introduce structural policy measures to simplify the playing field. But there is another important factor that can strengthen innovation: making managers more entrepreneurial.

Managers are generally well trained to maintain the fundamentals of a company, with solid routines, quality assurance, and core competencies deeply embedded in the organizational culture. The same European Innovation Scoreboard 2024 shows that Belgian SMEs indeed perform strongly in process innovation, but score weaker on product innovation and the adoption of digital technologies. Such innovation does not require more control, but rather more imagination and experimentation from the management team.

A recently published meta-analysis of 57 studies examining the influence of management team characteristics and composition on entrepreneurship within organizations shows that teams in which managers possess entrepreneurial skills and a transformational leadership style strongly contribute to intrapreneurship. Managers who have built entrepreneurial expertise through entrepreneurial projects, are willing to take risks, and can think creatively, prove to be decisive for established organizations aiming to become more innovative and agile. Transformational leadership reinforces this effect by encouraging employees to take initiative, see mistakes as learning opportunities, and collaborate toward an innovative culture.

In these uncertain times, a manager should therefore develop into an entrepreneurial leader. This is not a new leadership style, but rather a strategic capability. Such a leader not only deepens their own entrepreneurial actions, but also improves and accelerates decision-making, strengthens entrepreneurial behavior within teams, promotes open dialogue across departments and projects, creates room for loyal dissent, and makes decisions aligned with a clear collective ambition.

Yet entrepreneurial leadership within companies is far from self-evident. As Andy Grove, co-founder of chip manufacturer Intel, once said: “Success can trap you. The more successful we are as a microprocessor company, the more difficult it will be to become something else.” Too often, managers participate in inspiring seminars and workshops where they advocate entrepreneurial behavior and innovation, but once back in everyday reality revert to a “stick to your core tasks” mindset, leading to little entrepreneurial behavior or innovation in practice.

This brings us to leadership development, now a thriving business and an important component of HR policy, in which many programs already emphasize transformational leadership. This is appropriate and valuable, but those who truly want to stimulate entrepreneurial leadership must take a step further. Leadership development should also focus on stimulating entrepreneurial learning, enabling managers to sharpen their entrepreneurial skills, learn to recognize opportunities, and experiment with new approaches. This can draw on the knowledge and experience built in recent years by Centers for Entrepreneurship and entrepreneurship education within higher education institutions, especially when this expertise is deployed in a network of diverse stakeholders. The Wintercircus in Ghent is a good example of such a network, as a “technology hub with a thriving innovation ecosystem.”

Other recent research in the strategic management domain confirms and deepens these assertions. It shows that the development of dynamic managerial capabilities is crucial to enabling managers to adopt an explorative role, which translates into entrepreneurial behavior. These capabilities develop gradually through a learning process in which new knowledge is aligned, translated, and anchored in the organization. Participation in networks that combine peer learning, co-creation, and open innovation, in collaboration with higher education institutions, significantly accelerates this process. The interventions described in this research as strengthening dynamic managerial capabilities are essentially the same learning processes that stimulate entrepreneurial learning. They therefore form a concrete mechanism for sustainably developing entrepreneurial behavior and entrepreneurial leadership within organizations.

The message is as simple as it is urgent: immerse managers in entrepreneurial learning. As the complexity and unpredictability of the environment increase and innovation comes under pressure, managers themselves must take up the challenge and develop themselves and their teams into entrepreneurial leaders. It is an illusion to think that managers will naturally adopt a more entrepreneurial role; belief in one’s own style and approach is often too strong for that. The development into an entrepreneurial leader should therefore not be left to chance, but must be purposefully cultivated through programs that stimulate experimentation, reflection, and practical experience.

In these uncertain times, management as usual is no longer sufficient. Companies need leaders more than ever who can think and act entrepreneurially.

Bart Derre:  Holder of the Xerius-HOGENT Chair in Entrepreneurial Learning, Faculty of Psychology and Educational Sciences, Vrije Universiteit Brussel.

Mathieu Weggeman: Professor of Organizational Science & Innovation Management, Eindhoven University of Technology.