An entrepreneur is a person who has an idea for a new product or improved service. He develops a vision for how a company can fulfill the new idea, and takes this vision into the banking or venture capital community to obtain funding so he can build his company. Along the way, most entrepreneurs hire or partner with someone who has good management skills. Entrepreneurs are visionaries and catalysts, while managers put into action the ideas generated by the entrepreneurs, and manage the operations of the company.
In a 2006 study published in the Journal of Applied Psychology, researchers from the University of Illinois and the Melbourne Business School analyzed personality differences between entrepreneurs and managers. They used five personality factors that included extroversion, emotional well-being, agreeableness, openness to experience and conscientiousness. Results showed entrepreneurs to be more creative, innovative and likely to embrace new ideas. This was attributed to entrepreneur personalities having higher achievement ambitions than manager personalities. Results also showed entrepreneurs to be more self-confident, conscientious, resilient and stress-tolerant than manager personalities. Entrepreneurs were also likely to be tougher and more demanding in driving hard bargains than managers.
Entrepreneurs, as creators of their companies, embody many of the traits of parents. They believe in the value of their ideas like parents believe in the value of their children. Entrepreneurs are also likely to fight to protect their companies and are willing to spend long hours, enduring repeated investor rejection, to get their companies funded. Entrepreneurs are the exterior personality of their companies, and their personality governs the culture of the companies they create.
Managers are the inner workings of a company. They make sure the organizational trains are all running on time, delivering products and services at the lowest cost to the company and at the highest profit margins. Managers must deal with details and personalities to achieve organizational efficiency. They support the vision of the entrepreneur. While the entrepreneur fights to protect his offspring company, the manager makes sure the offspring has good manners and does its chores.
To be effective, managers must be leaders and work well with others. They should also be self-motivated, dependable, optimistic, confident and calm under pressure. Other qualities that make for good managers include industry knowledge, the ability to delegate and organize, the ability to communicate well, an appreciation for the politics involved in working within a corporate hierarchy, and a strong sense of how to manage time and money.
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