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Managers Vs. Entrepreneurs

Kanwal Rekhi
Monday, July 1, 2013
Kanwal Rekhi
Founded in 1993, Inventus Capital Partners is a U.S.-India venture firm managed by successful entrepreneurs and industry operating veterans who have financed over 100 entrepreneurs.

What is the difference between a manager and an entrepreneur? Is one better for society than the other? These are questions that frequently arise during our mentoring sessions with young college graduates who are at the beginning of their professional careers.


Management, as a scientific discipline, and managers as practitioners of it, are concerned with the control and maximization of a firm’s resources. These resources may include capital assets, human resource assets, customer assets, and processes. Managers thrive in and prefer relatively predictable and stable environments which enable them to steadily and incrementally improve utilization, nurture talent, cut costs, eliminate waste, and shorten development cycle times to extract more profits from same assets. That said, the ability for a manager to effect change in an organization is constrained by the inertia of his assets. A five percent annual improvement in productivity at a large industrial firm, such as GE, is considered to be an extremely successful result.
Entrepreneurs, on the other hand, are innovators and disrupters who are naturally antagonistic to the stable environment and incremental approach espoused by managers; they have little interest in maintaining the status quo since they cannot effectively compete against established players with well-oiled processes. The individual entrepreneur has no assets to start with and moves quickly to adopt new approaches and aggressively tackle opportunities in new markets and can thus afford to be disruptive as they have no well-established assets to lose. In the end, their advantage stems from the speed with which they can move in rapidly changing environments.
In many cases, the relationship between entrepreneurs and managers is an adversarial one, fraught with misunderstandings and caricatured impressions of each other. Managers look upon entrepreneurs as whimsical and even capricious in their approach to business, whereas entrepreneurs view managers as stodgy, hidebound, and potentially as impediments to change.



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