25 Most Influential - Interview with Raphael Amit, Entrepreneurship Professor, Wharton
Monday, November 03, 2003SUSIE GHARIB, NBR ANCHOR: Thanks a lot, Paul. NIGHTLY BUSINESS REPORT will soon mark its 25th year on public television, and to celebrate that distinction, we have joined with the Wharton School of the University of Pennsylvania to select the most influential business persons of the past 25 years. Our viewers submitted over 700 nominations. Now a panel of Wharton judges will make the final selection, which we will announce early next year.
Earlier today I talked about leadership with Raffi Amit, professor of entrepreneurship at Wharton, and asked him about the qualities of leaders who created new and profitable ideas.
RAPHAEL AMIT, ENTREPRENEURSHIP PROFESSOR, WHARTON: These are entrepreneur leaders, leaders that are learning, leaders that are flexing, leaders that are rapidly changing to new situations as they emerge. These are leaders that continuously search for opportunities, leaders that create opportunities for their companies, and are able to execute on these opportunities that they have identified.
GHARIB: Raffi, how would you distinguish between entrepreneurs who are in an established corporation and entrepreneurs who are starting a business from scratch?
AMIT: Well, in an established corporation there are many barriers to entrepreneurship, that fundamentally disincentives to risk. Bureaucracy is imposed too early. There may be a bias against mavericks. This project may be too large, too small. The project may consume too much money for too long. In an independent business, we wait for three, four, five years before we see cash-flow positive situation in large businesses. In a corporate setting, there may simply not be that kind of window to wait for the profits to come, and hence bureaucratic and accounting controls are imposed too early and often this is the kiss of death to those businesses.
GHARIB: Can you... do any examples come to mind who fits that description?
AMIT: Well, there are a number of examples of entrepreneurs, leaders in a corporate setting. So take for example Herb Kelleher, Herb Kelleher created a fantastic company, created a new segment in the airline industry. He identified the opportunities, and he executed flawlessly. Many other airlines have tried to copy him. Another example might be Richard Branson with Virgin. Again, a visionary leader who excelled in execution.
GHARIB: Those are good examples. You know, most business people try very hard to come up with ideas that will be profitable, they spend money on research, they talk to their customers, but they don't necessarily succeed. What distinguishes those who succeed and those who don't?
AMIT: In my view, the key to success is execution. There are a lot of ideas, a lot of very clever people with fantastic vision. What distinguishes those that succeed from those who don't is the ability to execute in a corporate setting. A number of such examples that one could recite, in great ideas but the execution has not quite measured up.
GHARIB: Are entrepreneurial leaders a special breed with unique talent, or is this a talent that anyone can learn?
AMIT: We've conducted a substantial amount of research on the very question you asked me. And the punch line is that these are - there are no special characteristics that distinguish these leaders from others. One cannot distinguish them on any particular trait or skill that these sellers have relative to others. And the message to each and every manager is, and entrepreneur, that you have what it takes to be very successful, just keep your eye on the ball.
GHARIB: Well, you've given probably a lot of managers who are watching this program some hope. Thank you very much.
AMIT: Thank you.
