The literature provides two distinct types of qualities in successful small business leaders; trait based characteristics that are inherent in an individual and leadership skills that can be acquired over time. According to Zaccaro, “leader traits can be defined as relatively coherent and integrated patterns of personal characteristics, reflecting in a range of individual differences, that foster consistent leadership effectiveness across a variety of group and organizational situations” (2007). Zaccaro provides several examples of “dispositional qualities” to include, “cognitive complexity and creativity,… adaptability, extroversion, risk propensity, … the need for socialized power, … and problem-solving skills [to] include metacognition, problem construction, and solution generation” (Zaccaro, 2007).
Another common trait among successful small business leaders is the willingness to take risk. While undertaking risk is inherent of businesses at all levels, successful small businesses formulate specific risk mitigation strategies to reduce the negative effects it may cause. “The level of risk present and the risk-handling behavior of the strategic decision maker in formulating intended strategy often may be critical to strategic success” (Baird & Thomas, 1985). While the willingness to take risk may be a trait based characteristic, understanding the specific risk mitigation strategy to apply to each situation can be considered an acquired skill enabling success.
The literature shows that there are several dispositional traits that allow for leader emergence. The available literature also states that successful small business leaders have a number of learned or acquired skills, either through formal education, real world experience, or a combination of the two. This concept is most clearly seen in the ranks of military officers, where inherent traits that have a high correlation to leadership propensity can be seen throughout the population of the organization, but where particular individuals emerge as leaders based on skill acquisition.
Possibly the most important component that differentiates successful small business ventures from those that fail is the leaders’ willingness to sacrifice themselves for the good of the organization. When a business is small, its membership is required to perform several tasks that may be outside of their area of interest, beyond their current education, and without support. If a small business leader is unwilling to make a personal sacrifice in order to see the organization succeed, the venture is doomed to fail regardless of the traits, talents, or education level of the individual.
The material covered in this literature review span several decades in an attempt to define the enduring qualities of successful small business leaders. The key performance areas of successful small business leaders would include: intelligence, assertiveness, risk acceptance, domain knowledge, seeking professional development, emotional intelligence, dedication, and self-sacrifice. While this list is not exhaustive in nature, it can be considered a foundation for future research.
Baird, I. S., & Thomas, H. (1985). Toward a contingency model of strategic risk taking. Academy of Management Review, 10(2), 230-243.
Zaccaro, S. J. (2007). Trait-based perspectives of leadership. American Psychologist, 62(1), 6.
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