Part one: Who are non-entrepreneurs?

By Marilyn Barnewall

Editor's note: Business Reform Magazine provides real biblical answers for real business issues. To visit us, click here.

Who are entrepreneurs? What is different between the presidents of America’s Fortune 500 companies and the owners of our small businesses?

To understand the differences between entrepreneurs and non-entrepreneurs, it is critical to understand the differences between power and control.

Control is exercised behind one’s own nose. Power is exercised behind the noses of others.

TRENDING: WATCH: Students support voting bill, then blow a gasket when they learn it's actually Georgia's law

The driving force of entrepreneurs is control of self-destiny. Being control-motivated does not equate to being a control freak, by the way. Entrepreneurs need to control risk because only fools take risks on playing fields they do not control. That is especially true when risks being taken involve the financial survival of home, hearth, and family.

The driving force of non-entrepreneurs is power. Without power, people who play ball on other people’s turf (those who work for others) have difficulty protecting themselves. Without power, you can lose that for which you work so hard.

Thus, entrepreneurs are control-driven; non-entrepreneurs are power-driven. This was proven, by a long-term research project conducted by The MacGruder Agency, Inc., from 1979 through 1993. Results of over 5,000 interviews of America’s successful self-employed versus high-level managers who worked for others were analyzed.

There is always confusion between “controlled” and “controlling.” “Controlling” equates to “manipulation.” Manipulation is an exercise in power. Thus, to be “controlling” is quite different from being “controlled.” Remember the definition… control is exercised behind one’s own nose. Power (the manipulation or management of others) is exercised behind the noses of others. Every day of a CEO’s life, his decisions direct (manipulate) the actions of others… all to the good. Manipulation is not necessarily a bad word.

Lee Iacocca is a good example of a non-entrepreneur. He is a very creative guy, with entrepreneurial ideas, but his affiliation with Chrysler Corporation offered a great deal of security. He proves that “security-driven” is not synonymous with “wimp.” Could he have succeeded on his own? We will never know. Running his own company and putting his own financial assets at risk when they were only minimal and a personal loss could have destroyed his ability to send his kids to college is something he never did.

Defining “risk” is key to understanding the differences between these two groups. If, for example, a person has achieved wealth decides to place a small percentage of personal assets at risk to start a new company, it says nothing about risk tolerance. Risk tolerance can be defined only by the resultant change of lifestyle financial loss causes to the existing lifestyles. Retired corporate executives who put $100,000 out of a $10 million dollar net worth into a new startup company are not risking much, are they?

Iacocca is bright. He is competitive and assertive. Having a high security need has nothing to do with these things. It has to do only with how much personal risk people are willing to take with personal assets (at a time those assets are minimal) to achieve personal success and wealth.

When Iacocca borrowed money to finance Chrysler Corporation, did he sign his personal residence over to the bank as collateral? No. Instead, he risked the assets of others -- in this case, Chrysler Corporation assets and those of its stockholders. When Chrysler Corporation needed help from the government, loans to the company risked taxpayer dollars. He took great risks with his personal and professional business reputation, but not with his personal wealth.

Entrepreneurs frequently put up their homes as loan collateral on business purpose loans. Because of their high tolerance for risk -- and because access to bank credit enables them to control their destinies -- they do so.

RELATED: Making decisions that facilitate success

To entrepreneurs, small is beautiful; to non-entrepreneurs, big is best.

The bigger the company you work for, the bigger is your benefit package of sick leave, health insurance, retirement benefits, vacation, etc. -- all highly attractive to security-driven people.

Workers who strike for more benefits are driven by security needs involving job benefits. They willingly sacrifice incomes to gain and expand security. Many would not be happy as self-employed people. The risks are simply too great. No one takes care of your health insurance, family leave, sick leave, retirement, or paid vacations. You do… or, you do not. That, of course, is the risk.

If you are a non-entrepreneur who wants to succeed with the least amount of financial risk, you likely have done whatever is necessary to gain a college education. It is hard to become president of IBM without a business degree… preferably an M.B.A.

Power motivated people are attracted to positions as journalists (media/entertainment), politicians, corporate executives, educators (including researchers and authors) at the college level, non-surgeons (surgeons take more risks), and Certified Public Accountants and lawyers who work for major law firms.

Middle-class, non-college educated non-entrepreneurs work as government bureaucrats (the higher you go on this ladder, the more likely the requirement for a college degree), health care workers (dental technicians, etc.), firemen, and policemen. Add to that list retail salespeople, wait staffs at restaurants, and administrative support staffs at major corporations, labor unions, and those employed in the airline/travel and transportation industries.

Public school teachers and nurses fall into unique categories. They are college educated, but frequently are more motivated to contribute to their communities than they are motivated to gain wealth. On the other hand, both of these professional groups have a strong security-drive. Few jobs are as secure as teaching.

When they strive for and achieve wealth, non-entrepreneurs do so passively. As a result of this long-term study, I dubbed them “passive/market investors.” Once personal wealth is achieved in the corporate world, passive/market investors manage, rather than create, wealth.

Rather than invest their savings and other assets in themselves, non-entrepreneurs tend to invest in passive assets controlled by others. For example, retirement funds, mutual funds, and the stock market. Investment vehicles controlled by others are “passive investments.” Active assets are controlled by the investor.

Some other personality traits of non-entrepreneurs include their sense of team (which is why they work well with others in large companies), being politically correct, and caring what other people think of them. The study found that they are externalists.

Non-entrepreneurs are usually excellent communicators. They tend to see reasons outside of themselves as causes of social and personal problems. If there is a problem with crime, it must be caused by social attitudes toward criminals or because criminals had painful childhoods.

Non-entrepreneurs delegate authority better than do entrepreneurs. The latter have a tendency to want to control things they should delegate.

Non-entrepreneurs are people-oriented. They like to utilize the power they gain to empower others (externalizing their own power) and are strong advocates of social rights.

Next week: Who (and what) are entrepreneurs?
 

Marilyn Barnewall, in 1978, was the first female to be named vice president in charge of a major loan and deposit portfolio at Denver’s largest bank. She started the nation’s first private bank, resigned to start her own firm and consulted for banks of all sizes in America and other countries. In June 1992, Forbes dubbed Barnewall “the dean of American private banking.” Author of several banking texts, she has written extensively for the American Banker, Bank Marketing Magazine, and was U.S. consulting editor for Private Banker International (Lafferty Publications, London/Dublin). Article originally appeared in the Grand Junction Free Press. Marilyn can be reached at [email protected].