Victoria Beckham has been named Entrepreneur of the Year by Management Today. She topped their list of 100 successful entrepreneurs thanks to her fashion company’s turnover, which has grown from £1m to £30m in the past five years, and its employment growth, which has grown from three members of staff to 100 in the same time.
Some might scoff at her selection, believing that she is only successful as a result of her fame as a Spice Girl and as David Beckham’s wife, or that she was only selected to attract headlines. While her selection likely resulted in more press than the award would have otherwise, both industry and research readily support the two indicators for which she won the award as worthy markers of business growth.
And, while Victoria Beckham has certainly benefited from her fame outside her business, this is not grounds for dismissal. In fact, we often tell budding entrepreneurs to capitalise on their resources – personal, financial and social. So why should we fault her for doing that? Creative performance and success is best judged by those in the field and her company’s work has garnered respect from other fashion designers and critics – not the easiest bunch to impress.
Performance indicators and accolades aside, her discussion of business practices in interviews indicates that she fits the entrepreneur role much more than some may think. So if you are a wannabe entrepreneur, there are some lessons we can take from her transition from pop star to business executive.
1. Use your personal and social capital
A review of different ways that new ventures can establish legitimacy and gain resources shows that the founder’s past experiences can provide legitimacy to the business and improve its ability to obtain resources. Status, connections (with people and organisations) and social capital can all contribute. Victoria Beckham made use of both support from friends in the industry and the fashion world’s perception of her as a fashion icon.
She might not have had designer status, but she used her social capital effectively, and built her status slowly through collaborations and licensing. She also raised her profile in her first year by meeting one-on-one with press, buyers and critics to personally explain her designs and vision, demonstrating that she was not just a figurehead, that she was directly involved in the designs.
For those not starting out with Beckham’s level of fame and capital, business accelerators, incubators and other communities of entrepreneurs not only offer opportunities to collaborate, network and learn from experts, but can also offer increased perceptions of legitimacy and a chance to build social capital, which may help improve your access to resources.
2. The importance of experience
While having a creative idea is important at the outset of establishing a business, it is the practical intelligence, or everyday “know how,” of the entrepreneur and their team that determines if that venture will grow. A recent study demonstrated this. It showed the importance of practical intelligence in entrepreneurship, developed through experience in the industry and in starting new ventures, for tackling the daily challenges that emerge as the company begins to grow. Practical intelligence is more than just technical expertise, it can include an understanding of the customer, the environment in which the business operates and how to solve common problems in that field.
The study also shows that experience is only important if entrepreneurs are also open to learning. Victoria Beckham built her industry experience as a fan of fashion and began dipping her toe into the industry with collaborations and licensing before ultimately starting her own label. She may not have had extensive experience in starting a business, but she has stated her desire to learn, particularly from criticism, and regularly meets with customers and retailers to develop her business.
The Hollywood walk of fame is littered with failed attempts to parlay fame into a fashion line. Perhaps she has succeeded where others have failed because she has taken the time to learn and build her experience in both the fashion industry and in running a business.
3. Have a vision you are passionate about
Beckham regularly speaks of her passion for her ideas and growing her brand. The importance of this was recently highlighted by a study showing the positive influence passion can have on employees’ commitment to the entrepreneur’s vision and organisation as a whole. While we don’t have a direct report from Victoria Beckham’s employees on whether this has made them more committed to her, it is telling that she has kept the same core team since the beginning and continues to grow her workforce.
There is a delicate balance, however, to be made between passion as a visionary leader and being a micromanaging bully. The research indicates that entrepreneurs tend to be highly driven, achievement oriented and have a high need for control, so there may be some growing pains when the business expands and they transition to trusting a growing workforce with their vision. Beckham has described her leadership style as paying respect to her team and their ideas, but emphasised the importance “that every aspect of what we do – the clothes, the swing tags, the shelves, everything – represents my point of view, because that’s what the brand stands for”.
4. Build and lead your team effectively
Beckham has described building a team of talented and passionate members, but also one where they feel like a family that can openly challenge one another. A recent review of the research on new business teams supports this. The authors suggest that it is critical to consider individuals’ prior experience, social capital and personality fit with the team, but the leader must also create a unifying mission and a psychologically safe, trusting environment where members feel valued, respected and free to share ideas.
Effective leaders, particularly those new to a field, must learn to trust their team, and capitalise on the expertise around them. While some have attributed Victoria Beckham’s success to the team she put in place around her, the evidence would suggest she is directly involved in the decision making and has taken steps to build a talented team, utilize their expertise, and lead decisively.
A classic article by management professor Ellen Fagenson, found that the key differences between entrepreneurs and managers was the high value that entrepreneurs place on freedom, a sense of accomplishment, leading an exciting life, hard work and ambition. Victoria Bekham has enough money that there is no need to work endless days in starting a new venture, but she has stated that she gets bored and likes to challenge herself to grow.
Victoria Beckham’s work ethic and ambition has been consistently demonstrated in interviews discussing her work and travel schedule, attachment to email, and obsessing over designs before bed. She is clearly achievement oriented, stating: “I’m a perfectionist … I’ve grown this brand from nothing to where it is now” and has said she “used to feel famous, now she feels successful”.
So, while it may be tempting to disbelieve the success of the former Spice Girl, all the signs indicate that she might just be a model entrepreneur after all. In her own words:
The product is speaking for itself, the clothes are selling, the retailers are happy, the brand is growing, the category is growing, and people can’t argue with that.