The Latin phrase “ex nihilo” means “out of nothing,” and it is most often associated with the concept of creation. This phrase perfectly defines the journey of the entrepreneurial leader.

Entrepreneurial leaders are a relentless, seek-and-solve breed of innovators. They are the ones forever craning their necks, trying to “look around the corner” for the next evolution of the business. They relentlessly pursue “a better way.” These entrepreneurial leaders are the real money multipliers: turning $1 of capital into $2, then $2 into $10, and $10 into $100.

Over the past 20 years, I’ve developed my own entrepreneurial ventures, taught entrepreneurial concepts, and mentored individuals in venture growth. Those experiences have helped shape one of the hallmark courses in Vanderbilt’s Executive MBA program—Creating and Launching the Venture—offered in both the Executive Edge and Global Immersion Tracks. The course is centered on the three distinct phases of business growth

Phase 1: Question. Design. Do. Discover. Disrupt.

Phase 2: Build. Delegate. Iterate. Adjust. Learn.

Phase 3: Adapt. Grow. Scale. Think.

Phase 1: Question. Design. Do. Discover. Disrupt.

Those who choose this less-traveled path create new businesses, new products and new markets largely out of nothing. They frame problems and seek innovative solutions. They test concepts with early-adopter customers. The first business model, the first customer of a new product, the first employee in a new market – none of it is easy.

This phase is all about bringing something new to the market. Leaders imagine how the solution solves a real problem – and they work hard to communicate that message of relevance to prospective customers. Leaders must have thoughtful curiosity and vision to thrive in this first phase.

It’s not long until most leaders find themselves spending their day working “in” the business – holding all the pieces of the business together. However, once a business reaches a certain size, trying to be at the center of every decision and approving every move becomes the leader’s downfall.

This phase involves a personal change and the humility to recognize the need for others. Leaders must spend their time hiring the right people, developing the team, and ensuring each team member fully understands the company strategy.

Phase 3: Adapt. Grow. Become. Scale. Think.

There are only so many hours in the day, and even entrepreneurial leaders only have a certain amount of capacity. As the business grows, focusing time for maximum impact becomes paramount.

Regardless of the industry, transforming the business while growing – its people, processes, business model and enabling technologies – is the most difficult work of all.

This phase of business requires incredible foresight and strategic planning. Leaders mentally live 6-9 months ahead of where the business is – planning for upcoming quarters, predicting resource needs, and looking for opportunity. The day-to-day will be managed by the team.

Leaders must grow faster than the company grows

Through each phase of growth, the leader’s skill and professional development must outpace the growth of the organization. The success gained through vision and creativity in Phase 1 will not necessarily translate to the most important skills needed in Phase 2 – team development and working through others. And the leadership traits that define success in Phase 2 become limiting without the communication and strategic skills required for scale and margin creation in Phase 3.

As part of this entrepreneurial journey, there is another “ex nihilo” that occurs for the leader. The learning that occurs – through visioning and design; introspection and investment in the team; and thoughtful communication and strategic thinking – transforms the entrepreneurial leader. And seemingly “out of nothing,” one learns to turn dreams into reality.

We’re building a new type of business leader. Want to learn more about the Executive MBA program? Visit our program page, or request information.

Michael Burcham, Ph.D., has more than 20 years of extensive experience in healthcare innovation, entrepreneurship, and startup venture coaching. He teaches Creating and Launching the Venture in the Vanderbilt Executive MBA Program at Vanderbilt’s Owen Graduate School of Management.