When the bank accounts are empty and the prototypes aren't working, these characteristics push the entrepreneur onward
Not everyone shares the characteristics of an entrepreneur. But, many think they do.
In the U.S. applications for new businesses hit a record 5.4 million last year. (U.S. Census Bureau) and Australia saw a 15.2% increase in businesses of 1 to 4 employees in 2020-21.(ABS). So what are the entrepreneurial traits are needed to make them successful?
Many of the best characteristics of entrepreneurs, I'll call them the ‘X-factor characteristics’, work like a hidden string - pulling the entrepreneur towards their goal. If the bank account is empty, the prototype fails, or the naysayers are smirking, it will be these characteristics that keep the entrepreneur on course; working hard, iterating the product, booking the trade fairs, and visiting customers.
In this brief article I list the X-factor characteristics, and share some helpful coaching tips from our speakers and thought leaders.
What is Entrepreneurship?
Entrepreneurship is the act of “making money by starting or running a business, especially when this involves financial risks.” This Oxford dictionary definition wobbles a bit when applied to different types of entrepreneurship, such as social entrepreneurship (more about purpose than making money), and large company entrepreneurship (minimal financial risk), but for small business entrepreneurs, solo entrepreneurs and scalable start-up entrepreneurs uncertainty is a huge part of their entrepreneurship, and, as we see below, its fuel too.
Entrepreneurship is also a mindset. That mindset is all about embracing constraints, not making excuses, and getting on with the job. Therefore, leaders should be taught to encourage the entrepreneur mindset and develop entrepreneurial traits in themselves and their team members.
The Pandemic Effect on Entrepreneurship
The pandemic saw work change, and workers change. So many employees changed work completely and heeded the siren call of entrepreneurship.
· A 2021 Gartner survey found 65% of workers said the pandemic made them ‘rethink the place that work should have in my life’ and 62% longed for a ‘bigger change in my life’.
· 80% of business leaders expect their organisation to enter a hyper-innovation phase (2021 Citrix survey)
· Innovation accounted for almost half the growth of companies over the past year (2021 Citrix survey)
Entrepreneurial characteristics, set out below, are ideal for a world in chaos. In fact, entrepreneurs who have the most impact see change as simply a path to more opportunities.
“While others are freezing, Impact Players are getting their arms around the chaos.” – Liz Wiseman, ‘Impact Players’ (Book Liz Wiseman’s October live virtual event now)
X-Factor Characteristics of Successful Entrepreneurs
· Exceptional creativity
· Intrinsic motivation
· Decision maker
· Informed Risk Taker
· Guts, Grit, and Resilience
· Quiet confidence
“You can’t look in a new direction by looking harder in the same direction.” – Edward de Bono
Creative people are adaptable people. Thinking creatively is a characteristic that arms entrepreneurs with unusual, original, and innovative solutions to problems. In teams, the entrepreneurial thinker is to be encouraged, even if it means odd behaviour.
“Some of the most creative people simply don’t fit into well-behaved molds,” says Jim Collins. “They’re often rebels, irritating and somewhat out of control.”
Jim says in ‘B.E.2.0 (Beyond Entrepreneurship 2.0’ all people have the capacity to be creative and can be helped with educational training in the creative process.
Tips to improve creativity - Jim Collins recommends:
· Training sessions and seminars on personal creativity and the creative process.
· Educational materials on the creative process, such as ‘The Art of the Problem’ by Russell Ackoff.
· Writing an innovation manifesto, i.e. We shall never say ‘That is a stupid idea’, We shall experiment first, evaluate later, We shall listen to anyone who has an idea.
Dr Amantha Imber, author of ‘The Innovation Formula’ recommends:
· Word your challenge so it is exciting. Instead of ‘How can we improve market share…?’ ask ‘How can we create the next schoolyard craze……?’
· Give employees control over how they use their time and resources to do their job. Research shows they’ll innovate more frequently.
Note: Leaders must learn the soft skills of empathy, listening, and psychological safety to ensure creative ideas are not shut down. Ensure leaders at all levels get professional development for these skills. Our Leadership Pass gives you a year of leadership development with live virtual access to the world's brilliant minds. Click on the tile below to learn more.
Successful entrepreneurs are self-starters. They have an incredible inner drive that punches through failures, obstacles, and challenges to realise a vision. This is intrinsic motivation as opposed to the reward-based extrinsic motivation.
In teams, intrinsically-motivated entrepreneurs turn up as ‘impact players’ who, Liz Wiseman says, tend to be ‘completion freaks’.
“They stick with things and get the entire job done, even when the job becomes hard and plagued with unforeseen obstacles.” – Liz Wiseman, ‘Impact Players’
Josh Linkner likens them to computer hackers, who have the mindset that every barrier can be penetrated.
“The fact that something has never been done or that the challenge seems daunting entices the hacker rather than deters her.” – Josh Linkner in ‘Hacking Innovation’
To improve intrinsic motivation, Josh recommends:
· Do large quantities of little experiments.
· Like a hacker, test many variables, identify a solution, and leverage rapid experimentation to the extreme. Multiple tests, multiple ideas, from multiple sources.
· Understand that humans are innately born to problem-solve. “Sometimes you don’t have the right tool, so you have to invent a new way forward.”
Entrepreneurs also need to motivate people to buy into their idea. Communication skills training is an essential part of entrepreneurship.
Like an explorer, passion propels the entrepreneur forward. A Deloitte study described the ‘passion of the explorer’ as:
· A ‘questing’ disposition that constantly probes and tests boundaries.
· A ‘connecting’ attribute that seeks knowledge and help from others.
· A ‘commitment to domain” that fuels a desire to make a significant impact in a particular area.
Entrepreneurs and explorers use these passion attributes to find ways around obstacles and challenges.
“Passion is an important but often-missing element in how companies think about developing the workforce for the future,” write the authors of the Deloitte study. “The learning that companies will find most important will require employees to get out of their comfort zone, to try new things and let go of old ones, and to be present and attentive with others.”
Tips to improve passion:
· Ensure your vision, mission, and goals have meaning and purpose at their core.
· Learn to think more like a curious scientist, as Adam Grant explains here.
· Make the workplace comfortable but intense says Liz Wiseman. Entrepreneurial types, such as the impact players she describes, like to be stretched in their work.
“Leaders who build great companies seldom suffer from indecision.” – Jim Collins
Entrepreneurs make decisions constantly. They will rarely have perfect information when deciding, but, as Jim Collins says in ‘B.E.2.0’ (Beyond Entrepreneurship 2.0), there is never perfect information. We know reading widely, prioritising lifelong learning, and investing in leadership development will improve the odds of an entrepreneur making good decisions more often, but at the end of the day, mistakes will sometimes be made.
To get better at decision making, Jim Collins suggests:
· Just remember the objective is to make a decision not to pulverise it with analysis.
· Effective decision makers use a combination of hard-headed analysis and intuition.
· If you’ve got a pressing problem, make a decision, and get on with it.
· Learn to live with the fact that you will make mistakes and you will learn from them.
· The best decisions are made with some degree of participation from others.
Informed Risk Taker
Entrepreneurship is characterised by risk-taking. Latest data analysis shows one-fifth of businesses (20.4%) started in 2016 closed after one year of operation. Within five years of opening, only half of the businesses opened in 2016 were still going. (U.S. Bureau of Statistics).
Entrepreneurship always involves some leaps into the unknown to drive change and add new value.
While most startups fail because there was no market need for their services or products, or they ran out of cash, CBInsights analysis cited by Fundera found 23% failed because they didn’t have the right team running the business.
Silicon Valley Product Group’s Marty Cagan, author of ‘Inspired’, says to minimise risk:
· Tackle risks up front, before you decide to build anything.
· Look at value risk (whether customers will buy it)
· Look at usability risk (whether customers can figure out how to use it)
· Look at feasibility risk (whether you can build it with the rime, skills and technology you have)
· Look at business viability risk.
· Remember, it’s about solving problems, not implementing features.
This all points to the importance of ongoing leadership and professional development for entrepreneurs.
Entrepreneurs must be masterful at adapting. Most everything will change as they progress, so this characteristic of entrepreneurship keeps them moving forwards.
A key reason for needing to be adaptable is that you may find out that the user or customer doesn’t have the problems you think they have, or they don’t want your solution. Successful entrepreneurs test product ideas early and often with potential customers before iterating and adapting.
When faced with change or a crisis, adaptability is a high-value characteristic that makes entrepreneurs very valuable on any team.
Tips to be more adaptable from Marty Cagan:
· When iterating the prototype, remember it’s not about proving anything. It’s about rapid learning.
· Ideas that stay on the shelf are not failures. View them as saving wasted costs of building and shipping products customers don’t value and won’t buy.
· Collect data so you know if and how your products are being used.
Guts, Grit, and Resilience
“Resilience is not trying a failed strategy repeatedly, but rather trying a new approach with optimism.” – K. Flanagan and D.Gregory, ‘Forever Skills’
Guts are giving it a go. Grit is about perseverance and hard work. Resilience is the ability to bounce back after a challenge.
Entrepreneurs bring all three characteristics to the table every time they dust themselves off after a fall and try a new approach with enthusiasm. As Albert Einstein once said, “A ship is always safe at the shore – but that’s not what it was built for.”
‘Grit to Great’ authors Linda Kaplan Thaler and Robin Koval say grit is:
· A willingness to take risks
· Working relentlessly toward a goal
· Taking challenges in stride
· And, having the passion and perseverance to accomplish difficult things, even if you are wallowing in the most difficult circumstances.
Tips to increase grit, from ‘Grit to Great’:
· Stop the excuses. Next time things go wrong, ask ‘What could I have done differently?’
· Go the extra 30 minutes. Apply yourself for half an hour more at something. If done every day it adds up to 180 hours per year.
· Recharge your spirit. When you’ve had a disastrous day give yourself a break.
An entrepreneur has a strong self-belief. There are plenty of others who’ll do the disbelieving, so it’s up to the entrepreneur to be quietly confident. They know that they are capable of successfully achieving their goals, they just have to get beyond the obstacles blocking their way. Incredibly, they will outwardly maintain an optimistic mindset that these goals can be achieved. This self-belief is not braggy or egotistical, it’s a deep-seated belief that they have something new and worthwhile that offers value for a customer, and they’ll work hard to bring
it to fruition.
To improve confidence:
· Remember Sir Richard Branson’s advice: “Screw it, just get on and do it.”
advice: “You’re bound to feel uncertain, unprepared, and unqualified. But
let me assure you of this: what you have right now is enough.”
· Focus on the opportunity rather than the challenge.
· Build your confidence muscles by trying more things you’re afraid of in your everyday life.
Empathy may seem unnecessary as a characteristic in an entrepreneur. But you may be confusing entrepreneur with the ‘mad inventor’ who is 100% IQ, and zero EQ. Empathy is present in all effective entrepreneurs, as it is connected to decision-making, problem-solving, and building a great team. Being able to emotionally read
other people, which means picking up on emotional cues, helps you understand your customer, get the most out of your employees, and iterate your products and services. As you grow, it helps to create a welcoming, nurturing workplace environment.
Tips to reflect on your self-awareness and improve empathy from Jeffery Hull, author of ‘Flex’:
· Keep a journal of your moods. Use a thesaurus to choose nuanced words: glum, gleeful, furious, exasperated.
· Practice asking others how they are feeling, not just how they are doing.
· Expand your conversations with questions such as ‘What’s your gut reaction to this?’ ‘What is your emotional response to this situation.’
Learn How to Make the Most Out of Your Business
“You can forgo the certainty of making your life a pretty little painting…and instead start with a blank canvas where you might just paint a masterpiece.” – Jim Collins, ‘Beyond Entrepreneurship B.E. 2.0”
Jim Collins himself took the entrepreneurial leap many years ago, and has made a lifetime career researching researching aspects of personal and professional leadership development. Jim Collins is one of the many global thought leaders we've featured in our live virtual events. With our Leadership Pass you’ll have unlimited access to 40 events and masterclasses, each designed to develop these and other leadership and entrepreneurial characteristics.
Various speakers and thought leaders from Growth Faculty’s own events and interviews.
J. Wiles, 2022, ‘Employees Seek Personal Value and Purpose at Work. Be Prepared to Deliver’, Gartner website.
G. McIntyre, 2020, ‘What Percentage of Small Businesses Fail? (And Other Need-to-Know Stats)’, Fundera website.
Eva de Mol, Melissa Cardon, and Svetlana N. Khapova, 2020, ‘When Entrepreneurial Passion Backfires’, HBR
Oliver Segovia, 2012, ‘To Find Happiness, Forget About Passion’, HBR
John Hagel III, Maggie Wooll, John Seely Brown (JSB), Alok Ranjan, “Passion of the explorer”, Deloitte Insights