Entrepreneurship may be one of the most confusing and difficult skillsets to understand and measure. Quite often I am asked by a business owner how he can get his management team to become more entrepreneurial.
The reason for this is simple. Entrepreneurial-minded people (and the ideas they generate) are extremely valuable to an organization. Entrepreneurial people are generally self-motivated. They bring a level of energy and commitment to the success of an organization. They often are natural leaders and their personal sense of responsibility makes them a perfect fit to oversee important projects.
Research has shown that entrepreneurs score high in five specific competencies or personal skills. The research was conducted by analyzing the competencies of people who had started multiple businesses and experienced both success and failure. The idea was to identify sets of skills that were most predictive of an entrepreneurial mindset.
It should be noted that the skills measured are soft skills. While there is some natural inclination to be good at some of these skills based on personality or values, these skills are primarily developed over time. This means that the experiences that these people have had contribute greatly to the development of these skills.
The five skills identified as correlating to the entrepreneurial mindset were:
- Personal Accountability
- Goal Orientation
- Interpersonal Skills
The quality that entrepreneurs displayed above all the others was persuasion. This is the ability to convince others to change the way they think, believe or behave. Persuasion for this study was defined as the ability to persuade others to join the mission.
It is not hard to understand why persuasion is important to the entrepreneur. The entrepreneur must sell others – customers and employees, as well as investors and vendors – on the attractiveness of his or her ideas. Starting a business from scratch requires belief in self and the idea, so that you can convince others to either to join your organization or buy from it. Without persuasion, it is unlikely that the entrepreneur will get off to a successful start.
Not surprisingly, leadership is also one of the five areas where entrepreneurs excelled. In this study, good leaders were defined as having a compelling vision for the future and the ability to inspire others to share in their vision. Leadership ranked number two as a skill that entrepreneurs scored highly on.
For people with an entrepreneurial mindset, their strength of vision is usually tied to a product or service that provides solutions to challenges. Their leadership ability is critically important since they must lead others to believe in their ideas and commit to join them. Without leadership, the entrepreneur will be unlikely to attract and keep the type of employees, vendors, investors and customers who are willing to take a chance on the new business.
Entrepreneurial-minded people also display personal accountability. Personal accountability is defined as demonstrating initiative, self-confidence, resiliency and a willingness to take responsibility for personal actions.
People who are personally accountable expect obstacles and see them as a part of the process toward success. Rather than give up in the face of adversity, they are challenged by obstacles to put more energy into defeating them.
The flip side of this finding is that individuals who blame others for their failures display a significant lack of personal accountability. These people will most likely stall in any entrepreneurial effort. This also implies that their resiliency in a non-entrepreneurial environment will be lacking if the organization experiences difficult times.
Goal orientation is another critical skill for entrepreneurial-minded people. Goal orientation should be understood as energetically focusing efforts on meeting a goal, mission, or objective. Goal setting is closely paired with leadership which describes the ability to influence others toward the goal.
It is important that entrepreneurs have a strong sense of what their goals are. Their commitment to their goals is critical to their success. Not only must they have the big goal of success for their venture but their overall success is tied to the ability to achieve interim goals. Identifying and motivating others toward goals allows them to influence others and gain their support.
The final identifying skill is a mastery of interpersonal skills. This is the glue that ties the other four skills together. The skills covered here include effectively communicating, building rapport, and relating well to all people, from all backgrounds and communication styles.
One interesting note from the research is that entrepreneurs believed that their ability to get along with others was important to their success. It would appear that awareness of the importance of relating effectively to others is part of what made them have good interpersonal skills. Without interpersonal skills, an entrepreneur would be limited to relating only to those who share their exact communication style, thus restricting their ability to convey the vision and goals.
Being highly competent in these five skills – or at least in a majority of them – does not ensure that you will be successful as an entrepreneur. However, without being reasonably successful in most of them, the ability to succeed as an entrepreneur is less likely. The research indicates that entrepreneurially successful people are successful for a reason. Namely, they generally display high levels of development in these five soft skill areas.
It is worth noting that, while some people are naturally inclined to be good at some of these skills, all of these skills can be learned and developed. This is especially true early in life. And they can be further honed throughout an entrepreneur’s career.
Referencing the comment at the beginning of this article, a company can increase the entrepreneurship of its employees by encouraging employees to grow in these five skills. Organizations that place an emphasis on these skills will grow because they will attract and retain people who are entrepreneurially inclined.
Conversely, organizations that discourage or squelch these competencies will find out over time that employees with entrepreneur inclinations have left the organization. In some cases, they will go to competitors. And in some cases, they will start organizations who are future competitors.