In search of the blueprints for enterprising mindsets
Entrepreneurs may exhibit common characteristics and cognitive styles. But are they unique? And can they be learned? This study provides employers and investors with fresh perspectives.
Company bosses, senior managers and HR professionals routinely seek (and pay premiums for) academic and professional qualifications, technical skill sets and industry-specific knowledge. Job applications, CVs, performance appraisals and references might enable them to make decent judgments about the extent to which
individuals (current employees and potential hires) meet their objective criteria.
But in the absence of formal metrics which reliably measure people’s entrepreneurship, those who seek to hire, develop or invest in entrepreneurial types must be alert to certain defining personal qualities. Some of those will be dead giveaways; others might be so subtle that their detection depends on a high degree of vigilance and scrutiny.
Challenging Common Myths
Entrepreneurs do indeed share certain traits and cognitive styles. But it’s frequently the way that different permutations of those traits combine – not how they each act in isolation – that generates or bolsters entrepreneurial spirit. The ‘creative cognitive style’ common amongst many entrepreneurs appear to be equally present in the non-entrepreneurial workforce. Yet conversely, cognitive styles - based on order, structure or logic - that typically manifest themselves in non-entrepreneurial types are far scarcer in entrepreneurs.
So while it might be straightforward enough to identify people with creative cognitive styles, it doesn’t follow that those people are natural entrepreneurs, or that the organisations they work for are more entrepreneurial than their competitors.
Those are the conclusions of a research team at Vlerick Business School in Flanders. The researchers studied and compared entrepreneurs and non-entrepreneurs in an attempt to identify which (if any) characteristics and cognitive styles might distinguish Flemish movers and shakers from their less enterprising peers. They also wanted to explore how any common characteristics or styles that emerged might also be linked to entrepreneurial orientation in business leaders (and the organisations they lead).
A Precious Commodity that’s Always in Vogue
Entrepreneurial spirit is typically one of the most highly sought-after qualities to businesses large and small. It rarely matters whether the economy is nose-diving or surging, and whether markets are stable or volatile; enterprising individuals will almost always find a ready market for their talents.
It takes a special combination of skill, qualities and outlook to perform in the ways that the business world expects of its top entrepreneurs. For instance, it’s not just about identifying business opportunities – it’s about being first to spot them and fastest to exploit them. The successful pursuit of greater competitiveness, increased market share or new revenue streams is what draws companies to entrepreneurs, even if colleagues in service or support functions are being let go and headcount freezes are in place elsewhere in the business.
ALL IN THE MIND: Ruthless opportunists or benevolent wealth-creators?
- Why be martyrs? Can’t you be content with an easy life?
- Supreme confidence is thinly disguised, arrogant entitlement
- Why must they always shake things up?
- Control freaks
- Watch out – they’ll look after themselves and make money at the unfair expense of others
- Adversity is a challenge – it just makes us more motivated
- Self-esteem propels us forward and makes us successful
- Changes bring opportunity, so bring on the changes
- Try and stop us
- The more we achieve, the greater the reward for those we work with (or who work for us)
Flushing out Go-Getters and Rainmakers
Entrepreneurs typically exhibit traits and characteristics which may also be present in conventional business managers and their subordinates, if to a lesser degree. But it’s by no means a given; how each operates as a result of his or her individual traits can vary in both their nature and influence on behaviour, while combinations of some traits may occasionally be a greater determinant. But what signs might indicate a budding entrepreneur?
- I do not need certainty: a tolerance for ambiguity:
In the absence of sufficient information, how people deal with different situations varies considerably; the most tolerant regard ambiguity, instability and unpredictability as challenges – but and will strive to overcome them to perform well. Give the uncertainty, risk and continuous change associated with carrying out entrepreneurial tasks, managers with high tolerance for ambiguity behave in more entrepreneurial and innovative ways.
- I’m my biggest fan: self-efficacy
How people approach and respond to specific tasks typically reflects their motivations and expectations; those who believe they have a fighting chance of succeeding may be more likely to stay the course – qualities that are critical for entrepreneurs, especially in start-up situations
- I don’t do standing still: the proactive personality
Entrepreneurs need no reminding to proactively influence or shape environments around them which are conducive to identifying opportunities and putting in star performances, even if that means instigating frequent change
- I’m in charge: locus of control
Entrepreneurs regarded as overly controlling enjoy the last laugh; those who personally take ownership frequently succeed at overcoming anything that gets in the way of their long-term objectives, responding to disappointments with agility, and to the trickiest obstacles with optimism and innovation
- I did that: the need for achievement
Difficult tasks don’t scare entrepreneurs; in fact, they crave that sense of personal accomplishment which accompanies good performance and the achievement of corporate objectives, and which tends to be self-perpetuating
Cognitive style – how people gather, process and respond to information – may explain why some are able to discover and exploit entrepreneurial opportunities with ease, while others fail (or don’t even bother trying). The Cognitive Style Indicator (CoSI) – a reliable, valid, and convenient instrument commonly used in skill development and performance management – identifies three cognitive styles that inform individual decisions, actions and behaviours, perhaps making entrepreneurs more readily identifiable, even when compared with high-achieving managers in large organisations:
- Knowing style: focused on logically reflecting on objective facts and precise details.
- Planning style: compelled to apply an orderly structured approach, organising information systematically with only rare forays outside the confines of conventional norms
- Creating style: unafraid to generate and experiment with a pipeline of imaginative, often impulsively conceived ideas, regardless of others’ opinions
In many companies, entrepreneurial orientation (EO) reflects the senior management team’s willingness to innovate and try out new ideas, on everything from products and processes to potential markets or revenue streams.
The research team found that certain permutations of trait characteristics exert a strong influence on corporate EO. How people make decisions, take risks, drive change, manage conflict and develop strategy are all critical indicators. Managers with creating styles tend to flourish amongst like-minded people, drawing inspiration from those around them in their quest to outperform expectations. Similarly, managers with knowing or planning styles (or a blend of the two) typically gravitate to more stable environments with conventional markers of success, such as price or quality.
Entrepreneurs typically score higher on the five character traits chosen for study by researchers, and lower on knowing and planning cognitive styles than non-entrepreneurs. However, comparisons between non-entrepreneurs and people who own or manage businesses indicate that entrepreneurs are not the only people with creating styles. But at least entrepreneurs are well-equipped to overcome the turbulence that may accompany economic recovery in Flanders, and sufficiently robust to withstand the pressures of striving to remain competitive in volatile trading conditions.
From Style into Substance: what now for Entrepreneurs and their Backers?
The findings of this research may well illuminate how entrepreneurship might be introduced and developed to optimise performance (of companies and business
owners) in a number of ways:
- Coaching and training
Both entrepreneurs and managers may be better able to develop the skills they need to become more effective leaders
- Starting a new business
Efforts to identify (and invest in the development of) entrepreneurial characteristics may benefit from applying these insights, especially in the light of greater interest in setting up new business ventures and choosing relevant business partners
- Management and entrepreneurial development
Companies focusing solely or largely on technical and managerial skills may find it worthwhile to build development of entrepreneurial traits into management education programmes (even if manages don’t necessarily work in customer-facing or revenue-generating roles)
Reflection and introspection by individuals can result in their taking more proactive approaches to their own personal development (in companies and in owner-managed-businesses) – the research team anticipates its findings will resonate with those who aspire to entrepreneurship, even those who remain in employment (rather than choosing to start up their own business)
So: is there a Blueprint for an Entrepreneurial Mindset after all?
This study’s findings indicate that there are certainly characteristics and cognitive styles which define many entrepreneurs. However, enterprising individuals don’t have a monopoly on "creative cognitive styles". They may well routinely challenge the status quo, standing out as a result of both their non-conformist attitudes and unshakeable faith in their own abilities and intuition. But it’s the way in which each combines entrepreneurial personality traits and shapes the entrepreneurial orientation of their environment (workplace, teams and employers) that is likely to distinguish them from less enterprising peers.
Cools, E. & Van den Broeck, H. (2008). The hunt for the Heffalump continues: can trait and cognitive characteristics predict entrepreneurial orientation? Journal of Small Business Strategy, 18, 2, 23-41.