Recent Forbes articles have offered ample discussion of the traits of a successful early stage company, but today I’d like to take a closer look at the personality strengths of the actual entrepreneur. I’ve often wondered if some personality types are better suited than others. I would maintain a definite “yes.”
Gallup Chairman and CEO Jim Clifton’s book, The Coming Jobs War, has a description for entrepreneurship—he calls it the “scarcest, rarest, hardest energy and talent in the world to find.” Forbes Contributor Dan Schwabel interviewed Jim Clifton in Oct. 2011 here. Aside from age (we’ve been talking about that quite a bit lately), educational background, and number of prior companies, successful entrepreneurs are ones who’ve learned or developed a very specific set of functional traits, Clifton maintains.
Sadly, few educational institutions recognize the psychological factors or know how to instill the critical traits that play such an essential role in a company’s ability to succeed.
As defined in Clifton’s book and also recently covered in a write-up by the Gallup Business Journal, here are the key functional skills every entrepreneur should have:
The 10 Demands of Successful Entrepreneurs, According to Gallup
1. Know your personal brand. Successful entrepreneurs know themselves well and can perceive others accurately.They have a high degree of self awareness and the ability to engage in self reflection that allows them to accurately recognize their strengths and weaknesses and to be open to the prospect of positive change.
This talent helps entrepreneurs to engage with employees, customers, suppliers, and investors in an optimal way that results in positive business outcomes.
2. Take on challenges. There is an inherent risk involved in venture creation. Entrepreneurs make hard decisions, often without complete knowledge of the factors that could affect their businesses. They must deal with the challenges of scarce resources, high uncertainty, and ambiguity.
Entrepreneurs with strong talent in this area are energized, rather than drained, by the perpetual challenges. They are willing to face fears, to take risks, and to experiment when necessary. They frequently take an overly optimistic view of the risks involved (even to a fault). They seek challenges willingly and are undeterred by the risks of venture creation and growth.
3. Think through possibilities and practicalities. Entrepreneurs must constantly hone their abilities to think outside of the box. Successful entrepreneurs can look at an existing idea or product and make it into something even better by looking at it with fresh eyes.
4. Promote the business. Successful entrepreneurs are their own best spokespeople. They are strong communicators, and they are readily able to enroll and motivate others. These traits are essential at every stage of the business.
5. Focus on business outcomes. It would seem to go without saying this would be one of the entrepreneur’s most critical traits. But it is surprising how many executives are unsuccessful or only mildly successful in maintaining this focus. Profit orientation should be a spontaneous, moment-to-moment mental activity for a highly-successful entrepreneur.
Yes, there are other highly valuable aspects of running a business as well–fulfillment, the ability to achieve personal growth and to instill it in others, and the ability to benefit the company’s customers and even the world with a remarkable solution. But without a focus on business outcomes, none of the other values can be fully sustained. Beware of statements such as “yes, we missed our goals, but we were fulfilling a higher purpose,” or “revenue doesn’t matter.” Yes, it does. A successful entrepreneur will recognize inherently that without a solid revenue model, all of the additional higher purposes for running the company are for naught.
6. Be a perpetual student of the business. Successful entrepreneurs are continual “students” who are constantly seeking additional knowledge to become perpetually more skilled at helping their businesses grow. An entrepreneur who is sure he or she knows everything and knows better than anyone else how to achieve their business objectives is destined to level out and to eventually fail. This trait becomes more and more critical as the business progresses.
7. Be self-reliant. Entrepreneurs often fill multiple roles to address the needs of a startup. Unsuccessful entrepreneurs resent this fact or handle these situations poorly. But successful entrepreneurs are prepared to do whatever is necessary to help the business succeed.
The entrepreneur’s sense of responsibility and levels of competence are critical in the early stage of venture creation. However, as the business progresses, entrepreneurs who are unable to shift from self-reliance to delegation may actually hinder the growth of their established company later on.
8. Be a self-starter. Startups and growth companies require long hours of work and high levels of energy and stamina. Successful entrepreneurs are passionate about making things happen. They show high initiative and they have an enduring sense of urgency at all times. They see opportunity where others see roadblocks. The individual who says, “I was never properly trained,” or shows irritation at a lack of detailed instructions or a pressing timeline will never be a successful entrepreneur.
9. Multiply yourself through delegation. As businesses grow, the unilateral decision-making style of early-stage entrepreneurs must change into an environment in which the entrepreneur delegates authority and takes on the role of a team manager instead. Gallup notes that Norman R. Smith and John B. Miner (1983) suggest the transition point is around 30 employees and $750,000 in assets. I would personally suggest the transition happen much earlier than this – at approximately 10 employees and $1.25-1.5 million in sales.
10. Build relationships. An entrepreneur may be the originator of an idea, but almost immediately, he or she must interact with others to secure resources, engage with potential customers and suppliers, or hire and manage employees. At every stage of a business, the ability to build strong relationships is crucial. “Successful entrepreneurs are adept at building relationships,” Gallup says. “They have strong social awareness and can attract and maintain a constituency.” The enthusiasm and positivity of strong relationship builders make it easier for others to interact with them. These entrepreneurs also have high standards of personal conduct that allows others to trust them readily and makes it easier for others to proactively form relationships with them. This skill will be essential at every stage in the company’s growth.
I can personally agree with every one of the traits the Gallup poll has suggested. In my experience, the skills and traits of the entrepreneur have had at least as much to do with a company’s success as the product or service, the state of the economy, or any other factor in determining a company’s chance for success. What has been your own experience with these factors? Are there additional traits you would name? Feel free to share your experiences here.