Have you got what it takes to be an entrepreneur?

Having just finished reading Michael Masterson’s Ready, Fire, Aim, which takes the reader through the exciting and sometimes perilous stages of early business growth, it’s interesting to note the qualities he lists that are essential for success as an entrepreneur.

At a time when companies are trying to recruit employees with more initiative and ‘entrepreneurial’ characteristics (hopefully not only because of the downturn), we believe his list are useful for companies big and small.

He classifies the essential qualities as follows:

1. ‘You need to be able to correctly identify the most important challenge, opportunity, or problem you face at any given time’

2. Coming up with ideas

3. Selling products

4. Managing systems

5. Developing superstars, and

6. Taking action

These may seem fairly straightforward, but Masterson’s guidance is that we need to be good at the above (not just mediocre or passable) if we want to have what it takes to be an entrepreneur.

He offers these criteria based on his extensive experience building a number of companies, as well as consulting entrepreneurs in many others. All in all, I would say he’s in a great position to give advice!

What I find interesting is whether anyone can be an entrepreneur, so long as they develop the above skills, or whether there is something more to it than that – whether entrepreneurs are in fact ‘born and bred’.

Skills or Talents?

We return to the age-old debate of whether entrepreneurs are born or made. This time, however, I would like to bring some science to the table. That science is the near-century’s worth of study carried out by the Johnson O’Connor Institute and made easily available through the Highlands Ability Battery.

This research started shortly after the end of World War One. Dr Johnson O’Connor was interested in performance differentials first of all among assembly line workers. The company he worked for (GE) could train and train their operatives but stubborn performance differences would remain. How could you account for this? O’Connor’s research discovered that this performance differential boiled down to one thing: finger dexterity. His research also discovered that this was a ‘talent’ – something people either had or didn’t have, to which training would make hardly any difference.

The ‘human engineering project’ was born.

In the course of the years that followed, Dr Johnson O’Connor as well as other psychologists tested and studied areas of talents and natural abilities in humans. The results can be seen here.

All of the areas in the chart are abilities we either have or haven’t got. They relate to the hardwiring in our brains and, it is argued, cannot be easily trained or changed. In short, they are us and the research has shown we are better off acknowledging the effect our talents have on us instead of trying to buck the trend.

The Entrepreneur’s Talents

The research conducted by the Johnson O’Connor Institute and incorporated into Highlands has indicated that the following natural abilities are advantageous to anyone with aspirations of becoming and entrepreneur. They are:

1. Specialist

Entrepreneurs have a tendency of being specialists (as opposed to generalists) as they will need to go ‘deep’ into their subject matter (or business) in order to fully understand it.

A preference to be either a specialist or generalist is elemental within us and isn’t something that can be trained.

2. Extrovert

There are many entrepreneurs who are introverts (Bill Gates and Howard Hughes being just two), but generally speaking, most entrepreneurs get their energy from people and hence tend to be extroverts. This is a ‘personal style’ factor rather than a talent, but it is an important characteristic which cannot be overlooked.

3. Time Frame Orientation

This is a crucial factor in entrepreneurship. Do you need instant results, or can you create a vision and work patiently towards it, even in the face of setbacks or pressure to deliver results?

Most entrepreneurs have at least a mid-range time frame orientation (2 years or more) and this makes sense as most start-ups don’t yield much success before that timescale.

4. Idea Productivity

Research carried out by the Johnson O’Connor Institute has shown that there are three natural abilities we may use when problem-solving: classification, concept organization and idea productivity.

The latter is essential to the entrepreneur. It’s point 2 of Michael Masterson’s list but I doubt it’s just a skill. Ideation is greatly hardwired and it’s unlikely that someone without this talent will be able to come up with the volume or quality of ideas that an entrepreneur frequently has to call on to surmount seemingly impossible challenges.

While strong concept organization may help with his point 4 (managing systems), idea productivity, or the ability to come up with ideas easily, is essential to most entrepreneurs’ likelihood of success.

The importance of great partners and teams

Clearly, if you lack any of the above talents, you can still be successful. Sheer effort and discipline may help, but research has also shown if you are striving in areas of natural weakness (i.e. where you don’t have any natural abilities) you are likely to lose energy and feel stressed as a result.

This is where bringing in a partner can help, and identifying your partner’s talent set is important. A good match is someone who has talents in areas you may lack. This factor is frequently overlooked but is crucial – relationship factors are, in my experience, of central importance to the success of a small business.

If you are interested in using the Highlands Ability Battery to identify the talents of key personnel, including entrepreneurial traits, or indeed for your own career – let us know here and we will be happy to help.