New Research: The Skills That Make an Entrepreneur
Entrepreneurial-minded people (and the ideas they generate) are extremely valuable to an organization. At our research firm, we recently conducted a multi-variable analysis of a group of serial entrepreneurs and identified five personal skills that clearly make them unique. "Personal skills" — often classified as "soft skills" — develop slowly over time, and we used them to help identify what job-related activities a person has developed. We primarily looked at people who started multiple businesses and experienced both success and failure.
After assessing the subjects on their personal skills and comparing their performance against a control group, we found a certain set of skills were the most predictive of an entrepreneurial mindset. In fact, by examining these five distinct personal skills alone, we were able to predict with over 90 percent accuracy people who would become serial entrepreneurs.
The quality serial entrepreneurs displayed above others was persuasion, or 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. In the study, this was uncovered by ranking on a scale of 1 to 6 prompts such as: "I have been recognized for my ability to get others to say yes," or "I have a reputation for delivering powerful presentations." Unquestionably entrepreneurs need to excel at persuasion, whether to recruit a team or get buy-in from investors and stakeholders.
Perhaps 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, i.e., surveyors who highly ranked prompts such as: "In the past, people have taken risks to support my vision, mission or goals," or "I have been criticized for being too competitive." Serial entrepreneurs ranked both of these prompts highly. For people with an entrepreneurial mind-set, their strength of vision is usually tied to a product or service that provides solutions to challenges, even when the general public is not aware the challenge exists.
Entrepreneurial-minded people also display personal accountability. We defined personal accountability as demonstrating initiative, self-confidence, resiliency and a willingness to take responsibility for personal actions. Subjects with strong personal accountability highly ranked prompts such as: "I have been recognized for achieving results when others could not," or "I have been criticized for holding people accountable for their actions." As evidenced by these prompts, people who are personally accountable look at obstacles as a part of the process and, rather than give up, they are energized by them. From this we can gather, individuals who blame others for their failures display a significant lack of personal accountability and will most likely stall in any entrepreneurial effort.
Goal orientation is another critical skill for entrepreneurial-minded people. In the study, goal orientation was defined as energetically focusing efforts on meeting a goal, mission, or objective (which closely paired with leadership, as it is described above). More entrepreneurs generally agreed with the statements: "I am known for overcoming significant obstacles to reach goals," or "I am most productive when working closely with others to achieve goals." As mentioned above, it's important that entrepreneurs have a strong sense of what their goal is, because their product or service depends on it. Identifying and advocating for the goal allows them to influence others and gain their support.
The final identifying skill is a mastery of interpersonal skills, the glue that holds the other four skills together. They include effectively communicating, building rapport, and relating well to all people, from all backgrounds and communication styles. In the study, people who excelled here agreed with: "My ability to get along with people has been a key to my greatest accomplishments," or "I am known for my ability to calm people who are emotionally upset." Without interpersonal skills, an entrepreneur would be limited to relating only to those who share their exact communication style, thus restricting her ability to convey her vision and goals.
In contrast to ephemeral notions that entrepreneurial success comes as a result of perfect timing meeting brilliant ideas in a cosmic moment of alignment, this research indicates entrepreneurially successful people are successful for a reason — that many of them highly display certain personal skills. And while this research identifies these skills, it should be pointed out these five attributes are not inherent. They can be learned and developed, especially early in life, and further honed throughout an entrepreneur's career.