Wikipedia defines entrepreneurship as the process of designing, launching and running a new business, which typically begins as a small business, such as a start-up company, offering a product, process or service for sale or hire, and the people who do so are called ‘entrepreneurs’.
The global financial crisis of 2008 led many people, particularly younger workers, to distrust traditional career avenues as weakened job security made them much less appealing. As a result entrepreneurship has been on the increase ever since, with focus on new tech in recent years.
In February 2019 the Australian Bureau of Statsitcs released new figures that showed an increase of 2.4 per cent in new, actively trading businesses from June 2017 to 2018. The bulk of new business were registered in the transport, postal and warehousing industry primiarily due to ride share driver related legislation. Growth was also found in construction, beer manufacturing, health centres, and gyms.
On a practical level it’s easier to start a new business than it has been in the past - both culturally and economically. In many cases the technology needed to launch a new business is relatively inexpensive and more accessible than ever. Funding has also eased up in recent years, making it easier to find money or crowd source.
Millennials and Gen Z also want more than money; they want meaningful work. Research continues to show that many younger people aren’t just looking to cash in - they are looking to make an impact and to solve problems.
Employers too look for and highly value an entrepreneurial mindset. For some roles thinking entrepreneurially is highly prized and training and development professionals are often called upon to design programs to build these skills and mindset. Entrepreneurial employees benefit the businesses’ capacity for innovation, product development, and growth.
However we all know that many people are not cut out to be entrepreneurs; in fact most of us probably aren’t. What makes for success as an entrepreneur? In addition to a novel idea or business proposition, is there a profile for entrepreneurial success?
Assessments have been used for decades in business as a part of the recruitment, selection, and development processes. They are usually used to determine job and culture fit, and as an aid in the development of core competencies. With the rise of entrepreneurship there is a need to use assessments to profile individuals who seek funding to start new businesses, or to put into critical roles and assignments.
The success rate of new entrepreneurs in establishing profitable, sustainable businesses is critical and due in a large part to the skills, competencies, personality, and even the Achilles heels of the person in charge. Some assessments have advanced to the point that they can profile the exceptional strengths and potential blind spots that individuals possess that can help or hinder success as an entrepreneur.
In addition to consideration of the soundness of a business plan, the individual themself should also be considered in an objective, detailed way. Using an advanced assessment investors as well as employers can gain an appreciation of the entrepreneur’s style, strengths, liabilities and vulnerabilities and make better informed decisions. Likewise the potential entrepreneur him or herself can learn a great deal of themself; looking in the mirror can jumpstart self-awareness and in some cases, the need for behavioral change.
Harrison Assessments has studied entrepreneurial success for the last 25 years and uses a paradox methodology to ascertain the suitability for entrepreneurship as well identify the factors that could hinder an entrepreneur. It uses a unique paradox methodology that distinguishes genuine strengths from strong characteristics.
Success in complex jobs – whether entrepreneurial, or not – is increasingly dependent upon flexible, versatile skill sets. For new business owners one such paradox involves being willing to take risks, while at the same time managing those risks with sufficient consideration to predict potential threats, problems and obstacles.
Balancing a welcoming attitude toward opportunity (i.e. risk) with a hearty respect for potential pitfalls of plans and strategies is one of the keys to success. A strong appetite for risk without sufficient time spent in due diligence and you have impulsivity that jeopardizes the chance of success. Too much emphasis on the potential problems, on the other hand, can delay progress and result in excessive caution – that is, missed opportunity enabling some one else gets there first.
Add in a healthy dose of optimism and you have the start of a firm foundation for the successful entrepreneurial mindset. An assessment based on paradox methodology can measure an individual’s risk appetite as well as that person’s tendency to sufficiently analyze potential threats. Not everyone is cut out to be an entrepreneur based on this criteria alone.
Another pre-condition for success of an entrepreneur is in the innovation arena. The paradox inherent in successful, sustainable innovation involves “blue sky thinking” or creative experimentation combined with perseverance. True invention is the by-product of both of these qualities – great ideas AND the stick-to-it-tiveness to march forward and achieve the goal.
Without creativity, we may keep marching but it may be down the wrong road; without perseverance, we may not complete what we started. In fact, many creative people do just that – they have one great idea after another without brining any of them to fruition. The inventive mindset ensures that energy is invested at very high levels to maintain creativity AND perseverance. It is essential to understand how a person balances these factors in order to achieve better odds of success.
Another paradox critical to entrepreneurial success involves the drive to achieve and people skills. A successful entrepreneur certainly needs to be highly self-motivated. No one else is in a position to generate drive the results that will be necessary for a successful startup. Success is highly dependent upon personal accountability, the willingness to embrace difficulties that will inevitably occur along the way, and clear objectives. At the same time, in order to succeed an entrepreneur needs to effectively interact with others, handling inevitable conflict, building high performing teams, negotiating win-win solutions and inspiring others to achieve the mission.
Strong ambition without strong interpersonal skills will result in the alienation of the key partners and stakeholders. On the other hand, strong interpersonal and collaboration skills without sufficient drive and energy to achieve results will also sabotage success. Therefore self-motivation and interpersonal skills is another of the key paradoxes that need to be carefully understood.
It is also essential to measure a complete range of potential “blind spots” that could hinder success. “Traits-to-avoid” can cripple success if extreme. In some cases a single result can better inform the individual of where they may need to devote some time and attention.
We are all capable of change if properly motivated. Change starts with self-awareness, then reflection, and finally, the motivation to get started with a plan to make some personal changes. An aspiring entrepreneur is not doomed to failure based of a single blind spot. Nor should anyone decline support when a result is found that can be improved upon given time and proper attention.
Assessments inform as well as predict and a good assessment will help an individual come to appreciate their strengths as well as areas in which they can improve.
Considering the risks related to entrepreneurship, we need improved tools, systems and methods to increase the chances of success. A good assessment holds up a mirror for us to see what we are best suited to pursue. It also identifies and clarifies the personal changes that will enable us to be more likely to succeed.
The Discover My Career tool by Harrison Assessments can assess an individual for Entrepreneurial Success as well as over 1,000 other specific jobs. The right career allows the individual to have a degree of confidence about the future and can make all the difference.
Reproduced with permission from Harrison Assessments. Originally published on the Harrison Assessments blog.