What Makes a Good Entrepreneur?

March 22nd, 2012 by Sarah Green Leave a reply »

Within Zircon, Dr Amanda Potter and the team have been talking to clients about Entrepreneurial Characteristics. As part of this work we have completed some desk research into the traits and characteristics that have been used to define and useful in explaining the past successes and in predicting the future development of Entrepreneurs. According to Begley and Boyd some of these include:

Five of these characteristics have been shown to be significantly higher in Entrepreneurs than line managers including: the Need for Achievement, Internal Locus of Control, Problem Solving Orientation, Interpersonal Reactivity and Assertiveness. We have provided further information about each of these five significantly different characteristics.

Motivational Traits: Need for Achievement
According to McCelland’s theory (1961) individuals who have a strong need to achieve often find their way into entrepreneurship and are successful. It expresses the motivation of business founders to search for new and better solutions than those given in the actual (market) environment, and their ability to realise these solutions through their own performance in the market. Therefore ‘need to achieve’ includes:

1. wanting to problem solve
2. setting targets
3. striving for these targets through their own efforts

Motivations Traits: Internal Locus of Control
Rotter (1966) focused upon Locus of control – it is important for entrepreneurs to have belief in one’s own potentiality for influencing events. It has been found that external locus of control decreases and internal locus of control increases in entrepreneurs, as they became more experienced

Cognitive Skills: Problem-solving Orientation
Problem-solving orientation expresses the cognitive ability to act in a complex environment and to feel attracted to non-routine tasks. It enables an individual to understand and solve existing problems by transferring knowledge into specific actions.

Social Skills: Interpersonal Reactivity
Interpersonal reactivity describes the ability to put oneself in the place of another person. In the context of entrepreneurship, it expresses the ability to approach other people and develop rewarding relationships with them. It is believed that a sufficient level of interpersonal reactivity enables the entrepreneur to produce more client-oriented products, which is why this variable is related to entrepreneurial success.

Social Skills: Assertiveness
Assertiveness expresses the ability to assert oneself and achieve one’s interests in a socially acceptable way. This variable is therefore complementary to interpersonal reactivity, and relates to the total performance of an entrepreneur towards his clients and suppliers.

N.B. Several studies demonstrate that ‘need to achieve’ and ‘locus of control’ are linked in that a strong need to achieve is related to targets and the desire to reach these, whilst the locus of control is related to translating these thoughts into action.

For further information about how we integrate psychology research into our talent assessment and talent management offering, please contact Dr Amanda Potter.

References:
• Leon Schjoedt. (2009). Entrepreneurial job characteristics.
• Hannu Littunen. (2000). Entrepreneurship and the characteristics of the entrepreneurial personality.
• Caliendo & Kritikos. (2007). Is entrepreneurial success predictable?
• Ciavarella et al. (2004). The big five and venture survival.
• Campbell & Burnett. (2008). A new perspective in entrepreneurial trait analysis.
• Carland, Hoy, Boulton & Carland. (1988). Differentiating Entrepreneurs from Small Business Owners.

Written by Melissa Tyson, Occupational Psychologist.

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