10 Entrepreneurial Attitudes of Entrepreneurs. 3 Key Characteristics of Entrepreneurship. 4 Traits of Successful Entrepreneur
Enterprise, entrepreneurs and entrepreneurship
It is hard to find a consensus of agreement for the definition of “being enterprising”, and the different ways in which the words are used causes further confusion. The primary differences are between the economic school of thought where enterprise is what entrepreneurs do by creating new businesses, jobs and wealth, all of which contribute to the economy; and the educational school of thought. The latter takes the view that not all firms are enterprising, and those that are involve use of imagination and creativity, generating new ideas, dealing flexibly with changing situations, taking responsibility and making decisions. As such it is closely linked with the principles of lifelong leaning and continuous professional and personal development. In some ways it can almost be viewed as a reversal of the 20th century approach to education in which personal creativity, initiative and imagination were educated out of people to make them employable in large conventional and conservative-minded organisations.
Enterprise is a word generally applied to businesses set up and operated by individuals, more often within the size range of SMEs. It can be, but rarely is used in the context of major companies or international organisations, as it tends to reflect a level of venturous, opportunistic and risk-taking attitude less typical of large organisations. However, with the government’s aim to promote enterprise cultures at all levels of education, the word is being increasingly used in schools in a much broader context as an aspect of the curriculum to promote changes in attitude towards venture creation.
The term entrepreneur typifies an individual attitude of opportunity-spotting, and the creation and exploitation of business opportunities to create wealth – often with the implicit use of innovation, imagination, and risk-taking. The entrepreneur creates and operates the enterprise, and in doing so displays the characteristic of Entrepreneurship. However, too often the latter has been used in the restricted context of new business start-up, particularly by academics and educationalists – but the people who tend to care least about academic definitions are the entrepreneurs themselves who are just interested in getting on with the job. Entrepreneurship is also referred to as the process of growing and sustaining the business after the start-up stage, implying a broader definition. Furthermore, the definition attributed to Harvard University is that: “Entrepreneurship is the pursuit of opportunity beyond the resources you currently control”, which opens up scope for the word to be applied equally to non-profit social enterprises, and to intrapreneurship within large commercial and public sector organisations to reflect entrepreneurial behaviour amongst staff. It is in this context that we start to consider the entrepreneur in terms of the characteristic which he or she exhibits or demonstrates.
Much is also spoken about the importance of generating and promoting enterprise cultures within organisations, in which staff are positively encouraged to use initiative and imagination for the benefit of the organisation, and ultimately also for themselves if the enterprising behaviour is acknowledged and rewarded. An enterprise culture in society is one where business is seen as a positive contributor to society and creation of social capital, and where society positively supports entrepreneurial activity. Within organisations it is a climate that recognises and reinforces both business success and individual initiative, and accepts that there is a risk of failure in new ventures that is both acceptable to the organisation, and which does not attract blame. It is a climate in which innovation and creativity can thrive.
Just to confound the issues further we must not forget to mention several other related definitions. We have the Social Enterprises which are essentially those set up for charitable or philanthropic purposes, or for the benefit or welfare of their members; and these usually operate on a not for profit basis, or plough back any profits into the organisation. Then there are the Serial Entrepreneurs who find a challenge in the process of creating and growing a new business and then selling it for a profit, only to move on to create another business, often in a totally different and unrelated market. In this situation the personal objective is not just one of financial profit or capital growth so much as the repeated and ever-greater challenge to create something perhaps bigger and better – a bit like the mountaineer who starts with Snowdon and Ben Nevis, moves on to the Eiger and progresses via Anapurna, to Everest as the ultimate challenge. Then there is the idea of Intrapreneurship – the practice of entrepreneurial behaviour within a large organisation or in the public sector. The Intrapreneurs are usually easily recognised within an organisation as the energetic ones who will spot the new ideas and the find resources to match them – almost like Belbin’s Resource Investigators, a member of the team but working at the edge of it, and often the one who others turn to for ideas when problems arise.
Entrepreneurial attitudes and characteristics
Entrepreneurship students are frequently encouraged to ponder the question: are entrepreneurs made or born? Is entrepreneurship an inherent characteristic, perhaps inherited or present at birth, which gives them a unique capacity for spotting opportunities, taking calculated risks, and using imagination and innovation, to create profit and wealth from business activities? Alternatively, do we all start life from a level playing field, and whilst most people head are educated and aim for employability, there are those who acquire or develop the entrepreneurial characteristics perhaps from experiences in early life that force them to become resourceful, or by exposure to other entrepreneurs or entrepreneurial activities? Certainly, children growing up in traditionally enterprising Asian cultures seem the acquire the attitude and perception that to go into business is a highly positive and respectable ambition, whereas modern western cultures have tended to educate out entrepreneurial attitudes in favour of preparing people for the more socially acceptable ambition of employability and having what is perceived as a “good” pensionable career. If entrepreneurial characteristics can be acquired by exposure to enterprising environments, then it follows that those entrepreneurial characteristics and attitudes could be treated as transferable skills to be taught or learned, and that with the right form of guidance and tuition, we should be able to raise the entrepreneurial capacity of the working population. Individuals, such as Gates and Branson are often held up as prime examples of people with inherent entrepreneurial characteristics and skills, but with design and content, educational and training programmes can certainly equip people with the knowledge and skills to create and develop new enterprises and to thrive in highly competitive environments. Whilst the existence of inherent entrepreneurial skills and characteristic cannot be completely ruled out, the capacity to develop such skills by appropriate training and/or exposure to enterprise cultures has got to be a stronger argument. This is further reinforced by (often negative) factors of personal experience and environment particularly in younger developing years that are often quoted by successful entrepreneurs. For example experience of poverty or hardship may act as a strong motivator in later life to create and accrue wealth. In the case of Richard Branson, he has often recounted his mother’s actions to make him self-reliant from an early age, as a strong influence on his subsequent entrepreneurial development.
Various attempts have been made to define the entrepreneurial personality. Timmons (2003) described 19 behavioural traits or characteristics, whilst Lessem (1986) used examples of seven specific high-profile entrepreneurs which he described as respectively reflecting imagination, intuition, authority, will, sociability, energy, and flexibility, these being based on specific combinations of attributes and personality traits.
Bolton and Thompson (2005) explain entrepreneurship as a balance between three characteristics:
Talent: abilities, such as creativity, opportunity-spotting, and networking.
Temperament: personal needs, such as desire to take responsibility, focus on performance, opportunity taking, feelings of urgency to act.
Techniques: personal skills sets and techniques to develop talents and to manage temperament.
Bolton and Thompson have adopted a more pragmatic analysis than some previous theorists, by looking at what entrepreneurs do in practice rather than by attempting to analyse personality or behaviours, although that practice will of course reflect personal attitudes and characteristics. They defined entrepreneurs in terms of action factors, i.e. the key action roles that can be associated with entrepreneurs or entrepreneurship in any context:
1. Entrepreneurs make a difference: They challenge accepted norms and often exhibit the ability to convert vague or ill-defined ideas into practical and profitable reality.
2. Entrepreneurs are creative and innovative: They combine opportunities with imagination to address new challenges in innovative ways.
3. Entrepreneurs spot and exploit opportunities: They are able to identify new opportunities in situations that other people would miss or ignore, perhaps again because of their ability to use imagination. They may not be the originator of an idea but they can see how to developer exploit its potential. This is closely linked to the previous example.
4. Entrepreneurs find the resources required to exploit opportunities: This reflects the Harvard definition of entrepreneurship mentioned previously, of pursuing resources beyond those currently controlled.
5. Entrepreneurs are good networkers: This is a key attribute that more conventional academic analysts frequently ignore, i.e. the practical skills of making, maintaining and exploiting contacts, in both short and long term, for mutual benefit. This is a key characteristic in finding resources.
6. Entrepreneurs are determined in the face of adversity: They do not give up easily as they are motivated to succeed, and possess determination and self-belief. They can also face up to and address unexpected problems and occurrences that may occur.
7. Entrepreneurs manage risk: They are prepared to accept and take responsibility for calculated risks that perhaps less enterprising people might avoid, but they will not take on unnecessary or excessive risks. One outcome of this is that they also quickly learn from their mistakes.
8. Entrepreneurs have control of the business: They make themselves aware of the on-going performance of the business, they control the business by attention to detail and by identifying what is important, but do not allow it to dictate their response or activity – a situation of strategic rather than operational control.
9. Entrepreneurs put customers first: Another issue sometimes overlooked by other theorists. Entrepreneurs have a strong customer focus and maintain constant awareness of changing customer needs and demands. This also contributes to the identification of new and evolving opportunities.
10. Entrepreneurs create capital: Whether financial in the business context, or social or aesthetic for non-profit making organisations, entrepreneurs create wealth, capital, or added value for the community. This concept is compatible with business enterprise, social enterprise and intrapreneurship.
As can be seen, there is some considerable inter-relationships and overlap between these various characteristics. Bolton and Thompson take the idea further by describing how the entrepreneur as opportunity spotter, identifies the idea (action factors 2–5 above) and then moves into the role of what they describe as a project champion to be able to engage and implement the opportunities that have been identified (action factors 1, 6–10) to make it happen.
The entrepreneur is then a complex combination of interacting factors:
Personality: in terms of possessing resilience, tenacity, opportunity spotting and taking, and risk-taking.
Attitude: having awareness of the importance of customer focus, the application of creativity and imagination, defined personal standards and values, the perception of enterprise as a positive activity.
Skills: such as ability to network, to think strategically, business knowledge and acumen, interpersonal skills and people management, to gain access to resources.
Motivation: personal drive and ambition, the desire to make an impact, need for achievement or self-satisfaction, desire for status, to create and accumulate wealth, social responsibility.