The DNA of an Entrepreneur
Posted by Pierre de la Fortune on March 21, 2015 @ 12:07 a.m.
Written by Greg Watson
Taxonomy To begin to define what an entrepreneur is we first need to create conceptual definitions of enterprise and the genetic players within the DNA space that we wish to look at. The Enterprise is the fundamental economic building block or cellular organizational structure that allows an individual or group of individuals to undertake an economic activity. Typically this activity is sophisticated, requires some level of organization, and includes some inherent risk. The modern enterprise is the fundamental building block of the transfer of goods and services in society today. Virtually any activity that you may want to engage in, whether that is basic human needs such as the consumption of food or shelter or discretionary needs such as entertainment or the purchase of luxury goods, involves your personal interaction with enterprises in one varying form or another. The traditional enterprise is composed of many individual actors each performing their unique functional responsibilities within the enterprise. Distinctly different, but not entirely separate from the individual actors within the enterprise organizational structure, is the entrepreneur. The entrepreneur is the individual who organizes, manages, and assumes the risk associated with the enterprise. So what makes an Entrepreneur different from all of the other actors upon the enterprise stage? That is what we seek to define.
One characteristic often attributed to an Entrepreneur is that of seeing or identifying an opportunity. In isolation, this is not an adequate definition of a entrepreneurial characteristic. The Entrepreneur may not be the first creator or innovator of an idea. However, we can utilize this function to help draw a distinction between an Entrepreneur and an enterprise actor. An inventor may create a new product or concept but not know what to do with it, lack the skills or drive to develop it, or be willing to take the risk to exploit it. So is an inventor an entrepreneur? Clearly we must evaluate additional characteristics and then evaluate these characteristics cumulatively.
A second characteristic often attributed to an Entrepreneur is that of organizing and managing new solutions to problems. Again, in isolation, this too is not an adequate definition of a characteristic of an entrepreneur. Excellent actors on the enterprise stage perform these functions on a daily basis within the enterprise organizational structure.
A third characteristic often attributed to an Entrepreneur is that of identifying market opportunities, the ability to create and execute a sales and marketing plan that identifies prospective customers, identifies a value proposition for those customers, and a sales process to convert those prospects into customers. Here too, sales and marketing professionals within the enterprise perform these functions on a daily basis throughout the various enterprise organizations that make up the fabric of our world stage every day.
A fourth characteristic often attributed to an Entrepreneur is that of identifying the financial capital resources needed and sourcing those funds from various financial channels, whether that is debt, private equity, public equity, or other financial boot strap facilities. This function is also routinely carried out across a varied spectrum of enterprise organizations including advisors, bankers, attorneys, and accountants. All of which frequently participate in the process of identifying and acquiring the necessary capital resources.
A fifth characteristic often attributed to an Entrepreneur is that of building a management team of both internal people resources as well as external people resources who collectively have the knowledge and skills to participate in the execution of an enterprise activity. Yet this characteristic too is also a core function within the modern enterprise. As we evaluate the characteristics traditionally identified as being associated with an entrepreneur, we quickly see these same characteristics executed by individual actors within the enterprise stage on a regular basis. So what makes an entrepreneur different from the various actors within the enterprise stage?
The traditional response centers around two distinct themes; * First a creative and passionate ability to combine these various characteristics to identify new solutions to meet unmet consumer needs in a new or different manner that creates lasting value, and * Second, a willingness to assume personal economic risk for undertaking that activity. To this traditional response, I would add five additional characteristics and one core value.
Characteristic of a Replicable mindset. There are some pursuits that can legitimately last a lifetime. However, such lifetime opportunities are rare. The world is full of what are popularly described as one-hit-wonders thus a critical criteria begs the question, did you just get lucky, or do you truly have the skills, talents, and characteristics that allow you the ability to repeat the entrepreneurial process not just once, but a second, third, and successive times. An entrepreneur has a replicable mindset that allows the enterprise creation process to be replicated time after time.
Characteristic of Sustainability of the resultant enterprise. This new enterprise that is created by an entrepreneur must also be sustainable. That is the enterprise must eventually develop to a point where it can be sustained without the original founder. If the enterprise requires the continued presence of the founder, the founder simply created a job. This is a traditional cycle of the various stages of development that a corporate enterprise goes through; and each stage typically needs a different type of management and leadership thus to grow to the next stage often will require new management and the traditional entrepreneur must have the ability to move on to their next entrepreneurial cycle of new enterprise creation.
Characteristic of Innovative knowledge creation. Finally, the entrepreneur has to have the ability to creatively innovate knowledge. This is exercised in the combination of the various skill sets or characteristics that are commonly attributed to entrepreneurs. While individual actors within the enterprise stage may be better at their individual skill sets, the entrepreneur combines the pieces in unique creative ways to identify new opportunities, organize and select the best available combination of individual talents and skill sets, manage the development and execution of an organizational structure to serve the new opportunity, and manage the risk that the entrepreneur is assuming in the creation of this new enterprise.
Characteristic of Leadership. The entrepreneur must be able to inspire people with a vision of what the new enterprise will be, inspire investors and stakeholders involved in the creation of this enterprise, and provide the leadership to guide and manage the implementation and execution of the business plan to grow the enterprise.
Value of Ethics. This quickly relates back to the ability of the entrepreneur to replicate the new enterprise creation process. An actor may be able to be successful once while conducting themselves in a less than ethical manner; but can they inspire people with a vision, and receive the confidence of investors and customers a second time?
Thus a true entrepreneur has the ability to identify opportunities, provide the leadership to creatively innovate new solutions to serve those opportunities, organize, manage, and execute a plan to serve those opportunities, inspire and motivate stakeholders, investors, managers, and team members, lead the enterprise into the future, and pass the mantle of leadership to others when the organizational needs change. And finally, have the ability to replicate this process when the opportunity presents itself.
Another way to restate that is: Entrepreneurs have a need to achieve; and once having done so, the need to do it all over again. - Greg Watson Position Statement: Individual Entrepreneurs are Born, but Enterprise Entrepreneurship Skills can be developed Individual Entrepreneurs: Entrepreneurs are inherently defined by their ability to identify and execute on combination of a variety of entrepreneurial characteristics and values; however, it is this need to achieve and this subsequent need to do it all over again that truly distinguishes the entrepreneur from the successfully executive, manager, self-employed business person, business founder, or the innovator/inventor. Enterprise Entrepreneurship: Many people believe that entrepreneurs are born with an innate drive and passion that allows them to accomplish these feats of new enterprise creation. However, that belief does not preclude the concept that within the corporate enterprise, various individual entrepreneurial skills can be taught and developed such that organized teams, provided with support and backing, can also function collectively in an entrepreneurial manner.
In many cases, free from the burden of assuming the risk of the economic activity, collective individuals functioning as part of a team will feel free to pursue new opportunities in an entrepreneurial like manner. Thus while they individually may not possesses the characteristics of an entrepreneur, they can collectively function in an entrepreneurial like manner to the benefit of and the risk to the enterprise.
Collectively, significant academic research is beginning to be developed in areas such as organizational development, new product development, and other functional areas to attempt to foster the development of entrepreneurial skills which will allow individuals as well as the enterprise to benefit. Enterprises that successfully are able to implement cross functional teams and provide the financial and organizational structural support to function in an entrepreneurial like manner stand to benefit significantly. These enterprises will also be able to attract more highly qualified individuals who desire to be part of an entrepreneurial process but are unwilling or unable to take the financial risk or lack some of the necessary entrepreneurial characteristics or skills.
Progress is being made within the academic community to develop and incorporate entrepreneurial skill sets into a broad diversity of academic disciplines. As the fruits of these efforts begin to develop, individuals, enterprises, and the roles that each play within society will all benefit.
The DNA of a Prototypic Entrepreneur The characteristics of the prototypic entrepreneur or DNA of an Entrepreneur is composed of interwoven strands of: 1. Identity and Beliefs, 2. Capabilities, and 3. Behaviors Identity and Beliefs: Entrepreneurs have an Identity System and a Beliefs System that at the deepest internal level, know and believe certain things about themselves. These are beliefs, not dreams or aspirations. Entrepreneurs: 1. Know who they are. 2. Believe they are an entrepreneur. 3. Has a strong need to achieve (not simply a desire to achieve). 4. Know they can create value. 5. Believe they have what it takes to build a business. 6. Believe in themselves. 7. Are comfortable with who they are. 8. Are optimistic. 9. Are visionary & pioneering. 10. Are passionate and energetic.
These characteristics are an inherent part of their self-identity and self-belief system. They are core values that the entrepreneur can not even imagine not being true; and is not happy when any one of them is not being fulfilled. Combined, these characteristics provide the strength for the entrepreneurial need to achieve. For the entrepreneur, Achieve is an action, not a result. Thus for the entrepreneur, success is not enough. Success once achieved must be started all over again for achieve is an action. This drive to achieve is a key distinction between an entrepreneur and a successful business founder, the inventor and his invention, or the traditional self-employed individual. This need to achieve is the highest correlation factor of successful entrepreneurs. Capabilities: Entrepreneurs have certain capabilities that are a natural functionality in the way they approach tasks and decision making. 1. Can make decisions in the face of uncertainty. 2. Can spot high leverage opportunities. 3. Can hire A Players (which often means hiring people who are better at individual tasks than they are). 4. Can build a thriving small business. 5. Can lead. 6. Can solve big problems. 7. Can see possibilities where others do not. 8. Can delay gratification.
Stanford University conducted a research project where they gave 4 (four) year old children marsh mellows and told them that if they waited 10 minutes before eating them, that they could have a second one. Some children ate the marsh mellows, some children waited, and some children pseudo ate their marsh mellows by licking them. Thirty years, later, they followed up this study to evaluate how these children performed in life. Those children that waited the 10 minutes statistically had happier marriages, higher paying jobs, had progressed further professionally, and also had the highest percentages of entrepreneurial activities. Entrepreneurs typically are not looking for the short-term financial gratification or rewards of material possessions, but rather look forward with a long term view building, growth, and development and the emotional and psychological rewards that come with their continued and ongoing achievements.
Behaviors: Entrepreneurs demonstrate specific behaviors that differentiate themselves from the expectation that a typical employee expects. 1. Action oriented 2. Always strive to do things better. 3. Driven to achieve results with high standards of excellence. 4. Does not need supervision or accountability to get tasks done. 5. Incredibly persistent.
The entrepreneurial mind thrives in environments of uncertainty, diversity of culture, talent and opportunity. These three areas of characteristics provide broad insights into the mindset of the entrepreneur; perhaps the genetic makeup of the entrepreneur.
Is there an entrepreneur chromosome that defines you either as being an entrepreneur or not? There probably is not such a definitive source. Are there dominant and recessive characteristics that function in a similar manner as genes do within the human genome? It certainly appears that there are; and warrants sound scholarly academic research into the manner in which these inter-relationships between these characteristics function and manifest themselves in entrepreneurship. For more info please visit: http://www.dnaofanentrepreneur.com/
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