What Drives Entrepreneurial Success?
Synopsis: Gallup's study of U.S. entrepreneurs found that high levels of entrepreneurial talent increase one's odds of business success.
Over the past few years, Gallup's assessment of 2,500 U.S. entrepreneurs found that higher levels of entrepreneurial talent significantly increase one's odds of business success. Compared with their less talented peers, highly talented entrepreneurs are:
In another study of 111 small businesses in Nebraska, Gallup found that highly talented entrepreneurs exhibited distinctive behaviors. These behaviors resulted in the highly talented entrepreneurs' businesses outperforming others by 22 percentage points in year-over-year profit growth. Compared with their less talented peers, highly talented entrepreneurs:
These studies demonstrate a clear positive relationship between entrepreneurial talents and business creation and success. Business-building talent affects behaviors that in turn influence entrepreneurial outcomes.
Entrepreneurial Talent: Innate or Learned?
An example of two violinists with differing levels of talent can help answer the question about whether entrepreneurial talent is innate or learned. Sally has an innate ability to identify the pitch and tone of a musical composition. By the age of 5, she could learn music by ear and created perfect first drafts of her compositions. She has precise rhythmic ability and can reproduce an exact musical note without an external reference. Martha, Sally's classmate since elementary school, has a keen sense of music but lacks some of Sally's innate musical abilities.
Irma Jarvela, a medical geneticist at the University of Helsinki, and her colleagues found that about 50% of musical ability is heritable (genetic). In other words, nature accounts for almost half of the observed differences in musical ability. This means Sally has an innate advantage over Martha.
High levels of innate talent do not mean that deliberate practice and hard work are unimportant. Rigorous practice, self-motivation and support from family members, mentors and teachers will certainly help both violinists fully realize their musical potential. But Sally, who has greater natural talent for music, will see much greater returns compared with Martha, who has less natural musical ability.
Similarly, in the realm of entrepreneurship, innate talents seem to make some people better at noticing new business opportunities and more likely to be risk-takers, natural salespeople and adept at cultivating social networks -- all traits that support entrepreneurial success. If you do not have these traits, you could try to learn the behaviors associated with them or take business classes, but Gallup's research suggests that you would have to do a considerable amount of work and might still achieve only average performance.
Business support programs can teach you basic management, accounting and finance, or marketing skills. They can provide technical assistance. Mentors and coaches can give you advice, share their own experiences and be your support system through the entrepreneurial journey. But support programs and coaches cannot teach you to recognize opportunities or to become a risk-taker. Nor can they teach you how to best use social networks to further your business interests. Just as genetics plays a role in musical ability, Nicos Nicolaou of Cass Business School, City University London, and Scott Shane of Case Western Reserve University found that the tendency toward entrepreneurship is between 37% and 48% genetic.
You are likely to be most successful when working with your dominant natural talents. Training and education will certainly help you achieve excellence in an entrepreneurial role, but success will come more easily if you have an inherent talent for the role. This means that identifying your entrepreneurial potential is vital. After identifying your potential, you need to apply systematic and continuous effort to nurture your innate ability and to manage your areas of lesser ability.
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|Publication:||Gallup Business Journal|
|Date:||Aug 27, 2015|
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