The entrepreneurial mind: What’s the secret sauce of successful innovators?
Researchers and academics are trying to discover what it is, exactly, that makes entrepreneurs different from others. Is it their personality? Do they think differently? Do they behave in different ways from the rest of us? What is it, if anything, that differentiates them from the general public?
The implications for discovering the secret sauce of successful innovators is enormous. Encouraging existing (and creating more) innovative business minds could not only transform economies and nations, but ensure their survival in increasingly challenging and fast-changing times.
A recent article in the Journal of Entrepreneurship called Five Minds for the Entrepreneurial Future suggests that if entrepreneurs do possess special cognitive skills, then the holy grail to encouraging flourishing innovation is encouraging and teaching these cognitive skills. Author Thomas Duening proposes what these cognitive skills may be by drawing on previous research of entrepreneurs. He calls these distinct capabilities of entrepreneurs the five “minds”. They are:
- The Opportunity Recognizing Mind: Research has found that entrepreneurs have a unique “opportunity recognition” capacity and that this capacity grows over time with seasoned entrepreneurs. Thus, continually learning from their experience, entrepreneurs become ever more adroit at weighing different factors and patterns in their environment to recognize potential economic opportunities.
- The Designing Mind: The skill to design a product or service, or to alter an existing one for a new market or use, is also a skill that entrepreneurs possess. They also design companies including their deal structure, location and team. This is a unique capability that differs from those capabilities needed to perform one function in a business such as accounting or sales. “Designing” suggests a richness to the integration of different elements in the entrepreneurial mind and suggests a level of sophistication above that of just organizing or operating in different functions.
- The Risk Managing Mind: Conventional wisdom may see entrepreneurs as risk-takers, but on closer notice, they are actually skilled risk-managers who operate in environments of ambiguity. A successful entrepreneur knows how to identify risks in advance, strategically take calculated ones and devise ways to manage any other risks beyond his or her control.
- The Resilient Mind: Resilience is seen not only in an entrepreneur’s ability to tolerate and manage risk and ambiguity on a daily basis, but also in their ability to face failure and recover from it. Indeed, successful entrepreneurs have often failed in their past, sometimes quite a number of times. Each failure poses challenges on several levels: emotional, financial and even social (i.e. reputation) that they have to successfully navigate through. A resilient entrepreneur learns to accept and grapple with failure and having dealt with it, moves on to new challenges.
- The Effectuating Mind: Entrepreneurs create or provide something of value and then provide that value to a market. To do these two things involves focused action and the effectuating mind concerns this action-orientation of the entrepreneur. Entrepreneurs are more action-oriented than planning-oriented as often they don’t rely on predictive analytics or make formal business plans. Instead they rely on a feedback loop of action and its resulting feedback to decide on what their next actions should be. It’s a constant course-correct business model based on experience.
If these are indeed the capabilities that set entrepreneurs apart, the next step would be to devise programs and initiatives in schools and other organizations to instill and reward these capabilities. Or at minimum, we would have to make sure we are not discouraging them. (Here is one entrepreneur’s take on how common parenting tactics like allowances might actually dissuade entrepreneurship in children: TEDTalk: On comic book arbitrage and raising kids to be entrepreneurs.)
Management guru Peter Drucker thought that entrepreneurs were not inherently different from others and that anyone could be an entrepreneur (read more here). In 1986, he wrote in Innovation and Entrepreneurship that entrepreneurship is a discipline and much like the subject of his main study (management), it had methodologies that could be learned: “Most of what you hear about entrepreneurship is all wrong. It’s not magic; it’s not mysterious; and it has nothing to do with genes. It’s a discipline and, like any discipline, it can be learned.”
Keri leads the strategic design, development, marketing and expansion of cutting edge business programs in the areas of entrepreneurship, innovation, marketing, HR, management and leadership at U of T’s School of Continuing Studies. See more…