Our understanding of the entrepreneurial personality is changing.
If you’re the type to challenge yourself to do 100,000 pushups and 50,000 sit-ups, you may agree with Inc.com’s Jeff Haden that the ability to delay gratification and withstand temptation are key to one’s success.
For competitive athletes, success may be a combination of traits that speak to one’s “whatever-it-takes” attitude, their personal accountability, their unwillingness to settle for “very good.”
We’ve all heard it said that successful entrepreneurs are different. There’s something in their personalities that drives them, shapes them, makes them naturals for the enterprise.
If that’s so — if there is an entrepreneurial “type” — shouldn’t we be able to discover what personality traits predict entrepreneurial ability?
Since at least the mid-1960s scientists have sought to learn if people’s enduring personality traits are predictive of future success. But in the popular press, it’s been a steady flood of speculation.
Do a quick search for “traits of entrepreneur” at Inc.com, and you’ll come up with a raft of articles on the subject published in the past year alone. Entrepreneur magazine (as one would expect) makes plenty of hay on this topic too, with a relentless string of lists — the five, six, 10 or 15 traits that typify the entrepreneur, including such priceless gems as “They’re early risers” and “They’re money minded.”
Some claim that, to succeed as an entrepreneur, you need to exhibit discipline, leadership, self-awareness, understanding of issues, and the unflinching ability to assess one’s own performance. Others may cite locus of control, “the extent to which people feel they have power over events in their lives,” as a critical trait, or a high tolerance for ambiguity. Who could argue with such common sense? But are they keytraits? Are they predictive?
The thing is, pop observations may be based on honest first-hand observation. But few stem from systematic testing.
A growing body of recent academic research is shining light on specific personality traits that correlate with entrepreneurial talent, success and satisfaction. They may even be predictive of entrepreneurial behaviors.
A 2012 study confirmed what may seem obvious: Entrepreneurs possess higher levels of risk-taking propensity, innovativeness, locus of control, and energy than non-entrepreneurs do. That same year, researchers in Spain investigated whether “affective traits” — our long-term, stable tendencies to experience positive or negative emotions — tells us anything about entrepreneurial behavior. And they do: Entrepreneurs with emotions and moods that remain positive over time tend to pursue broad, ambitious goals for themselves. They also demonstrate greater satisfaction with their business performance than those with negative affective traits. The “set point” of your emotions matters.
Other researchers have struggled over the years to isolate those personality traits that are most predictive of entrepreneurial success. A number of studies agreed generally on a set of strong traits common to founders:
- Need for achievement
- Goal orientation
- Need for autonomy
- Passion for work
But overall the investigations demonstrated mixed results.
The Big Five
One model recently emerged to become widely accepted. Known as the “Big Five” personality characteristics, each one exists on a spectrum, with positive or negative results depending on how strongly each trait is present. The Big Five are umbrella terms, broad domains, each one subsuming more specific characteristics. These broader terms are known by the acronym OCEAN:
- Openness to Experience. Not just open-mindedness, this speaks also to creativity, intellect, depth, and originality. A dearth of openness may be seen in someone who is commonplace, has narrow interests, or is shallow.
- Conscientiousness. The presence of this trait can manifest positively as self-control, deliberation, efficiency or precision. Its absence may appear as carelessness, frivolity or irresponsibility.
- Extraversion. This refers also to energy and enthusiasm. In its positive range this trait looks like adventurousness, assertiveness, dominance or sociability. Its absence could appear in someone who is quiet, reserved, retiring or shy. Extraverts tend to be adept at networking and relationship building.
- Agreeableness. This trait refers positively to cooperation, generosity, sympathy; negatively as cruelty, quarrelsomeness or unfriendliness.
- Neuroticism. Didn’t see that one coming, did you? Negative affectivity and nervousness. A strong presence of this trait refers to anxiety, self-pity, and ill temperament. Its lack suggests calm, contentedness and stability.
An international team of researchers confirmed several positive relationships between these Big Five traits and entrepreneurial behaviors:
- Openness to Experience and Conscientiousness were found to be the traits most closely related to entrepreneurial potential in a 2010 meta-analysis.
- The propensity for risk-taking is related to entrepreneurial intentions, but not to entrepreneurial success.
- There is a direct correlation between Openness and entrepreneurship. Entrepreneurs are especially receptive to, and ready to act upon, new opportunities and information.
- Extraversion and Agreeableness appear to work to opposite ends. The researchers found that “people who have no intention of starting up their own firms — non-entrepreneurs — tend to score lower in extraversion and somewhat higher in agreeableness than other people.” Evidently, being too agreeable may be an impediment to successful entrepreneurship! The researchers suggest that sympathy and kindness may even be detrimental in start-up decisions and activities.
- Perhaps surprisingly, in two major meta-analyses performed in 2006 and 2010, extraversion could not be related to entrepreneurial personalities.
- The Big Five can potentially be used to predict entrepreneurial startups and intentions.
While the Big Five have garnered plenty of attention by researchers, there remains little consensus among studies about the importance of such broad categories to entrepreneurial behavior. Within the past decade, another trait became recognized as having profound effects on life outcomes beyond what mere IQ or the Big Five domains can explain:
Have you been obsessed with a new idea but soon lose momentum or interest?
Is maintaining focus on projects that take months to complete difficult?
With questions like these, we’re testing for Grit — “the perseverance and passion for long-term goals.” Grit has two facets: Consistency of Interest (passion) and Perseverance of Effort (tenacity). Grit contributes powerfully to success in education and military retention, and to higher earnings. Some researchers think that Grit may be a facet of Conscientiousness yet distinguished from it due to Grit’s long-term and passionate nature. To the “gritty individual,” achievement is a marathon. One’s advantage is stamina. When others quit when disappointed or bored, the gritty person persists.
As you might expect, research demonstrates that Perseverance of Effort contributes positively to innovation success. Paradoxically, Consistency of Interest works against innovation, but it aids the performance of the organization. Innovation is about challenging the status quo and doing things differently. Consistency over time implies a degree of sameness that impedes innovation. The strongest relationship demonstrated by this study is the positive relationship between innovation success and organization performance.
The Dark Side
It’s not hard to believe: “Entrepreneurs’ personalities often overlap with criminals’ — problems with authority, excessive risk-taking, narcissism, Machiavellianism. One study found that “many successful entrepreneurs exhibited aggressive behavior and got in trouble as teenagers.”
When personality traits, even good ones, are taken to their extremes, one’s dark side can emerge. This finding was made a researcher at the University of Alberta who noticed that positive traits can be Janus-faced. Energy, passion and optimism can morph into overconfidence. Self-efficacy and self-assurance (or leadership) decays into hubris and narcissism. The need for achievement: aggression, ruthlessness. Desire for autonomy and independence: alienation. The need for control and dominance: obsessiveness, mistrust, suspicion of others.
“Indeed, many entrepreneurs take on that role because they do not fit well into standard jobs and because of their need to be independent and their difficulty with authority figures,” Miller wrote. Families of entrepreneurs have been known to describe them as aggressive, impatient, demanding, authoritarian, neglectful parents.
So what? Personality tests, that’s what.
The implications of research into personality traits raise interesting questions. Examples:
- Should educators develop curricula for inculcating entrepreneurial traits in students at a young age?
- Should investors assess the traits-based entrepreneurial potential of founders who have no track record, before getting on board?
- Will increasing entrepreneurs’ awareness that their moods affect work satisfaction help them to adjust their behaviors when needed?
Underlying such questions is the need for assessment. You have to know what personality traits you’re working with. Undergoing self-testing could be especially useful to those considering an entrepreneurial career. Resources abound. Some, such as Psychology Today’s Entrepreneurial Personality Profile and Forbes’ test for “Entrepreneurial Instinct,” have some rigor built in. (Forbes’ instrument is based on the OCEAN model.) Others are low-nutrient quick hits or brief introductions, such as this one and this one. Compare results with your friends!
And certainly with your partners.
Think you have the traits that it takes? Find out how tekMountain, the innovation center of southeast North Carolina, can assist you in crystallizing your goals and building a network of success.