I have written in this column before about whether entrepreneurs are made or born (January 18). As I noted in that column, the issue is no longer up for debate. You can become entrepreneurs, that’s clear. Unfortunately, the culmination of that debate raises a new question: What do aspiring entrepreneurs need to learn?
The most fruitful research on this question has identified a number of cognitive skills possessed by ‘savvy entrepreneurs’. Cognitive skills are ultimately unique ways of thought. Entrepreneurs who have been tested to reveal the cognitive skills they possess are generally NOT able to articulate them. They are aware that they have developed capabilities to turn disparate resources into profitable opportunities, but they cannot say exactly how they do it.
Research has identified distinct patterns in thought processes in an extremely diverse set of entrepreneurs. Scholars have translated these patterns into terms that can be used by people who teach entrepreneurship and, most importantly, those who practice he.
In another field of study, Harvard psychologist Howard Gardner wrote a book titled “Five Minds for the Future.” The rationale for Gardner’s work is that: “You can’t even begin to develop an educational system unless you have in mind the knowledge and skills you value, and the kinds of individuals you hope will eventually emerge.” His book focuses on the five “mindsets” he considers essential to general education: the disciplined mind, the synthesizing mind, the creative mind, the ethical mind, and the responsible mind.
While Gardner’s minds are debatable, his perspective that the way people think largely defines who they become is instructive. In light of her work, it seems natural to wonder if it is possible to identify five specific “mindsets” that are important to business success. My own research has identified five such mindsets: the opportunity mind, the design mind, the risk mind, the resilient mind, and the effective mind.
The opportunity-seeing mind is cultivated by identifying “pain spots” in industry-specific value chains. Savvy entrepreneurs quickly move from spotting a pain point to analyzing the size of the market opportunity. Aspiring entrepreneurs, by contrast, are more likely to extrapolate from limited experience and tend to neglect analyzing the SIZE of the opportunity.
The design mind has learned to create repeatable production processes that consistently generate valuable results for an identified market. In fact, one of the main differentiators between entrepreneurship and small business is that the entrepreneur designs and develops production processes that do not require your constant attention. Small business owners generally enjoy working in your business Entrepreneurs prefer the job design approach us your business
Risk management is an element of the business experience that is too often overlooked. A common belief is that entrepreneurs take risks. In reality, entrepreneurs have learned to be highly effective risk minimizers. Where others see intolerable risk, the savvy entrepreneur has learned to reduce the risk to an acceptable level. For example, savvy entrepreneurs operate on the “affordable loss principle” when launching a new venture. They don’t risk more than they can afford to lose.
The resilient mind is simply the ability to bounce back from the inevitable failures and setbacks that all entrepreneurs face. Expert entrepreneurs have learned to distinguish their business failures of staff failure. No doubt, they still experience disappointment and frustration, but they don’t turn their negative emotions inward. They view their business experiences objectively and strive to learn as much or more from their failures than from their successes.
Ultimately, the effective mind is simply the ability to realistically assess one’s talents, situation, and prospects. Any particular business opportunity. could being chased by anyone, but not everyone can chase every opportunity. Some people will simply be better prepared to capitalize on an opportunity than others. This may be due to your life history, family circumstances, genetic gifts, or other factors. Savvy entrepreneurs have honestly learned to assess their own unique talents and harness them in pursuit of opportunities. They don’t care that others may be better prepared to pursue other, potentially more lucrative opportunities.
The five entrepreneurial experience mindsets are goals for lifelong learning and development. Regardless of your current level of experience in any of these mindsets, you likely have room for improvement. If you deliberately practice and develop skills in these specific mindsets over time, your chances of business success will inexorably improve.
