People tend to have a rather romanticised view of entrepreneurs. They imagine them to be daring, brave, fearless and making stacks of money.
Individuals who start their own businesses are called “entrepreneurs”. However, this is not entirely true.
Many become self-employed out of necessity rather than because they are following a dream.
Many companies around the world will also have to become more “entrepreneurial” for the same reason.
The Fourth Industrial Revolution has brought a wave of disruptive technologies that is changing business models and forcing companies to become entrepreneurial to weather the latest storm.
Gorkan Ahmetoglu, co-founder of Meta Profiling and lecturer in business psychology at University College London, says innovation and creating “entrepreneurial ecosystems” within companies is no longer the carrot, but has become the stick.
Many companies are “almost panicking” about the level of innovation needed to remain relevant and competitive.
They imagine having to live up to the entrepreneurial image of companies like Facebook, Twitter, WhatsApp and Apple, he said during a recent visit to South Africa.
Jopie de Beer, managing director at JvR Psychometrics, says besides over-romanticising entrepreneurship, stereotyping is also a problem.
“Stereotyping is actually a nasty thing. Literature characterises innovators as mavericks who are impossible to manage.
They do not comply with any rules and they just follow their own – sometimes crazy – ideas,” she explains.
De Beer says there is no doubt that some innovators do fit this stereotype, but it is not one that has done them – or society – any favours.
She explains that innovators are people with a vast amount of knowledge about their fields.
They are able to connect the dots and have a vision of how their ideas will change the industry.
There is also a plethora of rather general assumptions of what constitutes entrepreneurial talent.
There is value in using a tested measuring instrument: “A company risks missing huge potential if it is not more systematic in its search for true talent,” she adds.
Ahmetoglu is one of the designers of the Measures of Entrepreneurial Tendencies and Abilities (META) psychometric test.
It is the result of a four-year research programme and has been completed by over 100 000 people, in 10 languages, in 25 countries.
The META research and studies revealed four key components of entrepreneurial tendencies. They are:
- Creativity (innovation): Divergent thinking, going against the status quo, thinking in new ways about old ideas and making original connections;
- Opportunism: The ability to connect the dots;
- Pro-activity: To take action – to “go for it”; and
- Vision: The ability to “see” the difference the new idea will make in the business.
If a person is identified as possessing all four of these key components, there is an 85% change that they have entrepreneurial abilities.
De Beer says it is quite normal for one individual to test high on pro-activity, for instance, but average on vision.
If the manager is aware of what each staff member’s aptitude is for these components, they will be able to combine teams in a way that will deliver the best results.
“Entrepreneurial talent needs freedom to advise the company on how to do things differently.Senior management needs to buy-in on good ideas and even not-so-good ideas,” she explains.
Entrepreneurs need tools and encouragement to implement their new thinking.
Companies with “entrepreneurial tendencies” generally have a bold leader with a strong vision.
These leaders consider new ideas and are willing to test them – more so than their competitors.
De Beer says companies with these bold leaders also tend to react quicker to market changes. They award people and teams for coming up with new ideas and they are not afraid of being seen as “the company that does things differently”.
Another stereotype is that companies imagine they have to “look” like Google or Apple. Ahmetoglu says companies do not have to imitate extreme innovators.
All they have to do is to observe the competition and to do more of what they are doing; and do it better.
He referred to data which indicates that 50 years ago the average lifespan of a company in the S&P 500 Index was 60 years.
Nowadays it is less than 20 and by 2035 it will be around 12 years.
Data also shows that 52% of the companies on the Fortune 500 list have gone bankrupt, were acquired or simply ceased to exist from 2000 to 2015.
De Beer says the type of skills the company identifies and nurtures, the way it organises itself, the way it determines cost and the way it positions itself are already affected by the Fourth Revolution.
It took the telephone 70 years to achieve a 50% household penetration. It took a company like Facebook a mere 852 days to reach 10m users. Google took 16 days to achieve the same.