“Is there an entrepreneurial gene?” by Cirilo P. Noel (July 11, 2011)
SUITS THE C-SUITE By Cirilo P. Noel
Business World (07/11/2011)
The World Entrepreneur Of The Year in Monte Carlo, Monaco is the annual grand gathering of the world’s best entrepreneurs organized by Ernst & Young and where the World Entrepreneur Of The Year is announced.
The Philippines was represented by Tennyson Chen, president of Bounty Fresh Chicken, as 2010 Entrepreneur Of The Year Philippines.
The Philippines has been represented well in this competition since 2004, when our very first contender, Tony Tan Caktiong, won the coveted global award.
For the first time this year, a woman was named the world’s top entrepreneur. Her name is Olivia Lum, global CEO and president of Hyflux, one of the world’s leading providers of integrated water management and environmental solutions.
Olivia’s victory was most welcome because entrepreneurship is traditionally viewed in many cultures as a male-dominated field.
Like it or not, people have stereotypes of entrepreneurs. In the Philippines, for example, an entrepreneur is synonymous with the term “businessman” who is engaged in the traditional “buy and sell.”
This, of course, is farthest from the truth, as gleaned from the impressive list of Entrepreneur Of The Year Philippines winners and finalists in the past seven years.
Yet, the question persists: Is there really a typical entrepreneur?
As founders of the world’s most prestigious business award for entrepreneurs, Ernst & Young has had the privilege of meeting and working with some of the most successful and creative entrepreneurs.
Although they operate across a highly diverse range of sectors and regions of the world, the Entrepreneur Of The Year World Program has found that entrepreneurs do share some traits and habits.
This led the program to conduct research through a survey and in-depth interviews with 685 entrepreneurs to help formalize a model of what comprises an entrepreneur. The result is a report titled, “Nature or nurture? Decoding the DNA of the entrepreneur.”
The study aimed to verify the perception of entrepreneurs as the “rock stars” of business whose reputation is that of freewheeling, innovative, risk-taking mavericks.
Are they really the dreamers whose freedom allows them to operate in a world far removed from the typical routine of corporate life as traditional managers?
This is the romantic view of entrepreneurship which is highly appealing but, just like other stereotypes, presents an incomplete picture.
In truth, the overlap between entrepreneurs and traditional managers is larger than what is generally assumed. Entrepreneurs may be highly creative and innovative persons with excellent ideas, but it requires compelling leadership and business discipline to turn those ideas into successful ventures.
In short, execution is key to success.
There has been much academic research on identifying the particular characteristics of a successful entrepreneur.
None has resulted in finding a simple formula or an “entrepreneurial gene” that can be nurtured or replicated.
However, research has shown that there can be certain attributes, characteristics and habits that successful entrepreneurs share.
These traits alone, though, are not enough to create the conditions for business success. A successful enterprise depends on the dynamics of internal and external factors such as market demand, timing, geography, culture, political environment and sometimes even pure luck.
The report came up with five key findings that can provide some insights into the minds of some of the world’s best entrepreneurs. The model describes the core of an entrepreneurial leader which includes both the innate and external characteristics of his or her mind-set, talents and abilities.
First: entrepreneurial leaders are made, not born. While many entrepreneurs start at a young age, the experience they gain from education and time spent in a more traditional corporate environment is vital to their future success. More than half of the survey respondents referred to themselves as “transitioned” entrepreneurs in that they had previously spent time in traditional employment before going on their own.
Second: entrepreneurship is rarely a one-off decision. Majority of the respondents were “serial entrepreneurs” in that they launched at least two companies before becoming successful. Entrepreneurs who embark on more than one business venture acquire valuable insight and lessons on how to make a new business successful.
Third: funding, people and know-how are the biggest barriers to entrepreneurial success. Most respondents said that their greatest obstacle is financial or the lack of funding. Despite a gradual easing of credit conditions in many countries, many entrepreneurs continue to experience problems with accessing finance. People and expertise were also cited as big obstacles. Moreover, people with the right skills are difficult to find, but finding people with the right values is even harder.
Fourth: entrepreneurs share common traits. As mentioned previously, entrepreneurs are made not born but they exhibit a combination of behaviors and attitudes. At the heart of the model is a strong internal locus of control — a personal belief that events result directly from an individual’s own actions and behaviors. This is complemented by a mind-set that sees opportunity where others see disruption, along with an acceptance of calculated risk and tolerance for failure. Shared traits include having vision, passion, drive, integrity, innovation, ability to take risks, resilience, pro-activeness, customer focus, teamwork, flexibility, focus on quality and loyalty.
Fifth: traditional companies can learn from entrepreneurial leaders. Fast-growing enterprises tend to place larger amounts of empowerment and share ownership in the hands of their employees. Entrepreneurial leaders also recognize and reward innovation, unlike traditional companies with few incentives because they can view innovations as disruptions to their business models. These two areas — employee incentives and fostering innovation — are good places to start. In a previous C-Suite article, I had discussed the concept of “intrapreneurship,” where employees in large companies are encouraged to think and perform like entrepreneurs.
While research has shown that an “entrepreneurial gene” is unlikely, entrepreneurs have created a certain persona as business leaders who play an increasingly important role in the global economy.
Their ability to see opportunities in an uncertain environment, take calculated risks and be tenacious in turning ideas into successful ventures are inspiring attributes.
While they enjoy considerable independence and may not be answerable to a corporate boss, entrepreneurs assume a huge sense of accountability and responsibility to customers, employees, investors and, in most cases, to the community and country.
Indeed, these business players are made, not born. Nurture, not nature, execution nor concept, are key in shaping an entrepreneurial mind-set.
(Cirilo P. Noel is the Chairman and Managing Partner of SGV & Co.)
This article was originally published in the BusinessWorld newspaper. It is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.