“Success is going from failure to failure without loss of enthusiasm.” — Sir Winston Churchill.
Certain leadership characteristics allow leaders, especially entrepreneurs, to experience tremendous success. These psychological chacteristics are innate, not readily observable, but essential nonetheless. This page contains 9 of these entrepreneurial characteristics.
- Before You Can Be a Great Founder, You Must First Dare
- If it is Difficult, But its Easier If You Learn To Act Like a Hero
- Nine Success Traits
- Characteristic 1: Self-Esteem
- Success Characteristic 2: Need to Achieve
- Entrepreneurial Quality 3: Screening For Opportunity.
- Success Belief 4: Locus of Control
- Entrepreneurial Trait 5: Goal-Driven
- Founder Characteristic 6: Optimism
- Quality 7: Courage
- Habit 8: Tolerance to Ambiguity
- Entrepreneurial Habit 9: Strong Internal Motivation—The “Fire Inside”
- On Site Resources
- Related Pages
- References and Resources
Before You Can Be a Great Founder, You Must First Dare
“Some are born great, some achieve greatness, and some have greatness thrust upon them.” Act II Scene 5 of Twelfth Night. — William Shakespeare
If you want to be a manger, work for a corporation. If you want to do something great, be an entrepreneur.
Entrepreneurs who think like a manager will fail. For one thing, you can’t manage a team ‚ you lead a team. You can’t manage change, you learn and you adapt. You don’t manage risk, you face down fear. You won’t always succeed, you will also fail. You never fall back, you need to fall forward. You have to have the courage to DARE.
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If it is Difficult, But its Easier If You Learn To Act Like a Hero
The journey of a thousand miles begins with a single step. If you’re ready to start living your dreams, then The Way of Heroes is the place for you.
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“Anyone can captain a ship in smooths seas. But it takes a great man to guide a ship through the storm.” — Unknown
To keep going despite setbacks is the hallmark of all successful entrepreneurs and business leaders. So much gets written about the managerial challenges of running a business, but there’s less said about great leadership. This article describes nine psychological characteristics of great leadership.
Nine Success Traits
Characteristic 1: Self-Esteem
Underlying everything is a high sense of one’s self-worth. Without that, individuals will never undertake tough challenges. Conversely, it’s important to develop self-esteem if one does not have it.
Success Characteristic 2: Need to Achieve
This need has been associated with entrepreneurs and leaders who constantly seek to perform at their best. For example, this leadership characteristic would have described Oliver Cromwell (1599 to 1658), the Lord Protector of England, who once remarked, “He who stops being better, stops being good.” On the other hand, the great Harvard psychologist David McClelland is most associated with the need for achievement, a need learned by children primarily from their parents (McClelland, 1965).
Individuals high in this need are open to feedback, are goal-oriented, seek to be unique, and strive for accomplishments based on their efforts—characteristics important to effective leadership. They also take risks, not extreme risks, but moderate ones.
And what is moderate risk? Moderate risk means you can influence events but don’t have complete control. The key is that individuals believe they will be successful, but it is not a sure thing.
Entrepreneurial Quality 3: Screening For Opportunity.
Like all individuals, leaders screen incoming information to separate the useful from the useless. However, successful entrepreneurs and business leaders constantly filter incoming information to seek new growth opportunities. They act like gold miners who must shift through tons of dirt to find those a few precious golden nuggets.
Unfortunately, most business people seem blind to new opportunities and continually miss new ways to grow the business. Some would argue that it is not finding opportunity but getting lucky. But, of course, some individuals seem to have the knack of being in the right place and at the time. For example, I have a good friend, George, who escaped communist Romania in the early 1960s and made his way to the United States.
After being here for a while, he decided to start a leather goods business. Putting together a few samples, he then talked to buyers about the possibility of getting started. Getting an appointment with the very first buyer, he showed his samples and got this response, “I’ll buy everything you can sell me.” He asked why he was so fortunate, and the buyer responded, “I wanted to drop our previous vendor since he was ripping us off” From this “lucky” start, George went on to develop an incredibly successful business—becoming a millionaire many times over. One could argue that he was lucky or that he capitalized on an opportunity missed by competitors.
Success Belief 4: Locus of Control
Successful leaders and entrepreneurs typically show a high internal locus of control (Lee, 2001). In many studies done over the years, those with a high internal locus of control are more likely to experience success than individuals who are high on the external locus of control. When someone perceives events as under the control of others, fate, luck, the system, their boss, etc., they have an external locus of control. Individuals high on the internal locus of control have different assumptions about how the world works. They assume that any success they experience is due to their efforts and that they can influence events. Interestingly, internals also think the failure was also their fault.
Entrepreneurial Trait 5: Goal-Driven
Businesses come and go, but those that last always share a common characteristic with their founder—a relentless drive to accomplish goals. They understand the priorities and continue to work toward that goal, day in and day out.
For many, the leadership characteristic of staying focused on a goal is tricky since living in a world of business tends to distract us. In his book “The Time Trap,” McKinsey put it this way: “A man was struggling to cut down enough trees to build a fence. An old farmer came by, watched for a while, then quietly said, “Saw’s kind of dull, isn’t it?” “I reckon,” said the fence builder. “Hadn’t you better sharpen it? Said the farmer. “Maybe later,” said the man, “I can’t stop now—I got all these trees to cut down.” Our goal should be to continue perfecting ourselves, which we rarely allocate time to.
Founder Characteristic 6: Optimism
Underlying successful entrepreneurial leadership is a boundless font of optimism that never seems to end. When faced with a problem, they view it as a challenge. When faced with a setback, they view it as a new direction; when told no, they say, “Maybe not now, but I know you’ll change your mind later.” This characteristic contrasts sharply with the vast majority of people who project a more pessimistic, defeatist quality. This belief in the positive serves as the foundation for dealing with the many setbacks one will inevitably encounter in the business world.
Young children naturally have a favorable view that seems more damaging as they age. Parents can quickly test this in children by asking, “What will you be when you grow up?” Young children confidently say precisely what they want to be. However, ask a teenager the same question, and they aren’t so sure.
Quality 7: Courage
Many professors talk about entrepreneurs as risk-takers. But this leadership characteristic is like saying snow is cold—it’s accurate but missing something. You might say one must have guts. Building a company from the ground up requires a great deal of courage.
Someone once explained that large organizations function like “womb,” protecting employees from a harsh and unforgiving environment. It takes great courage to leave a corporate or government womb and strike out by oneself into the cold, cruel world of business. When one first starts a business, one is alone.
Habit 8: Tolerance to Ambiguity
This term refers to a person’s tolerance to uncertainty and risk. Entrepreneurs generally score high on this scale (Entrailgo, 2000).
As we age, we tend to be more comfortable repeating a relatively small set of behaviors. For example, we eat the same food, shop in the same stores, watch the same programs, have lunch with the same people, and listen to the same music. etc. One may change jobs but rarely does one change industries. It’s amazing how many people retire in the same industry where they got their first job.
If one’s tolerance for ambiguity is low, one will gravitate toward large, established organizations—better still, work for the government where things change little, if at all. In contrast to older, established organizations, entrepreneurial start-ups exist in an environment where almost everything is new, and many things have not been done before. For example, no policies exist to guide action, and start-ups typically lack the old-timers who serve as the voice of experience.
Entrepreneurial Habit 9: Strong Internal Motivation—The “Fire Inside”
The motivation that drives our behavior comes from internal (intrinsic) and external (extrinsic). Intrinsic factors include constructs like needs, desires, motives, and willpower. Outside factors include any environmental motivational influence, such as rewards and punishments.
For entrepreneurs, the most important motivational factor is the intrinsic one. Entrepreneurs keep going even though employees tell them they are foolish, friends say they are wasting their time, and family tells them to get a real job. When the intrinsic drive goes away, so does any chance of success.
A few years ago, we put together a 160-hour program to teach very bright scientists and engineers how to put together an investor-quality business plan. The thinking was that with the right knowledge and coaching, these future entrepreneurs would be able to get a seed round from investors and go on to build a fast-growing organization. Unfortunately, however, a number of these individuals never opened the doors. Why, you might ask? It wasn’t that they lacked knowledge and brilliance—it was a lack of desire, what we called the “fire inside.”
The good news is that many of these leadership characteristics are learnable. For example, one can train the mind to recognize opportunity, optimism is a controllable state of mind (Seligman, 1988), and even the need for achievement can be increased (McClelland, 1983).
The bad news is it’s not easy to do so. After all, one can’t make a house strong with a good foundation, and one can’t be successful in business unless one possesses specific personal characteristics. But where there is the will, there will be a way.
On Site Resources
References and Resources
Entrialgo, Montserrat, Fermandez, Estaban & Vazquez, Camilo (2000). Characteristics of Managers as Determinants of Entrepreneurial Orientation, Enterprise & Innovation Management Studies, 1(2):187-2005
Lee, Don & Tsang, Eric (2001). The effects of entrepreneurial personality background and network activities on Venture Growth, Journal of Managerial Studies, 38 (4): 583-602.
McClelland, David (1955). Need achievement and entrepreneurship: a longitudinal study, Journal of Personality and Social Psychology. 1:289-392.
McClelland, David (1983). Human Motivation. New York: Addison-Wesley.
Seligman, Martin (1988). Learned Optimism: How To Change Your Mind and Your Life. New York: Pocket Books.