Why everyone should develop an entrepreneurial mindset
More companies than ever expect – and even demand – that employees adopt an entrepreneurial mindset. A close look at current job descriptions reflects this trend: About half of all ads for jobs emphasise that applicants demonstrate an entrepreneurial mindset. The pandemic likely intensified this trend. Samantha Dewalt, Managing Director of the Lehigh@NasdaqCenter, and Anh Dinh, Research Fellow at Lehigh@NasdaqCenter and Head of Accreditation at the University of Hohenheim, discuss what an entrepreneurial mindset is, and how to put it into action.
Question is, what exactly is an entrepreneurial mindset?
This much we know with some certainty: an entrepreneurial mindset is a combination of motives, traits, skills, and attitudes. But at last glance, a Google search for the term "entrepreneurial mindset" yielded no fewer than 18.5 million results. With so many definitions available, the concept remains widely overused and drastically misunderstood. So pinning down the precise meaning can be tricky.
Even so, the research we conducted through Lehigh@NasdaqCenter recently attempted to do just that. Our study, published last November in the Journal for Entrepreneurship Education, identified the 11 attributes of an entrepreneurial mindset that appear to be most essential for business success.
And here’s the good news: you can train yourself, through experience – and, ideally, education – to develop all 11 of these characteristics. And should. An entrepreneurial mindset is applicable to any workplace setting, equally valuable whether you’re an executive in a corporate environment, the founder of a startup or a freelancer.
We conducted a systematic, comprehensive literature review and fielded an original survey applying the Delphi method. Our questionnaire asked 52 entrepreneurial founders and entrepreneurship educators what constitutes an entrepreneurial mindset. No fewer than 47 definitions came back. We then aggregated those responses into the eleven attributes most often mentioned.
The study yielded some surprising findings. For example, success as an entrepreneur depends less on how much knowledge you’ve accumulated—or even how much formal education and training you’ve undergone—than it does on your personality, your attitude, and your level of motivation about entrepreneurship.
Founders, we learned, are more inclined than educators to believe that an entrepreneurial mindset is built from DNA. The qualities required for success, founders reported, are traits such as resilience, an acceptance of mistakes, an ability to deal with uncertainty, the stamina to endure ambiguity, and the fortitude to navigate through failure.
Our big takeaway? Budding entrepreneurs can best learn from experienced, practicing entrepreneurs, whether from colleagues on the job, mentors during an internship or through professors and guest speakers at a university.
How best to develop an entrepreneurial mindset no matter which career direction you pursue? Here’s a menu of 11 promising qualities you’ll need most:
Opportunity recognition and exploitation: This is the ability to recognise patterns that represent a valuable entrepreneurial opportunity. It also means staying alert to surroundings and flexible enough to pivot in new directions. For instance, amid the coronavirus pandemic, some liquor companies switched to producing hand sanitizer. Take Cameron Harvesty, founder of Poppy Flowers, a specialist in flowers for weddings and other events. The pandemic disrupted her business. But rather than give up, she identified a new opportunity – redirecting her focus toward creating at-home floral arrangement kits for do-it-yourself customers.
Risk-taking: No new business comes into existence without someone taking risks. This requires courage and the foresight to assess which potential losses are “affordable” versus unaffordable. Dawoon Kang, co-founder of Coffee Meets Bagel, pitched the stars of “Shark Tank” in 2017, only to turn down Mark Cuban’s $30 million offer to buy their company outright. The founders, seeing the potential to become a billion-dollar operation, took a big risk. The company is currently worth $150 million.
Uncertainty and ambiguity tolerance: Entrepreneurship is a journey into the unknown. Entrepreneurs neither know the likelihood of success or a failure nor the extent of one or the other. They confront – and must accept – high levels of uncertainty and ambiguity.
Creativity and imaginativeness: These attributes are the root of invention and innovation. They require “divergent thinking,” also known as thinking outside of the box, to enable the emergence of unconventional ideas. The result is novel discoveries that solve problems.
Innovative behaviour: It can be useful to question the status quo, to rethink how to boost efficiency in current business scenarios, and to anticipate upcoming trends. Netflix is an example. Blockbuster, then dominant, declined to take Netflix seriously. Today Netflix has revolutionised how we consume television.
Value creation: Entrepreneurship translates into value for society. In devising the printing press, German inventor Johannes Gutenberg brought about not only his own wealth but also benefits for private households and corporations. Kathleen Egan, combined her passion for surfing and background as an engineer and consultant to co-found ecomedes, a company that connects buyers and sellers of commercial building products through cloud-based software that reduces costs and improves sustainability. With her as CEO, the company creates value for commercial builders in particular and for society as a whole.
Problem-solving: The mode of thinking known as “convergent” means the use of a linear, in-depth analytical process to generate feasible solutions to a problem. Another case in point from the pandemic came from the automotive industry. Car companies such as Daimler and Ford shifted to production of medical equipment such as mechanical ventilators to support hospitals and patients. Entrepreneurs think critically about the present to improve the future for customers, business partners and employees.
Resilience: The capacity to overcome setbacks and adapt to challenges and bounce back from surprises is instrumental for the emotional rollercoaster we call entrepreneurship. Shana Tellerman, founder & CEO of Modsy, an online interior design services company, made the difficult decision to close her company this past July. But she quickly demonstrated the resilience to bounce back. She found a way for the startup’s internet protocol and technology to live on in a new capacity within a new entity.
Self-efficacy: Whether aspiring entrepreneurs enter the entrepreneurial process in the first place often depends on how much an individual believes in his or her ability to function as an entrepreneur. It’s a form of confidence.
Proactivity: The true entrepreneur takes matters into his or her own hands and pursues business opportunities rather than expecting miracles to materialise. It calls for a willingness to trigger positive change.
Mistakes and failure competence: Mistakes and failure in entrepreneurship are unavoidable. More than 80 percent of all start-ups fail in the first three years, other research has found. For instance, the successful online payment company Paypal was founded only after entrepreneur Max Levchin made one attempt after another. This persistence, a cousin to resilience, calls for accepting that mistakes and failure during the venturing process are inevitable and, equally important is transforming those setbacks into lessons learned.
So seek exposure to formidable real-world challenges, devise real-world solutions to real-world problems, pit yourself against bare-bones settings with few resources. Participate in active learning that features hands-on experience and direct application. Interact with high-impact entrepreneurs, whether they’re appearing as guest speakers at your school or acting as mentors and coaches.
Anyone can acquire an entrepreneurial mindset. Even born entrepreneurs can learn to be much more effective. It’s never too late. And the best time to start is now.
Lehigh@NasdaqCenter, an education-industry partnership between Lehigh University in Pennsylvania and the Nasdaq Entrepreneurial Center in San Francisco