Evaluation of Qualities of Successful Entrepreneurs - Essay Example

& Campus Semester handed in CREATIVE JOURNAL JC number Lecturer’s My entrepreneur capabilities Evaluation of qualities of successful entrepreneurs The General Enterprising Tendency (GET) test comprises five factors related to the following characteristics of the enterprising person (NCGE, 2006, p.18): Need for achievement – self sufficient, optimistic, task / results orientated, self confident, persistent and determined, dedicated to completing a task; Need for autonomy: prefers working alone, dislikes taking orders, does not bow to group pressure, stubborn and determined; Creative tendency: imaginative and innovative, versatile and curious, lots of ideas, intuitive and guesses well, enjoys new challenges; Risk taking: will act on incomplete information, accurately assesses own capabilities, evaluates likely benefit against likely costs, sets challenging but attainable goals; Internal locus of control: takes advantage of opportunities, discounts fate, makes own luck, believes in controlling own destiny, shows high determination. Figure 1. Results of my entrepreneur’s qualities evaluation The results of my self-assessment according to the GET test (see Fig. 1) indicate that I have the entrepreneurial inclinations. My Total Score is 42, what is corresponds to a group of Owner-managers, according to Caird (1993). In three dimensions I have high scores, but in a “Creative tendency” the score is medium and in a “Locus of Control” the score is even low. What I need to improve Begley and Boyd (1987) consider the Locus of Control reflects an ability of an individual to influence events in his / her life. They refer low scores in this dimension to “external” persons who “reject the credo that personal effort is the primary determinant of outcomes” (p.81). Although actually I believe in my efforts and try to take advantage of opportunities, I can admit that sometimes I tend to think that there is my destiny programme in the universe that rules my life. But now I know that my relatively low level of the Locus of Control can be a barrier to my entrepreneurial aspiring, so I should learn to exert more control over my life and to increase my personal responsibility in achieving success in the context of solving my problems. I should also pay more attention to development of my creativity, improving imagination and an ability to see different perspectives of ordinary things. Activity to attract and keep entrepreneurial talents in my company I consider my company attracts and keeps entrepreneurial talents thanks to two main principles of its business – to give the opportunity for personal growth to each employee and to enhance personal capabilities through building and development of the team. Each person in our company feels that the company’s success depends upon successes of each of us and vice versa. Creative climate of my working environment Amabile (1998) asserts that creativity takes place when expertise, creative-thinking skills, and motivation join together. In my company all three necessary components are established. In spite of that my business (a coffee shop) comprises much of routine, a creative atmosphere is provided thanks to challenges that are regularly given to staff, e.g. a contest in finding a best solution to attract of our ex-customers or to make suggestions for a seasonal menu. New ideas from the personnel are encouraged by our managers, especially if the ideas help to improve customer services. I think our good open-minded creative climate is also provided by the team that consists of people with diverse expertises and backgrounds – it helps us to gain different views and to synthesize them in new, sometimes unusual ideas. 2. Creative thinking and problem solving My approach to creative thinking and problem solving Sloane (2010) says: “Important decisions need more than instinct” (p.63). I agree with the statement - when I need to make a decision I often use my analytical ability: 1. I identify and formulate the problem. 2. I understand causes of the problem. The famous Kiplings “six serving men” help me in that – I ask myself about “what, why, when, how, where and who” regarding this issue. All answers I write down on a big sheet of paper. 3. Then I analyze all "pros" and "contras" of existing situation. It is helpful to analyze in relation to questions above, e.g. what is good and what is bad in this situation, why and for whom it is good and it is bad, etc. To ensure a good analysis I try to gather as much information as possible. 4. I generate ideas of possible solutions and analyze each of them in a similar way. For each of solutions I make a list of “pros” and “contras” on a separate sheet of paper. 5. After some time I look through all lists of solutions and their “pros” and “contras” once more and make changes if it is needed. 6. Basing upon the problem analysis, I make a decision. Sometimes it happens that the existing situation has more “pros” than possible solutions have – so I decide to undertake nothing. Sometimes my intuition suggests a choice. 7. After making a decision I act in accordance with the chosen solution and then I’m waiting for consequences. I’m always open to accept my mistake, if I made a wrong decision, and rewrite my action plan again. Barriers and triggers of my creative thinking process The biggest barrier of my creativity is a critique from other people. And the biggest trigger is an appreciation of my creative efforts from other people. So, I can say that “other people” is a most important factor that affects my creative thinking process. When I discuss my ideas with other people constructively - it encourages me to create more. On the contrary, if people only criticize my ideas – I become disheartened. Among other barriers I would mention a lack of resources - time, money, materials, information, etc. Among other triggers there are market and technological innovations, better resources, better communications with my friends and colleagues, and satisfaction of results. Analysis of problems Mazzarol (2007) claims that “one approach to fostering creativity is the development of rich pictures” (p.57) – the technique suggested by McFadzean (1998) to facilitate a better group understanding of a problem, its patterns and relationships between its features. I will use this technique to analyze a problem which bothered our company some time ago. 1. A brief statement of the problem. Our coffee shop works from 8.00 am to 10.00 pm everyday. As it is located in an entertainment area we have a lot of customers at a second half of a day, while at the morning (especially from 10 to 12 am) the coffee shop is often empty. What should we do to work more intensively at these hours?   2. Two pictures – the future and the present situations. Figure 2. The future and the present situations. 3. A brief explanation of the pictures. Present picture shows an empty table in a coffee shop. From 10 to 12 am there are few customers, as a consequence the coffee shop does not work effectively at this time. Future picture shows a cook working intensively; it means that there is a sufficient flow of visitors in a coffee shop, ensuring the efficiency of business. Thus, in order to ensure a sufficient flow of visitors from 10 to 12 am, the coffee shop should develop special offers addressed to the audience who is willing to take advantage of the opportunity to visit our coffee shop at this time (e.g. old people). 4. A compose strategy to shift from the present situation to the preferred future: (1) Analysis of market and a choice of a target group, taking into account limitations (location of the coffee shop, time for special offers, etc.); (2) Development of offers for this target group and calculation its efficiency; (3) Making changes in operations in order to provide offers; (4) Launching the new special offers (implementation, marketing, etc.) and analysis. 5. How the process differs from my usual approach. The main difference of the “rich pictures” approach is in that it intends using of both hemispheres of the brain – left and right, while in my usual approach the left side of the brain is mostly used. According to Lewis (1987): “While the left brain requires hard facts before reaching a conclusion, the right is happier dealing with uncertainties and elusive knowledge. …The left specializes in precise descriptions and exact explanations; the right enjoys analogies, similes and metaphors” (p.38). The “rich picture” approach uses pictures as metaphors of the situation, it helps to ensure a simultaneous work of both hemispheres, which in its turn, helps to explore the problem more deeply and to produce innovative and creative ideas. 3. Innovations in my life Innovations that have influenced my life profoundly Innovations related to communication have perhaps the most profound influence on my life. On the first place there are Internet and its various services – Twitter, Skype, social networks, which provide me the reliable links with relatives, friends, and colleagues. It is hard to imagine now how people lived without these communication tools. Today I can easily (and at a low price!) visit my friends in their virtual spaces and learn news about them, and I even need not to leave my room. Virtual communications give me a lot in my real life – I can travel around the world, staying at my internet friends’ places; I can do a virtual business, which will give me a real income; I can get valuable knowledge, which will help me to become a real professional. A big part of my life is now in the internet, and I like it - it gives me mobility and freedom to make my own choice. Ways of my awareness about innovations I become aware about the innovations either via news from specialized web-sites, emails of which I receive; or via internet-users that post news in their blogs. Sometimes I become interested in information of innovation on TV or in a printed magazine, but in order to find detailed information about new products and services I browse the Internet. Another reliable source of my awareness about innovations is my friends. We discuss innovations when occasion offers or send links to the useful internet-resources to each other. I trust their opinions and rely upon their advices regarding the innovations’ features. My type of innovation adopters According to Rogers (2003), there are five categories of adopters: innovators, early adopters, early majority, late majority, and laggards. I would refer myself to early majority group. I like innovations and gather information about new gadgets and tools that interested me, but I prefer to start using an innovation after some time, when a part of people have tried it already. I find it is easier to learn how new device or programme works when there are references and advices of others who already knows details. Because I have not much time to experiment with a novelty, I prefer to wait until some information is gathered from early adopters, so that I can use their knowledge and adopt the new device faster and easier. My process of decision about innovations Rogers (2003) suggests five stages of the innovation-decision process: knowledge, persuasion, decision, implementation, and confirmation. My innovation-decision process also consists of five stages, but I’ve formulated them as follows (see Fig.3): Figure 3. My innovation-decision process. At the first stage – awareness – I learn about the innovation and get the first information about its features. At this early stage the innovation is like a “black box” for me – I know very little about it. If I understand that the innovation is interesting to me, I gather more information so that to increase my awareness. It may last quite a long time, until I make sure that gathered information is sufficient to try launching. The stage of decision relates to this moment. The stage of launching follows the decision. I separate launching and exploitation stages because the launching stage is important for me – if I find that there are troubles with the innovation’s launching, I unlikely will continue its adoption – in this case I will either return on the Awareness stage to gather more information, or will give up this innovation at all. If the launching is successful, the stage of exploitation goes after. This stage is similar with the Roger’s implementation – I use the innovation and determine its usefulness and advantages. If I’m satisfied by the innovation, the final confirmation stage follows, and then I can say that the innovation is proofed and became a “routine part” of my life. Key actors influencing my decisions about innovations If I make decision about innovative technological gadget, or software for my computer, or vehicle – there are my friends who can influence it. I expect from my advisers the reliable information about distinctive features and specific characteristics of the innovation, how it is good in exploitation, what benefits and possible problems I will get, and other useful information. 4. Funding a venture My venture and related funding My venture is a coffee shop located in an entertainment area. Our main purpose is to satisfy customers offering them quality products and services. Our customers are local coffee addicts and tourists, who want to have a snack and rest. The coffee shop is also a place where people can meet and socialize with each other. Among the key sources of the venture funding I would choose the following: Debt financing Factoring Overdrafts Commercial bills Insurance companies Equity investment Owner’s equity Business angels capital Cash-flow Retained earnings I wouldn’t rely upon the Long-Term Loans because it is connected with high rates. Perhaps, formal venture capital would be also helpful for me, but I should learn more about it to make a decision. Issues of fund-raising process I consider the main issues that I might encounter in my fund-raising process are connected with the necessity: To present a clear businesses plan that includes a convincing market analysis, operations plan, cash flow forecasts and risk assessment. To present strategic analysis and plan. To ensure a good reputation of my company. To ensure an existing good stable cash flow. To ensure an adequate shareholder funds. Implementation vs. planning Cox et al. (2002) suggest that at the planning stage of the new venture creation process an entrepreneur fulfils two tasks: planning a new business and writing a formal business plan, while at the implementation stage tasks are: managing a small business and growing a successful business. So I can say that if the planning is connected mostly to predictions, the implementation is a process of realization of the planned actions on a day-to-day basis. Implementation has to do with operations management, while planning has to do with strategy management. During the implementation stage a manager should do his or her best in order to achieve goals defined at the planning, he / she should organize and motivate people, provide resources, mitigate risks, ensure success in the accomplishment of the plans and in further business prosperity. In venture business successful implementation is especially important to ensure returns of venture capital. Specific issues connected with the location As I said above, my coffee shop is located in an entertainment area, that’s why we have an irregular customers flow during a day – I guess it is only one problem related to our location. But at the same time we have a great benefit – from the afternoon a flow of customer is big and steady. 5. Review and discussion of an article “Some bosses stifle their employees and some make them shine” – so Wiseman and McKeown (2010) begin their article “Bringing Out the Best in Your People” in a May’s Harvard Business Review. The article deals with the issues of leadership and fostering a culture of intelligence in teams and enterprises. Basing upon the results of their study, Wiseman and McKeown (2010) introduce two types of leaders; they call them “diminishers” and “multipliers”. Regarding to the culture of intelligence, one can understand that “multipliers” are leaders who multiply intelligence among their employees and “diminishers” are leaders who diminish it. The critical question for multipliers is not “Is this person smart” but rather “In what ways is this person smart?” The main ideas and suggestions of the article correlate closely to issues of management of creativity, innovation and entrepreneurial skills, which we studied during the course. That’s why I’ve chosen the Wiseman and McKeowns article for reviewing in my Creative Journal. Wiseman and McKeown (2010) assert that a leader can get much more from a team or an organisation, without extra resources, if he or she leads like a multiplier. They reveal some distinctive areas – talent, culture, strategy, decision making and execution, where the leadership style of multipliers differ profoundly from the leadership style of diminishers. In relation to these areas the authors see five types of multipliers and diminishers (see Table 1). The authors explain in details what multipliers do differently in each of the areas, representing some bright examples of real managers who act as multipliers. In conclusion the authors give suggestions on how to become a multiplier even if a leader isn’t one naturally. It appears to be quite simple – first of all, a leader needs limit her or his comments, making space for others to contribute; and second, a leader need not fear to ask questions so that to challenge people to think, stop and rethink again. “…When you invite people’s best thinking and lead like a multiplier, your team will give you more – more discretionary effort, more mental and physical energy, and more of the fresh ideas critical for long-term success” (Wiseman and McKeown, 2010, p. 121). Table 1. The Five Types of Multipliers and Diminishers (Adapted from: Wiseman and McKeown, 2010, p.119). Diminishers Multipliers Talent The Empire Builder Hoards resources and underutilizes talent The Talent Magnet Attracts talented people and uses them to their highest potential Culture The Tyrant Creates a tense environment that suppresses people’s thinking and capabilities The Liberator Creates an intense environment that requires people’s best thinking and work Strategy The Know-It-All Gives directives that demonstrate how much he or she knows The Challenger Defines an opportunity that causes people to stretch their thinking and behaviors Decision making The Decision Maker Makes centralized, abrupt decisions that confuse the organization The Debate Maker Drives sound decisions by cultivating rigorous debate among team members Execution The Micromanager Drives results through his or her personal involvement The Investor Gives other people ownership of results and invests in their success Wiseman and McKeown (2010) emphasize: “Getting the most from your team is important all the time; but when the economy is weak, it’s even more critical” (p.118). In my opinion, these words are very significant for understanding of what leaders of organisations can do so that not only to save their businesses, but even to develop them and increase their value under the current difficult economy circumstances. The good solution is to make a shift in responsibility of thinking about business from a leader of organisation to the organisations’ employees. Results of the research represented in the article demonstrate evidently that when leaders give people a permission to think, speak and act; when they provide a high tolerance for mistakes, understanding the importance of learning along the way – they create flourishing atmosphere and mental spaces where people can grow and improve in innovative thinking and entrepreneurial abilities. As a result the business will benefit also. I consider the article is a helpful supplement to our Entrepreneurship and Innovation course; it contains not only comprehensive theoretical insights on modern leadership issues, but also a number of real up-to-date examples and practical advices. 6. Reflective Overview What have I learnt during the delivery of the subject? What did I gain from the simulation? Working on the subject, I realized a lot of useful things. My major outcome of this work is an understanding that creativity is also an essential quality of entrepreneurs, along with traditional characteristics of entrepreneurs, such as responsibility, high energy, independence, etc. I learnt that successful businessmen can combine analytical and creative abilities so that to get profound results. It inspires me to develop my creativeness together with other significant qualities needed for an entrepreneur. In addition I’ve learnt many practical things related to management of innovations, leadership, human resources management, business planning – all of those aspects, which are vital for small business management. I realized what innovations are, why they are important for businesses, where they can occur and how to foster innovations within a company. The simulation was also extremely helpful, giving me a possibility to explore my knowledge and managerial skills in practical situations. Events happened nearly like in real life, and I had to make decisions in various aspects of business management so that to save my virtual business and keep it prosperous. This is very useful practice for understanding changes in real world and for training abilities to react on changes creatively and sensibly. My perception of whether I might seek to be more entrepreneurial or innovative? I always believed that my personal background and characteristics enable me to become a good entrepreneur. I also knew that I have to learn more in order to be successful. But I knew little about my real abilities, until I evaluated them. The result of self-assessment revealed my weaknesses that I see as opportunities for personal development. After reading of books and articles related to subjects of the Unit, I also understood that there are a lot of managerial aspects where I have to improve myself to be more entrepreneurial and innovative. Now I know that people with a passion for entrepreneurship and innovation rely on intuition and a high level of creativity to sense a new opportunity, and at the same time they have an ability to count up an economic benefit, to provide a reliable organisational environment, to solve complex problems of leadership. To become one of them, I should learn and train more. References Amabile, T.M. (1998). How to Kill Creativity. Harvard Business Review, September-October, 78-79. Begley, T.M., & Boyd, D.P. (1987). Psychological characteristics associated with performance in entrepreneurial firms and smaller businesses. Journal of Business Venturing, 2, 79-93. Caird, S. (1993) “What Do Psychological Tests Tell Us About Entrepreneurs?” Journal of Managerial Psychology, 8 (3), 11-20.  Cox, L.W., Mueller, S.L., and Moss, S.E. (2002). The impact of entrepreneurship education on entrepreneurial self-efficacy. International Journal of Entrepreneurship Education, 1(2), 229- 245. Lewis, D. (1987). Mind Skills: Giving Your Child a Brighter Future. London: Souvenir Press. Mazzarol, T. (2007). Entrepreneurship and Innovation: A Manager’s Perspective. Prahran, Victoria: Tilde Publishing. McFadzean, E. (1998). Enhancing creative thinking within organisations. Management Decision, 36 (5), 309-315. NCGE. (2006). Advising Entrepreneurial Students. Information and Guidance for Careers Professionals. Birmingham, National Council for Graduate Entrepreneurship (NCGE). Retrieved June 03, 2010 from http://www.ncge.com/files/biblio970.pdf Rogers, E. M. (2003). Diffusion of Innovations. 5th Ed. New York: Free Press. Sloan, P. (2010). How to be a Brilliant Thinker: Exercise your mind and find creative solutions. London: Kogan Page. Wiseman, L., and McKeown, G. (2010). Bringing Out the Best in Your People. Harvard Business Review, May, 117-121. Read More