Running Your Own Business

The book is called: “So you want to be an Entrepreneur?”
The title should really be: “So you want to run your own business?” as the definition of what an entrepreneur is varies depending on with whom you talk, and within which sector of industry they operate.

The goal of running a business isn’t to make a profit. The goal of running a business is to meet customer needs, so they will pay you, so that you make a profit. That, at the end of the day, allows you to actually reinvest for the development and growth of your business. But not everyone thinks this way.

The problem is, most entrepreneurs do business in exactly the same way that most entrepreneurs do business, and they struggle to achieve comfortable mediocrity at best. Why is this the case?
It is because they model what creates struggle and mediocrity rather than modelling what creates extraordinary entrepreneurial success!

The statistics speak for themselves:

  • 8 out of 10 businesses fail in the first 5 years – (I know this one first hand!)
  • Only 1% of business owners are millionaires.

So which way is best, from a business perspective? And which way is best from a profit perspective?

Motivation

The next question to ask is: what motivates a person to become an entrepreneur? Or simply to run their own business?
Entrepreneurs have high “Achievement” rating – the doing things better is not about reward or recognition given by others.  It’s simply about doing things better. i.e. for less effort or for more output or higher quality etc. as judged by themselves. This point is also important as a high “Internal” suggests an entrepreneur is more confident in their ability to be proactive when making decisions (Rotter, 1966).

Easy wins or tough challenges do not necessarily fulfill achievement and make entrepreneurs work harder.  Doing things better than others because they improved them (product or process or output) does. But it’s not the behaviour or the outcome that continues to drive them, in as much as it is a recurring search for a “goal state”. (McClelland, p591). An individual’s need for Achievement as an entrepreneurial tendency was established by Johnson in 1990.
Motivations are formed in early life as a result of parental standard setting for personal improvement.  Values are cognitively formed in later life. (McClelland, p595). Who would have believed that your business success could be dependant upon how your parents were instrumental in your motivation as a child!

One’s attitude towards risk is also important. The difference between entrepreneurs and regular employees is that entrepreneurs risk their own business, their own assets and sometimes the assets of others in order to fulfil their achievements (Littunen, 2000). Consider now how you feel about risk, and how it affects your decision-making process.

Research

Over the past 24 months Gables Consultancy has profiled a growing number of men and women in the UK who are entrepreneurs. It’s easy to spot them: they tend to work for themselves! The data set for the book includes new and budding entrepreneurs as well as successful, multi-millionaire entrepreneurs, so the range is large, controlled and inclusive. This is done on purpose to ensure that wherever you are on the spectrum, you will find someone thinking in similar ways to yourself within the data set, and thus within the book.

They were either picked or volunteered to be profiled in the first instance, in order for their Thinking Preferences to be determined by an Identity Compass profile, so we can measure how they think, rather than what they think. As far as I know, this hasn’t been done in the UK to this degree.
The literature suggests that decision-makers’ mindsets and mental models are powerful factors in predicting organisational failure or prosperity. I have so far mapped out these mental models of thinking and compiled the data to demonstrate specifically how successful entrepreneurs think. The image below gives you an idea of the intention behind the book.

Entrepreneurs For Dummies

The image is a little long-winded and tongue-in-cheek, but if you want to grow your business, you have to grow your thinking.
The Identity Compass Profile forms the basis for my research as it gives a scientific break-down of the individual Thinking Preferences of each entrepreneur profiled. The collective data then points us to the thinking and behaving habits of the “average” Entrepreneur, allowing me to tease out those habituated thinking patterns that best-serve the more successful business minds.

What’s the Point?

The point of the book is four-fold.

The empirical literature in entrepreneurship indicates that one of the major problems is the inability of the founder(s) and his or her managers to navigate the change from an entrepreneurial business to a professionally managed business (Gupta and Chin 1994; Dyer, Jr., 1988; Hofer and Charan 1988).

The successful growth requires the founder/leader(s) and their managers to grow and acquire new capabilities (not skills) as the business expands. Their ability to assimilate these, and knowledge, may be based on their potential capabilities, as outlined in Elliott Jaques’ Stratified Systems Theory (1989). This research examines the validity of using Thinking Preferences as a guide to helping a business ease the transition from one organizational stage to the next. Therefore, the purpose of this study is to explore the relationships among key decision-makers, their potential capabilities and their changing roles and responsibilities in a new and growing business.

I also work with students at under-grad and post-grad levels and recent research suggests that one-in-four students express a desire to set up their own business once they finish their studies. Some even forgo their studies and go out into the real world early.

So the usefulness of this book will be for the following groups of people:

  • Budding Entrepreneurs: who would like to know how a successful business person thinks, in order to imitate the areas of thinking they know work, and will affect their business acumen.
  • New Entrepreneurs: who have recently set up a business and would like a pointer in the right direction so they can learn good habits now, rather than be forced to break bad habits later.
  • Existing Entrepreneurs: who are not doing quite as well as they had hoped and have the presence of mind to know they need help, but the kind of help to develop their thinking in order to change their approach to their business model, that isn’t currently working.
  • Successful Entrepreneurs: who know how they have got to where they are right now, but lack the awareness of self to move to the next level. This one is very common and forms the majority of the developmental work I do.

The Meaning

Let’s take an example: the score for “PARTNER”, for every profiled Entrepreneur is then totaled and an average is produced. “Partner” is the Thinking Preference which demonstrates how one shows empathy in a work situation. “Observer” demonstrates one’s ability to take the dispassionate, logical perspective, so someone high on Observer would be useful in a crisis, but would this be useful for an Entrepreneur?

I have done this for every profile so far and a pattern has emerged in the thinking of what it takes to be an entrepreneur in the UK. The graphic below offers a small insight into the developmental levels of complex thinking and how an entrepreneur thinks about entrepreneurship.

Where this study is different from other studies on Entrepreneurship is in the make-up of an Entrepreneur’s thinking and behaviour. The combination of preferences that are most useful for people starting a business can be seen from the results of my study and those which are most useful are available for my clients by way of comparison. No other study offers this specific scientific information on the habituated behaviours, patterns of thinking and thought processes of what it is to be an Entrepreneur for comparison and Developmental purposes. And to write the book, obviously.

Values as a Benchmark

Also, from the research it would appear that higher level thinking derives the following Values:

  1. Effectiveness / Efficiency
  2. High Performance
  3. Responsibility
  4. Competence
  5. Challenge
  6. Quality

Do you have any of these as part of your business value system? In this specific order? If so, then you are on your way to being a successful high level thinker. This doesn’t mean though that you’ll become rich. That’s not how Thinking Complexity works!

Get Involved

As this is an on-going study, the outcome is the book on what it is to be an Entrepreneur, with a view to helping anyone who is thinking about becoming, or is already in the process of running their own business.

Anyone can have a decent idea for a business and anyone can run a business (either well or badly), but where each will differ is in some aspects of thinking that are habituated and beyond our awareness. These are the areas where we will fall down and where we need the most help. My research will pinpoint what it takes to think like a successful Entrepreneur so we can do a comparison between your thinking patterns and those of tried and tested Entrepreneurs already making their businesses work.

The results so far are extremely interesting, and perhaps not what you would expect to see.

For all those interested, get in touch today and we can measure how you think right now so we can add your data to my research, but also work out where your thinking differs from those already doing it. How useful would it be to know precisely how your thinking influences your business success?

 

Call us today and let’s collaborate on your business development!