Traits of Successful Entrepreneurs
The Journal of Private Equity 2017.20.3:12-15. Downloaded from www.iijournals.com by NEW YORK UNIVERSITY on 06/03/17.
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Arunachal Khosla and Puneet Gupta
A runachal K hosla
is an assistant professor
at the University Institute
of Applied Management
Sciences at Panjab
University in Chandigarh,
India.
arunachal_khosla@yahoo.com
P uneet Gupta
is a managing director
at Kentrus Capital
(Private Equity) in
New Delhi, India.
pgupta@kentrus.com
I
t is said that change is the only constant.
This phrase has never been as apt as it is
in the present time. The world around us
is changing and doing so at a pace never
felt or seen before. The present era of change
is characterized by high levels of uncertainty
and complexity. The business environment
has become globally interrelated and connected through technology. The ramifications
of technology lead to faster communication.
Changes and events occurring in one part of
the world have global implications. On the one
hand, these changes and events have resulted
in bigger challenges for the business world.
But on the other hand, the result has been a
world full of bigger and better opportunities.
This world of uncertainty and complexity has
led to the emergence of a new generation of
entrepreneurs who are immensely driven and
have contributed exhaustively to the creation
of new ventures and the generation of wealth.
As change accelerates, a large number
of startups and small firms are being built all
over the world. These small firms and startups
are increasingly responsive and adaptable to
changes in the business environment, mainly
because of their small size, which allows them
the flexibility to respond to market turbulence
and disruptions. These small firms and new
ventures are created and run by entrepreneurs,
and thus entrepreneurs have become the creators of wealth in developing and developed
nations. A large number of big corporations
are trying to learn and acquire the various
traits and skills of these entrepreneurs to make
their organizations adaptive, responsive, and
successful. This is primarily because as organizations become large in size and multiple
layers are created, they become less responsive and more rigid, resulting in stagnation,
delayed decision making, and decline.
Deciphering the traits of successful
entrepreneurs is essential so that these skills
can be understood, developed, and promoted
for the success of the organizations, irrespective of their size. Knowing and understanding
these traits keeps an organization young and
f lexible as well as responsive to the dynamics
of the business environment.
This article is an attempt to list and
elaborate on the most essential traits of successful entrepreneurs that are predictive of
entrepreneurial and organizational success.
It is beyond doubt true that entrepreneurs
think and act differently. The way the entrepreneurs manage their organization and its
people is very different from how it is done
in most large organizations.
The five major traits of successful entrepreneurs that are essential contributors to
the success of their business ventures are the
following:
1. Comfort with uncertainty
2. Laser-like focus and execution
3. Flexibility in response to market needs
12 Traits of Successful EntrepreneursSummer 2017
4. Big picture focus coupled with a detail orientation
5. People management with the right balance
of delegation
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COMFORT WITH UNCERTAINTY
At the top of the list of traits that characterize an
entrepreneur is the ability to cope with uncertainty and
strike comfort with ambiguity. Entrepreneurs have been
found to be very low on uncertainty avoidance, indicating
a high level of tolerance of uncertain situations and events.
While most seek refuge in clearly structured situations,
the entrepreneur’s mind is fairly comfortable with uncertainty in the business environment. This tolerance of
uncertainty also contributes to the risk-taking propensity
of the entrepreneur. High tolerance of ambiguity increases
the entrepreneur’s risk appetite. This in turn helps him
to explore wider avenues and bigger opportunities in the
market and make crucial decisions with more ease.
Whereas risk is an essential part of business decisions, tolerance of ambiguity is nowhere indicative of
entrepreneurs indulging in mindless risk taking and illconsidered business decision making. Rather, tolerance to
uncertainty helps them take calculated and well-thoughtout risks and decisions, which not only gives them a
wider playing field but also doesn’t make the organization overly vulnerable. Successful entrepreneurs realize
that uncertainty is not always chaotic and bad; rather, it
is a characteristic of entrepreneurship. The success of an
entrepreneur and his firm largely depends on his ability to
tide over uncertain times and circumstances. It is important that the entrepreneur takes chances irrespective of the
uncertainty because the probability of success is higher
on the other side. Entrepreneurs have a fair idea that the
markets they operate in will witness high uncertainty and
are most of the times uncontrollable. So, the best option
they have is to be cautious of how they respond to uncertainty. In this response to uncertainty, entrepreneurs risk
their possessions, their reputation, their resources, their
settled lives, and their fixed incomes to see the success
of their entrepreneurial ventures. Thus, we can say that
entrepreneurs are willing to live in uncertainty and take
bigger risks to drive their organizations to success.
LASER-LIKE FOCUS AND EXECUTION
Where uncertainty characterizes an entrepreneur,
the risks associated with ambiguity can be moderated
Summer 2017
with the entrepreneur’s trait of having laser-like focus
and execution. It is the entrepreneur’s task to work
toward the success of the business. He must focus on
ensuring the achievement of goals and the satisfaction
of customers as well as employees. Staying focused
helps entrepreneurs explore, avail, and harness market
opportunities, executing them to the fullest rather than
switching from one option to the other. This laser-like
focus makes the entrepreneur put all effort, energy, and
resources into the well-considered market opportunity
and in accomplishing the goals that have been developed
for the firm.
Laser-like focus is an essential trait for entrepreneurs because it helps them keep their firms competitive
in a dynamic environment. It makes the task of managing the business effective and results driven. Focused
entrepreneurs are not disturbed by the risks and uncertainties at and around work. It also helps them take
charge and keep their minds from wandering, staying
immersed in the critical tasks that ultimately lead to
goal attainment.
Whereas focus helps an entrepreneur follow his
goals with persistence and dedication, lack of proper
execution may limit the firm’s performance. Effective
execution of tasks ensures that persistence and dedication
are channeled in the right direction. This trait of execution will result in the conversion of a business opportunity into a successful business venture. Proper execution
can be the determining factor in the success or failure
of a business. This is because execution will deal with
pertinent questions related to how, when, where, and
by whom various tasks need to be performed in the
organization.
FLEXIBILITY IN RESPONSE
TO MARKET NEEDS
Another of the key traits of a successful entrepreneur is f lexibility. An entrepreneur should be f lexible
enough to introduce changes as and when the market
requires him to do so. To remain competitive and acquire
and retain market leadership, the entrepreneur needs to
be prepared to accept and introduce changes in people,
product, technology, processes, and so on. Flexibility is
essential to respond to market needs through innovation
and creativity.
Many factors inf luence the change in market
conditions in which the firm operates. This change can
The Journal of P rivate Equity 13
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be in the form of new competitors, new products, or
product innovations, changes in economic conditions,
changes in government policies, inclusion or removal
of certain legal provisions, and so on. Flexibility helps
the entrepreneur gather new insights and information
about these changes in the market and their likely impact
on business. Flexibility lets an entrepreneur assimilate
and use this information about changing market needs
and conditions and respond to them more appropriately,
thus minimizing the impact of change and at the same
time catering to the needs of the new market. This f lexibility gives a clear advantage to entrepreneurial firms
and startups over large organizations. Relative to large
companies, entrepreneurial firms are leaner and f latter,
making them much more responsive to changes and
giving them speed and strength in decision making.
This trait also helps the entrepreneur anticipate change
and manage and mold the strategy to suit the market
needs. Furthermore, f lexibility gives the choice to
entrepreneurs to manage the size of their business with
respect to their products, projects, and people and to
suit it to the requirements of the market. In the current
context, where customers seek maximum value for their
money and want new products, new features, and aftersales support, f lexibility helps the entrepreneur deliver
and outperform the competition.
BIG PICTURE FOCUS COUPLED
WITH A DETAIL ORIENTATION
Thinking big is the key to creating and sustaining
a successful business. Looking at the big picture helps an
entrepreneur view any situation, event, and market in its
entirety rather than in parts and pieces. On a day-to-day
basis, one may be too engrossed in the attention to detail,
but successful entrepreneurs have the capability to step
back from the details. They can step back from the little
pieces of progress toward their projects and goals and
look from a broader perspective to ensure that all of this
is taking the business in the right direction. Details are
a key aspect of the business, but they may lose their relevance if the entrepreneur loses sight of the larger goals
he has set out for his business. Thinking big is an important trait of the entrepreneur because it helps ensure the
focus on the key functions of the business rather than
getting lost in the processes and procedures required to
achieve these goals. A constant vigil on the direction
and growth of the business and analysis of supporting
information helps the entrepreneur understand the big
picture in the right perspective.
If the entrepreneur has constant awareness of the
big picture, working toward details becomes more
rewarding for him and his business. Having the big
picture in mind will help the entrepreneur to be more
vigilant about the details that take the business to higher
levels of success and performance.
A detail orientation is the ability of the entrepreneur
to be able to pay great attention to details. He can clearly
understand the cause and effect relationship between
various events that occur and situations that emerge.
Detail orientation helps him to study the reasons associated with changes in the market and predict the impact
these changes can have on the business. It helps build a
clear understanding of the details of the business and thus
remain more aware and informed. This increased awareness leads to higher-quality decisions being made by the
entrepreneur in response to organizational and market
needs, which further results in higher levels of precision
with which the tasks are performed in the organization, leading to improved efficiency and performance
of the entrepreneur as well as the organization. Detailoriented entrepreneurs contribute toward creating more
successful businesses because they have higher-order
analytical and problem-solving skills. Thus, detail orientation makes the entrepreneur anticipate the challenges
and be more proactive vis-à-vis market needs and staying
ahead of competition.
PEOPLE MANAGEMENT WITH THE RIGHT
BALANCE OF DELEGATION
Jim Col lins in his book Good to Great
(HarperBusiness, 2001) suggested that it is important
to decide on the people who will board the bus with you
before you actually board the bus. This highlights the
importance of having the right people when the entrepreneur takes on his journey of creating and building
business. Once the entrepreneur identifies the right
people, he constantly works toward managing them
effectively. Successful entrepreneurs understand and
believe that people are the most valuable resource for any
organization, and through effective people management,
the company can be efficiently driven forward, toward
its objectives. They build a right blend between strategies that aim at improving systems and structures and
improving the performance of managers. Entrepreneurs
14 Traits of Successful EntrepreneursSummer 2017
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constantly work toward building and improving their
people management skills. People management skills
allow an entrepreneur to build teams that are highly
engaged at their workplaces. This engagement results
in an increased push toward organizational success.
High levels of engagement at work ensure that people
are more driven and will be more willing to put in
high levels of effort to complete the tasks and achieve
organizational goals. With their effective people management skills, entrepreneurs are consistently able to
motivate the workforce to perform tasks and accomplish outcomes.
Entrepreneurs make their team members feel
valued by investing in their growth and development.
They share information, constantly encourage them, and
provide rewarding career options and excellent training
opportunities. These incentives increase the level of
ownership that employees feel toward the organization
and make them more enthusiastic and driven toward
performance and goals.
Delegation of work is an important aspect of
people management. With the effort and energy that
an entrepreneur puts into building his business, there
is a high probability that he might want to retain the
power to make all important decisions and perform key
tasks himself. But as the business grows, it becomes more
and more difficult for the entrepreneur to be in charge
of everything. Effective entrepreneurs master the art of
Summer 2017
delegating appropriate and important tasks and decisions
to the team members. This delegation of work to trusted
team members, on the one hand, gives time for entrepreneurs to focus on the big picture. On the other hand,
it creates a sense of worthiness and trust among other
members of the organization. They feel valued and
part of the organization and experience higher levels of
responsibility and accountability toward their work, thus
effectively contributing to business outcomes.
We can say that delegation can be the most important tool of an entrepreneur for effective management.
Successful entrepreneurs master the skill of delegation,
leading to a huge positive inf luence on the organization.
They ensure that the tasks that are entrusted to team
members are carefully selected before being delegated.
The entrepreneur ensures that the team members to
whom a task is given have the required skill to perform
that task and are also made well aware of the reasons
associated with delegation to that person. Deadlines are
communicated along with the critical nature of the task
that is delegated.
And finally, successful entrepreneurs also ensure
that when the delegated work is successfully completed,
they reward and recognize the good work done and also
the effort that has been put in by the team members.
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The Journal of P rivate Equity 15