World Class Entrepreneurs

Nature vs Nurture

The ages old debate between nature continues. A guest approached the famed pianist Liberace following a performance at a private party and said, “I would do anything to play the piano like you.” The entertainer refuted by suggesting anyone willing to put in the hours of practice he did could be just as accomplished. His view is consistent with philosophy that supports tabula rasa, a contention that we are all born with a clean slate. Modern theorists place a greater emphasis on talent, stating Liberace’s education and practice played significant roles leading to his success, but his intelligence, ear for music, and natural tendencies toward innovation and creativity were critical components leading to fame.

The Right Stuff

Over the last 30 years, businesses have invested a lot of money and time in identifying talent among job applicants. Strategic corporate positions once filled by those with strong resumes and impressive interviews now require the passing of personality tests that measure various inherent abilities associated with the jobs. Education and experience are still valued in the workplace. Employers, however, recognize that individuals with innate qualities tied specific to the tasks at hand are more passionate, goal oriented and happier in their work.

In their attempts to identify potential entrepreneurs, researchers have discovered some consistencies among leading corporate innovators that include both experiential and genetic components. MSUM Business Professors Ben Clapp and James Swenson note that highly successful entrepreneurs such as Bill Gates, Steve Jobs, Elon Musk, and the Google team of Sergey Brin and Larry Page were innovators in their pre-teen and early teen years. Clapp and Swenson theorize that while starting a business practice at a young age is a key indicator to future success, the trigger lies within one’s genetics.

Can the strands of DNA be deciphered to unveil entrepreneurial talent at an early age? Numerous studies over the last 20 years suggest personalities reveal what a microscope, at this point, cannot. A 2006 study by Hao Zhao of the University of Illinois at Chicago and Melbourne Business School’s Scott E. Seibert focuses on components of the Big Five Personality Dimensions as means toward measuring entrepreneurial readiness.

The Entrepreneurial Pieces

Zhao and Seibert’s statistical data revealed a high correlation between conscientiousness and the status for entrepreneurism. They define conscientiousness as, “…an individual’s degree of organization, persistence, hard work, and motivation in the pursuit of goal accomplishments.” Certainly, a high score in this dimension is commonly associated with entrepreneurs.

Their research also revealed consistencies between entrepreneurial traits and those found in agreeableness and openness. Agreeableness, defined as one’s interpersonal orientation, is found to inhibit entrepreneurs more willing to drive hard bargains through influence and manipulation for their own self-interests. Thus, a low score is consistent with a high entrepreneurial status.

With openness comes intellectual curiosity, suggesting the propensities toward exploring new experiences and ideas. High scores in openness infer one is “creative, innovative, imaginative, reflective and untraditional,” according to the study.

Scores recorded under two remaining personality dimensions, neuroticism and extraversion, failed to provide conclusive results under this analysis. Other research, including critical studies conducted by Brooke Envick and Margaret Langford (2000) and Douglas Griest (2017), attest low scores in neuroticism as being key indicators of entrepreneurial qualities.

There are additional studies on entrepreneurial trait theory, such as those that concentrate on human capital theory, but the greater focus of these has been on personality traits. Among these the Five Factor Model appears to have garnered the most interest.

Malcolm Gladwell, author of the current business bestseller “David and Goliath,” not only concurs with the findings of Zhao and Siebert, but goes on to define the best environments and circumstances for developing these entrepreneurs. This brings us back to the initial issue of nature versus nurture as examined by MSUM Professors Clapp and Swenson who contend that successful entrepreneurs are a product of both.

MSUM Research

Clapp and Swenson support theories on genetic predisposition, specifically personality traits, that define entrepreneurial readiness. They contend that, “Genes alone cannot explain the development of an expert.” They concur that a positive environment that provides motivating factors and practical application in terms of development are essential experiential components to becoming a world class entrepreneur.

Their 2016 research concludes with these six definitive statements:

1. Genes play an important part in the development of an expert.

2. Genes alone cannot explain the development of an expert.

3. Learning how to play the game through deliberate practice and experience alone do not account for the development of an expert.

4. Genes can accelerate the learning ability of an expert whereas a novice shows little or no improvement from the same training.

5. People have both internal and instrumental motives for doing what they do, but internal motives are essential for becoming a top performer.

6. There is such a thing as “entrepreneurs;” without the learning of a specialized set of skills that is driven by an interaction between genes, culture, and a specific environment – no one is born an entrepreneur.

Swenson is quick to point out that entrepreneurial success is not predicated on genetics alone. “Less than one percent of the population will score in the top 10 percent in conscientiousness and openness and the bottom 10 percent in agreeableness in combination,” he said. Going beyond this, he believes an ideal environment, ample resources, motivation, education, and practice alone can produce highly successful entrepreneurs whose talents may rest elsewhere.

Putting Research to Practice

MSUM’s Center for Entrepreneurial Studies (CES) is in the early stages of testing personality trait theories as a means to identifying students with natural tendencies toward entrepreneurship. Over the past year, student volunteers have taken the Big Five Personality Dimensions test. Much of the focus has been on openness, conscientiousness, and agreeableness in concert with trait theories of the past. These tests have also uncovered some consistencies between entrepreneurship and neuroticism, enough to further examine its validity of this dimension in assessing entrepreneurial readiness. A more analytical approach would be required to offer any theory, but the link between neurosis and of being risk averse certainly lends itself to further study.

The results of these preliminary tests have yet to provide any conclusions except that, while several students have excelled in one dimension or another, no one has come close to registering in the top 10 percent (or bottom 10 percent regarding agreeableness) in all three selected personality dimensions. This comes as no surprise since the CES curriculum is primarily structured for non-business students.

The CES seeks to ramp up its testing for the school year 2017-18 in an attempt to weigh the significance of each personality dimension toward producing a total individual score to measure the propensity for entrepreneurial success. The question remains as to whether a rubric can be constructed to accurately assess entrepreneurial readiness.

There is validity to Liberace’s statement. The climb to the top of any occupation takes hard work. However, to neglect the contributions of genetics and the environment may leave one well short of the number of variables necessary to calculating the odds for success. Personality trait theory has been credited with advancements in job placement, education, team building and several other areas, particularly those that are psychology-related. And while the bulk of research provides some definitive theories, they also seem to pose more questions than answers. Indeed, there is much more to be learned and researchers continue to be challenged and motivated.

How Do You Measure?

The big five personality dimensions are based on the Five Factor model (FFM) developed in 1961 by Ernest Tupes and Raymond Christal. It was created for the primary purpose of assessing the relationship between personality and academic behaviors. Later research put to question FFM’s ability to predict behavior, but it is a highly regarded tool for exposing personality traits.

There are numerous online sites that offer free big five personality tests including The Big Five Personality Test. Scoring is depicted in percentiles, representing how the strengths of one’s personality traits compare with those of the general public. The measure of entrepreneurial genes is most apparent with having high scores in conscientiousness and openness and a low score in agreeableness. The benchmark used for identifying natural entrepreneurial talent is a combination of a minimum 90 percent in the former two dimensions and 10 percent or less in agreeableness. According to theorists, anything close to meeting these marks with some added experience and education may be the formula for entrepreneurial success.

This story was first published in Moorhead Magazine, Fall 2017.