Entrepreneur's Handbook
QUALITY AND SKILLS OF SUCCESSFUL ENTREPRENEURS
The personality traits of successful entrepreneurs is a topic that attracts people who are considering an entrepreneurial career. Although there are many studies on this subject, there is no clear information that successful entrepreneurs have a distinct set of qualifications. In some studies, it is even stated that there is no relationship between entrepreneurial success and personality traits (Gartner, 1988; Brockhaus and Horwitz, 1986). In other words, it is not correct to approach entrepreneurship as a job that people who have some innate personality traits will do. Anyone can be an entrepreneur. However, of course, it can be said that some features in entrepreneurship have the ability to affect entrepreneurship success, as in every profession. For example, the entrepreneur will need to quickly make important strategic decisions during and after the establishment of a business. For this reason, having a determined personality will help him / her in this regard. These traits are not inherited, but can be developed in line with the desire and determination of the person. In summary, it should be kept in mind that the qualifications and skills required for entrepreneurship can be acquired through working. The most basic qualities that a person needs to gain in order to be a successful entrepreneur can be gathered under basic titles such as self-efficacy, being innovative, risk taking and leadership.
4.1. Self-efficacy
Especially in cases where the level of uncertainty and competition is high, it is an important issue that the entrepreneur has a high belief in reaching the goal he has set and his confidence in his own competencies. Entrepreneurship is a journey full of obstacles and adventures. In this journey, entrepreneurs can often encounter unexpected surprises. In order to cope with these negative situations, the entrepreneur needs to be confident in achieving the goal and act in this direction with determination. Otherwise, when he encounters the first negative situation, which will definitely happen, he may immediately spoil his morale and make it impossible to reach his goal. For this reason, high level of self-efficacy is accepted as one of the most important determinants of entrepreneurship success. Studies have also found that a high sense of self-efficacy is closely related to the growth of small businesses (Baum ve Locke, 2004).
Self-efficacy is defined as the belief in a person's knowledge and abilities that he / she can exhibit in reaching a desired result or in a particular situation (Luszczynska, Scholz ve Schwarzer; 2005). Individuals with high self-efficacy set high goals for themselves and prefer tasks that others find difficult to take. They fight against difficulties voluntarily. They can motivate themselves to reach their goals and do not hesitate to struggle to reach their goals. For this reason, people with high self-efficacy achieve success by resisting all the difficulties that may arise while walking towards their goals (Luthans, Youssef ve Avolio, 2006).
It is stated that the subject of self-efficacy in terms of entrepreneurship emerged as an important determinant of entrepreneurship performance, especially in the studies conducted after 2000 (Kerr, Kerr ve Xu, 2017). The sense of self-efficacy of the person is of course closely related to the subject at hand. Entrepreneurial self-efficacy usually consists of a combination of innovation, risk taking, marketing, management and financial control (Chen, Greene ve Crick, 1998). In other words, the sense of efficacy does not occur spontaneously. The person who wants to become an entrepreneur needs to accumulate knowledge and experience that will help him achieve his goals. When this knowledge and experience occurs, the self-efficacy perception of the person will also increase. As the potential entrepreneur has both knowledge and experience about the subject he / she wants to do, his / her belief in achieving success will increase.
4.2. Being Innovative
As mentioned at the beginning, innovation is a feature that separates the entrepreneur from other professions and shows the entrepreneur's main area of responsibility in a business. The innovation mentioned here includes not only products but also services, creating new markets, entering new distribution channels, and differentiating processes. Therefore, in this book, it would be appropriate to understand this broad framework from the word innovation or the more popular expression and innovation. Here, the entrepreneur is the person who constantly observes the market opportunities in relation to these issues and seeks to integrate the developments in the market into his business, or who personally reveals these innovations through R&D processes. Of course, it will bring along some features such as the responsibility of dealing with innovation intensely, being inquisitive, the ability to observe, and the liking to do research. The entrepreneur should constantly improve himself with questions such as "How can I make the product I offer better, how can I better satisfy the customer base I serve, can I make a difference in the market I am addressing?".
4.3. Risk Taking
Risk taking is expressed as a characteristic of entrepreneurship that has been the basis of entrepreneurship since the 1730s, when it was first defined. Indeed, future decisions made continuously in entrepreneurship may not always result as expected. For example, your pre-business sales forecasts may be less than your estimate after the product is on the market, even worse, you may even have to close the business.
Of course, the entrepreneur's risk-taking feature does not mean that he takes excessive or high risks like a gambler. In fact, there have been many changes from Cantillon's understanding of entrepreneurship that he developed on taking risks. For example, famous management philosopher Peter Drucker stated that entrepreneurship is perceived as risky because many so-called entrepreneurs do not learn what they do properly, and that such entrepreneurs lack method and violate even very basic rules that need to be known, and therefore they fail (Drucker, 1985). According to Drucker, entrepreneurs who innovate and act accordingly by reading the change around them correctly are actually entrepreneurs who try to minimize risk, not risk takers. Indeed, the biggest risk entrepreneur will take is not acting in accordance with the change in the market and not being able to renew himself.
For this reason, defining entrepreneurship in terms of risk taking is an incomplete explanation, although not very wrong. The entrepreneur, of course, takes some risks and creates an enterprise and takes the responsibility of running this. However, risk-taking is a matter of decision-making, and anyone who is in a decision-making situation will take the risks that come with this decision. A person whose decision-making ability is not developed, in other words, cannot be a good entrepreneur, good manager, good employee or investor who cannot take the necessary risks. For example, when we go on traffic, we risk having an accident, etc. If we don't want to take this risk, we will have to stay out of the house. Every decision we make actually involves certain risks. Therefore, risk-taking is not just an issue for entrepreneurs, but for all people. Within an enterprise, all employees take certain levels of risk and make certain decisions and implement them. Therefore, it is not entirely correct to claim that there is anyone who does not take risks.
The fact that entrepreneurship is mentioned too much with risk may be due to the nature of the decisions made by the entrepreneur affecting the whole business and the people who make it. Because it is claimed that entrepreneurship and risk are closely linked, as an entrepreneur makes strategic decisions such as introducing a new business-related product to the market, withdrawing from the market, and making new investments. In summary, taking risks is an important issue in entrepreneurship as in every field of life and every profession. Successful entrepreneurs are individuals who can adjust their risk level to potential gains and have a high uncertainty management capacity. (Brindley, 2005). For this reason, entrepreneurs need to learn what risks to take, how to measure and manage them in order to be successful.
4.4. Leadership
Leadership has a special importance in entrepreneurship. The presence of the leadership characteristic that an entrepreneur or manager should have brings along an efficient and harmonious business organization. In this respect, the ability to direct others and influence their behavior for a specific purpose comes to the fore in leadership. People with this leadership characteristic can show themselves in the field of politics, military service, education, sports, non-governmental organizations and of course business. In the historical development, many influential and well-known leaders can be mentioned in this field.
From the business point of view, leadership means directing the behaviors of employees in line with the business objectives and persuading them to show the behaviors that will achieve these goals. For this reason, in the leadership process, the issues of gaining the appreciation of the employees and convincing them about the business vision come to the fore. Leadership is the result of influencing employees' behavior by using their power of persuasion, not by using force to do their jobs. Therefore, the most important feature of a leader is that he can persuade employees to take action in line with his vision by inspiring dignity. The right to lead is a privilege given by group members to the person or persons they adopt as leaders (Şimşek ve Çelik, 2011, s. 81).
Leadership and administratorship are often used interchangeably. Indeed, both concepts refer to the processes of managing people within the business. However, leadership and administratorship are not synonymous concepts. While management often refers to a managerial authority (general manager, director, chief, etc.), leadership refers to the whole of personal characteristics that do not originate from the position. Of course, a good manager should also have leadership qualities, regardless of the level in the business. However, although not ideal, it is possible to see managers who do not have leadership characteristics in businesses. Therefore, although it is not necessary to be a leader in order to be a manager, it is necessary to have leadership qualities for a good and successful manager. Accordingly, the differences between management and leadership are listed below (Koçel, 2011):
- Management is a professional practice, leadership is the activities of influencing and mobilizing people.
- Management takes place within an organizational structure, it is not necessary to be an organizational structure for leadership.
- Management is about doing things in the most effective way to achieve defined goals, while leadership is about determining goals and work to be done.
- The manager gets the job done using the powers given to his office, while leaders mobilize people with their personal characteristics, behavior and vision, trust and inspiration they give to people.
- The manager has a job description, while the leader has no job description.
- Management is about reaching the given goal, and leadership is about changing and transforming.
- The manager is the person who does the right things, the leader is the person who does the right things.
As can be understood from these articles, there are important differences between the leader and the manager, and it is an important issue in terms of business success that a manager also exhibits leadership characteristics. In that case, it is necessary to examine what leadership qualities a manager should have are.
There is a lot of research on leadership traits. In these studies, it is seen that the characteristics of effective leaders change depending on the situation, resources, nature and complexity of the job. However, the general characteristics of the effective leader can be listed as follows (Wagen 2007):
- Honest and reliable,
- Consistent,
- Determined and patient,
- Determined,
- Confident,
- Understanding,
- Attaches importance to cooperation,
- Visionary,
- High communication skills,
- Able to produce creative solutions to problems.
It is clear that these characteristics of a leader are important in terms of being successful in terms of both entrepreneurship and management. For this reason, people who are at the point of making critical decisions in the business, whether entrepreneurs and / or managers, must have these qualities and create an effective unity of purpose in line with the vision they give to employees.
It should not be forgotten that trust is the basis for successful leadership, in other words, to mobilize employees towards a goal. Therefore, an entrepreneur who cannot create a sense of trust in employees cannot be expected to be a leader (Maxwell, 2010). That's why personal integrity is an integral part of leadership. The famous management thinker Drucker stated that a person lacking integrity cannot be a leader in the business, and over time people will stop following him (Cohen, 2010). Developing the other characteristics listed above on the characteristics of honesty and trust will also make the entrepreneur an effective leader. Therefore, it is recommended for entrepreneur candidates to examine the features listed here and to conduct a study on which subjects are good and in which subjects are lacking. Because an entrepreneur with strong leadership qualities will both evaluate the resources and ensure that the business reaches its goal by keeping the team's motivation high.