ENTREPRENEUR
The X Factor
What
are the common traits of great business builders?
Best selling author Anthony K Tjan explains
In
the age of quick fix solutions, tips are hot property. And in the fray to find
the ultimate X factors of business success are a plethora of CEOs, academics,
consultants and executives churning out books, reports and studies. And just to
find out just how much gyan is out there, Google a query how to start a
business and 2,210,000,000 results appear instantly. So when three business
leaders Anthony K Tjan, managing Partner from VC firm Cue Ball, Richard J
Harrington, Chairman of Cue Ball and Tsun Yan Hseih, a business consultant,
decided to write a book, they decided to take the research a step deeper, and
focus not on the business but the businessman. Coming from diverse back ground
- Tijan was founder of internet advisory froup ZEFER, Harrignton, CEO of Thomson
Corporation, Hseih, a senior director at Mckinsey, they already had a wealth of
experience but they went on to interview hundreds of leaders across the globe
to suss out the key qualities of great business builders. In an interview with
CD, Tjan discusses the best selling book Hearts, Smarts, Guts and Luck and what
it takes to succeed.
How did you zero in on heart, smarts, guts and luck as the determinants of success ?
They are the four driving traits of successful entrepreneurs and business builders. One could use a number of other adjectives, but most tend to be correlated with these four. For example, we define 'heart' as the purpose, passion, work ethic and nuance around a business. If you take our Entrepreneurial Aptitude Test, you will see that one section of the test offers many adjectives to choose from. We have divided them into these four top-level categories. Most important to remember is that self-awareness, more than anything else, is what makes the differences between those who are good and those who are really great.
Why is self-awareness so important for being a successful entrepreneur?
Only by knowing your real strengths and weaknesses can you effectively lead. As leaders and by human nature, we are often biased towards demonstrating more of our strengths, with a fear of showing any vulnerability. But the paradox of great
leadership is that you need a balance
between conviction and humility. You
need to have the guts to go with the vision in which you believe but also the humility and belief in the luck element and that learning, change, and evolution are possible. Really successful entrepreneurs have the capacity to both command respect but and more importantly, earn it over time. Self-awareness serves as a mirror to who you are and how you are doing. There is nothing more important for making progress as knowing the baseline from which you start.
What do you mean when you say "luck is the result of a lucky attitude"?
The traditional definition of luck is one of fate, chance, or probability. But this is not the type of luck we are talking about. In the business sense, what we call luck is an attitude that lets you take advantage of circumstances as they come about. In fact, in our book we share research which showed that people who viewed themselves as lucky performed better on tests involving hidden clues. In our work to define this attitude, we found that three traits were most critical toward creating more luck: humility, intellectual curiosity, and optimism. What was equally interesting was that 25% of our sample base turned out to be Luck-dominant. A large number of entrepreneurs have a simple ambition of making a lot of money. And some do end up making money. Isn't that a key motivator to start and be successful?
Making money is obviously part of the end objective but it should not be the driving purpose. Money is an output to other inputs. You can make money a lot of different ways, but to create great lasting institutions that are beloved and connected to consumers, the overarching purpose has to be about something other than just making money.
What would be the failure rate of heart-driven entrepreneurs?
You cannot be successful on any one of the qualities alone. Every successful person has a baseline of all four traits of heart, smarts, guts, and luck, but tend to be dominant in one or two. For those dominant in heart, it often correlates with earlier stage founders and there comes a point where it is necessary to scale the business and tradeoffs with some of the ideals are required. One needs to be a "pragmatic idealist" at that point in time. Heart-driven founders thus often need to be complemented with more 'scaler' personalities which may be, smarts and guts driven. It goes back to understanding what your real purpose is at the highest level and if you need to make certain tradeoffs.
What kind of dashboards should an entrepreneur have in the first 3 years of starting up?
There are the obvious basic financial metrics of revenue and breakeven targets. But CEOs should really know and communicate the 3-5 top goals that will help achieve that and align the input metrics that will achieve that output. For example, if you are running a store and want to achieve certain year-overyear sales growth, that will come as a result of having loyal and happy customers. Try to ascertain what will really delight customers and focus on delivering and measuring those elements. Too often there is a focus on output metrics, like financial results, when what really needs focus are the leading indicators and input metrics that will drive the desired result.
How can entrepreneurs get ready for the journey they are about to start?
One of the most important elements is to have a good mentor and to also be self-aware of your strengths and weaknesses so that you gather the right team. There is perhaps nothing more important than focusing on having the right people. Reading our book can help too!
Why did you — ex-Mckinsey and current Vice Chairman of the consultancy Parthenon, fact based hypothesis driven consultants — choose to write on the softer aspects of business, rather than a book on strategy or execution or processes?
We actually write on both, and we went into the process unbiased as to which one drives success. What our sample set of 500+ successful folks tells us is that it is as much r more of these softer factors that drive success. At the same time, we clearly indicate where pattern-recognition and following best practices can accelerate or help ensure success. In addition to the chapters dedicated to smarts (pattern-recognition) and guts (the drive to execution), there are reference chapters that speak of the most common principles and best practices of successful entrepreneurs. In many ways, we did exactly as you suggest - we did take the fact-base and data results from our research and married that to the context of our own experience base in building businesses.
——— Vinod Mahanta —CDET121026
How did you zero in on heart, smarts, guts and luck as the determinants of success ?
They are the four driving traits of successful entrepreneurs and business builders. One could use a number of other adjectives, but most tend to be correlated with these four. For example, we define 'heart' as the purpose, passion, work ethic and nuance around a business. If you take our Entrepreneurial Aptitude Test, you will see that one section of the test offers many adjectives to choose from. We have divided them into these four top-level categories. Most important to remember is that self-awareness, more than anything else, is what makes the differences between those who are good and those who are really great.
Why is self-awareness so important for being a successful entrepreneur?
Only by knowing your real strengths and weaknesses can you effectively lead. As leaders and by human nature, we are often biased towards demonstrating more of our strengths, with a fear of showing any vulnerability. But the paradox of great
leadership is that you need a balance
between conviction and humility. You
need to have the guts to go with the vision in which you believe but also the humility and belief in the luck element and that learning, change, and evolution are possible. Really successful entrepreneurs have the capacity to both command respect but and more importantly, earn it over time. Self-awareness serves as a mirror to who you are and how you are doing. There is nothing more important for making progress as knowing the baseline from which you start.
What do you mean when you say "luck is the result of a lucky attitude"?
The traditional definition of luck is one of fate, chance, or probability. But this is not the type of luck we are talking about. In the business sense, what we call luck is an attitude that lets you take advantage of circumstances as they come about. In fact, in our book we share research which showed that people who viewed themselves as lucky performed better on tests involving hidden clues. In our work to define this attitude, we found that three traits were most critical toward creating more luck: humility, intellectual curiosity, and optimism. What was equally interesting was that 25% of our sample base turned out to be Luck-dominant. A large number of entrepreneurs have a simple ambition of making a lot of money. And some do end up making money. Isn't that a key motivator to start and be successful?
Making money is obviously part of the end objective but it should not be the driving purpose. Money is an output to other inputs. You can make money a lot of different ways, but to create great lasting institutions that are beloved and connected to consumers, the overarching purpose has to be about something other than just making money.
What would be the failure rate of heart-driven entrepreneurs?
You cannot be successful on any one of the qualities alone. Every successful person has a baseline of all four traits of heart, smarts, guts, and luck, but tend to be dominant in one or two. For those dominant in heart, it often correlates with earlier stage founders and there comes a point where it is necessary to scale the business and tradeoffs with some of the ideals are required. One needs to be a "pragmatic idealist" at that point in time. Heart-driven founders thus often need to be complemented with more 'scaler' personalities which may be, smarts and guts driven. It goes back to understanding what your real purpose is at the highest level and if you need to make certain tradeoffs.
What kind of dashboards should an entrepreneur have in the first 3 years of starting up?
There are the obvious basic financial metrics of revenue and breakeven targets. But CEOs should really know and communicate the 3-5 top goals that will help achieve that and align the input metrics that will achieve that output. For example, if you are running a store and want to achieve certain year-overyear sales growth, that will come as a result of having loyal and happy customers. Try to ascertain what will really delight customers and focus on delivering and measuring those elements. Too often there is a focus on output metrics, like financial results, when what really needs focus are the leading indicators and input metrics that will drive the desired result.
How can entrepreneurs get ready for the journey they are about to start?
One of the most important elements is to have a good mentor and to also be self-aware of your strengths and weaknesses so that you gather the right team. There is perhaps nothing more important than focusing on having the right people. Reading our book can help too!
Why did you — ex-Mckinsey and current Vice Chairman of the consultancy Parthenon, fact based hypothesis driven consultants — choose to write on the softer aspects of business, rather than a book on strategy or execution or processes?
We actually write on both, and we went into the process unbiased as to which one drives success. What our sample set of 500+ successful folks tells us is that it is as much r more of these softer factors that drive success. At the same time, we clearly indicate where pattern-recognition and following best practices can accelerate or help ensure success. In addition to the chapters dedicated to smarts (pattern-recognition) and guts (the drive to execution), there are reference chapters that speak of the most common principles and best practices of successful entrepreneurs. In many ways, we did exactly as you suggest - we did take the fact-base and data results from our research and married that to the context of our own experience base in building businesses.
——— Vinod Mahanta —CDET121026
Which
one are you?
Capability Traits
Heart Dominant: Brings purpose and passion to the venture
Smarts Dominant: Conjures up great ideas
Guts Dominant: Starts and sustains action
Luck Dominant: Has a Lucky Attitude and Lucky Network
Capability Traits
Heart Dominant: Brings purpose and passion to the venture
Smarts Dominant: Conjures up great ideas
Guts Dominant: Starts and sustains action
Luck Dominant: Has a Lucky Attitude and Lucky Network
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