Are entrepreneurs born or made?

Mar 18 2013 13:52 Abram Molelemane and Anton Ressel

Cape Town - One of the many questions that usually pop up when entrepreneurship is discussed is whether entrepreneurs are born or made. Like most things in life there is no simple answer, but our experience of working with entrepreneurs has given us a few insights into this debate, incorporating arguments from research in the USA, which we share with you in this article.
In the past, research has highlighted many successful entrepreneurs who dropped out or barely graduated from college to start their companies. Some of these success stories have no formal business background whatsoever, but have succeeded in spite of this.
Such data suggests that at least in part, entrepreneurship is an inherent trait, like athletic prowess or artistic ability. However, before we get carried away or come to any conclusion, let’s explore in a bit more depth the argument as to whether entrepreneurial thinking can also be taught.
Research
Research has provided records proving entrepreneurship as being innate. A study conducted by the Northeastern University’s School of Technological Entrepreneurship in Massachusetts (showed that only 1% of entrepreneurs believed that higher education played a role in forming their entrepreneurial mind-set, while 61% credited their innate drive.
A post extracted from a business blog, cites a book ‘The Hypomanic Edge’ by Psychologist John Gartner, who agrees with the notion that entrepreneurship is innate. He says that successful entrepreneurs have a distinct personality trait. In his book, John discusses some characteristics embedded within ‘hypomanics’ such as brimming with infectious energy, irrational confidence, and really big ideas. They think, talk, move, and make decisions quickly, writes John.
Business Week also had a post by Karen E. Klein, (Are Entrepreneurs Born or Made?) supporting the notion. According to Business Week, Klein got out the books and researched experts such as EQ guru Daniel Goleman and Scott Shane, a fellow columnist and the A. Malachi Mixon III Professor of Entrepreneurial Studies at Case Western Reserve University in Ohio.
Shane says that the tendency toward entrepreneurship is about 48% "heritable," meaning influenced by genetic factor.
Given the findings above along with numerous other research, there is a strong case for believing that entrepreneurial skills come naturally. However, it appears that many believe they can also be taught.
The Way Forward
Allen Gannett, an entrepreneur and partner at Acceleprise, an enterprise technology accelerator, says that the first step to having a generation of skilled entrepreneurs is to start by educating our kids to become entrepreneurs. This is especially relevant here in South Africa, where our entrepreneurial activity ranks dismally when compared with other developing nations (GEM Report 2012).
Gannett says that encouraging entrepreneurial activity is largely in the hands of our educational institutions and our policy institutions. ”When we talk about supporting entrepreneurs, we need to ensure that regulations are sensible, that the immigration system allows for hard-working entrepreneurs to stay here, and that the government provides sensible incentives for entrepreneurship”, he explains. From educational institutions we need programmes that will train, support and offer mentorship to budding entrepreneurs, adds Allen.
Unfortunately, we still have a way to go in South Africa before we can say that government has succeeded in creating a truly enabling environment for entrepreneurs – SA remains one of the most difficult, expensive and legislatively onerous places in the world to start a new business, which makes programmes that support budding entrepreneurs, and teach people to be better business leaders, so crucial to our collective future success.
Programmes such as the Legends programme, a national SMME and non-profit business incubator sponsored by Old Mutual, which offers mentorship, business support, workshops, e-learning and other resource, as well as other business incubators such as Raiz Corp have proven in the past to have contributed to the growth and success of many entrepreneurs and their businesses.
CEO of enterprise development specialists Fetola and founder of the Legends programme, Catherine Wijnberg, says effective business support programmes provide support mechanisms for entrepreneurs which include assistance in developing the ’hard’ skills (business systems/processes & administrative methods) and the ‘soft’ skills required to respond to changing environments (increased confidence, better customer relationship management, stronger understanding of market-research and product development etc).
“As enterprise development specialists (management consultants who specialise in helping small businesses to succeed) our role is to use a range of support mechanisms to help the entrepreneur through this tricky minefield, by providing a secure safety-net and sounding board from start-up through accelerated growth to stability”.
“The programmes we run look at entrepreneurs and their organisations in a holistic way, and seek to address all the common challenges they may face as they grow and progress. Interestingly, some of our biggest successes have been with non-profit leaders, who have benefitted hugely from increased entrepreneurial thinking and better business skills,” she adds.
Wijnberg cites the example of Legends beneficiary Neftaly Malatjie, Founder of Gauteng-based non-profit Diepsloot Youth Projects. The organisation managed to increase their donor funding from R54 000 in 2011 to R1.1m in 2012, an increase Malatjie credits squarely to the support and business know-how he was able to access through Legends. “Thanks to a better understanding of how money works in my organisation, as well as a mindset shift of seeing my potential donors as clients who also have needs and requirements, I was able to close deals that in the past simply never happened. I do not know where we would be without the support of Legends,” he explains.
Another example is that of Molefinyana Seqhala, Founder of Seqhala Open Projects. This fast-growing electrical consulting and construction firm was started by Seqhala, a qualified electrician who worked as an employee for over ten years before he identified a gap in the market for a multi-service provider of electrical, building, maintenance and security services, in response to what he saw as domination of the market by one or two established players.
In the past four years, Seqhala has grown a promising business – he has purchased several work vehicles, increased his turnover by over 800% and currently employs 15 people, with plans in place for expansion into manufacturing of building and related materials. He too credits his success to programmes like Legends and the support of a long-time mentor, who has taught him how to cost a job properly, manage materials and get the most out of his staff.
It is evident that not all of us were born natural entrepreneurs, however there are organizations that have stretched out a helping hand to support small businesses and entrepreneurs in cultivating entrepreneurial growth and success.

One-liners for Executives

One-liners are very short statements that purport to capture the essence of a situation.  At their best, they can bring clarity and precision to complexity and confusion. They can also focus decision-making.  The knock on them is that they can oversimplify and create only an illusion of an understanding.
Regardless, one-liners are part of every executive’s world.  Here are 15 of the best.  Used properly, they can help an executive determine what to do and also help get others on board.  Sourcing can be difficult and is uncertain, as a number are so commonly used that they have become part of the woodwork.  Where possible, sources are provided but apologies if certain ones are overlooked.
1. “If you don’t know where you are going, any road will get you there.”  I am uncertain of the specific source, but the idea is captured in Lewis Carroll’s Alice’s Adventures in Wonderland, in a bizarre exchange between Alice and the Cheshire Cat.  Alice asks the Cat which way she ought to go; the Cat says it depends on where you want to get; Alice says she doesn’t much care; the Cat says then it doesn’t matter which way you go.
For executives, the message is simple.  You cannot lead anybody or anything anywhere if you don’t know where “there” is.  The absence of clear goals often explains why businesses perform poorly.  Clear goals are common thread to all successful businesses.
Goal setting should not be taken lightly; it really matters.  Maybe Beat Generation icon Jack Kerouac said it best in On the Road:  “Sal, we gotta go and never stop going till we get there.  Where we going, man?  I don’t know but we gotta go.”  Not a recipe for running a good business.
2.“The main thing is to keep the main thing the main thing.”  This Steven R. Covey gem should be top of mind for executives.
Don’t get distracted by things that don’t matter; keep yourself and your team focused.  When the “main thing” ceases to be the main thing, you end up being satisfied with decisions only accidentally.
Keeping the main thing the main thing takes attention, discipline and courage.  Keeping the main thing the main thing requires a clear understanding of what the main thing is and why it is the main thing.  If you are always failing to keep the main thing the main thing, you may need either a new main thing or a new leader, or both.
3. “The art of being wise is knowing what to overlook.”  William James may have been a 19^th-20^th century Harvard philosopher and psychologist, but with advice like this he would have been very much at home in the business school, teaching executives.
Executive time and energy is scarce; not overlooking what should be overlooked creates confusion and anxiety and is usually at the expense of something that should not be overlooked.  Good executives have the capacity not to let the small but irritating stuff get to them and affect their performance as leaders.
4. “There is never just one cockroach in the kitchen.”  Warren Buffett’s more colorful version of “Where there’s smoke there’s fire” is terrific advice for executives.
When even small things go wrong, investigate thoroughly and fix the problem, because one offs are rare in the trouble department.  Problems are usually a sign of other problems.  Don’t let denial get the best of you.  Don’t just deal with problems; actively look for them.
5. “The devil is in the details.”  Updated from the much older expression, “God is in the details”, this is probably sourced as anonymous but it is surely worth executive consideration.
What looks good at the 20,000-foot level can actually be a nightmare when you get close enough for real understanding.  The message:  Before deciding and committing, drill down and then drill down further.  If you are far enough away almost anything can look good; up close, not so much.  When things go wrong, it is often the details that get you.  The results always expose the details you ignored.
6. “You don’t know what you don’t know.”  Socrates, Bob Woodward of Watergate fame and former U.S. Defense Secretary Donald Rumsfeld have all been associated with this line.  Donald Rumsfeld’s version has a big following:  “There are known knowns; we also know there are known unknowns; but there are also unknown unknowns – there are things we do not know we don’t know”.
Executives who don’t know what they don’t know often get into trouble.  Learning to know what you don’t know is no small trick, but it begins with humility and includes involving and actually listening to many different viewpoints.  Just because you don’t know what you don’t know does not mean others do not know what you need to know.  Getting those others involved — to borrow a concept from trigonometry — is called triangulation.  Good executives triangulate from many angles when the stakes are high.  Another well-known line fits here:  “Advice on advice:  get some”.
7. “Bedside manners are no substitute for the right diagnosis.”  This is vintage Alfred P. Sloane.  Sloane put together General Motors in the 1920s and wrote what is arguably the best business book ever:  My Years with General Motors.
Executives, like doctors, are in the problem business.  You can’t solve a problem unless you diagnose its root cause properly; kindness, personality, charisma etc. are certainly important but they will not fix a problem that has been misdiagnosed and is consequently not being treated properly.  It is good to have a nice person as your doctor, but if you are seriously sick the only thing that really matters is a doctor who gets your situation right.  At that point you are not looking for bedside manner. You are looking for competence.  So it is with business, where the executive is the doctor.
8. “Like hires like.”  Not sure of this source but it is sure something for executives to think about when they appoint people.
People like what they see in the mirror and tend to replicate it when hiring.  Examples:  if you appoint from outside your organization, don’t be surprised that your appointee continues to add from outside.  If your appointee is of a particular viewpoint, don’t be surprised if more follow with the same viewpoint.  A related version of this line:  “Situations change, people don’t”.
9. “Success often lies not in what you do, but what you stop.”  A former Canadian prime minister, William Lyon McKenzie King, had a view of politics along these lines.  It applies to business.
Doing new things gets big headlines while stopping things hardly gets noticed.  But what you stop can make all the difference in a business.  Examples:  a bad executive hire; a bad acquisition; a bad product; a bad securities issue.
10.  “If you cannot measure it, you cannot improve it.”  Physicist Lord Kelvin (Sir William Thomson) is the source.  Ford Motor Co. CEO Alan Mulally provides the modern day version “The data will set you free”.
A big part of achieving goals in business is to measure, accurately, where you are and where you want to get.  An unwillingness to measure is not a good sign.  Accountability is rooted in measurement and accountability is key to success.
11. “Only the paranoid survive.”  This is the title of Intel co-founder Andrew Grove’s very highly regarded 1999 management book.
A healthy fear of the things that can get you in a business is a good quality in an executive.  It can keep you out of a lot of trouble.
12.  “You get what you incent.”  Widely used but of uncertain origin, this line should always be with executives.
“Incentives affect behavior” is a cornerstone of management and economic theory.   Workplace incentives include everything from ordinary income, bonuses and stock to perks, recognition and title.  Executives control the incentives they provide.  They should think about the relationship between incentives and behavior.
13.  “No situation is so bad that overreacting and doing something stupid cannot make it worse.”  Also of uncertain origin but it too makes a good point for executives.
Bad things happen.  Executives have to deal with them.  Good executives do not make things worse.  They do not panic.  The more scholarly version of the line comes from Thomas Hardy:  “And yet to every bad there is a worse”.  Then there is the medical version:  “Primum non nocere:  First do no harm”.
14.  “Structure follows strategy.”  Former Harvard Business School Professor Alfred D. Chandler tells executives that they should first determine their strategy and then design an organizational structure to execute it.  Too often, strategy is forced into the existing structure with predictably poor consequences.
15.  “This too shall pass.”  Sources include Persian poets and King Solomon.
Great advice for executives having trouble functioning effectively because of the stress of the day.  The concept of trouble passing with time is soothing and provides perspective.  But it is not a substitute for managing.  While everything does eventually pass, difficulties must be managed with an urgency and intensity befitting the situation.  When “This too shall pass” becomes “Don’t worry, be happy” it is time to change executives.
You can’t run a business with one-liners.  But being able to sum things up in a few words can sometimes be a real help to executives.  There is a lot of wisdom in some one-liners.  The trick is to use the wisdom but appreciate the limitations.

Unemployment over 30%

Feb 27 2013 19:06 Jaco Leuvennink

Students with big aspirations stand on the steps of the Wits University Great Hall.

 

Cape Town - Employment in South Africa is still 450 000 below what it was in 2008 before the international financial crisis started taking its toll.
This was revealed in the National Budget tabled in Parliament on Wednesday.
It means high unemployment remains the most pressing challenge facing the country.
The Budget Review says there are 4.5 million jobless South Africans and another 2.3 million people categorised as “discouraged” who are no longer actively seeking work, raising the broad unemployment rate to 33.2%.
Slow economic growth in 2012 hindered formal non-agricultural employment growth. Between September 2011 and September 2012, about 82 000 jobs were created, bolstered by rapid growth in national and provincial government payrolls in the middle of the year. Moderate employment growth is expected over the next three years.
With fiscal pressures providing little room for an expansion of public sector employment, job creation prospects will largely depend on private sector hiring.
Youth joblessness remains exceptionally high, with more than 40% of those who are economically active and under the age of 30 unemployed. To date, interventions to encourage the private sector to hire younger workers have proven inadequate, the Budget Review says.
Nominal wage settlements averaged 7.6% in 2012 compared with 7.7% in 2011. After moderating to 5.9% in 2011, growth in nominal unit labour costs has started to rise. Productivity growth averaged just 1.2% over the last two years, according to the Budget Review.