Management Psychology Group

Tag: personality assessment

  • Entrepreneurs and Personality

    What is an entrepreneur? Why are certain people successful starting and growing a business and others are not? Is it just luck or being in the right place at the right time? Certainly Bill Gates, with his technical talents, needed the computer revolution in order to make Microsoft the successful company it is. But is it just timing and luck or are other factors involved?

    Recent research in the field of psychology suggests that personality has a great deal to do with being a successful entrepreneur. In a recent study published in the highly regarded Journal of Applied Psychology (2006, Vol. 91, No. 2, 259-271), Hao Zao of the University of Illinois at Chicago and Scott E. Seibert of the Melbourne Business School analyzed and combined the results of twenty-three independent research studies. A statistical method known as meta-analysis was used which allows research studies to be combined in a way that yields overall trends within a field of research.

    When using meta-analytic techniques, a few basic rules must be followed. First, all of the studies being combined must use consistent definitions and methods. Therefore, an entrepreneur was defined as “…someone who is the founder, owner, and manager of a small business and whose principal purpose is growth.” Second, in order to pinpoint exactly what makes an entrepreneur different from other business people rather than people in general, only studies which compared entrepreneurs to managers were used. Finally, the studies chosen used only personality traits which fit the widely accepted Five Factor Model (FFM) of personality.

    Extraversion – This determines how naturally outgoing we are. Some people need a great deal of social interaction and are comfortable in social environments. Others need very little people contact and may even be timid or a bit fearful of social encounters.
    Emotional Well Being (Neuroticism) – Some of us are more self-confident than others. In addition, some people show emotions readily and others are “stone faced” and rarely change their expression.
    Agreeableness – This trait involves how easygoing and tolerant versus how intense and potentially irritable a person behaves. Are you someone who goes through life in a fairly calm fashion or do you get frustrated frequently? Easygoing people may be easy to get along with but may also lack drive and determination. Intense and irritable people may be highly driven and goal oriented but may also ruffle feathers or worse.
    Openness to Experience – This trait determines whether we are likely to seek out new ideas and think creatively or whether we are more practical-minded, efficient, and conservative in our outlook.
    Conscientiousness – This trait determines our core “modus operandi.” At the one extreme, people are focused, organized, detail-oriented, perfectionistic, achievement-oriented, dependable, and compulsive. On the opposite end, people tend to be flexible, spontaneous, tolerant of ambiguity, disorganized, and less achievement-oriented.

    The FFM organizes personality around five general personality traits. Personality traits are largely determined by our genetic makeup but also solidified by early environmental influences such as learning, family relationships, and our experiences to name a few. These core traits make us who we are and cause us to behave in certain ways. Thus, personality traits predict with pretty good accuracy how we perceive situations, solve problems, interact with people, and carry out our job responsibilities. The FFM consists of the following personality traits.

    Each of the twenty-three studies included in the meta-analysis compared entrepreneurs to a group of managers on the FFM personality traits. The authors found significant differences between entrepreneurs and managers on four out of the five traits. For those of you with minimal familiarity with statistics and research, these are impressive results. The entrepreneurs scored significantly higher than managers on the traits Openness to Experience and Conscientiousness. Therefore, entrepreneurs are characterized as more creative, more innovative, and more likely to embrace new ideas than their manager counterparts. Second, the results indicated that entrepreneurs were higher than managers on Conscientiousness. Further analysis indicated that the differences here were primarily due to the entrepreneurs having a higher achievement orientation as compared to managers. Entrepreneurs and managers did not differ on other aspects of Conscientiousness such as dependability and organizational skills.

    The second key set of results showed entrepreneurs to be significantly lower than managers on Neuroticism and Agreeableness. Consequently, entrepreneurs are more self-confident, resilient, and stress-tolerant than non-entrepreneurial managers. These results make sense considering the highly stressful, demanding, and chaotic work environments which entrepreneurs usually find themselves. With regard to lower scores on Agreeableness, entrepreneurs are likely to be tougher, more demanding, and more prone to drive a hard bargain than managers. This may explain how the successful entrepreneur is able to accomplish a great deal with relatively few resources. In addition, the negative aspects of low Agreeableness, which can be significant, are no doubt less detrimental in a small entrepreneurial enterprise versus a larger and more structured organization. Finally, no significant differences were found between the two groups on Extraversion. Therefore, entrepreneurs were no more or less outgoing than the managers.

    So what is the relevance of these research findings? First, as an organizational psychologist working with business people, I’m frequently asked the question, “Do you think I would be successful starting my own company?” The ability to compare oneself to successful entrepreneurs can help an individual make an important career decision even if they have no previous experience working in an entrepreneurial environment. Avoiding bad career decisions is something all of us desire. Second, these data can help people who support and work with entrepreneurs to make sound decisions. For example, Venture Capitalists are faced frequently with the decision to fund or not fund a start-up company. With tremendous amounts of money at risk, this research allows the VC to make sound decisions about the people involved in addition to market analysis and evaluating the merits of the product/service. As the field of psychology continues to move forward scientifically and further away from the old days of theory and conjecture, the information which results from psychological research can and should be used to support the making of good business decisions.

    Douglas L. Griest, Ph.D. is a founding partner of Management Psychology Group and eTest, Inc.

  • The Foundations of High Performance: The I-Competencies

    Are top performers made or born? How can I get more of them? The answers to these questions hold the key to every leader’s success. The more top performers a leader can select and/or develop, the greater the success of his or her organization.

    Competencies are clusters of KSAPs (knowledge, skills, abilities and personal characteristics) that enable a person to be successful in a particular job. There are two basic types of competencies. The foundation competencies are built into the system for the most part. These are the innate abilities and the enduring behavioral patterns we get through the luck of the draw from the gene pool and our early learning and background experiences. This is the raw material we have to work with. The surface competencies are the result of later training and experience in schools, early jobs and other learning experiences. People can develop a wide range of surface competencies depending on the types of foundation competencies they possess.

    Performance is dependent upon a person’s natural abilities and characteristics (the foundation competencies), the knowledge and skill the person possesses (the surface competencies), the ability of the organization to facilitate success and the ability of the leader to keep his or her people motivated and focused on the goal. The successful leader selects people with the necessary foundation competencies, helps them develop the necessary surface competencies and facilitates their success by keeping them focused on the right objectives. At the most basic level, high performance depends on four foundation competencies — the I-competencies:

    The Intellectual Competency. This is more than just how well a person can perform on a standardized test although it does include the aptitudes that predict success in an academic environment. However, it also encompasses common sense, mental agility, quickness and creativity, among others. It is a combination of how well the person uses his/her abilities and the unique mix of abilities. People who make smart decisions and who use their talents effectively are more successful over time than those who make bad decisions and/or squander their intellectual resources. The data are quite clear and unambiguous. There are always exceptions to the rule (there are very bright people who never amount to anything and there are people of very average ability who work hard and achieve at very high levels) but overall correlations between the components of this competency and performance over time are clear and consistent in a very broad range of jobs and organizations.

    The Interpersonal Competency. People who have good social skills and who get along with other people are much more successful as a group than those who don’t have as many talents in this area. The interpersonal competency includes general social and persuasive skills, social insight and intuition, likeability and persuasiveness among others. The intellectual competency enables a person to solve a problem. The interpersonal competency enables him or her to convince other people that the solution is the right one.

    The Integrity Competency. This is somewhat broader than the basic honesty-dishonesty dimension although it is an important part of this competency. This also includes general conscientiousness, discipline and follow-through. The person with high integrity will meet his or her commitments in the time frames agreed upon and to the standards at or above those which are expected. If not, he or she will let everyone know in plenty of time so that they won’t be surprised. Part of this competency includes the ability to focus and to use one’s talents and aptitudes with appropriate discipline. This is the factor that holds things together and facilitates trust and consistency of performance.

    The Intensity Competency. This includes energy, stamina, drive and the person’s ability to get fully engaged. People with high intensity are active, not passive. They are driven by a need to get things done and to see results. With the proper control and focus, people with high intensity will achieve at higher levels than those with only average levels of stamina and energy. This is the gasoline that drives the engine.

    As with any gift, there are potential downsides with each of the I-competencies. Very bright people may sometimes become overly academic, theoretical and philosophical. They may pursue ideas merely for intellectual challenge and fail to accomplish things in the practical realm. They can also inadvertently intimidate other people because of their strength of intellect. People with high interpersonal competency can sometimes get so wrapped up in the relationship aspects of the job that they lose sight of the tasks and goals at hand. The high discipline and conscientiousness which comes with the integrity competency can lead people to rigidity, perfectionism and stubbornness. The high energy and drive which comes with intensity can lead to errors of impatience, excessive ambition, impulsivity, an inability to relax and stress-proneness.

    In spite of potential problems, the I-competencies tend to counterbalance and facilitate one another. For instance, the drive and energy of intensity helps to ensure that the very bright person does not waste time in overly academic pursuits when practical results are demanded. Also, the conscientiousness of integrity can counterbalance the highly extraverted person when he or she is tempted to focus on relationships more than on task performance.
    Various surface competencies (e.g. financial acumen, collaborative problem solving, handling heavy workloads, sales ability) are dependent upon the foundation I-competencies at the base. If the person possesses the necessary foundation competencies and consequently has been able to develop the appropriate surface competencies, the stage is set for high performance. This is where leadership comes in. Merely having good people on one’s team does not guarantee performance. Their efforts must be focused and mobilized and they must be encouraged and rewarded for using their abilities in a collaborative manner.

    How to Succeed as a Leader

    Select for foundation competencies. If a person doesn’t have them, no amount of effort will enable him or her to develop the surface competencies necessary for top performance. The foundation competencies are wired into the system, whether by nature or nurture. At this point you cannot develop them through training or experience. Many dollars are wasted on people who don’t have the capacity to benefit from organizational training efforts.

    Focus on surface competencies for training. A leader may be lucky enough to have people with fully developed surface competencies necessary for success on the job but most people will need some sort of training and experience to get up to speed. Financial skills, specific engineering problem solving techniques, in-depth knowledge of the company’s services and products and specific sales techniques are among the surface competencies necessary for success in various jobs. For the most part these can be learned through academic or on-the-job training, coaching and general experience. These are the areas for training and developmental dollars.

    Attend to the basics. Not everyone has a charismatic leadership personality. However, most people can learn to get work done through others by focusing on the right basics: be sure the goal is clear and exciting (people need to know what is expected and they need to feel it’s worth doing); help them get the resources they need; Remove barriers; monitor progress, provide corrective feedback, and use collaborative problem solving when things get off track; reinforce good performance after the goal has been accomplished.

    This is the task cycle by which all work gets accomplished in an organization. Leaders who operate effectively in all phases of the task cycle pull for exceptional performance from their team. However, if the team hasn’t been selected carefully for the appropriate foundation competencies and trained to develop the necessary surface competencies, not much will happen.

    In summary, all it takes to be successful as a leader is to get good people, be sure they have the tools for success, give them clear and worthwhile targets, provide supportive feedback and critique…then stay out of their way until you’re needed. It’s that simple…and that complex.

    Hodge Golson