Are you a heart-dominant entrepreneur like Starbucks’s Howard Schultz? Smarts-dominant like Jeff Bezos of Amazon? Guts-dominant like Virgin’s Richard Branson? Or do you carry the luck trait, like Tony Hsieh of Zappos? According to Tony Tjan, co-author of Heart, Smarts, Guts, and Luck, these are the four traits that drive decision- making, and ultimately success.
Your entrepreneurial profile impacts your business, from starting up, to scaling it, to shifting strategy, to selling it. At these turning points, it’s important to know which traits you should dial up or dial down and what kind of people you may need beside you. “Having this degree of self awareness may be the best marker of a successful entrepreneur—even more critical than having a high IQ,” Tjan says.
Most entrepreneurs tend to overemphasize the formal business plan at inception. In Tjan’s research, 70 percent of those businesses that had a successful exit did not start with a formal business plan. They may have had a general direction set out, but not the conventional formal plan most think of, with lots of Excel spreadsheet pages and detail after detail of why the market is gigantic. The entrepreneur is more important than an overly formal plan or idea. Acording to Tjan, people matter more than ideas, and the general business model matters more than an overly detailed financial plan at the early stage—because those financial projections will never come out as planned, anyhow.
The Four Key Attributes of Successful Entrepreneurs:
Heart: A heart-dominant person kicks things off with passion and fire. He or she conjures up a great idea—a ventures’ seed or bulb, and will simply believe that the right things will happen and the bulb will grow.
Smarts: The smarts-dominant individual is best-suited to seeing patterns faster than anyone else and providing structure, analysis, and an actionable plan. He or she can be a highly successful business-builder.
Guts: Those with guts have the thick skin and fortitude to initiate and try something new, the guts to endure, and the guts to evolve. The guts trait can be divided up into risktakers and risk-tolerators.
Luck: Most entrepreneurs benefit from luck at one time or another in their careers, even though luck appears to be chaotic and unpredictable. Those who seem to be “luckier” than others tend to be optimistic, intellectually curious, and humble.
By knowing what you are good at and where you have gaps, you are in a better position to identify people who will complement you to join the team. “For example, if you are a heart-dominant entrepreneur, you are probably better served by having a partner or employee who complements you with, say, a smarts-guts profile,” Tjan says. Basically, a diversity of excellence in people from the outset can often help a businesses reach better outcomes faster.
Are you born with these traits or can you acquire them?
On the heart side, there are people who have a natural passion for something. Others acquire that purpose and passion over time, meaning that they discover or refine passions through life experiences and relationships. But from a practical standpoint for a business, the heart of a business is almost always a reflection of a founder with clarity around his or her purpose or calling, around the “why” of the business as much as the “what.” That heart may be shaped over time, but it sets the core values and foundation for a business. Perhaps more than heart or luck (which are traits that are more inner and attitudinal in nature), smarts and guts are clearly traits that could be acquired. On the smarts side, it is all about pattern recognition, and experience itself makes you better at that.
How can you get more gutsy?
Tjan found that some guts-driven people are just born with a higher propensity for risk taking, but what was really interesting was that there were three ways to influence your level of guts: your childhood experiences, training, and peer support.
Eighty percent of the guts-dominant entrepreneurs Tjan studied had a childhood enterprise, from a lemonade stand to the proverbial newspaper route. Learning rejection or the value of a dollar early in life matters because it builds resilience early; it thickens the skin. With training, simply knowing what to expect can help a lot. The case-study method taught in some business schools can help prepare you for common business patterns. And as for peer support, having a group of family and friends that is behind you allows you to have more confidence in what you do. If it is peer pressure that leads many kids to do dumb things, it is also peer support that is more important than anything for positive behavior change.
Is there such a thing as too much smarts?
Molly Gregor is the features editor of the New York Enterprise Report.