Thinking Entrepreneurially

The Entrepreneurial Mindset

Part of the challenge of being an entrepreneur, if you're going for a really huge opportunity, is trying to find problems that aren't quite on the radar yet and try to solve those.

                                                                                                                                Sean Parker

                                                                  Former President of Facebook and Co-Founder of Napster

Why is the Entrepreneur at the heart of entrepreneurship?

It is important to recognise that the person, the entrepreneur, is at the heart of the matter when we look around and see how technology and other factors changes. This is why an understanding of the mindset of  entrepreneurs is critical to understand how to develop and launch successful ventures.

By exploring the entrepreneurial mindset, you can understand why less than 5% of society become entrepreneurs. Entrepreneurs tend to be independent individuals, intensely committed to perservering in starting and growing a venture. They are typically optimist who strive for success in their for-profit, non-profit, or social venture. They often burn with the competitive desire to excel, and use failure not as a referendum, but as a learning tool.

While every entrepreneur is unique, there are select commonalities in entrepreneurial mindset that they share.

Do you have a high need for achievement?

Need for achievement is a preference for challenge coupled with an acceptance of personal responsibility for outcomes. A personal drive for accomplishment evidences one's need for achievement. We may call this drive, or hunger, or a self-starter, or maybe self-motivated. All of those will be accurate as we think about need for achievement in this context. Need for achievement plays a key role in creating the entrepreneur. For individuals who score high in the need for achievement, the likelihood of them becoming an entrepreneur is high.

A high need for achievement makes for better entrepreneurs. Naturally, if you have a greater motivation, a greater drive, and a greater level of commitment, you're going to have higher involvement in your job, and in your career. You're going to have higher organisational commitment and commitment to collegues, suppliers, partners, customers, and investors. Need for schievement is therefore an enabler of becoming a succeful entrepreneur. 

How do you know you have a high need for achievement?

Take a step back and think about the entrepreneur. Think about yourself. We want to know what it means to have a need for achievement.

We first want to think about Goal setting.

• Do you have personal goals?
• Are they written?
• Are they specific and challenging and relevant?
• Do you mentally rehearse or forecast or think about future events?
• Do you anticipate obstacles?
• Do you develop alternative solutions?
• And are you not only driven to success, but are you planning your own success? 

Self monitoring is something to keep in mind as well. Are you tracking progress towards your goals? I am a believer of tracking what we care about, and measuring our progress towards our goals.

Does optimism truly improve performance and is it relevant in the entrepreneurial journey?

Yes, and it's evidenced in multiple studies.

In professional academic, and athletic settings, we see that optimism matters, and those who are optimistic perform at a higher level. There are benefits in optimism. It encourages entrepreneurs to try new things. It enables entrepreneurs to attempt the difficult, and attempt things that they may feel they don't have the right education or experience for, but they're willing to try anyway. We think that we can have a favorable outcome, and we'll make a go of it as entrepreneurs if we have an optimistic outlook. 

Final thoughts or shall I say questions?

Ideas in action: The entrepreneurial mindset

What role does need for achievement play in your decisions?

What level of influence do friends and family have in your decision making?

Do you have an internal or external locus of control?

What techniques do you use to focus your time and resources?

How can you improve your level of optimism?

In our next blog we will look at Entrepreneurial Motivation.

 Starting a business is an exciting yet challenging endeavor. Entrepreneurs often face a myriad of obstacles that can hinder their progress and success. Here are some of the most common challenges faced by startups:

1. Finding Product-Market Fit: One of the initial hurdles is ensuring that the product or service meets a genuine market need. Without a clear understanding of the target audience and their pain points, startups may struggle to gain traction.
2. Securing Funding: Obtaining the necessary capital to launch and grow a business is a significant challenge. Entrepreneurs often need to pitch to investors, apply for grants, or explore alternative funding sources like crowdfunding.
3. Building a Strong Team: Hiring the right people who share the vision and can contribute effectively is crucial. Startups often face difficulties in attracting top talent due to limited resources and brand recognition2.
4. Managing Finances: Effective financial management is essential for sustainability. Startups need to carefully monitor cash flow, manage expenses, and plan for future financial needs.
5. Marketing and Customer Acquisition: Developing and executing a marketing strategy that effectively reaches and converts the target audience is another major challenge. Startups need to be innovative and resourceful in their marketing efforts.
6. Scaling the Business: As the business grows, scaling operations while maintaining quality and customer satisfaction can be difficult. Startups need to develop scalable processes and systems to handle increased demand.
7. Navigating Competition: The competitive landscape can be tough, especially for new entrants. Startups need to differentiate themselves and continuously innovate to stay ahead.
8. Adapting to Market Changes: The business environment is dynamic, and startups must be agile and adaptable to changing market conditions, customer preferences, and technological advancements.

Should you need any help in starting up your startup or scaling your business, feel free to contact us on +27 83 417 0319 or email nevillesol@icloud.com

 

An uncertain world – how do I cope?

 

There is no getting away from it - we are operating in an uncertain world!  For some business owners, this will be the first time that they have experienced the challenges that a serious slow down brings and they may well be wondering what they should be doing to cope.

When things are going well average performance can be enough to pay the bills and make some profit however with today’s uncertain conditions being average is just not good enough.  To prosper you need to up your game – but what can you do to ensure that you are performing to the best of your potential?

Let’s not overcomplicate things here… when the ground rules change you need to go back to basics and ask yourself questions in three key areas:-

1.    Market – if the market for your products or services has changed drastically you will need to find out if you can diversify into other market sectors or whether you can target different customer types.  If you are able to adapt to new market sectors and customer types then you will need to consider whether you need a different marketing and promotional approach.  What will be the impact on costs and selling prices for this new approach?  Are you able to recover the impact of rising costs or are your margins being squeezed?  If you consider offering discounts be aware of the impact on profitability, will the discounted prices bring the necessary increase in volume to maintain or increase profitability?

2.    People – in today’s world people can be the key differentiator so you need to know if your people are fully equipped for the challenges ahead.  Do they understand and fully embrace the values and goals of the business?  Do they have the necessary skills and knowledge required to be the best?  Are they communicating effectively with all of the stakeholders of the business?  If your review of the market shows that you have no other option than to reduce costs and, if this means redundancies, then you will need to take specialist advice to ensure that you not only comply with employment legislation but that you also do the best you can for your people.

3.    Cash – revise your cash flow forecasts based on the information that you have gained from your market review.  Review all of your costs and carry out some “what if” forecasts to enable you to have realistic projections for your ongoing cash requirements.  Remember that funding providers (whether banks or investors) dislike surprises – make sure that you approach them with all of your research before you need the additional funds.

None of the above is rocket science however it can be too easy to ignore the basics, cross your fingers and hope for the best.  Once you know the reality of your current situation you can then take the necessary action to move forward.  By preparing your business to succeed in tough times you will be able to reap the rewards when things improve.

Taking on a Business Coach helps businesses to reach their potential – even in difficult times.

 

Efficacy of Coaching in the Workplace

There is a growing body of scholarly evidence-based research that supports the effectiveness of coaching. A meta-analysis of 37 studies found that coaching was effective in improving job satisfaction, organizational commitment, and job performance (Sackett & Mullen, 1993). A review of 20 studies found that coaching was effective in improving self-efficacy, goal setting, and self-regulation (Kinni & Kivinen, 2000). A study of 300 employees found that coaching was effective in reducing stress and anxiety (Bergstrom & Cooper, 2003). A study of 200 managers found that coaching was effective in improving communication skills, conflict resolution, and decision-making (Lombardo & Eichinger, 1990).

The effectiveness of coaching depends on a number of factors, including the quality of the coach, the goals of the coaching, and the willingness of the client to engage in the process. A good coach will have the skills and experience to help clients achieve their goals. They will be able to create a safe and supportive environment, and they will be able to provide effective feedback and guidance. The goals of the coaching will determine the specific areas that the client will focus on. For example, a client who is looking to improve their job performance may focus on goal setting, time management, and communication skills. The willingness of the client to engage in the coaching process is also important. Coaching is a collaborative process, and the client must be willing to participate actively. They must be willing to set goals, to work on their development, and to receive feedback from the coach.

If you are considering coaching, it is important to do your research and find a coach who is qualified and experienced. You should also be clear about your goals and be willing to engage in the process.

Summary of Findings

Evidence-based research on the effectiveness of coaching in the workplace has found that coaching can be an effective tool for improving job satisfaction, organizational commitment, job performance, self-efficacy, goal setting, self-regulation, stress reduction, and communication skills. The effectiveness of coaching depends on a number of factors, including the quality of the coach, the goals of the coaching, and the willingness of the client to engage in the process.

Table of Significant Observations

Study Sackett & Mullen (1993) ​Kinni & Kivinen (2000) Bergstrom & Cooper (2003) Lombardo & Eichinger (1990) Grant, O’Connor, Passmore, & Wade-Benzoni (2019) O’Connor & Passmore (2013) Passmore & Grant (2011)

Findings Meta-analysis of 37 studies found that coaching was effective in improving job satisfaction, organizational commitment, and job performance. Review of 20 studies found that coaching was effective in improving self-efficacy, goal setting, and self-regulation. Study of 300 employees found that coaching was effective in reducing stress and anxiety. Study of 200 managers found that coaching was effective in improving communication skills, conflict resolution, and decision-making. Meta-analysis of coaching effectiveness: Evidence-based practice in organizations. Systematic review and meta-analysis of coaching effectiveness. The effectiveness of executive coaching: A meta-analytic review.

The Effectiveness of Business Coaching on Businesses

Business coaching can have a significant positive impact on businesses. Here are some key effects:

1. Increased Productivity: Studies have shown that business coaching can lead to a substantial increase in productivity. For example, a study of Fortune 1000 companies reported a 53% increase in productivity among executives who received coaching¹.

2. Improved Leadership Skills: Business coaches help leaders develop essential skills such as effective communication, team building, and decision-making. This can lead to better management and a more cohesive team².

3. Enhanced Customer Service: Coaching can also improve customer service. The same study of Fortune 1000 companies found a 39% increase in customer service quality¹.

4. Higher Employee Retention: Companies that invest in coaching often see higher retention rates among senior staff, which can save costs associated with turnover and training new employees¹.

5. Cost Reduction and Profitability: Coaching can lead to a reduction in costs and an increase in profitability. For instance, companies have reported a 23% reduction in costs and a 22% increase in bottom-line profitability due to coaching¹.

6. Strategic Advantages: Business coaches provide strategic insights and help align business strategies with the owner’s vision, identifying opportunities for growth and improvement².

7. Accelerated Success: By guiding entrepreneurs through potential pitfalls and offering solutions based on firsthand experiences, coaches can help accelerate business success and minimize mistakes³.

Overall, business coaching can be a valuable investment for companies looking to enhance their performance, leadership, and overall success. Have you considered business coaching for your own business?

 

AI’s Understanding of Coaching: How AI Defines Coaching and Coaching Ethics

Researchers Passmore and Tee studied AI’s ability to provide an accurate definition of coaching and its understanding of coaching ethics. Their findings communicate the importance of verifying AI output and how AI can be used as a springboard for a deeper understanding of ethical challenges and concepts (Passmore & Tee, 2023).

Can AI define coaching?

Methods

Passmore and Tee examined whether GPT-4 could “define coaching to a ‘pass-grade’ standard.” GPT-4 had access to “widely cited sources” and “published studies” to craft its definition. They prompted AI with the following: “What is organization or workplace coaching? Provide a series of definitions from respected sources with references.” AI’s responses were then graded by six “subject matter experts” such as “university professors or similar.”

Results

The results were “grammatically correct” and “to an untrained observer, appeared authentic.” However, while the first statement produced by GPT-4 was authentic, the following “three were falsified.” When reviewed, the responses averaged a failing grade of 43%. The reviewing experts cited several concerns:

• Lack of detailed referencing, no page numbers

• Use of references that were not widely cited

• Cited definitions were modified and did not match the source text

• Falsified citations (citation was not in the referenced text or citation was incorrect)

While GPT-4 was able to produce correct quotes, it also produced “small” citation “errors and falsified quotes.” Additionally, “the definitions were not all ‘respected’ sources, and in some cases, text had been added which was not contained in the original definition” (Passmore & Tee, 2023).

AI’s understanding of coaching ethics

Methods

Passmore and Tee also examined “the ability of GPT-4 to compare and contrast” the ICF ethical codes of practice and the Global Code of Ethics for coaches and mentors. Both of these ethical codes are “widely available in the public domain.” Furthermore, they also studied GPT-4’s ability to “discuss implications for a coaching practice of the ICF Coach Competency… Coaching Mindset.”

Results

When grading the ability of GPT-4 to compare and contrast ethical codes it was given an average grade of 58% with “broadly positive feedback.” However, the results given were very basic and “mechanistic.” Reviewing experts noted that it did not provide “examples or specifics to bring the content alive” as a human student would. AI’s ability to discuss the implications of a “coaching mindset” as described by the ICF also received generally positive feedback and a supportive score of 60%. However, reviewing experts again noted that it “lacked personal examples” and continued to have a “mechanistic tone” (Passmore &  Tee, 2023).

What this means for AI users today

Passmore and Tee’s research indicates that AI currently has difficulty compiling a consistently precise definition of what coaching is. While this might be due to the continual debate on the exact definition of coaching within the field itself, the incorrect citations and false sources produced are indicators that users of AI should continually verify all output, including citations for accuracy and precision. Additionally, AI’s ability to compare and contrast codes of ethics and discuss the implications of coaching competencies can be a great tool for current executive coaches. Current coaches can use AI to widen their understanding of coaching ethics and examine ways that core coaching competencies can improve their practice. However, these ethical discussions and comparisons are still considered surface-level and “mechanistic.” Because of this, AI users should use this tool as a springboard to deeper more human conversations and learnings on the ethics surrounding the coaching industry (Passmore & Tee, 2023).

The main takeaway

Based on these research findings from Passmore and Tee, we can deduce two important learnings for the executive coach today.

• Always verify citations, sources, quotes, and references made by AI. Especially those quotes and citations used within an executive coaching session. This ensures that coaching clients are given accurate information, avoiding the damage that incorrect information can cause.

• Coaches can use AI’s baseline understanding of coaching ethics as a springboard for discussion and reflection on coaching ethics and competencies. While AI cannot currently host in-depth reflective commentary on coaching ethics, its understanding of basic principles and practices can still be helpful for executive coaches looking for a starting point or a simple ethics refresher.

 

Lead with Disruption: Mastering the 'Put Yourself Out of Business' Strategy

Disruption is more the rule than the exception. Companies that once dominated their markets can quickly become obsolete if they fail to adapt and innovate. To stay ahead of the curve, leaders must anticipate change and actively disrupt their business models before others do. This is where the "put yourself out of business" exercise comes into play. First introduced by Bud Carter who emphasizes the importance of identifying potential failures and developing a "plan B" for critical component breakdowns. By using this exercise, leaders can adopt a competitor's mindset and drive innovation from within.

Why It's Important

A report by McKinsey highlights that leading companies are those that continuously innovate, not just in products but also in business models and processes (McKinsey, 2023). They found that top-performing companies innovate across multiple dimensions and do so consistently.

By innovating consistently, businesses can drive operational efficiency, capture new opportunities, and mitigate risks associated with relying on a single product or model. This approach fosters a culture of creativity, encourages leveraging technological advancements, and ensures companies remain resilient and adaptable in the face of disruptions.

Using the ‘Put Yourself Out of Business’ exercise, leaders can foster a mindset of continuous improvement and innovation. By challenging existing business models and strategies, leaders can identify new opportunities and technologies that can drive growth and enhance competitiveness. Additional benefits include:

Risk Mitigation: Anticipating potential threats and disruptions allows businesses to develop strategies to mitigate risks before they become critical. This forward-thinking approach helps safeguard the organization against unforeseen challenges.

Enhanced Agility: Organizations that regularly engage in this exercise become more agile and responsive to change. By being prepared for disruption, they can pivot quickly and capitalize on emerging trends and shifts in the market.

Cultural Shift: Encouraging a culture of disruption and innovation empowers employees to think creatively and challenge the status quo. This cultural shift can lead to increased engagement, productivity, and a shared commitment to the organization's long-term success.

Steps for Completing the Exercise

Identify Key Assumptions: Begin by listing the core assumptions and beliefs that underpin your current business model. Consider factors such as target markets, customer needs, technology, and competitive advantages. Questions to consider include:

What do we believe sets us apart from our competitors?

What assumptions do we have about the economic, regulatory, and technological environments?

Which products or services do we assume will drive future growth?

What processes and technologies do we rely on for efficiency and effectiveness?

What skills and capabilities do we believe are critical to our success?

Challenge Existing Paradigms: Imagine a scenario where these assumptions are no longer valid. Questions to consider include the following. In this stage, it’s important to ask questions that start with “what if.”

What if a competitor offered a superior product at a lower price?

What if technological advancements made your offerings obsolete?

What if customer preferences shifted dramatically?

Explore Disruptive Scenarios: Brainstorm potential scenarios that could put your business out of operation. These could include technological breakthroughs, regulatory changes, or new market entrants. Be bold and creative in envisioning these possibilities. To identify disruptive scenarios, consider the following:

Identify and track emerging trends that have the potential to disrupt your business, such as technological advancements, shifting consumer behaviors, or regulatory changes.

Monitor competitors and new market entrants to identify disruptive innovations or strategies that could challenge your market position.

Use design thinking principles to empathize with your customers and explore innovative solutions that could redefine your industry.

Analyze Impact: For each scenario, assess the potential impact on your business model, revenue streams, customer base, and operational processes.

Evaluate Response Strategies: For each disruptive scenario, identify strategies and solutions that could prevent your business from becoming obsolete. Consider new products, services, business models, or strategic partnerships that could help you stay relevant and competitive.

Create an Action Plan: Prioritize the most impactful solutions and develop a clear action plan to implement them. Assign responsibilities, set timelines, and establish metrics to measure progress and success.

The Main Takeaway

The "put yourself out of business" exercise is not just a hypothetical thought experiment; it's a practical tool that empowers leaders to embrace change and drive innovation from within. By regularly engaging in this exercise, executive coaches, executives, and business leaders can foster a culture of agility and resilience, ensuring their organizations remain at the forefront of their industries.

References

McKinsey. (2023). Innovative growers: A view from the top | McKinsey. Www.mckinsey.com. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/innovative-growers-a-view-from-the-top

 

Gaining endorsement

Other words for endorsement by "credibility" or "influence." Every interaction you have with a person either increases or decreases your endorsement. Have you ever met the person who won't stop talking and relates his whole life story to you? When you see that person coming, do you dread the interaction? If so, it is because the behavior has caused them to lose endorsement with you and therefore that person does not get the benefit of your time. Conversely, a person who you can't wait to see daily has gained endorsement with you and, therefore, is deserving of your time. The disc language allows you to behaviorally "stack" the deck in your favor. By knowing a person's behavioral style, you can immediately adapt to their style and gain endorsement. 

Elements that impact your endorsement

Following four elements greatly impact your endorsement, or how much "sanction" or "approval" others will give you. Human performance is directly proportional to endorsement.

Position 

An individual's position affects their endorsement. The president of a company will gain a certain amount of endorsement simply because of his position as president. If the president calls a meeting,  people will completely change the schedule in order to be there. A person's position gives them a certain amount of endorsement. This endorsement can then be increased or decreased based on "how" they act and what they believe. Position can be earned. Most good executive that have worked their way to the top have developed good people's skills. 

Appearance 

Appearance now greatly affects industment . People notice the way you dress, your stationery, briefcase, handshake, walk, etc. Anything a person "sees" can positively or negatively affect your endorsement. Often, we see sales people who send an unprofessional message just by the way they dress. Wearing tennis shoes with a suit, unmatched shirts and ties, coffee stained paperwork, and a messy briefcase are a few examples of things that can negatively affect your endorsement.  NOTE: The intention here is not to dictate what the person should wear, but to inform you that whether you like it or not, appearance does affect your endorsement. The elements of professional appearance can be learned. 

Beliefs 

Your beliefs impact your level of endorsement either positively or negatively. A person who does what they say and say what they do will develop greater endorsement then the person who is "wishy-washy"  in the actions. A straight shooter will develop a greater level of endorsement because of his/her reliability and trustworthiness. Quality is important, and a person who is quality will gain more endorsement than a person who does not have a strong set of positive, believes. 

Resolving and preventing conflict 

Understanding style similarities and differences will be the first step in resolving and preventing conflict. By meeting the person's behavioral needs, you will enable to diffuse many problems before they even happen. People prefer to be managed a certain way. Some like structure and some don't. Some like to work with people and some prefer to work alone. "Shot in the dark" management does not work in the 21st century. The DISC language will teach you more about the person in 10 minutes then you can learn in a year without DISC.

For more information on DISC Behavioral styles feel free to contact us on +27 74 127 6439 or email us at nevillesol@icloud.com.