*OPINION – Three Mindsets Necessary for Entrepreneurial Success
What determines whether or not an entrepreneur is successful?
Cal State Fullerton’s Center for Leadership recently brought Ryan Gottfredson to its incubators to share some of his latest research that helps answer this question. What might surprise you is that the answer is something you likely haven’t given much thought to. (CSUF has two incubators – one in Placentia and one in Irvine).
To introduce the answer, consider the following questions:
Who is going to be more successful:
– Entrepreneurs who see challenge and failure as (1) things to avoid or as (2) opportunities to learn and grow?
– Entrepreneurs who see critical feedback as (1) things to avoid or as (2) being helpful for thinking optimally?
– Entrepreneurs who see risk as (1) things to avoid or as (2) being necessary for obtaining rewards or accomplishing goals?
It seems pretty clear that in order for entrepreneurs to be successful, they need to be able to see challenge as failure as opportunities to learn and grow, critical feedback as being helpful for thinking optimally, and risk as being necessary for obtaining rewards or accomplishing goals.
What this suggests is that entrepreneurs’ success is determined by the manner they see and think about the situations they find themselves in.
But surprisingly, through my research, I have found that only 7% of people consistently see all three of the situations in the most optimal ways.
So, what is it that causes entrepreneurs to encounter the same situations (challenge, critical feedback, and risk) but see and interpret them so differently? The answer to this question identifies a primary driver in entrepreneurial success.
This driver is our mindsets. Mindsets are the mental lenses that orient us toward a unique way of understanding and guide us toward corresponding actions and responses. In other words, they are our mental fuel filters that filter select information into their brain, and what gets filtered through is what ends up guiding our thinking, learning, and behavior.
To demonstrate the foundational role mindsets play in how entrepreneurs operate, consider an entrepreneur that receives tough and constructive feedback. Depending upon the entrepreneur’s mindset, the entrepreneur could see that feedback as: (1) questioning his/her entrepreneurial abilities and get defensive, or (2) being valuable information that could dramatically improve the entrepreneur’s success. Depending on the entrepreneur’s mindset, his/her mindset is likely to dictate how the s/he thinks about the feedback, how likely s/he is going to learn from the feedback, and the manner in which s/he will behave in response to the feedback.
The Three Mindsets Necessary for Entrepreneurial Success
If entrepreneurs’ mindsets are what drives their success, do you know what mindsets you need to develop to think, learn, and behave in the most effective way?
Although mindsets are foundational to entrepreneurs’ effectiveness, most groups I speak to are unable to identify a specific mindset that is essential for entrepreneurial success.
As a leadership researcher, I have identified three sets of mindsets that have repeatedly demonstrated that the mindsets influence individuals’ thinking, learning, and behavior. I have pulled these different mindsets together into one framework to help entrepreneurs clearly identify the mindsets they need to develop to operate more effectively. Each set of mindsets represents a continuum from negative to positive as follows:
Every entrepreneur possesses a mindset that lies somewhere along each continuum, and the basic idea is that the more positive one’s mindset, the more effectively they are to think, learn, and behave in the situations that they encounter on a daily basis.
Let me describe each set:
Fixed: We do not believe that we or others can change or develop our/their abilities, talents, and intelligence.
Growth: We do believe that we and others can change or develop our abilities, talents, and intelligence.
When entrepreneurs possess a fixed mindset, they seek to avoid failure, because to them, failure means that they are a failure. Thus, those with a fixed mindset are primarily focused on looking good, and if something does not come easily or naturally to them, they have a tendency to give up.
Entrepreneurs with a growth mindset, on the other hand, are primarily focused on learning and growing. They embrace challenges, see failure as an opportunity to learn and grow, and believe that success only comes though pushing through obstacles and difficulties.
Closed: We are closed to the ideas and suggestions of others
Open: We are open to the ideas and suggestions of others and willing to take those ideas seriously
Here is a great quote from Farnam Street: “Before you smugly slap an open-minded sticker on your forehead, consider this: closed-minded people would never consider that they could actually be closed-minded. In fact, their perceived open-mindedness is what’s so dangerous.”
When entrepreneurs possess a closed mindset, they are primarily concerned about being seen as being right. As such, they seek to have their ideas supported, inclined to provide answers (as opposed to ask questions), avoid feedback and new perspectives, and see disagreement as a threat. All because they believe that what they know is best.
When entrepreneurs possess an open mindset, they are primarily concerned about finding truth and thinking optimally. In order to do this, they ask questions, seek to understand, seek feedback and new perspectives, and see disagreement as an opportunity to learn. All because they believe that their perspective is limited and they can be wrong.
Prevention: Being focused on not losing
Promotion Being focused on winning and gains
Entrepreneurs with a prevention mindset are like a ship captain whose primary objective is to not sink. When this is the leaders’ objective, s/he focuses on ensuring no problems occur, limiting risk, and not “rocking the boat” (i.e., maintaining the status quo).
Entrepreneurs with a promotion mindset are like a ship captain whose primary objective is to get to a specific destination. As such, the leader anticipates problems, sees risk as being necessary to reach destination, and is willing to adjust operations to reach destination.
The difference between these two entrepreneurs is that those with a prevention mindset get blown about by the winds and the currents of the sea and end up in a destination not of their choosing, while those with a promotion mindset are willing to brave the winds and the currents of the sea to end up in a destination of their proactive design.
Becoming a More Successful Entrepreneur
Who is going to be more successful, an entrepreneur whose mindsets are:
fixed, closed, and prevention, or growth, open, and promotion?
The effect of such entrepreneurs on their businesses are just like they sound. Entrepreneurs with negative mindsets are constricting. Entrepreneurs with positive mindsets are expanding. And so are their businesses, respectively.
What mindsets do you possess? Correspondingly, what type of entrepreneur are you because of your mindsets?
Again, from my personal mindset assessment, I have found that only 7% of people consistently possess all three positive mindsets, suggesting that you can likely enhance your success by awakening to your mindsets and improving them to help you operate in a more effective way.
If you are interested in learning how positive your mindsets are relative to thousands of others, I invite you to take my free personal mindset assessment. It will provide you with a personalized and comprehensive report to help you better understand each mindset set, what your mindsets are, and direction on how to improve your mindsets.
In all: The key to being a successful entrepreneur is your mindsets.