What Entrepreneurs Need to Know About Their Brains
Are you more like Howard Schultz of Starbucks, the billionaire investor Warren Buffett, Richard Branson of Virgin, or Tony Hsieh of Zappos? Knowing the answer could help you become more successful in your business.
Being aware of how your brain works can help you make better decisions as an entrepreneur, contend the authors of a new book, Heart, Smarts, Guts and Luck (Harvard Business Review Press, 2012). Business veterans Tony Tjan, Dick Harrington, and Tsun-yan Hsieh interviewed and researched more than 500 business leaders from young, upstart entrepreneurs to experienced CEOs and identified four character traits that define a business leaders' decision-making process.
Here is a rundown of the four categories of entrepreneurs they found and the leaders that exemplify them:
1. Heart. Howard Schultz of Starbucks. Hearts-dominated leaders are the passionate, big-picture, founding visionaries that may not necessarily have a rational, research-based business plan, but are fiercely committed to seeing their goal through.
2. Smarts. Billionaire investor Warren Buffett. The smarts-dominated leader is rational, makes decisions based on facts, sets goals, delegates responsibility and knows how to hold people accountable.
3. Guts. Richard Branson of Virgin. Guts-dominated leaders actively seek out uncertain business ventures with the possibility for high reward (risk takers) or are capable at managing situations laden with heavy consequence (risk-tolerant).
4. Luck. Tony Hsieh of Zappos. While almost every successful business venture owes some portion of its success to a lucky break, the luck-dominant business leaders strategically expose themselves to luck by developing organic, deep connections with a group of people and then having the open and optimistic outlook in life to be able to take advantage of opportunities when they present themselves.
To learn what kind of leader you are, take the authors' entrepreneur aptitude test at www.HSGL.com. Six in 10 company founders that are still in the early stage of growth are heart-dominant leaders, according to the book.
"You tend to go through a couple phases in business building. There is the founding stage, then what we call the scaling stage and extending stage and in each of those stages you have to shift gears," Tjan told Entrepreneur. "You have to go from heart-dominant to smarts/guts-dominant -- or you need different types of people to help you."
Take the quiz. What kind of entrepreneur are you? Is this a surprise? Leave a comment below.
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.