Economics For Entrepreneurs
Lisa Stevenson: Organizational Psychology and the Entrepreneurial Personality
In our ongoing project to build a solid bridge between the theory and practice of entrepreneurship, we explore the connection between organizational psychology and the entrepreneurial personality.
Lisa Stevenson studied I/O Psych as an undergrad, in connection with business courses, and became fascinated with it. I/O Psych is shorthand for Industrial and Organizational Psychology — the application of psychology in the workplace. Lisa went on to post-graduate studies and a Masters Degree in I/O Psych. She applied it in consulting companies, first as a recruiter and then as an organizational development consultant.
The application of I/O Psych is aimed at improving people outcomes and people performance within firms. The discipline embraces talent and fit — does an organization have the right talent to get jobs and projects done now and in the future, and do the people with the right talents “fit” the firm’s values. Often, firms use I/O Psych to develop pro forma profiles and compare individual assessments to those profiles, looking to emphasize the most desired characteristics and avoid those that are unwanted.
One of the methods of I/O Psych is the application of self-assessment tools. There exists a wide range of psychology-based or psychology-inspired self-assessment questionnaires and surveys that are focused on assisting firms and their HR departments to evaluate and optimize their employee base. One particular application is the combination of different personality types in teams in an attempt to balance strengths and maximize collaborative output and productivity. One of the prominent self-assessment tools Lisa mentioned is MBTI (Myers Briggs Typology Indicator) — a popular free version of which is available at 16Personalities.com. Another is "Business Chemistry", the internal tool used at the global consulting firm Deloitte, where Lisa works in Talent and Development. You can take this self-assessment yourself at BusinessChemistry.Deloitte.com, and find the explanations and implications of their personality classifications. A third widely used self-assessment tool is StrengthsFinder from Gallup.
Can self-assessment help entrepreneurs to succeed? Lisa says yes — but not in the same way that corporations use self-assessment. The entrepreneurial role — whether (co-)founder / CEO or team member — is different. It requires adaptability, being able to do lots of things well, not just one thing; to earn new jobs and skills, including “dirty work”; to be deeply involved in all aspects of operations to understand and master how the entire business functions, not just one aspect of it. When she is hiring for entrepreneurial roles she looks for (1) a bias for action and (2) a willingness to take risk (such as learning a new skill or taking on a new task) combined with a skill at mitigating risk (learning fast, narrowing options quickly, reversing bad choices when new information requires it, without self-criticism). Entrepreneurial self-assessment is not concerned with strengths and weaknesses, but with knowing oneself candidly and acting on that information. There is an entrepreneurial personality based in bias for action and risk mitigation, but it’s not the same for every entrepreneur. It’s best to find your own balance. (At Economics For Entrepreneurs, we are developing a self-assessment that assesses behavioral traits rather than personality traits — you can take the first iteration here).
As an entrepreneur, Lisa applied the lessons of self-assessment both to herself and to her brand. Lisa started a growing jewelry brand called Rise Hawaii. Initially, it was based on her hobby of free diving and scuba diving. She would collect shells and sea glass and sell them to jewelers. She discovered that there were no jewelers making exactly the kind of jewelry she preferred personally — a combination of delicate elements with high-end precious metals. She started designing, then manufacturing — learning skills like dipping shells in molten gold — then selling on line and distributing to retail stores. Rise Hawaii is now a fast growing international brand selling online and through more than twenty retailers.
Personality analysis helped her in two ways. She understood her own personality from the self-assessments she had taken, and could observe her own behavior in stretching herself too thin in her business by trying to please every potential customer and meet every demand. By understanding the underlying personality traits, she was able to change behavior for the good of both her business and her best customers. She also applied a similar assessment technique to the personality of her brand. Lisa realized that, initially, she was trying too hard to emulate established "Hawaiian jewelry" branding adopted by others, but this did not reflect her authentic self. She consciously realigned her brand’s personality with her own. The result is a unique and sustainable brand positioning and a happy owner.
And self-assessment helps Lisa imagine her entrepreneurial future: growth through alignment with companies and causes exhibiting values she shares, including worthwhile purposes such as ocean conservation.
There’s a way for all entrepreneurs to benefit from self-assessment and self-awareness. Take one or more of the self-assessments accessible via the links provided here. Absorb the background information that’s provided. Use it to be self-aware: what do the results tell you about yourself? Did you learn anything new? Can you observe your own behavior and see personality traits at work? Are there any ways in which you are being inauthentic — behaving in ways that others want you to, rather than being true to yourself? What do the results tell you about your personal balance? Where does your profile need shoring up with new practices, new learning, or someone’s help? The key is to be aware, to understand yourself.