In the UK, there has been a shift in the economy over recent years, moving from knowledge based activities to creativity, innovation, entrepreneurship and imagination (Fillis & Rentschler 2010). As a result of this development, entrepreneurship and starting your own business is an increasingly attractive prospect for many, with plenty of support to ensure new businesses are successful. This has been reflected in the number of businesses created in the UK, with over 608,000 started in 2015, a record up from 581,000 the previous year (Yoshioka 2016). This growth has continued year on year, suggesting that this is actually a long-term cultural shift, rather than a short-term reaction to the financial crisis of the mid-2000s.
Entrepreneurship is defined as: the process of creating value for business and social communities by bringing together unique combinations of public and private resources to exploit economic, social or cultural opportunities in an environment of change (FIllis & Rentschler 2010). Consequently, entrepreneurship can actually be starting a new venture or even working within an existing organization to create change or add value. Indeed, managers have traditionally been required to possess a number of generic skills such as communication, team working and leadership, however, this cultural shift has required managers to adapt, and become ‘intrapreneurs’.
But what kinds of skills do you need to become an entrepreneur or intrapreneur? There have been a number of studies into the skills entrepreneurs possess, however in this article we’re going to focus on 3 skills which seem to keep cropping up. These are:
- Creativity
In the context of entrepreneurship, creativity is the ability to create new ideas or products, or find creative solutions to problems. Innovation is an extension of this in which the idea/product/solution is then implemented (Duening 2010). Creative thinking is also closely related to problem solving (Isaksen 1995). Creativity and innovation are essential parts of entrepreneurship, due to the fact that the role itself involves bringing new products or ideas to the market. However, creative solutions do not need to be complex, particularly in the business field where simple responses can result in success for the organisation (Fillis & Rentschler 2006).
- Risk Management
This is the ability to measure the cost of a decision in comparison to the potential reward. In the context of entrepreneurship, it is the ability to minimise the risk associated with a specific undertaking, whilst not necessarily eliminating the risk entirely. Additionally, it is important to note that it does not mean avoiding risk, simply minimising (Duening 2010). This is an extremely important skill for an entrepreneur to possess. This is because the activities of entrepreneurs are inherently risky and often have access to less resources than big multinationals. There is a common misconception that entrepreneurs are notorious risk takers, and this can be attributed to the number of high profile entrepreneurs who have exceeded the average tolerance of risk. However, the frequency of risk taking among entrepreneurs is actually the same as the general population (Duening 2010). Instead, what they excel at is being able to minimise the risk.
- Opportunity Recognition
Opportunity recognition can also be described as pattern recognition. This is the process through which entrepreneurs can perceive complex events as identifiable patterns (Baron 2006). These can be seemingly unrelated events that others haven’t recognised. Being able to recognise patterns is often a key initial step for an entrepreneur trying to identify a new business opportunity (Baron 2006).
The key to developing pattern recognition is not to simply be alert to opportunities or event to actively search for opportunities. Instead, it is more important to ensure that the search takes place in the best places and the best ways (Baron 2006). For instance, this could involve identifying changes in technology, demography, markets or other factors that play a significant role in the success of most businesses. As an example, Entrepreneurs in the Chicago area Entrepreneurship Hall of Fame were found to be more likely to identify opportunities through actively searching more unique sources, such as personal contacts and specialised publications (Hills & Schrader 1998).
Additionally, it is important that the information is gathered in areas of prior knowledge. It has been found that prior knowledge of customer needs and to meet those needs, considerably increases an entrepreneur’s ability to create potentially valuable business ideas (Shane 2000). In order to help develop this skill, it may also be helpful to gain the insight of other people to discover what trends and developments they feel may be happening in a particular industry (Hills & Schrader 1998). Additionally, it is possible that two or more people may have individual parts of information and only once together do they ‘connect the dots’ and start to see the pattern or opportunity.
Entrepreneurial skills are useful for anyone looking to start their own business, but also to those working within existing organisations. The current economy demands adaptability in order to succeed, and the entrepreneurial skillset can provide this. Entrepreneurs should consider how they can develop these skills themselves and managers should consider how they can build and facilitate working environments that will enable themselves and their team to unleash their potential.
