Why High Confidence Is Crucial for Entrepreneurs
Business Journal

Why High Confidence Is Crucial for Entrepreneurs

It helps them start businesses, persist in the face of ambiguity and failure, and remain poised in meeting challenges

Entrepreneurs with high Confidence perform well in stressful conditions.

Highly successful entrepreneurs have little self-doubt -- rather, they are more likely to possess strong self-belief. If you have high Confidence, you believe that you have what it takes to be a successful entrepreneur.

Your certainty in your ability helps you start businesses, persist in the face of ambiguity and failure, and remain confident in meeting challenges as you pursue business success. You recognize opportunities and initiate action. While uncertainty may plague others -- who endlessly weigh the potential value of an opportunity, gauge the complexities in the environment, and fall prey to "analysis paralysis" -- a resilient self-belief leads you to act. And act quickly. You are so confident in your ability to control the events in your life and to manage your environment effectively that you know you will succeed. Your high Confidence also helps you convince others -- investors, customers, prospective employees, and potential partners -- of your ability to get positive results.

Entrepreneurs with high Confidence perform well in stressful conditions. You believe that bigger challenges bring greater rewards and that strong, persistent efforts will lead to success. You see little possibility for failure, choose courses of action that you think have a high probability of success, and avoid situations where you feel less in control. When others see risk, you see opportunity. When others see roadblocks and potential failure, you see victory.

What's more, as an entrepreneur with high Confidence, you like to build your knowledge base. The more information you have about a particular situation, the less risk you see in pursuing the opportunity. This gives you more confidence in your decisions and improves your likelihood of successEntrepreneurial StrengthsFinder Order Now

Your certainty in your ideas and your ability to make things happen motivate you to create and commercialize new products and services. Your strong Confidence talents inspire continuous innovation that helps your company grow and survive.

Entrepreneurs with high Confidence assume that growth will continue well into the future. Indeed, you are quite focused on the long-term horizon, driven by your unshakeable belief in your ability to build large, successful enterprises. You are willing to navigate the difficulties of a business cycle, gradually accumulating human and financial resources, constantly investing in new ideas, expanding the company's knowledge base, and attracting better talent to ensure your long-term success. You take your responsibility to steward the company into the future very seriously.

A word of caution: Entrepreneurial confidence and conviction grows businesses, but overconfidence can be harmful to an enterprise's health. Sometimes overconfident entrepreneurs make decisions in haste, underestimating the complexity of the situation. You can avoid jeopardizing your company's future by slowing down and considering all the relevant factors before making a decision. This is especially true if your business is in a dynamic industry with a complex environment and a constantly changing landscape.

At times, you can underestimate the resources required for company survival or growth by overestimating your ability to get results with minimal staff, materials, and equipment. At other times, you overcommit resources in pursuit of a certain idea or opportunity without assessing the competition and market readiness. This is especially true when entering new and untested markets.

What's more, if you are an early mover into a business sector, you should pay close attention to customer needs and readiness, technological issues, supply chain contingencies, and delivery systems you need to bring the product or service to the market. Paying heed to these issues will prevent you from making mistakes and wasting money and resources -- and will increase the likelihood of your company's survival and growth.

Confidence in Action

Warren Buffett: "I always knew I was going to be rich. I don't think I ever doubted it for a minute."

Michael Dell, CEO and chairman of Dell, Inc., when asked, at age 19, what he wanted to do with his life, told his dad: "Compete with IBM."

Malcolm Gladwell, author of The Tipping Point and Blink, explaining overconfidence: "As novices, we don't trust our judgment. Then we have some success, and begin to feel a little surer of ourselves. Finally, we get to the top of our game and succumb to the trap of thinking that there's nothing we can't master. As we get older and more experienced, we overestimate the accuracy of our judgments, especially when the task before us is difficult and when we're involved with something of great personal importance."

Maximizing Your Confidence Talent

  1. Plan ahead to boost your confidence. Draw an elaborate business plan with rich details. Project multiple scenarios, run analysis, and outline resource needs before taking action. Set milestones and outcome expectations for each stage of a project. Prepare for contingencies. While you are already confident in your ability to be successful, thorough planning can validate and support your certainty and help you achieve your objectives.
  2. Do your homework. To make your product or service ready for the market, collect as much information as you can about industry specifications, procedures and documents, competitors, value proposition to customers, intellectual property protection issues, and technological requirements.
  3. Avoid the "speed trap." Don't let your strong sense of self-belief and initiative push you to make decisions under pressure. When the window of opportunity is narrow and you have to make decisions quickly, pause to reinforce your certainty by considering your experiences, knowledge, and what-if scenarios before you take action.
  4. Discuss opportunities with your network. Consider your self-image in these discussions. You are sure of yourself and easily influence others. But your network ties can help you assess opportunities in a different light. Listen to their points of view to get a more complete picture of the situation. They can also help you access resources to pursue those opportunities.
  5. Avoid "in-group" thinking. Your self-confidence and strong desire for control may cause you to surround yourself with people who are not likely to challenge your thinking. Seek feedback from diverse stakeholders -- managers, senior executives, board members, and investors. Their alternative outlooks on risks and opportunities will stimulate your sound decision making.

The 10 Talents of Successful Entrepreneurs

When Gallup studied entrepreneurial talent, we found a tremendous variety of behaviors among successful entrepreneurs. But after analyzing the data and listening to hours of interviews, we distilled everything down to a list of 10 talents that influence behaviors and best explain success in an entrepreneurial role. Every entrepreneur uses some mix of these 10 talents to start or grow a business:

  • Business Focus: You make decisions based on observed or anticipated effect on profit.
  • Confidence: You accurately know yourself and understand others.
  • Creative Thinker: You exhibit creativity in taking an existing idea or product and turning it into something better.
  • Delegator: You recognize that you cannot do everything and are willing to contemplate a shift in style and control.
  • Determination: You persevere through difficult, even seemingly insurmountable, obstacles.
  • Independent: You are prepared to do whatever needs to be done to build a successful venture.
  • Knowledge-Seeker: You constantly search for information that is relevant to growing your business.
  • Promoter: You are the best spokesperson for the business.
  • Relationship-Builder: You have high social awareness and an ability to build relationships that are beneficial for the firm's survival and growth.
  • Risk-Taker: You instinctively know how to manage high-risk situations.

These 10 talents don't address every factor that affects business success. Non-personality variables such as skills, knowledge, and experience along with a host of external factors play a role in determining business success and must be taken into consideration when theorizing on business creation and success. But these 10 talents explain a large part of entrepreneurial success and cannot and should not be ignored. Understanding and acknowledging your inherent talents gives you the best chance at success.

This article is part of a series on the talents of successful entrepreneurs, adapted from the book Entrepreneurial StrengthsFinder (Gallup Press, September 2014). Learn more about the book | Learn more about the assessment

Gallup http://www.gallup.com/businessjournal/173387/why-high-confidence-crucial-entrepreneurs.aspx Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A +1 202.715.3030