The Chief Psychology Officer

Ep66 Unlocking the Entrepreneurial Mindset: Challenges and Success Stories

• Dr Amanda Potter CPsychol • Season 3 • Episode 66

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Join us for an enlightening conversation with Dr. Amanda Potter, Chartered Psychologist and CEO of Zircon, as we navigate the complexities of the entrepreneurial mindset. Ever wondered what differentiates a freelancer from a true entrepreneur? Discover how visionaries like Simon Rogerson from Octopus Energy harness their relentless energy and forward-thinking approach to fill market gaps with scalable business ideas. We'll also confront the challenges women face in entrepreneurship, examining why only a third of global businesses are women-owned and exploring solutions to bridge this leadership gap.

What drives an entrepreneur to move toward opportunities rather than flee from less favourable situations? The answer lies in a proactive mindset. Drawing from personal experiences and observations, we shed light on how upbringing can shape entrepreneurial tendencies. We distinguish freelancers from entrepreneurs in terms of opportunity identification and venture creation and delve into intrapreneurship—where innovation thrives within established companies. The conversation does not shy away from the real-world hurdles faced by psychologists entering the consulting field, emphasizing the need for psychological safety to foster innovation.

Unleash your entrepreneurial spirit by exploring the intersection of personality traits and successful business practices. Inspired by an interview with Simon Rogerson, we discuss how traits like curiosity, learning agility, and the ability to embrace failure are vital for success. Whether the entrepreneurial mindset is a state or a trait is a question worth pondering, as we explore how passion and risk-taking, are crucial elements of entrepreneurship. The thrill of bringing ideas to life, making a global impact, and stepping into discomfort to foster growth is at the heart of our discussion, offering insights into how you can transform your business and life.

Episodes are available here https://www.thecpo.co.uk/

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For more information about the BeTalent suite of tools and platform please contact: TheCPO@zircon-mc.co.uk

Speaker 1:

Whether you're an established business owner, aspiring entrepreneur or innovator within your organization, there are certain success factors that drive the entrepreneurial spirit. Welcome to the Chief Psychology Officer. With Dr Amanda Potter, chartered Psychologist and CEO of Zircon, I'm Angela Malik and today we explore the world of entrepreneurship and the psychology behind a successful entrepreneurial mindset.

Speaker 2:

Hello Amanda, hi Angela, this is one that's interesting for us too, I think, because we are both entrepreneurs and we've both run our own businesses for a number of years For me, now, over three decades. Well, I've been a psychologist for over three decades. I've been running Zircon for 24 years, and before that I had another consulting firm. So I think this is a really interesting topic and I wonder do we have the mindset of entrepreneurs, angela, as we have been business owners? Do we have what it takes? Let's see, hmm.

Speaker 1:

Let's see. I think first it would be good to define what we mean by entrepreneur in this conversation. There's a journey some people take, myself included, where they start off more like a freelancer and then the business grows into something more than just the individual, bigger than us. Where is the line between just working for yourself versus?

Speaker 2:

entrepreneur. I think it's a really good thing to kind of clarify, actually, because we were having a debate, weren't we? Does an entrepreneur mean the individual contributor, or is it someone who actually goes out and spots an opportunity and creates an idea and brings that idea to market? And I think it's that latter one. I think it is very much that person who looks for a new opportunity and looks to fill a gap in the market. So I believe freelancers and contractors of which there are many really excellent ones out there, particularly in the world of psychology those sole traders, depending on what they do, often sell their personal time and expertise. They're not necessarily enterprising and creating a business that can be scaled and grown, and that's what we're interested in.

Speaker 1:

Under that definition. I wonder if I am an entrepreneur, because I did start off as a freelancer selling my own time. At some point it did grow it was a translation agency into a consultancy where I was not just selling my own time but other people's time, other people's expertise. But it's not like we created something new and brought that to market. It wasn't something niche, it was just a service that is needed and supplying those experts to do that job. What do you think, Amanda?

Speaker 2:

Well, I think you shifted. I think you started with saying as a freelancer contractor but you shifted more into being entrepreneurial. And if I think about the podcast interview that we had with Simon Rogerson, the CEO and co-founder of the Octopus Group, of which Octopus Energy is one of the many companies within his group, his storytelling in that podcast was very much about entrepreneurs like the CEO of Octopus Energy, greg Jackson, being really driven, a real powerhouse of energy. He was saying that literally you can feel the energy that comes around this person. He said the best entrepreneurs that Simon said that he's met are the people who have incredible impact, incredible power and drive and energy. He was talking about the fact that, in my language, very relentless in their pursuit of goals and they're looking for the gap in the market constantly and being really enterprising about filling that gap.

Speaker 1:

Something around agility, I guess, looking ahead and trying to be prepared for the challenges of the industry.

Speaker 2:

Indeed, it's really taking that macro, external perspective and lens thinking about what's happening in the market, in the economy, in the world, what's coming and how are we going to potentially fill that gap, what is the opportunity? Whereas freelancers and contractors are incredibly valuable, they're very much filling the gap today and helping to resource a solution or provide a service, whereas I think entrepreneurs are really thinking externally, in a macro way, about what are the opportunities and where is the market going and what does the market need in the future and how are we going to fill that opportunity, fill that gap and how are we going to add value.

Speaker 1:

Absolutely so. Is being an entrepreneur predicated by action? Do you have to have done the thing, built the business started to scale, or is it just a mindset?

Speaker 2:

Well, I, think that's a really interesting one, because you might see and meet people who have grown really big businesses but don't necessarily think of themselves as an entrepreneur. It's happened because they had a brilliant idea. They didn't set out to be an entrepreneur. And then other people we talk about wanting to be entrepreneurial, wanting to go independent or to create their own business, but never quite get there. So I think it's about mindset and of course, being a psychologist, I'm really interested in the mind. So let's focus on that, shall we? Absolutely.

Speaker 1:

But I think we should start off with some stats. So how many of us out there in the world are entrepreneurs?

Speaker 2:

I actually love stats because it gives us a really good starting point. I think it's a really good thing to do, but actually I'd like to look at gender, because we're both, of course, female entrepreneurs. I'm still going to think of you as an entrepreneur. Thank you very much, Angela. And globally, only one in three businesses is owned by a woman, suggesting that there are more male entrepreneurs out there than there are female entrepreneurs.

Speaker 2:

And actually, what's really interesting, if you look at our industry, there are so many psychologists who go through A-level and undergraduate psychology and then when we get to masters, there's still a predominance of women. There might be a few more men. And then we look at the number of businesses of our size and bigger in the UK and most of them are led by men, and that's been something I mean. There's some incredible female CEOs of organizations that are similar size to us that I'm thinking of now, who I'm in contact with and I talk to, and also in payment rewards as well payment and rewards as well and it's really hard, I think, but it's so interesting why the women are not getting to that point of growing the businesses, but men are.

Speaker 1:

I wonder why, although in the UK specifically, I've seen research that the number of female entrepreneurs is actually increasing. I saw a statistic where, in 2022, that percentage of women running micro businesses was 40%, as opposed to 32% in 2020.

Speaker 2:

Interesting. It's micro businesses, though. So micro businesses are kind of more an established concern. So I think that there probably is more of a diversity of men and women when we're talking about micro businesses. I think when we're going into those larger businesses, once again, it's very interesting that we're seeing more of predominance of men.

Speaker 2:

But if we go back to the trait research, we go back to strengths research and the difference between male and female traits and preferences and strengths. We know from our research and we know from the research of personality theory that actually men are much more predisposed to move towards strengths that are about power and competition and decisiveness and autonomy, and women are much more predisposed to go towards and be energized by strengths which are around compassion, inclusion, collaboration, engagement, and so therefore, the very starting point about what energizes us and what brings us joy at work as men and women is different and therefore we might be seeking something quite different from the organizations we're creating. Lucky for me, I've mentioned a few times that I have very male characteristics in terms of strengths being decisive, competitive which means that, as a CEO and founder of Zircon and co-founder of Be Talent, actually I'm someone who is not very typical of the female population in terms of what drives me and what energizes me, yeah, the research you mentioned.

Speaker 1:

It does align with studies from Harvard Business Review as well that say that women are more risk averse, so not as likely to start a new venture. Women are more patient, so they put up with situations at work that they may not want to be in for longer. Perhaps and there's yet to be a market that is as friendly to female entrepreneurs as there is to male.

Speaker 2:

That's a really interesting point, isn't it? I think the risk one. I mean, I'm not particularly risk seeking. I'm much more risk averse, which is why I've grown Zircon in an organic way rather than a big boom and bust way. So it's a really interesting point that men and women, actually their starting point and what they need from work and from the organizations they're creating is different. But that point around a market that's friendly to female and male entrepreneurs is an interesting one, because we can think about that in terms of the requirements that are on men and women from a home, work life experience situation as well. But moving on, Angela, what would you say are your top strengths? Because I've mentioned minor, decisive and competitive, which are typically male according to our research.

Speaker 1:

What are yours, Mine, are risk taker and initiator, so I'm not very risk averse at all.

Speaker 2:

Well, we're a perfect match, then we are, because risk taker actually normally is a more of an energizing male trait and initiator, interestingly, is more female. So you've got a mix there, and the reason why we know this is, of course, because with our B talent strengths questionnaire we look at gender and we look at the differences and which ones are more significantly energizing for men and which ones are more typically energizing for females, which is an interesting point.

Speaker 1:

What have you seen in the stats around age?

Speaker 2:

Well, in the UK the entrepreneurs are getting younger, so they're braver, which is very cool. So for the last four years, there have been more people under 35 going out and creating business. In fact, it's more than doubled, and it might be related to the COVID pandemic, but it's gone up from 16% to 34%, so that's pretty cool. But it's gone up from 16 to 34%, so that's pretty cool. I actually set up my first organization when I was in my early twenties, so I was literally completing my master's, doing my PhD and running my first consulting firm before I went to Aon, which was before Zircon. I was very young and I didn't yet know a lot, but I was brave enough or not crazy enough to actually go out and try and sell work to businesses and had great fun actually, I started my business when I was in my early 20s as well.

Speaker 1:

Amazing, it's a good time to start a business. You're young, you've got the energy. Yeah, you have a lot more courage. You're not as aware of the risks either.

Speaker 2:

It doesn't feel as daunting.

Speaker 1:

And you don't have all the responsibilities of the family at that age as well. I imagine, though, with entrepreneurs being younger and younger these days, we're probably also going to see the same kind of shift of diversity amongst ethnic minorities.

Speaker 2:

We are, and that's the great news. I mean, the numbers aren't quite as big as the younger populations, which has gone up to 34%, but it's still growing in the right direction. So black founders grew from 5.4% pre-pandemic to 6.6% now, and Asian entrepreneurs has risen very slightly from 10.1% before the pandemic to 11.9%. So only a small shift, but in the right direction, which is great.

Speaker 1:

Interestingly, my own anecdotal experience of entrepreneurship and ethnic minorities has been that there's not a space in the traditional workplace for them, or so they feel. So I've had more than once, more than twice, black and Asian freelancers and business owners telling me that they made their own space in the world because they didn't get on in the workplace. There was discrimination or there was bullying, or it just wasn't a comfortable culture to operate in, and so they made their own way and created that space for themselves.

Speaker 2:

It's really empowering in a way. Well, I think you're talking about psychological safety as well, aren't you? But how interesting that they have almost created their own businesses because they didn't feel safe or didn't feel included or didn't feel like they belong to those organizations. I think there's another thing as well around mindset, which is, I think, are you moving away from, are you moving towards? In that example, people are moving away, but with me I was moving towards, because my mum was a self-employed hairdresser for years.

Speaker 2:

My dad built and led a large housing regeneration business with his best friend and his brother, which was, I think, 37 years. They ran that business with hundreds of employees. So I didn't even question the idea of being self-employed or running my own business. But it's interesting when I talk to many senior psychologists or HR directors or senior HR leaders who are talking about going independent or becoming a coach or building their own business and talk about it a lot, but they never make the step, they never make the move to it. They have the aspiration of being entrepreneurial, but they don't necessarily have the mindset to take the risk and to make that jump. So I do think it's a really interesting point around mindset, and also moving towards versus moving away? What are you doing it for? Why do you want to be an entrepreneur?

Speaker 1:

That's really interesting, because one of the other ways I would differentiate, in my own mind, whether someone has that mindset or not is when they make that first initial step into running their own business, and perhaps at that point we would just classify them as freelancers rather than entrepreneurs. But are they thinking bigger? Are they aiming for something beyond themselves and looking at ways to level up, and level up, and level up? And in my mind, that is exactly the mindset you need to be an entrepreneur that is exactly the mindset you need to be an entrepreneur.

Speaker 2:

It's very much about the pursuit of an opportunity and the creation of a venture to sell a product or to sell a service. So that point around business creation or opportunity identification is really important, because I think to really be an entrepreneur, we really need to be thinking about creating an idea. It might be building on an existing idea, but creating something to sell.

Speaker 1:

So you've kind of touched on this already, Amanda, but let's drill down into entrepreneurship and what exactly that is before we go further into the mindset of it. Is it just setting up a new organization or a proposition?

Speaker 2:

No, it's very much all the things I've just mentioned. It's about pursuing an opportunity, creating a venture to sell something or identifying something that can create value for a customer group or for a population. So it's very much about working out what somebody or what an organization needs and then working out how to provide and to fill that need.

Speaker 1:

I'd expect also that entrepreneurship looks different in different contexts.

Speaker 2:

It does. And I mean, you know, of course there's sometimes it's about opportunity you might be in the right place right time and you spot something, and other times it's very much about necessity. If we think about the pandemic and all of the extra gear that was needed and the masks and so on, there was a real necessity-based entrepreneurship that was originating from that and the rise of all of the virtual technology and so on, that came from necessity. But I think most of the time what we see is opportunity-based, I would say, because it's a new idea or something that somebody has originated themselves.

Speaker 1:

So what if you are an entrepreneur at heart, but you're not self-employed, you're not running your own business? Is there a term for that?

Speaker 2:

And you know, I think there is but you're very macro thinking, externally focused, interested in sales and wanting to drive commercial success.

Speaker 2:

You're an entrepreneur because you're within an established company, you're employed by that company, yet you're still bringing in new ideas and innovation within the company in order to help drive sales, help drive success of that organization.

Speaker 2:

And I think some people are naturally motivated towards intrapreneurship from within the organization and some people are not even bothered.

Speaker 2:

What's so interesting hiring psychologists into our world and bringing a new work experience psychologist in each year and this year we've had six trainee psychologists doing work experience with us is that I remember so many of those over the years being really surprised that we had to go and tender and bid for work and that we had to go out and find opportunities to work with clients and then get paid by them. So there was no recognition from doing the undergraduate course in psychology that when they arrive into our organization to do the work experience that actually it's a commercial enterprise, that we have to bid and tender and we have to deliver high quality work and get paid for that work and then rebid for future work and build more relationships. That was completely lost upon the psychologists who were coming in to do that work experience. It just didn't compute at all from doing a psychology degree that that would be what it would be like to work in the consulting business.

Speaker 1:

I'm really surprised to hear that.

Speaker 2:

I know me too and I can think of one particular example of a somebody who worked for us quite a few years ago. She did a full placement with us for a full year and she was literally flummoxed that everything that we had to do around the edges before we even get into doing the consulting work face to face with the customer.

Speaker 1:

I mean the obvious question there is why are you doing the work in the first place if you're not trying to add value for a client? The client actually kind of drives everything else that comes out of that and yeah, I personally don't understand it.

Speaker 2:

But Well, I think it's a really good point because I think bridging that gap between business and psychology is key to what we're doing of course, and I think there's a real role for psychologists to really be clear about how we can help people to be more commercial and more entrepreneurial, about how we can help people to be more commercial and more entrepreneurial entrepreneurial within organizations and to understand how could they help to create and identify ideas that are going to benefit the organization, even if it's not in a commercial way, it might be in a way that helps to improve processes in the NHS, for example. It's still about helping that organization to improve and drive success.

Speaker 1:

And of course we would be remiss if we didn't mention that organizations that want to encourage entrepreneurship need a high level of psychological safety.

Speaker 2:

Yeah, because in order to innovate, we need to feel safe.

Speaker 1:

So moving on, Amanda, to mindset. What is the entrepreneurial mindset?

Speaker 2:

Well, of course, there are many authors looking at this, and they all take a slightly different perspective, and so I have some favorites from the things I've been reading that are particularly helpful, and one of them is by a researcher called Davies 2024. Davies interviewed a number of entrepreneurs and drew out three common attributes of entrepreneurs, so rebelliousness, impat and willingness to act or do not just think, and for me, that really summed it up, actually, because it made me think about the really good, strong entrepreneurs that I know. They're really good at all of those things. They challenge the status quo. In other words, they're not prepared to just follow tradition or live in a world which is functionally stupid. They're impatient and intolerant for change. They want to make things happen and they act. They don't just pontificate, they're not procrastinators, so they're decisive, they act and do so.

Speaker 2:

I really like that.

Speaker 1:

I thought it was quite simple and to the point it really reminds me of your interview with Simon Rogerson as well oh my gosh, he was so incredible.

Speaker 2:

He was talking about all of those things. He was so incredible, he was talking about all of those things. Yeah, he was great. And Caitlin and I were almost literally on the seat edges of our seat trying to keep up with him. Yeah, he's just an incredible man.

Speaker 2:

And actually it makes me think about my old PhD research, which I know I've referred to a few times. Sorry about that everybody who's listening, but we talked about it on that podcast about the three characteristics of type A behavior, a personality characteristic of people who are very hardworking and driven, also known as coronary heart disease prone behavior. So my PhD was looking at the aspects of it in comparison to the big five and the three aspects are achievements driving, impatience, irritable and anger, hostility. And I asked him, because he described himself as type A does he have all three characteristics? And he said he's perpetually disappointed and impatient and he rarely takes the time to celebrate success, swiftly moving on from one problem once he's solved it to the next problem to solve. And so he says he's truly impatient, irritable and achievement striving, but he doesn't regard himself to be angry or hostile. So I still think you know those old theories of personality and behavior like type A are still relevant. They may not be current, but actually they still provide some good insight into things like entrepreneurship.

Speaker 1:

It's interesting because those are similar characteristics to what we see in our high performing talent research that we do with our clients.

Speaker 2:

Do you know what? We have such a privileged life, actually, angela, because we work with these amazing organizations around the world, having the opportunity to interview their most senior leaders and ask them questions about the challenges that they're facing and what they need from leaders in order to overcome those challenges and drive success in the organizations and achieve their strategic goals and aspirations of the business. So we have that incredible privilege of interviewing these senior leaders to understand all of that and therefore identify the models of talent and potential for those organizations. And when we do that, you're absolutely right. The types of things that we're already talking about now come out in those models. But other things that come out too are things like curiosity, learning, agility, definitely decisiveness, comfort with failure as well, and a preparedness to be disruptive and to challenge and that external macro focus.

Speaker 2:

We talk about those things and have done before, because some of those things, even though they're often identified as being critical for those organizations and every organization is different we find that a few of those are lacking in. The organization is not natural, for example, for people to have a broad external focus. They often think internally. Particularly when they're under pressure, they get very narrow and have tunnel vision and therefore think about the problem in front of them and don't look at the external landscape. For example, and when they're under pressure because most of these people are working in very relentless environments what happens is they don't think about the long term, they think about the immediate situation, and now they're just firefighting a lot of the time. Yeah, exactly, and we go towards functional stupidity rather than challenging the status quo. So, even though many of the things I've just been talking about are repeatedly identified in these global organizations as being critical for success, actually, what we find very often in those same organizations is there are a typical number of characteristics that are often actually lacking and actually need developing.

Speaker 1:

Yeah, and luckily they can be developed.

Speaker 2:

But if we think about things like internal locus of control versus external, we have a natural preference all of us towards one or the other. I remember back in 2002 when we did the research with American Express. We were looking at internal versus external locus of control and the impact on performance, and we found that there was a correlation between internal locus of control, so taking accountability for outcomes and overall success in a sales role. I mean, that's what's so fascinating about psychology is that we have either internal or external preference for locus of control, and it has a significant impact on our accountability and our preparedness to take ownership for action and to learn from failure, and it's a really simple characteristic, but it's one that to learn from failure. And it's a really simple characteristic, but it's one that's quite hard to change because it's a trait, it's a preference Some of us attribute. You know it was me, and some of us it wasn't me, it was his fault. You know, dodgers, if you like.

Speaker 1:

So I guess that raises the question for me of is an entrepreneurial mindset, state or trait? Is it something you mindset, state or trait? Is it something you just have, or is it something that you can build up, like resilience?

Speaker 2:

the brilliant question, actually, and I love the whole trait and state argument, as you know, because, just to remind the listeners, personality is trait and therefore stable and enduring emotional intelligence is state.

Speaker 2:

In other words, our emotional intelligence and our resilience can vary depending on the situation we're in and and therefore, stable and enduring Emotional intelligence is state. In other words, our emotional intelligence and our resilience can vary depending on the situation we're in and the environment we're in and the people we're with and strengths are somewhere in the middle and therefore is a combination of trait and state. But I think that, in terms of entrepreneurialism, if we think about the energy, the excitement and the passion for an idea, it's about the situation we're in and it depends on the market, depends on the team, it depends on the opportunity. So I think actually entrepreneurship is more of a state Because, also, if we go back to some of the characteristics that are predictive of entrepreneurship, they are resilience, they are agility, responsiveness, awareness and a lot of these things are dependent on the situation and dependent on the environment, and they're things that we can improve and change over time.

Speaker 1:

So then the natural question from that, amanda, would be if you have that entrepreneurial mindset already but you haven't sprung into action yet, how do you make that leap? How do you channel that mindset into action? Because, as we said, the research shows there are more aspiring entrepreneurs than there are people actually doing the thing building the empire.

Speaker 2:

I think there's two things for me. The first thing is that you just have to take the plunge. You really do, because I have seen for literally decades and heard for decades colleagues talking about going independent or building their own businesses, but never doing it. There have been a few exceptions I'm just thinking about Tom Emery, who said he was going to do it and he's done it and he's done a brilliant job creating his own business but he's one of the few, actually. So I think the first one is take the plunge and the second one is do what you love. Create something that you're excited about. Don't think about it just to make money. If you do it just because you want to make money, it's going to be completely empty and shallow and hollow. But do something you love.

Speaker 2:

Now, I absolutely love researching and building B-Talent genuinely, and that's why I spent 10 years working Saturday and Sunday mornings on it, from 6am till my son was awake or until it was time for me to go and take him out, because I was truly excited about the research and the product we were creating. And even now, when we're at the latter end of the validation process, I'm still excited about the factor analysis, research and all the incredible stuff that Jess and Kashaya and Sharon and everybody is bringing to me and Emily. Let's not forget Emily, because actually we have these incredible ideas. We go out and test them. Not all of them work, but some of them are brilliant, like the psychological safety questionnaire.

Speaker 2:

You know it's making a massive difference for clients around the world. It's being used in Korea, in Japan and everything. And what a privilege to have built something from my research my idea originally going out, building those 10 scales, validating them and now having it translated into all those languages around the world and being used by incredible clients. I mean there can't be surely anything better than that. I'd like it also to make loads of money, if you don't mind, but that's secondary actually to building something that's making a difference in organizations. So for me it's take the plunge and do something you're really excited about and love and then hopefully be commercial about it, so it makes you.

Speaker 1:

A bit of cash on the side would be quite, quite helpful it's quite ironic that you are risk averse, as you describe yourself, but you're saying risk is the first big step. That's the thing you have to take in order to get into it. Maybe you're not as risk averse as you think, Amanda.

Speaker 2:

Oh see, actually Sarah and I debate this. I know I mentioned Sarah a lot on this podcast because I can't help it, but she would say that I'm risk averse when it comes to money, but I'm very risky when it comes to every other aspect of life and other types of decision making and she's not wrong. So relationships, business decisions, product decisions, team decisions are much more risky, but when it comes to money, I'm like, no, let's be careful.

Speaker 1:

I think if you're thinking about growth and growing and really this applies not just to business but any part of your life you want to find that uncomfortable space, you know, where you're not just sitting there complacent. And when you dive in and you start your own business, that is extremely uncomfortable. At the beginning. You're learning so much. The learning curve is so steep, especially at the beginning when you've got no capital hardly and you've maybe don't even have a space to work from.

People on this episode

Contributor

Dr Amanda Potter

Host
Contributor

Tim Hepworth

Host
Contributor

Caitlin Cooper

Co-host