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Can you predict the success of a business by looking at the personality of the entrepreneur who founded it?
Without going all the way to the crystal ball, some strategies make it possible to better identify the strengths and weaknesses of the entrepreneur, and therefore of his business.
According to a study by the University of Cambridge, investors who use personality assessment tools for entrepreneurs in their investments are 30% more likely to be successful in their investments.
So let's dig into how to de-risk your investments using this tool.
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In the business world, the personality of the entrepreneur is crucial, especially as the bearer of the vision of his company.
This vision is its North Star, the indicator that guides decision-making and strategies adopted.
It is therefore important for entrepreneurs to know how to communicate this vision to their teams so that they understand where the company is trying to go.
An entrepreneur who has characteristics such as determination and open-mindedness in his personality can effectively articulate and transmit a long-term vision, thus ensuring a coherent and inspiring direction for the company.
Let's take the example of an innovative and daring entrepreneur.
Its ability to look to the future and to take calculated risks is reflected in the company's strategic choices, from the development of new products to the exploration of new markets.
In other words, the kind of attitude that may appeal to investors looking for dynamic growth opportunities.
On the other hand, an entrepreneur who distinguishes himself by an empathetic and open approach promotes a culture of inclusive innovation. In this way, he can better understand the needs and expectations of his customers and his team, which is essential to adapt the company to market changes.
In short, the vision of the entrepreneur, shaped by his personality, is fundamental.
It not only determines the strategic direction of the company but also influences its ability to innovate and adapt.
Qualities that encourage the resilience of your company, and therefore the solidity of the project (and of the investment).
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The personality of the entrepreneur also plays a major role in creating and maintaining corporate culture. It is an invisible force that shapes the work environment, values, and behaviors within the organization.
An entrepreneur with strong leadership and optimism tends to create a healthy and dynamic corporate culture.
For example, a personality oriented towards openness and communication promotes a climate of transparency and trust, or psychological safety.
It encourages the right to make mistakes and therefore innovation, team spirit and employee commitment, key factors for the long-term success of any business.
Conversely, an entrepreneurial personality that is too demanding, skeptical, or versatile can create a toxic work culture that damages employee productivity and motivation.
Investment funds are increasingly aware of the importance of corporate culture in the success of the projects they finance. So they're looking to invest in businesses run by entrepreneurs who not only have a solid vision, but who are also capable of creating and maintaining a positive corporate culture.
In conclusion, the personality of the entrepreneur is essential in creating a strong and coherent corporate culture. It directly influences the work atmosphere, employee engagement and, ultimately, the overall performance of the company.
For investment funds, evaluating the personality of the entrepreneur is therefore becoming an essential step in the investment decision-making process.
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In the Hogan Assessments method, “derailers” refer to personality traits that, under stress or pressure, can become counterproductive and interfere with an individual's professional effectiveness and interpersonal relationships.
These are therefore the shortcomings that can hinder the potential for success of an entrepreneur, and therefore of his business.
Here are a few examples, illustrated among others by recent studies by Hogan Assessments :
For investors, evaluating the personality of an entrepreneur is a crucial aspect in making investment decisions. In this context, a personality inventory is a valuable tool and can be combined with a 360 degree evaluation for maximum safety. These evaluations offer a more nuanced and objective perspective on the entrepreneur's personality, going beyond initial impressions or limited interactions.
The major advantage of an inventory like the one offered by Hogan Assessments lies in its ability to provide detailed and valid insights on various aspects. It helps to understand not only the strengths, but also the potential derailments that could affect the leadership and management of the company. However, the interest is not in cataloging or judging, but rather in offering a balanced and complete vision of the entrepreneur's personality by going beyond the impression he wants to make in the first meetings.
By integrating these evaluations into their analysis process, investors can better understand how an entrepreneur could respond to stressful situations, manage conflicts, or lead their team towards common goals. This makes it possible to highlight qualities such as resilience, creativity in the face of obstacles, or the ability to inspire and motivate a team, aspects that are often decisive for the success of a business.
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In short, the use of a personality inventory, as part of an overall assessment, enriches the understanding of investors. This allows them to make more informed choices, aligning their investment strategies with the intrinsic characteristics of the entrepreneur.
In conclusion, for investment funds, the use of methods like Hogan Assessments is a prudent strategy. It not only makes it possible to identify the entrepreneurs who are most likely to succeed, but also to prevent risks related to personality traits that could prove harmful to the company.
