- Financial Literacy
Fostering an entrepreneurial mindset
Not everyone wants to be an entrepreneur, but everyone has the potential for entrepreneurial thoughts. Cultivating an entrepreneurial mindset is about equipping people in your organization with a certain way of thinking and working as they improve their skills. When we talk about entrepreneurial development, we are not assuming that everyone will be an entrepreneur. Instead, we’re encouraging them to think like one.
Why do we need more entrepreneurial thought? There are both economic and educational reasons for fostering an entrepreneurial mindset.
The economic imperative
Disruptive technologies such as the internet of things, robotics, virtual reality and artificial intelligence are changing not only the way we live and work, but the economy itself. We’re living through what the World Economic Forum and others are calling the fourth industrial revolution. McKinsey predicts that up to 800 million workers will need to find new livelihoods by 2030. Oxford University estimates that 47 percent of current jobs could one day be automated. The employment landscape is changing and will look completely different in a few short years.
Entrepreneurs grow revenue, create jobs and engineer solutions to problems. According to research from MIT, new businesses account for almost 20 percent of gross job creation. By creating jobs, entrepreneurs improve the standard of living and create wealth not only for themselves, but also for related businesses and their employees. In fact, well over half of the social enterprises in the U.S. have been created in the last 13 years.
The educational imperative
Educator Gene Carter noted that the role of 21st century schools is to “prepare young people to participate in America’s democratic society.” Our education system no longer achieves the objectives it was designed to meet. In my view, schools today are centered around developing compliance versus fostering creativity or entrepreneurial thought.
There are more than 90 million U.S. residents in Generation Z (born in 1997-2009) and Generation Alpha (born in 2010 and after). Unlike previous generations, Gen Z and Gen Alphas will spend the bulk of their lives completely immersed in technology. They are parented and taught by millennials, Gen Xers and baby boomers.
As the digital economy began to expand, a team from Harvard undertook a massive international study to determine the critical skills needed for the next century. They identified a variety of cognitive, interpersonal and intrapersonal skills: critical thinking and problem-solving, collaboration, agility and adaptability, initiative, effective oral and written communication, logical reasoning and analyzing of information, empathy, tolerance and respect. The leaders of tomorrow will enter a workforce in which those who are self-directed, original and creative will have the greatest chance of universal success. These are the traits of an entrepreneurial mindset.
Four skills that encourage an entrepreneurial mindset in the workplace
1. Develop creativity over compliance
A hallmark of leaders who will succeed in this fourth industrial revolution is that they question things. In the workplace, we must resist the urge to keep employees “obedient.” It’s our responsibility to teach them constructive ways to challenge the status quo and articulate their rationale instead of asking them to blindly follow the rules, a habit that inhibits entrepreneurship. Try asking your employees, “What do you think needs to change? Why? What would you propose instead?”
2. Encourage a love of work and responsibility
Create opportunities with increasing responsibility that enable team members to be positive and productive contributors. As employees grow in their work and responsibility, they will grow their confidence. Encourage them to speak up and create solutions based on needs that they see. Ask them, “What needs do you see not being met, and what solution can we create?”
3. Cultivate a risk-taking approach
Entrepreneurs take huge risks, but being comfortable with uncertainty doesn’t happen overnight. The earlier we foster this skill in the workplace, the better results we’ll see in employees. Ask employees, “What’s one risk you’ve wanted to take, but haven’t felt comfortable with?”
4. Teach and model financial acumen
The understanding and application of financial management principles and habits is lacking in our culture. According to a Federal Reserve study, 40 percent of Americans don’t have an extra $400 in case of an emergency; according to another study, 63 percent of Americans are financially illiterate, meaning they lack the skills necessary to manage their bank accounts and plan for the future.
On the professional front, encouraging employees to understand basic accounting concepts will shape their ability to make more empowered decisions about their budgets and the overall company finances. Explore open-book management principles. Then, ask employees, “What level of financial understanding would you like to have in our company that would support you in doing your work even more efficiently and effectively?”
Celebrate the entrepreneur DNA
Entrepreneurs are passionate; they persevere; they’re resourceful and open-minded. When you note these skills in an employee, acknowledge them. They’ll focus on those skills even more with your support. As leaders, we must celebrate “failures” and learnings that allow us to move forward quickly.
This article originally appeared in the Denver Business Journal on November 15, 2019.
About the Author:
Kristina Scala is the Founder and President of Aspen Academy, Aspen Youth Leadership Institute, Aspen Entrepreneurial Institute, Aspen Academy Investment Fund, Bear’s Student Enterprises, and MODI. Scala is a thoughtful and creative leader, passionate entrepreneur, enthusiastic educator and master facilitator who presents on topics of education and personal, leadership, entrepreneurial, and parenting development. She works to inspire and motivate people to live a purposeful and authentic life through being kind, doing good, and making the world better through what we think, say, and do.