Entrepreneurial Identity And Why It Matters

What is your EI – your entrepreneurial identity? Chances are you’ve never much thought about it, but what is certain is that you have one.

Entrepreneurial Identity is an academic concept, more often used by researchers looking at entrepreneurial behavior, but in essence it describes a person who bases their self-identity in their entrepreneurial ambitions. Just as someone who enjoys tennis and wants to excel at it might describe themselves as a tennis player, someone who wants to create a new business in any sector may define themselves primarily as an entrepreneur.

And it can be useful for entrepreneurs to think about, because it goes further than just the job title you give yourself. In a 2015 academic paper, researchers Ha Hoang and Javier Gimeno explained: “Entrepreneurial identity refers to a person’s set of meanings, including attitudes and beliefs, attributes, and subjective evaluations of behavior, that define him or herself in an entrepreneurial role. The construct of entrepreneurial identity encompasses how a person defines the entrepreneurial role, and whether he or she identifies with that role.”

In other words, the approach an entrepreneur takes to the business of business becomes your entrepreneurial identity. Like many things in life, this can be both a strength and a weakness, or as Eliana Crosina et. al. put it in a recent article published in MIT Sloan Management Review, it can be an entrepreneur’s superpower, but it can also be their Achilles’ heel.

First, the positives. A strong EI can serve as both a motivating and grounding factor in the early stages of a company, helping to create a strong sense of what the company is about, what it’s values are, what it aims to achieve, and how it aims to achieve it – in other words, a strong EI on the part of a founder creates a strong company culture.

Many entrepreneurs are motivated to launch their business not because of the profit they hope to make, but because they can see a way to make the world a better place and want to follow through with their vision. For example, the founders of Fluent, a language school in Tel Aviv, see language as a way to connect people and foster mutual respect across cultures. Their lessons place emphasis on cultural and language exchange rather than one-way teaching and learning.

Put simply, the vision is what gives the organization its value set, which translates into the company culture. This in turn can act as a compass point for the company at crucial decision-making moments.

We’ve looked in other articles at how important culture is to an organization, but in short, companies with a strong set of foundational values are better able to take advantage of disparate opportunities that fit those values, making them more flexible in a changeable environment.

But it’s not all good news. Particularly among more established businesses, a strong EI can act as a hindrance if it becomes too embedded and self-defining. When that happens, flexibility is lost, leaving the entrepreneur unable to adapt to changing circumstances.

The solution, Crosina et. al. suggest, is to strike a balance: a successful entrepreneur has a strong sense of who they are and what their purpose is in starting the company, grounding the culture in a firm set of core values, but is adaptable enough to shed certain elements of that identity as circumstance dictates.

As they put it: “By continuing to reevaluate their entrepreneurial identity — what makes them tick, why, and how — leaders may harness EI’s generative power as a source of motivation, persistence, and innovation.

“This ongoing introspective process may also help leaders decide when it is time to hire others to help them run their organization; after all, EI is as much one’s superpower as it is one’s Achilles’ heel.”

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