How much entrepreneurship is in you?

Data from more than 2,500 companies

This is not a gimmick, but the practical result of a comprehensive scientific study. Professor Bird and her team wanted to find out why some companies are more successful than others – and what role the skills of their owners play in this. To do this, they analyzed a data set containing information on the finances, ownership structures, and top management of more than 2,500 German owner-managed companies.

She then analyzed the LinkedIn profiles of the largest shareholders together with her co-authors, Dr. Jannis von Nitzsch from Heinrich Heine University and Prof. Ed Saiedi from BI Norwegian Business School. Using a so-called “bag-of-words” approach, characteristic terms were identified that allow conclusions to be drawn about specific competencies.

The analysis covered, among other things, education and professional experience, as well as terms indicative of strong matching or governance competencies—such as “experimenting,” “creative,” “startup,” or “entrepreneur” in relation to matching competence.

To assess the validity of this approach, selected terms were transformed into survey items and used in a questionnaire administered to firm owners. The resulting set of questions is now being made available to companies for further use.

The most important findings: Revenue growth is more likely to increase when company owners have above-average governance and matching skills. The correlation is more pronounced in young, less structured companies than in older ones. However, family businesses often benefit less from the governance skills of their owners than other companies. The reason: family members are often given preference, even if they are not necessarily the most competent.

Click here to access the tool: http://www.ownership-competence.de