“We run this company on questions, not answers.” This sentence comes from Eric Schmidt, Google’s former CEO. It makes it clear which characteristic the company values most in new employees: Curiosity. The recruiting strategy is correspondingly consistent: when the company was looking for engineers, it published a huge billboard with a riddle. Anyone who solved it ended up on a website and thus in the selection process of Google’s HR department. And that’s regardless of the puzzle solver’s formal qualifications for the open position.

Is curiosity the super skill?

Curiosity is not actually a skill, but a tendency towards certain behaviors. Curious people embrace the unknown, have the courage to try things out and enjoy taking the first steps on a new path. Our research shows that this is closely linked to characteristics that are attributed to a person’s “entrepreneurial capital”, such as the “agility mindset” personality trait. People with a strong agility mindset approach the challenges of a fast-paced world with a strong creative drive. And see themselves as capable and willing to influence the developments around them. This characteristic can be trained, as you will see in the second part of the article.

With this in mind, curious personalities can be a huge asset to companies. After all, our environment and the conditions under which organizations have to operate have been changing at an ever-increasing pace for years. People who have a natural curiosity are usually better able to deal with these changes and are more open to new situations and insights. Even for those that contradict their previous beliefs. There is unlikely to be a “We’ve always done it this way” with them in the team.

Instead, they constantly question the status quo. Like to explore new ways of overcoming challenges. And are not so quick to settle for the first solution that comes along. Their strong interest in new things also relates to other people, which tends to make them good team players. Even in very heterogeneous constellations. Anyone focusing on diversity when recruiting is therefore well advised to look at how well developed characteristics associated with curiosity are in candidates.

Mister & Miss T

Because these often go hand in hand with other valuable character traits and skills. The so-called “T-Shaped Employee” is the jackpot among employees. On the vertical axis, the stem of the T so to speak, he or she brings in-depth skills in at least one area, for example in marketing or finance. The horizontal bar of the T stands for overarching characteristics and soft skills. People with a keen interest in new things, for example, also tend to have a great capacity for empathy and the ability to collaborate. While expert knowledge can be read off the resume from the stem, other measurement methods are needed for the horizontal axis.

In the past, these were mainly costly assessment centers in which attempts were made to find out what makes candidates tick using fairly straightforward personality tests. Thanks to AI technology, there are now more sophisticated methods that use natural language analysis to measure character traits. Subtle and unbiased.

Putting the brakes on curiosity – here’s how

Although curiosity plays an important role in meeting new challenges, it is not yet sufficiently valued and encouraged in companies. The practice of trying to solve problems of the present and future with resources from the past instead of courageously asking the right questions persists. In a 2021 SAS study, one in five German managers rated curiosity as an unimportant trait for company performance.
(five percent more than the international average)

This result leads directly to one of the biggest obstacles to more curiosity in the company: The way performance or success is measured. KPIs that are too tough not only cause unhealthy stress among employees, but also put the brakes on their curiosity. Those who have neither the time nor the energy to ask themselves questions simply carry on as before. Regardless of whether it makes sense or not. Two points speak against this way of working:

Instead of measuring success solely in terms of performance and KPIs, companies can focus more on learning goals:

Learning to think small

In my opinion, the learning organization is the model with the best prospects for the future. And curiosity is an essential part of future competence in organizations. This is based on the insight that we cannot plan the future. Models and strategies that try to predict what the company will need in five years’ time are outdated. Instead, companies need to strengthen the self-efficacy of their employees and learn to trust in the process.

“Instead of thinking big once, it’s about thinking small very often in order to achieve great things,” writes Martin Wiens in Neue Narrative magazine (issue #3). Among other things, he refers to management researcher Jim Collins, who investigated what particularly successful entrepreneurs do differently to others. One key factor: they are curious. He calls it “paranoid in a productive way”. In other words, they constantly engage with their environment, the market and their organization. Even and especially when things are going well. At the same time, they encourage their employees to keep their eyes and ears open, ask themselves critical questions and become effective in the best interests of the organization.

Training curiosity

“I have no special talent, I am just passionately curious,” said Albert Einstein. – The good news is that everyone is born with a minimum level of curiosity. Otherwise we would not have learned to speak or walk. It is usually the structures in which we operate. From nursery school to the company office – that allow this valuable quality to wither away. It is up to managers to restore it. For example, with these three simple workhacks:

#1 The customer chair

In physical meetings, this is a chair at the meeting table that is left empty to remind participants to always think from the customer’s perspective:

What would our customer say about this if he or she were in the room?

What would he or she think of the idea?

And, what impact would our decision have on the customer?

In virtual meetings, a team member can slip into the customer role and actively answer the above questions from the customer’s perspective. To make the role visible to everyone, the colleague can wear a hat or a large sign with the customer’s name, for example.

#2 The learning journey

… consists of a single question from HR or managers to employees: Imagine we give you three tickets for your personal learning journey. With these three tickets you have access to everything (e.g. countries, companies, the Chancellor’s office, NASA, prominent role models, a farm in the hinterland, …). Where would you stop along the way to learn something or to look behind the scenes (simply out of curiosity)?

The answer can be short and concise and does not have to be justified. While some stops on the learning journey directly indicate specific interests, others form a basis for engaging in conversation with employees and getting to know the other person better.

#3 Slack Time

Slack time is a fixed period of time each month during which employees can work on or try out their own ideas. This time can be made available to either one department or the entire company. The only requirement is that the project is related to the company’s goal. Employees briefly present what they have been working on at regular intervals. A message board can serve as an additional tool on which colleagues can note which projects they (would like to) work on so that teams can find each other in a self-organized manner. Slack Time helps to find useful product ideas and solutions to organizational problems for which there is sometimes no time in everyday work.

Companies do not need to have ready-made answers to climate change, demographics, dealing with global conflicts, skill gaps, GenZ, GenAlpha and the AI revolution in order to manage change and, at best, help shape it. But they should start asking themselves the right questions and allow themselves to be as curious as ever.

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Personality first – this is one of the most important trends in dealing with talent.

Why? 

The so-called “hard” skills that companies need are changing faster than ever before. Today’s expert skills will be yesterday’s news tomorrow. What remains are the supposedly “soft” skills and people’s personalities. The better companies know their employees, the better they can assess who they should invest in in terms of professional and personal development.

Bye Bye Bachelor

But an engineer still needs to be familiar with physical principles; an architect needs to know material features, how to use drawing programs and what regulations to take into account. – That is true. Expert knowledge is essential in some professions. For many jobs, however, a different trend has been emerging for a long time. While German HR departments cling surprisingly persistently to university degrees in their job postings, companies in other countries have long since abandoned them. According to a study published in the Harvard Business Review in 2022, US companies reduced the requirement for a university degree by 31 percent when advertising positions with a high level of qualifications, including management positions.

The British branches of Ernst & Young announced ten years ago that a university degree would be completely removed from the job profile. This is in line with numerous studies that were recently listed in a very interesting article on t3n. It clearly shows that soft skills will be much more important in the future. And that goes for engineers and architects too, by the way. After all, they are also involved in an increasingly complex environment that is subject to constant change. And in project work that is carried out by multidisciplinary teams. And in companies that are under increasing pressure to transform their structures from the ground up while day-to-day business must continue.

Transformation needs personality

These companies (and sooner or later it will affect almost all businesses) need employees who are willing to develop with them. It is becoming increasingly important to entrust people with the right role in the company at the right time, in which they can access and contribute their full potential. Certain character traits are even more important in that regard than professional qualifications or a formal degree.

Why?

Because transformation means that the traditional hierarchy is increasingly dissolving. And with it the logic of the commander and the recipient of orders. This leads to consequences:

1. Without top-down instructions, interaction between employees who are on the same organizational level becomes the most important steering element in companies. In the book “The Humanization of the Organization”, the authors write in this context: “This brings with it all kinds of annoyances – self-promotion, refusal to make a statement due to stage fright, tactful agreement to nonsense, (…). Anyone who frequently has to endure fruitless meetings that largely serve the self-promotional needs of some of the participants (…) knows the problem.”

2. In structures where individuals have more responsibility and cannot refer to their superiors every time they have a dispute with a colleague, the ability to deal with conflict and self-control are essential. The ability to win others over and mediate between subjective realities takes the place of punishment and reward or right and wrong.

3. Having the freedom to shape things in your own way also means making decisions under uncertainty. This requires a stable personality and at the same time the right instinct for situations and the ability to get the right people on board.

The best basis for coping with these new conditions are employees who have certain personality traits (or: who do not have them – see excessive tendency towards self-promotion) and with them certain soft skills at a high level. At the very least, however, personality is a good starting point for acquiring these skills. Sebastian Klein writes in the magazine Neue Narrative (issue #19): “People who resist any kind of personal development and reject personal responsibility cannot play a leading role in an organization that is fundamentally changing its operating system.”

More automation – more soft skills

An operating system that must change not only in view of the demands of a new generation of employees, but also in view of increasing automation. Many jobs will change, moving away from purely mechanical activities towards mediating, translating and explaining work at the interface of machines and interdisciplinary teams. Personality and soft skills will be the decisive factors in workforce planning and in the design of individual learning and development programs.

So which character traits are the most important? Which soft skills will be even more important in the future? – There are various rankings on this, such as LinkedIn’s Top Skills 2024, which also clearly shows that the supposedly soft factors are gaining in importance.

The “Inner Development Goals” framework is also worth a look. This has derived various dimensions from the question of how we can create a sustainable and liveable future and assigned the essential skills and attitudes to them.

If you put the various rankings and frameworks side by side, including the models we use at Zortify to analyse the personality of employees and applicants, a very clear picture emerges of where the journey is heading, even if individual nuances will vary from organization to organization.

Our top 3 personality traits…

… and the corresponding soft skills are:

1. High level of open-mindedness
People with a high degree of openness are generally curious, tend to question the status quo and enjoy exploring new ideas and opportunities.
Corresponding soft skills: listening, exploring new topics, taking initiative

2. Moderate agreeableness combined with moderate competitiveness
Individuals obtaining moderate scores on the Agreeableness – Competitiveness scale oscillate between yielding and adapting to other people’s needs but also remaining firm in their own beliefs and points of view. 
Corresponding soft skills: empathy, listening, communication 

3. High adaptability (agility mindset)
Agility Mindset is a personality dimension developed by Zortify. A high level is characterized by dynamism and flexibility as well as the strong will to shape and initiate the omnipresent change.
Corresponding soft skills: creativity, resilience, ability to prioritize

These skills already made the difference between good and outstanding companies in the past. Today they are simply essential. And they will continue to be a must for organizations tomorrow and the day after tomorrow. They are the qualities and skills that can never be fully automated. At the same time, new technology can be the key to finding them with little effort and without bias in candidates and existing employees.

“It is not the strongest or most intelligent who will survive but those who can best manage change.” 
(Charles Darwin)

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“Too leisure-oriented? – We’re just hard-working in a different way.” was the headline of the brandeins magazine in September 2020, using many examples to draw a picture of a Generation Z that is changing the world of work practically “on the job”.

The new generation of employees is neither lazy nor inherently less well educated than previous generations. Even if they are repeatedly accused of being so. Rather, they were born into a world that is becoming more complex and confusing with each year. A world in which static knowledge is becoming less important. And they are constantly challenged to acquire new information and new skills for themselves. DIY in a continuous loop. Against this backdrop, GenZers take a skeptical view of what has long been considered normal and desirable: a job for life, for example, or climbing the traditional career ladder. 

Left and right is the new up

Today, many young employees appreciate flat hierarchies and an open environment in which “upwards” is only one of many possible directions. Rather than being above others, it is much more important for them to be connected with their colleagues. To work on eye-level towards a common goal with the support of competent and empathetic leaders. And to develop individually in the process. These are the key factors for employee retention. 

A study from the US came to the conclusion that employees who are promoted horizontally or professionally within the first three years in the company, for example (temporarily) taking on a new role with greater responsibility in another department or leading a new project, are 62% more likely to stay with the company. With a “vertical” career move, such as a promotion to a management level, the figure is only slightly higher (70%). Without the opportunity to try out other areas of responsibility outside of the routine, however, the probability of talent staying falls to less than 50%.

Young high potentials in particular are being headhunted and tend to be more willing to change jobs than older employees. What can a company offer to counter the growing “market of opportunities” from outside? – A diverse internal market of opportunities, for example, that allows employees to constantly realign their work, reinvent themselves, try things out, take on new roles, take on more responsibility – and all within the organization in which they are already active and rooted. This is not wishful thinking, but now a clear expectation of GenZ: according to Deloitte (2021), 70% of GenZ employees expect their employer to help them achieve their personal and professional goals.

The transparent generation?

In return, employees who want to develop further are the best thing that can happen to a company. It is important to find the “sweet zone” where the goals of the company and the many individual purposes and personalities of the employees overlap. The more precisely organizations design their Learning & Development programmes, the better it is for them. After all, employees who thrive in their new role are the key to companies being productive and innovative.

AI technology can provide valuable support in growing alongside each other. Especially with regard to employees of a generation that is used to using digital technologies and generating data about themselves. From mindfulness apps to fitness trackers, many young people naturally use data-based tools to better understand themselves. And navigate through a world that demands a lot from them. So it’s only logical that their employer should also use smart technology to help them find their place in the organization – and do so continuously.

AI-based personality diagnostics can help GenZ:

Strengthening strengths 

Instead of working on deficits, companies should focus on the potential of their employees. Further development based on the principle of “strengthening strengths” is not only more rewarding. But also saves time and money and increases the chances of employees fulfilling their role well. The AI-based personality analysis can help to find out which basic character traits qualify employees for certain roles in the organization. And in which areas they can still work on themselves in order to be capable of performing a task in all its facets. 

Personality first, skills second

Studies on requirements in job advertisements also show that the focus on personality and the associated strengths is becoming more important. According to the study, “frustration tolerance” was mentioned 71 percent more frequently in job advertisements in 2021 than in 2018. Empathy was requested 39 percent more frequently. At the same time, the need for existing language skills, among other things, fell by almost a quarter.

Personality first – this means that AI-based personality diagnostics are also gaining massively in importance. This is because it enables companies to reliably measure the key characteristics of (potential) employees.

The benefits of AI-based personality analysis:

And it works particularly well for GenZ employees. That is because: 

And: they are hard-working. Just in a different way 😉

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How much “humanity” is good for organizations would be answered very differently by people from different philosophies. On the one hand, there are those who say that we can only do good work if we are allowed to be ourselves in a professional context. With the full range of our characteristics, feelings and needs. This view has become very popular with the New Work movement. In his book “Reinventing Organizations”, Frederic Laloux talks about the principle of “wholeness”: we can only do good work if we can be ourselves and don’t have to spend energy on wearing a professional mask.

Many of the things we see in organizations today are based on this way of thinking. The dress code has been abolished in many industries. Employees bring their dogs to work and, especially in young companies, it is no longer a stigma to cry or talk about fears in the work environment.

At the same time, there are many voices (and my perception is that they are becoming increasingly louder) that say it is important to differentiate between people and members of an organization. In this context, the authors of the book “The Humanization of the Organization” speak of a necessary “barrier” between people and companies that protects both sides. As long as the individual character traits and needs of a person do not clash with the manners and behavior associated with a role in the company, they are none of the employer’s business. In this context, the authors speak of “role expectations”.

The bright side of power  

These role expectations raise questions in the face of a fundamentally changing world of work. Examples include the following:

One thing is clear: the values of the next generation and therefore also the expectations of how people work together in companies often differ from those of the baby boomer generation. Whose representatives still hold many important positions in organizations. Especially when it comes to leadership behavior, the ideas diverge.

For a long time, character traits that we would describe as toxic today were beneficial for climbing the corporate ladder. Above-average manifestations of counterproductive behavioral tendencies (self-centeredness, impulsive, strategic manipulation) are still strongly represented among managers today. This is increasingly becoming a problem for companies. Young employees in particular expect their managers not only to set goals and make decisions. But also to motivate, listen and respond empathetically to their needs. According to a LinkedIn study, 41% of employees with up to two years’ work experience would like managers to show more empathy. Among trainees and students, the figure is as high as 60 percent.

More than four colors

However, such soft factors are difficult to read from a CV or documented performance. This is where modern measurement methods based on AI offer new possibilities. AI systems can help HR managers to develop an in-depth understanding of employees’ individual strengths and development potential. Technology makes it possible to take a nuanced look at people and not make hasty judgments. This is important because it should be clear to every HR manager by now that human personality cannot be broken down into four color types. At the same time, the many nuances cannot be captured by an interview or coaching session alone. Especially as all those involved are not free from bias. AI can set new standards here and shine a light on characteristics that have often been overlooked. But are essential for the functioning of an organization.

What does AI measure?

There are different AI models that target different spheres of personality. The goal behind the use of AI systems for HR is basically always the same:

In the area of “Learning & Development”, the focus is on characteristics that are accessible for further development. It is important to emphasize that the aim is not to “turn people around” so that they fit into the organization. This is neither possible nor desirable. Rather, the aim is to use the insights gained with the help of AI to strengthen employees so that they can grow in their professional role. For example, the finance colleague who tends to be overly pessimistic learns to consciously adopt a different perspective. Or the HR colleague learns how to be empathetic. Coaching, mentoring and other formats make this possible.

Outlook

There are different views on how much humanity is good for an organization. Whichever perspective you follow, the key ultimately is whether a person’s behavior and the expectations of the role they perform match. It is less important whether it is authentic behavior or a “professional mask” that employees put on at the office door. What is more important is that their actions are rooted in character traits that consider good and productive cooperation to be desirable for the benefit of the organization and its members.

Behavioral expectations and thus also desirable traits are subject to change. To which companies must respond if they want to attract and retain employees of the new generation. The latest AI models make these character traits, which are essential for the functioning of an organization, measurable and presentable. The technology thus enables both each individual employee and the organization as a whole to develop in the best possible way and shape a desirable future.

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Entrepreneurial capital is like a secret weapon for business people, whether you are an entrepreneur, corporate employee or leader – you want to score high in entrepreneurial capital. It’s made up of certain mental powers that help you do well in your work and handle challenges bravely. It’s not about skills or personality traits, it’s about your mindset, how you think and deal with things.

Imagine having an invisible shield that helps you stay strong during hard times and makes running your business and lead your people smoother. That’s what entrepreneurial capital does. It helps you to not give up, believe in your ability, and always expect good things to happen.

The Wonderful Things About Having Entrepreneurial Capital

When a person has lots of entrepreneurial capital, they usually feel better, do their work happily, and achieve more because they can handle stress and problems effectively.

For a whole company, when everyone has high entrepreneurial capital, it leads to good performance all around, and it even earns more money for the company. In fact, high levels of entrepreneurial capital correlates positively with employee engagement, psychological wellbeing, performance, and authentic leadership. (Same research shows that low levels correlate with everything we want to avoid in business i.e., cynicism, high staff turnover, job-stress, anxiety, workplace deviance…)

Resilience: Bouncing Forward and Growing

Imagine a tree. When a storm comes, it bends in the wind. After the storm, it doesn’t just return to its previous shape; it grows even stronger and adapts to withstand future storms better. This is what resilience in the business world is like. It’s not only about coming back to where we were after facing challenges but also bouncing forward, learning, and growing from those experiences. When life throws difficulties our way, we use them as stepping stones to become even more robust and adaptive.

Optimism: The Sun Always Follows the Rain

Optimism signifies maintaining a positive outlook and persistently expecting favourable outcomes. Just like after every spell of rain, we anticipate the sun to shine again, an optimistic mindset in entrepreneurial capital embodies believing that after challenging or difficult periods, positive and prosperous times will follow. This faith in a brighter future drives our actions and decisions, it also makes us more courageous and risk-taking.

Self-Efficacy Conviction: Steering Our Own Ship

Self-efficacy conviction is similar to having an internal locus of control, where we believe that we have the steering wheel of our career journey in our hands. Imagine being the captain of a ship. Regardless of the turbulent seas or calm waters, it’s our belief in our ability to navigate through these varying conditions that defines our self-efficacy conviction. We see that our actions, decisions, and strategies significantly influence our career journey and achievements.

Agility Mindset: Dancing Through Dynamic Shifts

Envision a dancer, seamlessly flowing with the rhythm, effortlessly adapting to every beat change. An agility mindset in entrepreneurial capital mirrors this dancer, gracefully pivoting through the erratic beats of the business world, ensuring each unexpected move becomes a choreographed step towards success. With an agility mindset you embrace change, convert challenges into new opportunities, always staying in sync with the fluctuating markets and trends.

Developing Entrepreneurial Capital: Is it Possible?

Absolutely! Cultivating entrepreneurial capital is achievable by nurturing resilience, self-efficacy conviction, optimism, and an agility mindset, thereby enabling any individual to flourish. This is perfectly done through coaching, workshops, training and even meditation and self-reflection.

In conclusion, entrepreneurial capital is like a secret tool that helps us and our teams to do well in business. By focusing on growing our resilience, self-efficacy conviction, and optimism, not only do we become better entrepreneurs, but we also make our businesses stronger and more successful.

Unlock the Secret Weapon for Success!

Ready to harness this power for your success? Contact Sophia today to discover how Entrepreneurial Capital can elevate you and your company to new heights!

Sophia Karlsson Business Development & HX Consultant

sophia@zortify.com Schedule a meeting VCARD

Founders are characterized by optimism, resilience and self-efficacy conviction. All values are measurable and trainable. Why is that? 

Successful founders have strong personal resources. They are particularly optimistic, resilient and at the same time convinced of their own effectiveness. This entrepreneurial capital can be measured, and trained in every person. 

Nurturing Entrepreneurial Capital in the face of uncertainty

Around one in ten of the working population in Germany is self-employed.[1] Crises such as the current Corona pandemic hit the self-employed particularly hard. Because they bear the full risk for their entrepreneurial activities. But even before Covid-19, it was true that anyone who wants to realize their own business idea in today’s volatile world needs psychological “capital” from which he or she can draw in difficult phases. 

Self-employed people in particular often make risky decisions, work in a complex business environment and have to deal with an uncertain future. At the same time, in the best case, they consistently pursue their vision and also motivate their own employees. How do successful founders manage all this at the same time? The answer: with the help of their entrepreneurial capital, which they carry on their shoulders like an imaginary “resource backpack. This mental capital can be measured – and trained. An analysis offers an important starting point for making existing resources visible and expanding them. 

The influence of entrepreneurial capital on business success can explain why relatively few people start up businesses in Germany, even though, according to the Global Entrepreneurship Monitor, many today consider themselves qualified enough and see opportunities to build up their own company. For the support and promotion of innovations and the start-up scene, therefore, the development of entrepreneurial capital is also an important adjusting screw. 

What personality traits does entrepreneurial capital comprise? 

Entrepreneurial capital forms the basic psychological framework for a successful and satisfied working life. It is based on the concept of “psychological capital,” which is increasingly in focus in psychological research, and comprises certain cognitive resources from which a person can draw to influence his or her own well-being. 

These resources are more stable than emotions or moods but at the same time malleable and open to development. A high expression of the interacting resources is related to higher performance, job satisfaction, and psychological well-being. Conversely, individuals with low levels of psychological capital exhibit increased cynical behavior, job stress, and anxiety. 

Current research shows that successful founders are particularly convinced of their own effectiveness, resilient as well as optimistic – and significantly higher than their own top managers. These three personality traits form the entrepreneurial capital of each person and, in their interplay, have a significant influence on professional success and job satisfaction: 

Factor 1: Self-efficacy beliefs. 

An unwieldy word with a strong impact. It refers to confidence in oneself and one’s own abilities to successfully complete tasks. People with a high level of self-efficacy set themselves ambitious goals and can control their own motivation. Even in difficult situations, they do not bury their heads in the imaginary sand. But try to master them as well as possible. Studies show that mastering challenging experiences and social persuasion promote the development of one’s own self-efficacy conviction. 

Successful founders are convinced of their own effectiveness. 

We know from our everyday life that a person’s actual competence and self-confidence do not always match. There are enough people who believe themselves to be less capable than they actually are – and vice versa. For founders as well as for employees, confidence in one’s own abilities is always an important resource. It helps not only in turbulent times, but also when leading a team or presenting one’s own ideas. 

Factor 2: Personal resilience 

Let’s imagine the following situation: A pandemic spreads worldwide and investors bail out. A worst-case scenario. However, unexpected events are not only part of building a business in pandemic times. As a rule, a start-up is always associated with a high degree of risk and uncertainty – failure and decisions with a bad outcome are often part of it. In addition, the responsibility increases the larger a start-up becomes. How do successful founders respond to such challenges? 

Successful founders show a high level of resilience and deal calmly with unexpected events. 

Successful founders show a high level of resilience: they accept reality as it is, tend to improvise, take risks and face challenges with openness. Those who are resilient get back up more quickly after setbacks and failures, cope better with conflicts and deal more calmly with uncertainties. Stumbling blocks? They are much less likely to throw resilient people off track. And if they do fail, they get back on their feet quickly and often recover at an even higher level of their personal self. People with high resilience focus either on their available resources, on the potential risks, or on the process itself, and aim their strategy at achieving the best possible outcome. 

Factor 3: Optimistic attitude 

Successful founders show a strong basic confidence in a positive future. They see and seize opportunities before others do and thus usually enter “error-prone” new territory. Optimists, however, tend to forgive themselves for mistakes more easily and to see opportunities even in the face of great uncertainty. Instead of being intimidated by possible failure, they believe in the success of their plans. 

Looking on the Bright Side – successful founders are particularly optimistic. 

What exactly makes an optimist “tick”? Research shows that they explain positive events with personal and lasting causes. In contrast, they attribute negative events to external, temporary and situation-specific causes. The world is perceived as a place where good things happen to you on a regular basis. 

How can entrepreneurial capital be measured? 

Zortify has developed a scientifically based test that uses artificial intelligence to evaluate a person’s entrepreneurial capital. The algorithm analyzes personality traits based on answers to self-assessment questions and freely formulated texts. 

The special feature of AI-based text analysis is that it incorporates non-manipulable results into the evaluation, thus ensuring high validity of the test results. While the subjectivity of reviewers* cannot be completely ruled out, the use of AI technology enables objective and precise results to recognize and harness one’s own potential. 

“Self-awareness is the most important cornerstone of emotional intelligence.” Daniel Goleman 

What is the benefit of the analysis? 

Knowledge about the individual characteristics of entrepreneurial capital provides an important basis for reflection and expands the options for action for guided personality development. The test results can be used to work out clearly defined topics in a coaching session. Previous research has shown that even one to three hours of highly focused microinterventions not only lead to a significant improvement of one’s own mental resources. But also to an increase in performance at one’s own workplace. 

It is not only important for the self-employed and founders to invest in their entrepreneurial capital. The analysis provides a good basis for further training offers or decisions about financial support. For example, students with high entrepreneurial capital and a strong interest in entrepreneurship can be filtered and supported with a tailored educational program. 

By fostering entrepreneurial capital, HR development can also help managers and employees* become more resilient, more optimistic about the future, and more confident in seeking alternative approaches in a volatile work environment. A transparent, supportive leadership style has an influence on the psychological capital of employees. And this, in turn, determines whether employees leave a company quickly or remain motivated in the long term. 

Whether a founder, manager or employee – recognizing and promoting one’s own entrepreneurial capital helps people achieve their own goals and gives them the opportunity to adapt more easily, overcome difficulties and strengthen their mental well-being. 

[1] Source: German Federal Statistical Office (Microcensus 2018) 

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When it comes to conducting due diligence, most people focus on analyzing financial statements, legal documents, and other technical information. However, it’s important not to overlook the role of psychology in due diligence. Here are some reasons why psychology should be considered when conducting due diligence.

According to Oxford Languages, the definition of Due diligence in this matter is:. A comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential.

Understanding the Human Element

At its core, due diligence is about understanding the risks and opportunities associated with a potential investment. And when it comes to risks and opportunities, it’s important to consider the human element. Understanding the people involved in a potential investment, including their personalities, motivations, and decision-making processes; can provide valuable insights into the potential risks and opportunities associated with that investment.

For example, if a potential investment involves a CEO. Who has a history of making impulsive decisions or has a reputation for being difficult to work with. This could be a red flag that suggests additional risks that should be investigated further. Alternatively, if a potential investment involves a management team. That has a proven track record of successfully navigating difficult market conditions. This could be a positive sign that suggests that the investment may be less risky than it appears on the surface.

Assessing Cultural Fit

In addition to understanding the personalities and motivations of key individuals involved in a potential investment. It’s also important to consider the cultural fit between the investment and the investor. This includes not only the culture of the company or organization being invested in but also the culture of the investor.

For example, if an investor values social responsibility and environmental sustainability. They may be reluctant to invest in a company that has a history of violating environmental regulations or engaging in unethical business practices. Similarly, an investor who values transparency and open communication. He may be wary of investing in a company that has a history of being secretive or opaque about its operations.

By considering the cultural fit between the investment and the investor, due diligence can help to identify potential areas of misalignment that could ultimately lead to problems down the line.

Mitigating Bias and Emotion

Another reason why psychology is important in due diligence is that it can help to mitigate bias and emotion. When people make investment decisions, they are often influenced by a range of cognitive biases and emotions. Such as confirmation bias, overconfidence, and fear of missing out.

By incorporating a psychological perspective into the due diligence process, it’s possible to identify potential biases. As well as emotions that could affect judgment and develop strategies to mitigate them. This could involve conducting surveys or interviews to gain a better understanding of the emotional and cognitive factors that may influence decision making. Or decision making frameworks could be developed that aim to counteract common biases and emotional reactions.

Ensuring a Holistic Approach

Ultimately, the goal of due diligence is to ensure that all potential risks and opportunities associated with a potential investment are thoroughly assessed. By considering the role of psychology in due diligence, it’s possible to ensure a more holistic approach. That takes into account not only the technical aspects of the investment. But also the human and cultural factors that can influence the success or failure of an investment.

Conclusion

When conducting due diligence, it’s important not to overlook the role of psychology. By understanding the personalities, motivations, and decision-making processes of key individuals involved in a potential investment. As well as the cultural fit between the investment and the investor. Due diligence can help to identify potential risks and opportunities that might otherwise be missed. Additionally, by bringing a psychological perspective to due diligence, it’s possible to mitigate biases and emotions that may be clouding judgment. And to ensure a more holistic approach that takes into account all potential factors that can influence the success or failure of an investment.

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Narcissism is widespread. Team and company success can be affected by narcissists in different ways.

Humorous, eloquent, self-confident – in short, a personality that magnetically attracts attention. You have certainly encountered such a person in your everyday professional life. Despite numerous positive effects that narcissistic persons can have on their environment, they are quickly noticed for their negative impact: The own advantage is in the foreground, bullying and harassment of colleagues are not uncommon, but also arrogant, inconsiderate and uncooperative behavior is often the order of the day. 

Harvard Business manager 5/2021, Die Jungbullen kommen

Unveiling the Hidden Narcissists in Management

If you think about where you have encountered this person in your professional life, you will most likely find out that it was one or the other manager. This was also the conclusion of the study This was also the conclusion of the study we did together with Harvard Business manager and published it in their magazine in 05/2021, « Die Jungbullen kommen ». In addition to the survey of 9,918 study participants, 34 qualitative telephone interviews with exposed executives showed that many respondents had direct experience with narcissists in their own careers. Feel free to reach out to hello@zortify.com to receive the publication.

Narcissism has thus arrived in the executive ranks. Not only “old” men are the problem. Women also exhibit these traits. Comparing both sexes, it can be seen that men in all age groups have significantly higher narcissism scores on average than women. 

The study also reveals a new trend that seems to confirm previous views. For example, young people whose age group is also referred to by Time magazine as the Me-Me-Me generation, i.e. women and men under 30, exhibit the strongest narcissistic tendencies in the study. Today’s socially valued values such as a high willingness to perform, self-expression, individual competition and striving for power characterize the younger generations in particular. Global competition and constant assessability through social media reinforce this effect. 

Might be everywhere

Toxic narcissism at all levels – not just among managers – can have devastating effects on teams, their members and, in the long term, on companies. But the negative consequences don’t just affect financial aspects of an organization. In the following, we show what damage can be caused in companies and in teams by narcissists and how AI can help to identify narcissistic traits more quickly. 

Narcissism is measurable: our NLP-based assessment analysis measures the characteristics that correlate positively, but also negatively with business success. The so-called counterproductive behavioral tendencies. Interested? Take a closer look here.

The negative consequences of narcissism for companies and teams 

Narcissism is not yet widespread in the German population, the study also showed. On average, society in this country has moderate narcissism levels. 

However, as soon as you change your perspective and focus on leadership and top positions, you will see a completely different picture. This is also reflected in the study. This fact is also addressed by a large number of scientific papers and articles in career magazines. 

Narcissism is no longer an unknown phenomenon. However, the effects that narcissistic tendencies can trigger in teams are underestimated nowadays, even though they have long-term and negative consequences for companies. 

When personal goals take precedence over corporate and team goals 

The urge for recognition and attention repeatedly tempts narcissists to prioritize their own personal goals. The focus is on (short-term) success, a place in the limelight. This focus is also based on the fact that people with narcissistic tendencies find it difficult to respond to the needs of fellow human beings. 

In the short term, narcissists can be successful with this behavior. But if colleagues and co-workers are not taken into consideration in the long term, the collateral damage at the team level is very high. The narcissist attributes successes of the team to him/herself. As soon as something goes wrong, however, the employees and colleagues are to blame. The interest revolves only around their own success. This has a negative impact on employee loyalty and satisfaction. 

This misconduct also has long-term effects on the success of the company. Narcissists lose sight of what is important and take great risks. Key people can thus be disturbed in their own development. The company risks losing skilled employees. 

If your colleague is a narcissistic leader, sooner or later the core elements of an organization will be affected. In an organization, people work together to accomplish something that cannot be accomplished alone. Narcissists undermine this cooperation. The effectiveness of an organization is reduced as a result. Decisions that are less fact-based and less oriented toward the success of the company, but rather toward quick personal success, mean in the worst-case high losses and revenue losses for the company. 

Remote work: What happens when information is not passed on? 

The behavior of narcissists to pursue only their own personal goals also has an impact on the way they work. Information may only be passed on to colleagues and team members who are useful in achieving one’s own goal. Important data and facts do not necessarily end up where they are needed. The remaining team members become unable to act because they need the information for further decisions and work steps. 

A majority of German companies currently work with their employees in home offices. Remote work can be an optimal breeding ground for narcissistic managers. Depending on the constellation and workflow, they find it easier here to pass on information only in a targeted manner, to block the flow of information and to spin their intrigues. This can only be balanced out and prevented through good team communication and active exchange between colleagues. 

Toxic Team Culture: When Narcissism Impedes Cooperation 

Narcissists try to create an environment of yes-men, because it is easier for them to achieve their personal goals. Critical feedback providers are devalued, ignored – these people may only receive information under difficult conditions – and excluded. This also prevents a team from developing and growing. This leads to the aforementioned fluctuation of high potentials. The team culture is also directly affected. 

Narcissistic people exert a direct influence on policies and practices that prevail in an organization. Conflict of interest guidelines, ethical behavior, teamwork – all are ignored. On the other hand, narcissistic leaders often fail to alert employees to misconduct that violates standard social norms – in some cases, this less collaborative behavior even receives recognition. 

Because of such activities, further organizational damage occurs. It prevents teams from working together and makes it more difficult for them to achieve shared success. When employees are deprived of the opportunity to learn, grow and acquire new knowledge, their skills suffer. The morale and self-confidence of a team also suffer when a narcissistic leader claims collective successes for himself and blames failures on the employees. This creates a toxic team culture that can also have an economic impact on a company. 

Deception and misinformation: When narcissists take it to the extreme. 

If there is an intervening supervisor who can put a stop to your narcissistic leader with the help of company policies and control, you can breathe a sigh of relief. If the narcissist is higher up in the corporate hierarchy, he/she is automatically less vulnerable and can continue to enforce his/her misconduct. 

Narcissistic facets such as delusions of grandeur would be a realistic option in companies led by a narcissist:in – combined with a high level of risk. This delusion could manifest itself, for example, in an aggressive and extremely reckless expansion strategy. The entrepreneurial consequences are devastating in case of failure. 

You might also observe effects on the interpersonal level. Business partners who disagree or express too little praise are dropped and sent out the door with a scandal attached. The interests of employees are ignored and dismissed if they are displeased. If narcissistic persons are in a position that allows them to act freely, fraud and misinformation are a proven means of securing their own position of power and removing risk factors. 

Detect narcissism faster with the help of AI. 

If companies ignore this multitude of problems, they must expect high losses in several organizational areas. A study by McKinsey and Kienbaum concludes that up to 35 percent of hiring decisions are wrong. These costs alone can amount to three times the annual salary of the target position for a company. 

In personnel selection procedures, attempts have been made for decades to identify such personalities (in good time) with personality tests in order to avoid organizational negative consequences. But these tests only examine the basic characteristics of a person. It is difficult to correlate these with entrepreneurial success. Since these tests rely on self-reporting by participants, they are susceptible to manipulation. 

The limitations of traditional Personality Tests

With the help of Zortify and its artificial intelligence, it is not only possible to determine subclinical narcissistic character traits such as excessive self-confidence, striving for dominance or overestimating one’s own abilities. In addition to this, also the three dimensions of the dark triad (according to Delory Paulhus) – so called “Counterproductive Behavioral Tendencies” are measured: Self-centeredness, Impulsive Excitement-Seeking, and Strategic Manipulation. 

Zortify: Unveiling the Dark Triad of Personality Traits

In this way, all characteristics are taken into account that can be detrimental to the company. Self-centeredness, Impulsive Excitement-Seeking, and Strategic Manipulation together make up the so-called “Counterproductive Behavioral Tendencies” here. In the context of the approach chosen by Zortify, Impulsive Excitement-Seeking is understood to be a personality tendency characterized by dissocial, antagonistic and insufficient behavior. Often caused by a lifestyle characterized by extremes. 

A leader characterized in this way would, for example, relentlessly live out his or her career ambitions. Strategic Manipulation describes a scheming and ruthless pursuit of power. This behavior is detached from any moral and ethical principles. Employees at management level with a strong expression of this personality trait are prepared to forego consideration or ethical principles in favor of achieving or maintaining power. They will stop at nothing for their own advantage. 

The Destructive Potential

The aforementioned character traits, coupled with unscrupulousness, are still decisive for professional and corporate success for many employees in today’s companies. The above-average manifestations of the characteristics of the dark triad are sometimes strongly represented among executives, but also in the entire leadership field. Counterproductive Behavioral Tendencies, however, are possessed by everyone. 

Zortify algorithm trained with artificial intelligence incorporates insights from the analysis of the target’s written text into the assessment, which cannot be manipulated in the process. Decision-makers are thus enabled to make a better selection of candidates. 

Protecting corporate success through the targeted use of AI 

You will encounter personalities with narcissistic tendencies at all hierarchical levels in professional life. In the foreseeable future, this will become more and more common as younger generations exhibit high narcissism levels. The study also showed this. 

If companies do not take measures in time, narcissists can cause many problems for their employees and skilled workers. In addition, a high level of organizational damage can also be expected. 

In order to counteract these problems in time, narcissistic characteristics must be identified as quickly as possible. Zortify can support decision makers in this process, accelerate it and protect them from manipulation. So join our mission and let’s create an “asshole-free working environment”. Reach out to hello@zortify.com to learn more.

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