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THE SUCCESSFUL INTELLIGENCE OF HIGH GROWTH ENTREPRENEURS: LINKS TO NEW VENTURE GROWTH ABSTRACT We develop a model of successful intelligence in entrepreneurship. The model was tested through interviews with 22 printing industry CEOs and responses from 143 founders of early stage high growth printing and graphics businesses. Successful intelligence combined with entrepreneurial self efficacy to relate with celerity (swift action) and multiple improvement actions (repeated goal-driven changes). Celerity and multiple improvement actions predicted higher venture growth across four years. This field study confirmed that successful intelligence consists of practical, analytical, and creative intelligence, and that, together with entrepreneurial self efficacy, it enables and motivates successful entrepreneurial actions. Successful intelligence can be developed, so entrepreneurs may benefit from our findings, and venture financiers may have another tool for screening investment options. key words: entrepreneurship, successful intelligence, venture growth, cognition, behavior INTRODUCTION Successful intelligence in the entrepreneurship context is the ability to succeed in new venture creation and growth. Successful creation and development of high growth opportunities is critical for economic well being (Bhide, 2000; Shane & Venkataraman, 2000). Indeed, growing ventures are the dominant source of job creation, market innovation, and economic growth (Hisrich, Langan-Fox, & Grant, 2007). Unfortunately, over 50% of new ventures fail within 5 years (Aldrich, 1999). Personal characteristics of entrepreneurs, together with features of the venture opportunity itself, are among the strongest predictors of new venture failure and success (Baum, Frese, Baron, & Katz, 2006). Indeed, according to venture financiers, early venture survival and growth depend largely upon characteristics of the entrepreneur (Shepherd, 1999; Zopounidis, 1994). Thus, understanding entrepreneurs’ personal characteristics that may drive successful new venturing can yield important social and economic gains. Recently, Sternberg (2004a) argued that his (1997) theory of successful intelligence (SI) contributes to the explanation of successful entrepreneurship. We took this as a challenge to better understand successful intelligence (SI) in the entrepreneurship domain by conducting an empirical test of Sternberg’s theory of SI (1) in terms of its composition and (2) how it relates with entrepreneurship growth. The study fits the cognitive stream of research about entrepreneurs. Entrepreneurship researchers have increased empirical attention to cognitions, but few studies address general or specific intelligence directly (Baron, 1998, 2004, Busenitz & Barney, 1997; Corbett, 2007; Krueger, Reilly, & Carsrud, 2000; Mitchell, Busenitz, Lant, McDougall, Morse, & Smith, 2002; Mitchell, Smith, Seawright, & Morse, 2000; Simon, Houghton & Aquino, 2000). Among the few, Baron and Markman (2003) studied social competence which is related to social intelligence; they found a relation with financial success. Mitchell et al. (2000) drew upon social cognition and information processing theory (Fiske & Taylor, 1991; Neisser, 1967) to explain and show significant relationships between expert ability scripts and the venture creation decision. Thus, an opportunity exists to build upon early understanding about entrepreneurs’ thinking and acting. Sternberg’s (2004b, 2007) conception of SI is appealing for practitioners as well as academics because SI is task oriented, and SI can be improved. People can develop their successful intelligence by capitalizing on their strengths, compensating for their weaknesses, and adapting to, or shaping, their environments. SI is situational. Sternberg (2004b, 2007) has described the usefulness of successful intelligence for understanding entrepreneurship, leadership, and strategic and operational management. Sternberg (1997, 2004a) explains that SI consists of practical intelligence (PI), analytical intelligence (AI), and creative intelligence (CI), and he emphasizes that all three components of SI (PI, AI, and CI) are needed for entrepreneurship success. Thus, we study the components individually and their amalgamation as a predictor of behaviors that improve new venture growth. Among the components, PI is the experience-based accumulation of skills, dispositions, tacit knowledge, and the ability to apply same to solve every day problems. Some refer to PI as “street smarts”. Experience and domain-based PI is the most malleable of the three components of SI (Sternberg, 2004a), and it provides the “know how” for idea generation and development of new business ideas. The second component of SI is creative intelligence (CI), the ability to generate novel ideas that meet the needs of a context. Entrepreneurs need CI to discover and design new business ideas and to reveal options during experimentation and improvisation as they cope with operational and marketing barriers to changed products, processes, and business models. Like PI, creativity is also domain specific and can be learned (Csikszentmihalyi, 1996; Gardner, 1999). Finally, AI is analytical intelligence. Entrepreneurs need AI to understand increasing volumes of information and to evaluate increasingly complex product and market interactions. Social and emotional intelligence are additional types of specific intelligence that have received attention from organizational and leadership psychologists (Caruso, Mayer, & Salovey, 2002), and entrepreneurship scholars (Baron & Markman, 2003). We agree with Baron and Markman (2003) that competencies based upon social and emotional intelligence, such as network building and self-management, contribute to successful new venture creation and growth. Thus, we focus on SI, but we also measure and analyze social and emotional intelligence.

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This page is a summary of: The Successful Intelligence of High-Growth Entrepreneurs: Links to New Venture Growth, Organization Science, April 2010, INFORMS, DOI: 10.1287/orsc.1090.0445.
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