Emotional Intelligence #1 Attributional Bias

In this next series of Blogs, I will discuss issues arising from the emotional intelligence of our leaders. Our intrinsic biases and prejudices colour our outlook. They guide us and inform our decision making, and we need to be more self-aware to also become more effective when engaging others. We explore these issues in more depth in CEO School.

 

Global Entrepreneurship Monitor

Global Entrepreneurship Monitor

Attributional Bias

They say ‘winners write the history books’. Thus, the bias exists that every success story will hold an indelible truth. Yet academic and anecdotal research suggests multiple underlying causes for entrepreneurial success.

Consider this: entrepreneurship born of necessity, as distinct from that born of opportunity seeking. The conventional wisdom is that business success stories emanate entirely from opportunity seeking. The Global Entrepreneurship Monitor, a global study covering 42 countries including Australia, reports that businesses founded to pursue opportunity are seven times more frequent in number than those founded out of necessity. There also appears to be a strong correlation with age — opportunity seeking business formation reducing with age. Thus, as we age, we are less likely to form a new venture. A new study just released by Ernst & Young Worldwide adds further detail to this picture and you can read this here.

One great exception to this was Dr Peter Farrell. At the age of 46, and after a long career in academia and as a major corporate executive, Peter led the buyout of a division of Baxter healthcare. This small business unit, called ResCare, was renamed ResMed, short for Respiratory Medicine. From humble beginnings in 1989, this business is today an NYSE listed $4.5 billion giant, and a great Australian success story. Dr Farrell will join us at some point during CEO School and share his story.