Role of management institutions in fostering entrepreneurial self-eficacy (ESE)

Entrepreneurial self-efficacy (ESE) is an outcome of entrepreneur’s innate belief in their own cognitive ability to perform all the necessary tasks that go along with ideating, launching and growing new ventures. With management institutions playing a prominent role in creating and supporting entrepreneurs, this concept becomes a differentiator in steering start-ups beyond the Death Valley phase, which poses the maximum challenges in terms of having a sustainable business model and positive cash flow.

How it helps

It also gives a budding entrepreneur the confidence to take calculated risks and informed decisions and fosters personal resilience and perseverance that becomes a counter-weight to short term setbacks and failures. A higher level of ESE has often been found to be the reason of entrepreneurial adaptability, problem-solving ability, agility and resourcefulness. Entrepreneurs with higher ESE display not only higher cognitive ability but also a high level of Emotional Intelligence (EI), which makes them more motivated to communicate their vision adept at networking to learn many different perspectives during meetings.

The perspective-taking ability refers to a key element in EI: Empathy. This ability to take a deep dive into the minds of others is a crucial starting point for entrepreneurs to become Design Thinkers and become efficient in the five-step process of Design Thinking that comprises Empathy, Define, Ideate, Prototype, and Test. This extremely useful human-centric framework in entrepreneurship and innovation comes with sufficient training.

Similarly, start-up founders adopt a “Lean Mindset” to tide over the initial struggles by creating effective survival strategies, setting Specific, Measurable , Actionable, Realistic and Timely (SMART) goals through a Build-Measure-Learn loop, validated learning, and pivoting. Management institutions build these capabilities by deploying their robust intellectual capital through an ecosystem of educators, start-up mentors, industry experts, and the various networks that they collaborate and work with.

Possessing ESE is an outcome of mastery of experience, social persuasion, social modelling and imagining and visualising positive experiences, which essentially have been embedded in the myriad platforms that management institutions offer such as established incubators, accelerators, campus ventures, and different centres of entrepreneurship.

The unique and well-researched ways of designing specialised entrepreneurship courses by incorporating tried-and-tested methods of finance, marketing, human resources, organisation- design, and management communication certainly enhances the capability and self-efficacy in the early-stage start-up founders. Management institutions with their competent and trained faculty, alumni network, and invited industry experts become a hub of specialised workshops, pitching events, business plan competitions, hackathons, networking events.

These interactive forums impart the requisite knowledge to entrepreneurs, provide them with an exposure to the global standards and best practices and, importantly, showcase their ventures to potential angels and venture capitalists (VCs). Additionally, such institutes have become the nodal points of an enabling ecosystem for entrepreneurs in their respective geographies and form the bedrock of start-up founders’ self-efficacy and build the necessary capacity in them to take an informed plunge into the challenging, unknown and highly complex world of entrepreneurship.

The writer is Chief Executive Officer, XCEED, XLRI Jamshedpur.