For the past 5 years, my team has been involved in unravelling the relationship between different traits that make up entrepreneurship and its relationship to an individual’s creditworthiness. This project has covered many geographies and cultures that include Senegal, India, Tanzania, Kenya and Bangladesh. The sample for the project involved smallholder farmers, farmer-producing organizations (FPO) also called Sacco’s, dealer networks and extension officers. The results of the projects which were variously funded by USAID, Rockefeller Foundation, CYMMT etc. – to name a few- reveal a very interesting constellation of traits. The theory of constellation of traits is based on the assumption that traits of similar nature constitute a family or constellation and, in that group, there is one major trait around which few minor traits linger. Therefore, analysis of that major traits can throw light on the other minor traits in that galaxy. For entrepreneurship, the major trait was the need for achievement and networking, assertiveness and empathy. Likewise, for creditworthiness the major trait was Conscientiousness and the minor sub traits were high ethical standards, integrity and truthfulness. Based on these constellations we were able to accurately portray the profile of the person and classified them into three bands viz., Champions, Masters and Rookies. The definition of these three categories is as follows:

  • Champions are those who have scored the highest on Technical, entrepreneurial & Behavioral skills. Thus, equipped and efficient to demonstrate confidently the product & services to customers and have the ability to penetrate addressable markets.
  • Masters have strong Technical Knowledge and skills, and relatively low Entrepreneurial & Behavioral skills. Having the ability to effortlessly reach out to customers, facilitate discussions & educate the customers.
  • Rookies have the lowest relative scores in Technical, Entrepreneurial & Behavioral skills. Having the inclination to do business, and the ability to interact with customers. Adequate ability to create awareness about the product and services and have an understanding of the market.

The next logical step was to design a customised business plan that gets monitored on a QoQ basis. The algorithm of a Champion then easily pointed out the right kind of targets, action plans and KPIs. The process was very similar to what Facebook does when it analyses the public content shared by users on their Facebook and then prepares the newsfeed not only for that individual user but his ‘friends, families and groups’. Once we were able to profile the person, we were able to use the ‘nudge’ principle for any behaviour change and modification that was called for.

When we use the word constellation, we imply that some traits form a group and therefore the study of one or two traits gives us a clue about the other traits and thus gives us a fair idea of the constellation. To amplify when we noticed that the person had a high degree of achievement drive present in him, we also found the presence of passion for work, self-efficacy and openness to ideas. Likewise, when we noticed evidence of low inclusion- both wanted and expressed the person had high scores on introversion and neuroticism. When we juxtaposed entrepreneurship and creditworthiness, we observed that a person scoring high on entrepreneurship was not necessarily high on creditworthiness. Likewise, someone scoring low on entrepreneurship was found to be high on creditworthiness. In reality, we needed an ideal blend of entrepreneurship and credit worthiness. To us, creditworthiness implies a strong presence of conscientiousness. Conscientiousness implies being perfect in any assignment. Such individuals do believe in hard work and planning. They are disciplined and organised in various tasks/projects that they undertake. Being cautious is also one of the aspects of conscientiousness. Usually, a credible borrower is a very conscientious one and from that viewpoint, we need to assess the borrower on this attribute of personality. We also noted that people with a high degree of creditworthiness possessed ethics, honesty and high moral fibre. Thus, around the major factor of Conscientiousness, we found the constellation of good ethics, honesty, moral fibre and a 'straight on your face' approach.

Once we had analysed the profiles of the sample, we sat with them in groups to provide them with ‘non-threatening feedback’. The main purpose of the sessions was two-fold. Firstly, to validate our observations and secondly nudge them suitably towards set goals. This also gave me the opportunity to experience first-hand who takes initiative, who presents his thoughts logically, who is withdrawn or who prefers short cut over detailed planning etc. Facebook uses a similar technique (not face-to-face) by analysing the quality of usage by the users. They find out the average time spent on content, the timing of posting (quick or take time -Impulsiveness vs thoughtfulness), the ‘informative ‘content of the posting, the comments, reactions, and shares. All these give a pretty accurate picture of the user to Facebook which then based on the analytics shoots individual-specific content which help form their conscious and sub-conscious personality.

To conclude, our work indicates that using a constellation of trait approaches and algorithms we can accurately profile entrepreneurs and their creditworthiness. With a focused customised business plan and KPIs, we can measure their output with a defined periodicity. This is the most reliable method of mentoring entrepreneurs.