There is a lot that entrepreneurs need to bring to the table if they want to be successful at their ventures. They need to be inventive enough to come up with a great idea. They need to be persistent enough to make it come to life. They need to be persistent enough to keep it going even when things look bad. They need to be realistic enough to know when they are barking up the wrong tree.
In addition to all this, they need to be good psychologists. Of course, we are not talking about graduating with a psychology degree, but knowing what drives people and how they can use it to their advantage.
Insight Into (Potential) Customers
One thing no enterprise can survive without are customers. Without customers, it is impossible for a company of any kind to grow and this is where being a psychologist can be of huge help. For instance, an entrepreneur who is a good psychologist will have no troubles identifying a portion of the market where their product or service will be welcomed. They will know exactly what this market segment wants and needs and perhaps even how much they are willing to pay.
A great psychologist will also be able to predict how their existing customers will react to changes to the brand and whether these changes might push certain people away. All of these things can be achieved through metrics and business analytics, but they take time and they are rarely predictive enough.
Good psychology can do incredible things for customer insight.
Improved Employee Management
There is perhaps no aspect of running a business where an entrepreneur's psychologist skills are more put to test than in managing employees. When you boil it down, being a manager to people comes down to simply psychology. Through psychological analysis, an entrepreneur will be able to easily identify the employees who are giving their best and those who need a bit more motivation to reach their full potential.
A great psychologist will also know how to defuse potentially volatile situations in the workplace; conflict situations that can wreak havoc to the overall morale in the company if they are not handled the right way. When it comes to handling human resources, an entrepreneur that is also a great psychologist will always be at an advantage.
The goal of every company is to make conversions, in other words, to turn visitors and potential customers into actual paying customers. Depending on the kind a business that an entrepreneur runs, this will require different decision making processes, but at the core of every one of them will be human psychology, i.e. the psychology of people who are transformed into paying customers.
In the online arena this is even more difficult as conversions are harder to come by. Simply put, people are willing to leave a company's website or ecommerce store without purchasing more often than brick and mortar stores. This is where good psychology in combination with great exit intent software can do wonders. With a help of smartly and strategically deployed messages, a website visitor who was just about to leave can be turned into a customer.
Hiring (and Firing) the Right People
If a business is to thrive, it simply has to have all the right people in all the right places. Some companies go to outside recruitment companies while others decide to do it in-house. For a fresh entrepreneur, this is probably something they will have to handle themselves and this is where being a great psychologist can do wonders.
For instance, someone who is good at reading people will know how to recognize dud candidates from the shortest of CVs. When such an entrepreneur invites candidates for interviews, he or she will immediately be able to tell how well certain candidates will handle their tasks. Moreover, they will be more successful at determining what kind of a personality a certain candidate really is, even though they might wish to present themselves in a different light.
A good psychologist entrepreneur will also know exactly which people to get rid of and when. If someone is underachieving because they had a bad month, the smart entrepreneur will be able to tell this. However, if someone is underachieving because they are slacking off on a continuous basis, an entrepreneur with great psychologist skills will identify such an employee straight away.
The world of business is all about people. In order to know people, one needs to be a great psychologist. It is therefore only logical that entrepreneurs who are also great psychologist will be better at what they do.
It is not the sole prerequisite, but being able to read people will always be a bonus in the world of business.
Also published on Medium.