Developing Behavioural Observation Scales to Foster Effective Entrepreneurship‪.‬

It is widely accepted that the individual entrepreneur is a key factor driving the ultimate success or failure of a new venture. If we are to develop and coach prospective and current entrepreneurs, it is important for us to understand what entrepreneurs do that contributes to their ultimate success. Consequently, there is a need to focus our attention not just on the performance of new ventures but also on the performance of entrepreneurs themselves. Understanding the underlying behaviours that differentiate effective from ineffective entrepreneurs can facilitate the development and coaching of prospective entrepreneurs and provide a foundation for the continuous improvement of existing entrepreneurs as they develop and grow their ventures. Currently much of our understanding of these issues is based on popular wisdom and folklore concerning the nature of the entrepreneur. There is still very much a need for solutions based on systematic and rigorous research. One literature that can provide guidance to research in this area is that of performance appraisal. While many people think of performance appraisal in terms of its administrative purposes (for example: promotion and pay decisions), the primary purposes of performance appraisal are developmental. These developmental purposes include: (a) facilitating an understanding of effective performance, (b) creating development opportunities, (c) sustaining and improving motivation, as well as (d) encouraging communication and feedback (Latham, Skarlicki, Irvine, and Siegel 1993). As such, performance appraisal is discussed in most human resource management textbooks (see Gomez-Mejia, Balkin, Cardy, and Dimick 1998; Templer, Cattaneo, DeCenzo, and Robbins 1999). However, in such texts, performance appraisal is usually presented in the context of traditional private and public sector organizations, many of which are large with human resource departments dedicated to this task. Yet this is not the context in which entrepreneurs operate. Not only is the context different, but so too are the roles. Often in larger organizations, people specialize in one job or function (that is, Finance, Operations, Marketing, etc.). This is not the case with entrepreneurs, who often use multiple skill sets from multiple disciplines (Lazear 2002). Given the differences in the context and role of entrepreneurs versus employees in organizational settings, we were faced with the question of what makes an effective entrepreneur. This is the very question that we strive to answer in the present study.