May 18, 2021

The Five Dimensions of an Entrepreneurial Mindset

By: ELIstaff


Our brains receive millions of pieces of information every second. That’s why we often fall back on our mental default settings to make sense of the world around us. Imagine how little you would get done every day if you had to rediscover what pants are and how they work every time you got dressed. 

Our mindset keeps our brain from becoming overwhelmed. We have these sets of interrelated beliefs, assumptions, and knowledge about many things, including entrepreneurship. 

Mindsets aren’t static. We cultivate them consciously and unconsciously through our experiences and the people with whom we surround ourselves. In the case of entrepreneurs, the power of compelling goals that involve creating value for others influences their mindsets much more than creating wealth for themselves.

Having a compelling goal shifts our perspective. It motivates us to constantly develop our innate abilities in ways that contribute to the greater good. Also, it energizes and engages us in ways that can enable us to accomplish extraordinary things. Even in the face of adversity. 

The five dimensions of an entrepreneurial mindset

In any mindset, there are five dimensions: self-efficacy, locus of control, beliefs about our capabilities, motivation, and level of resilience. When we strive toward a compelling goal using entrepreneurial thinking, it shapes these five dimensions in the following ways. 

1. High self-efficacy beliefs

Self-efficacy relates to how we feel, think, motivate ourselves, and behave. Having high self-efficacy means we believe firmly in our ability to navigate life and achieve our goals. We are more likely to believe challenges are opportunities we can conquer; rather than potential pitfalls we should avoid. And, the more mastery experiences we have, the more robust our sense of self-efficacy becomes.

This way of looking at our beliefs about ourselves, based on the pioneering work of Albert Bandura, is central to the Ice House model. 

2. An internal locus of control

People with an external locus of control have deeply held (and mostly unconscious) beliefs that fate, luck, circumstances, or powerful others somehow control the events in their lives. By contrast, people with an internal locus of control believe, “If it is to be, it’s up to me.”

We usually don’t walk around advertising whether or not we believe we can control the outcome of situations. But, people’s locus of control tends to show up in their language and behavior through complaints about external factors or people. 

People with high self-efficacy tend to have an internal locus of control. When facing failure, people with both an internal locus of control and high self-efficacy focus on what they can control in the situation and adapt their methods to do better next time.

3. A growth mindset

If you have a fixed mindset, you believe your capabilities are inherent and can’t be changed. By contrast, when you have a growth mindset, you think your learning and intelligence are not set at a certain level but can be changed if you put in extra time and effort. 

Recent neuroscience research bears this out. With practice and persistence, our neural networks grow new connections, strengthen existing connections, and build insulation. As a result, increasing how quickly information flows across those connections. Scientists have also found that if people believe their brains can grow, they behave differently. In other words, it proves we can cultivate a growth mindset. 

4. Intrinsic motivation

Doing something for its own sake rather than for external rewards is the most potent form of motivation. Extrinsic rewards actually undermine our intrinsic motivation. For example, children are intrinsically motivated to draw, but as soon as someone introduces a reward for drawing, they lose interest. 

Intrinsically motivated individuals tend to have higher levels of engagement and psychological well-being. They also tend to outperform those who are motivated by money, letter grades, or other rewards.

5. High levels of resilience

Whether we interpret circumstances positively or negatively can have a powerful effect on our ability to persist. Those who are more resilient are likely to have an explanatory style that is optimistic and positive. On the other hand, phrases like “This will never work” or “This always happens to me” indicate a pessimistic explanatory style. As well as lower levels of resilience. 

When we learn that cognitive distortions about adverse circumstances are just that, distortions, we can learn to influence our explanatory style to be more optimistic. 

In this video, ELI Founder and CEO Gary Schoeniger goes into more detail about the critical dimensions of an entrepreneurial mindset. 

It’s worth pointing out again—as Gary does in the video—that having a compelling goal shapes these dimensions, not the other way around. Having a solid belief in your self-efficacy or having a lot of intrinsic motivation, for example, is not a prerequisite to establishing entrepreneurial thinking.

As your brain becomes more and more adept at making sense of the world around you through an entrepreneurial mindset, you may find that some tasks which used to feel insurmountable become as routine as putting on your pants.