Running a company that makes the cut for the Inc. 500 list is not for the faint of heart, says Keith McFarland, whose consulting company administered a personality test to 250 CEOs on the Inc. 500 list. According to the Test of Attentional and Interpersonal Style (TAIS), the CEOs of fast growing companies are more similar to Army commandos than to the CEOs of Fortune 100 firms.
McFarland compares the intensity of entrepreneurs to that of special units like the Navy S.E.A.L.s. They operate in tough environments and compete against larger and richer companies that aggressively guard their market share.
The test identifies four operational styles that help young companies achieve success:
1. Driving to beat the odds. The CEOs with this operating method have the ability to perform under pressure. McFarland describes CEOs with the self confidence to "parachute into hostile territory, often with little more than their wits and a compelling vision and this confidence to go on." These CEOs invade established markets, and most of them depend on their own funds but have little personal wealth. Usually they can tell a story of the time they dodged a business bullet and survived.
2. Adapting on the fly. CEOs with this ability can make quick decisions, without referring to market studies or lengthy strategic planning sessions. They can find and exploit obscure niches in the market.
3. Spotting the leverage points. These CEOs can analyze a complex situation and cut to the heart of the matter. To solve problems they can think "outside the box" and "read" people and situations.
"What else could explain how so many of them to take products which are already in wide distribution – tweak one or two elements – and create high-growth companies by taking market share away from well-established competitors?" asks McFarland.
"These findings dispel a common misconception – that Inc. 500 entrepreneurs are brilliant tacticians skilled at taking effective action in the moment, but who lack the strategic thinking skills necessary to build a successful business over the long term," writes McFarland. "Instead, not only are Inc. 500 CEOs strong in strategic thinking, they are keenly aware of their surroundings."
4. Recruiting the world. Charismatic CEOs persuade employees to pass up a higher paying job at a bigger firm in order to take a high-potential job at a growing firm. They build positive personal connections with people and groups, writes McFarland. They may even be able to convince service providers, such as attorneys, accountants, and landlords, to cut fees or accept payment in warrants. Their gift of persuasion, and their emotional connection to their businesses, may help them attract angel investors.
"They rank high on support and affection, higher than practically any other group surveyed except for highly successful sales people," writes McFarland.
The survey also debunks some of the common myths associated with the entrepreneurial psychology. CEOs of fast-growing companies tend not to be huge risk-takers, for example. Nor are they control freaks (at least not any worse than ordinary CEOs). Nor are they terrible bullies or rash decision-makers.
And when CEOs do fail, McFarland says, they fail – not because of weaknesses – but rather because they overuse their strengths.