Question

JANE’S EVALUATION
Paul Medwick is a commercial banker. In the past month, he has received loan applications from three entrepreneurs. All three have fledgling businesses with strong potential. However, Paul believes it is important to look at more than just the business itself; the individual also needs close scrutiny. The three entrepreneurs are (1) Robin Wood, owner of a small delicatessen located in the heart of a thriving business district; (2) Richard Trumpe, owner of a ten-minute oilchange-and-lube operation; and (3) Phil Hartack, owner of a bookstore that specializes in best sellers and cookbooks. Paul has had the bank’s outside consultant, Professor Jane Jackson, interview each of the three entrepreneurs. Jane has done a lot of work with entrepreneurs and—after a couple hours of discussion—usually can evaluate a person’s entrepreneurial qualities. In the past, Jane has recommended 87 people for loans, and only two of these ventures have failed. This success rate is much higher than that for commercial loans in general. Following is Jane’s evaluation of the three people she interviewed.
Characteristic Robin Wood Richard Trumpe Phil Hartack
Perseverance H M M
Drive to achieve M H M
Initiative M H M
Persistent problem-solving M M H
Tolerance for ambiguity L M H
Integrity and reliability H M H
Tolerance for failure H H H
Creativity and innovativeness M H M
Self-confidence H H H
Independence H H H
H = High; M = Medium; L = Low.
1. Which of the three applicants do you think comes closest to having the mind-set of an ideal entrepreneur? Why?
2. To which applicant would you recommend that the bank lend money? (Assume that each has asked for a loan of $150,000).
3. Can these three entrepreneurs do anything to improve their entrepreneurial profile and their chances for success?

Answer 1

Answer:

1. Richard Trumpe comes closest to having the mindset of an ideal entrepreneur.  This is because of his high creativity and innovativeness.

2. I would recommend that the bank lend the $150,000 to Phil Hartack because of his high integrity and reliability.

3. The three entrepreneurs can improve their entrepreneurial profile and, therefore, their chances for entrepreneurial success by working to improve their weak points.  For example, Robin Wood can improve his drive to achieve, problem-solving skills, creativity, and innovativeness.  Richard Trumpe can also improve his problem-solving skills and work on his personal integrity and reliability by making it a point to live by the truth.  His word should become his bond, henceforth.  This has cost him the loan and made Phil preferable.  Phil also needs to up his creativity and innovativeness game, which will rub off on his ability to take initiatives, drive to achieve, and perseverance.

Explanation:

a) Data and Calculations:

Characteristic                          Robin Wood  Richard Trumpe  Phil Hartack

Perseverance                                  H                         M                         M

Drive to achieve                              M                         H                         M

Initiative                                           M                         H                         M

Persistent problem-solving            M                         M                         H

Tolerance for ambiguity                 L                          M                         H

Integrity and reliability                    H                         M                         H

Tolerance for failure                       H                         H                         H

Creativity and innovativeness       M                         H                         M

Self-confidence                              H                          H                         H

Independence                                H                          H                         H

     Scores              H      M       L

Robin Wood           5       4        1

Richard Trumpe    6       4        0

Phil Hartack           6       4       0

H = High; M = Medium; L = Low.

Answer 2

1). The applicant who would come closest to possessing the mindset of an ideal entrepreneur would be:

Richard Trumpe

2). The applicant who would be recommended to the bank for lending the money would be:

Phil Hartack

3). The decision that could be made regarding the improvement in the entrepreneurial profile of the three entrepreneurs would be:

Yes.

Entrepreneurial Mindset

• As per the details provided, Richard Trumpe is most likely to reach closest to having the ideal entrepreneurial mindset because he possesses a higher level of innovation and vision.
• Phil Hartack would be recommended to the bank for lending him money because his credibility and probity are quite high.
• There are probabilities of all the three to improve in terms of their entrepreneurial profile where they can enhance their low points and become more innovative, effective, productive, and efficient.

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