The title refers to a very good book about what it takes to be an entrepreneur and build a great business. The authors of the book are Anthony Tjian, Richard Harrington and Tsun-Yan Hsieh and the book is called Heart, Smarts, Guts and Luck published by Harvard Business Review Press, Boston, Mass, 2012. The authors tried to figure out the basic components of what it means to be an entrepreneur.

Smarts is all about pattern recognition. Whether it is book smarts, street smarts, people smarts or creative smarts. Most people fit into one or more categories and all have advantages and disadvantages depending on the stage of the company and what they are trying to do. The smarts refers the ability to organize, simplify and prioritize.

Those with book smarts tend to want to analyze everything, that is a great attribute but if you over analyze, there is no action or you do not see the answer in front of your nose. If you do no analysis, you will not receiving funding to grow, or there needs to be a balance in the analysis.

Street smarts is learning what it is like for your customer. Street smarts relies on observation, experience, being practical to ensure things get done. Often times the common sense solution which those with street smarts see is often not seen by book smarts, because of regulations that were put in for good reasons. Street smarts is often called thinking outside the box or what is it like in the trenches, where many decision makers do not go. (an example is Undercover Boss).

People smarts is dealing with people – both good and not so good, but generally they care about the people. Theses people engage a pattern recognition that decodes and intuits how people will react. There are multiple advantages – how people make decisions; building and maintaining strong relationships; breaking down the cynicism that people have; and managing people for the good of the organization.

Creative smarts includes the ability to grasp patterns that other do not These people are idea generators or innovators. They have the ability to change the game and see what others do not see. The result can be magical customer experiences.

The perfect blend is each type of smarts comes with its own risks and shortcomings. Business smarts is about mixing and matching different types and not just seeing the patterns, they see the big pictures and move to take advantage of it.

Linking to dividend paying stocks, companies that are profitable are often move to conservative method of operations – they like risk when it makes money otherwise they do not want too much. The smarts of the company is what you listen or read about when senior executives express their outlook for the future. Do you agree with the balance or is there one? what innovations are the companies looking at? and could they expand to bring in addition segments of how the company has defined itself?

There are more questions than answers, till the next time – to raising questions