Competencies Matter: Modeling Effective Entrepreneurship in North East of Italy Small Firms

Purpose – The purpose of this paper is to explore if and to what extent the competency portfolio of entrepreneurs affects firm’s performance, controlling for a set of individual and organizational variables. Design/methodology/approach – Applying nonparametric statistical analysis on data from behavioral event interviews and survey questionnaires to a sample of 53 entrepreneurs (small firm owners), this study investigates: the type, scope and depth of the entrepreneurs’ competence portfolio; and the relationship between the entrepreneurs’ competence portfolio and their firm performance. The empirical setting is a sample of northeast Italian small family businesses. Findings – The authors’ research shows which are the functional, emotional and cross-functional competencies that differentiate entrepreneurs’ performance and identifies which are the threshold competencies (Self-control, Information gathering and Visioning) and the distinctive competencies (Planning, Empathy, Business bargaining, Organizational awareness, Directing others and Benchmarking). Originality/value – The existing literature on the determinants of successful entrepreneurship mostly focuses on technological, financial and institutional factors, even if entrepreneurs’ skills, knowledge, creativity, imagination, and alertness to opportunities are at least as much important in shaping small firms’ performance. Building on competency modeling techniques and emotional intelligence literature, this study explores the link between personal characteristics and competencies of entrepreneurs and the performance of their firms. The study offers some managerial implications, provides direction to practitioners and policy makers on how to support entrepreneurship and small business development, and suggests future research directions.