Gallup’s Jim Clifton: Innovators and entrepreneurs are not always the same thing

Jim Clifton, the current chairman and former chief executive officer of the renowned global polling and analytics company, Gallup, is a staunch advocate for business and entrepreneurship.

Preparing for this interview, I bought his book Born to Build, expecting it to be the story of Gallup and his journey there – a prospect I was cherishing. I was slightly taken aback when it was all about building businesses.

Clifton likes to talk, but he likes to listen just as much. In fact our interview starts off with a raft of questions from Clifton about Africa, previous speakers of the Babacar Ndiaye Lecture, and the audience that generally attends the IMF/World Bank meetings. Asking questions is something that comes naturally to Clifton, who has spent most of his life asking questions to determine thinking and forecast trends. But his passion is around building businesses and entrepreneurship.

A bestselling author and philanthropist, Clifton is convinced of the profound social and economic benefits that entrepreneurship can bring and believes that fostering a culture of entrepreneurship isn’t just advantageous for economies but also essential for the overall well-being of society.

Clifton’s views are founded on his belief that while a steady job is undeniably desirable, there aren’t enough to go round, and there are unlikely to be enough for the 8 billion or so inhabitants of the earth until more people are able to create viable businesses.

“A good job is a great thing but you can’t have enough of them until people start creating more businesses.”

Large corporations, he says, often choose to consolidate, rather than create new jobs, which exerts a contracting effect on the jobs market, the opposite of what most people would want.

“Big businesses are great but they actually shrink jobs. So you have to have the right mix of big and small businesses and then you can have good jobs,” he emphasises.

Innovation vs entrepreneurialism

But there is a crucial distinction, Clifton argues, between entrepreneurship and innovation. Some individuals excel at innovation but may struggle with the intricacies of running a business, while others thrive in the entrepreneurial realm without being prolific innovators. While there can be overlaps – successful entrepreneurs who are also innovative thinkers – it is essential to recognise that these traits do not always coexist.

“One is a horse and the other is a cart,” he explains. The problem, he laments, is that “the smartest people in America don’t know the difference because they put the cart in front of the horse.” 

For example, Clifton says, Vint Cerf, recognised as one of the fathers of the internet, was a brilliant innovator who struggled to run a business.

“He is the one who got data to fly across fibre optics. Previously, you could get voice but not data; he figured out how to get it in packets.”

That breakthrough, similar to the Wright brothers discovering how to get lift on a vehicle, a precursor to revolutionising travel, nevertheless did not make Cert a good businessman.

“People think he’s an entrepreneur but he didn’t even believe in it. He and I used to laugh about it.”

He recalls being asked to give a talk to a class of extremely bright students at a centre of innovation and entrepreneurship at one of the top educational institutions in the world. His host later asked him to give this class a test on entrepreneurship, which none of them was able to pass. This led to some reflection by both Clifton and his host, with a sobering admission from the latter.

“Not one thing has ever come out of this innovation centre; not one start-up.”

Clifton has some thoughts on the reason behind the dismal performance on the test and the failure of the centre to birth any viable businesses.

“We still think entrepreneurship is about IQ,” he says.

“It requires genius but not that kind of genius. The genius in entrepreneurship is the drive, hope and optimism and that’s difficult to quantify and put into the metrics of training.”

Building a business, Clifton says, requires skills that are not necessarily reflected in academic abilities. For example, he points out, it is easy to rank academic abilities in a class of a thousand students but when the question is which of them would be able to build a successful company, that ranking serves little purpose.

“When you clarify that, the whole problem changes. So we need to have those two defined right. They need each, and for businesses to thrive, you need both of them together,” he argues. 

The USA, Clifton’s home country, is considered the most entrepreneurial nation in the world, with about 16% of its adults engaged in entrepreneurial pursuits, according to the Global Entrepreneurship Monitor. Even more strikingly, about 55% have started a business at some point in their lives, while 26% have started more than one venture in their course of their lives, according to the same report.

Clifton, has spent some time and $30m through his foundation reflecting on why the United States leads the world in entrepreneurship, and concludes that it is because Americans celebrate entrepreneurship at all levels and do not regard it as what you do when you can’t get what is considered to be a good job.

“America celebrates salesmanship more than any other trait,” he says.

According to Clifton’s perspective, it is precisely this factor that has empowered entrepreneurs from Steve Jobs to Elon Musk to not only succeed but to achieve unprecedented levels of success, feats that would likely have been unattainable had they operated in any other country.

Developing the next generation

Finding and growing the people who can build businesses is something that Clifton is focused on through the Clifton Builders Programme in partnership with the University of Nebraska. The programme promises “strengths-based development” to support “entrepreneurial minds”. Each year, a number of students in the first year are chosen based on their potential and taken through the programme in their second year at the university. The course is meant to nurture individuals who exhibit exceptional leadership and entrepreneurial aptitude and empower these promising students with the skills and knowledge needed to become catalysts of positive change on a global scale. The idea is to cultivate a generation of change-makers with the ability to leave positive footprints around the world. Currently, the programme has 97 students enrolled in it, while more than 160 business ideas have been generated and pitched over the life of the programme.

According to Clifton, drive, an eagerness to disrupt and unstoppable optimism are some of the common traits that mark out these change makers from the rest of the pack. The Clifton Builders Programme’s task is to highlight and accentuate the natural strengths that these students and potential entrepreneurs possess.

“One of the things that my dad figured out was, you have to work on people’s strengths to accelerate their development. It’s slower when you focus on their weaknesses and attempt to make some modifications. So rather, sit each one down and figure out what’s right with them.”

The senior Clifton’s approach resulted in the Clifton Strengthsfinder Test, which helps students to find their strengths and has become something of a benchmark test. Last year, of the 2,000,000 high school graduates who went on to pursue academic programmes in 4-year colleges in the United States, 600,000 took the test, attesting to the popularity and usefulness of the assessment.

Clifton says he’s generally not a fan of tests, but thinks they are important in identifying some abilities. “If we were going to start a soccer team, we’d need to know how fast our players are,” he says. 

The ability to spot talent is crucial to a country’s economic fortunes, he says, something that America is very good at.

“You could be poor in some corner of the country but if you have a high IQ, Stanford will find you. There was this boy with very difficult family circumstances who took one of our tests. We were amazed by his performances and immediately flew him in but Stanford had already found him and given him a full scholarship. The ability, willingness and capacity of the American system to identify and nurture these stars, in the manner of sports teams chasing after the next wunderkind, sets it apart, Clifton says.

“You have to watch out for the unicorns,” he emphasises, pointing out that of the 1200 startups valued at over a billion, 725 of them are American.

Can Africa court the US?

Talent might yet count in Africa’s favour as it pursues economic transformation. Recent geopolitical shifts, specifically the growing tensions between the world’s two largest economies, the US and China, could have significant ramifications for Africa, Clifton says. China’s opening up to the world under Deng Xiaoping, following the historic visit by President Richard Nixon in February 1972, is widely credited for its meteoric economic rise, unprecedented in modern history. Now, with some US companies seeking other destinations for their investments as the risks of doing business in China rise, there could be opportunities for other regions to court “the most beautiful woman in the world,” as Clifton characterises US investor interest.

“She’s walking away [from China] and she’s never coming back. So the question is: where will she go next? There are only two places I think she can go and those are South America and Africa.” Gallup is exiting China, something that seems to irk Clifton, who appears unimpressed with the country’s leadership.

To Clifton, Africa’s talented youth have enormous potential to drive growth and prosperity on the continent. The continent is the youngest and is expected to have the most people of working age by the middle of the century, presenting enormous opportunities or if not properly managed, some risks and challenges.

“If Africa could put some order to entrepreneurship, they could perform very well and that would change everything.” 

Key to this transformation, Clifton says, is strong local leadership.

“You have to have what I call city mothers and fathers.”

These would be people who are committed to their cities and to ensuring their success. To these city mothers and fathers would fall the task of identifying high-potential youths who can build, sustain and grow businesses. They’d also need, he argues, initiatives such as the Clifton Builders Program to help these young people to reach their potential. Local leadership is what differentiates cities from other cities even in the same country, Clifton says, making a reference to Austin in Texas, which has seen an explosion of innovation and a wealth of startups due to local leadership.

“Local leadership explodes entrepreneurship faster than national leadership. Who the president is doesn’t matter as much as you think. When Obama told entrepreneurs “you didn’t build that” it didn’t make much of a difference, even though I thought it was a very unfortunate statement. But it really matters what local leaders do or say.”

To drive this point home, Clifton highlights the difference between Memphis and Nashville.

“These are two cities in the same state with the same president, the same governor and the same regulations and yet one is one of the 5 hottest cities in the world and the other is one of the most failed cities in the world.“ 

The importance of data

Naturally, given his background, Clifton is absolutely convinced about the importance of data in managing companies and economies. Yet, he says, Gallup’s research shows that only about 30% of brand-preference decision-making is driven by rational analysis, while emotional reactions account for 70%.

“In science, medicine or anything, we always begin with the question: what is measurable? Economists have to get the emotional state of their countries and cities are more measurable. I think they can really make headway once they do.”

Getting the right data means asking the right questions to elicit the most useful answers. This is a challenge that data gatherers, pollsters included, must grapple with daily, because decisions that hinge on data can be fatally compromised by inaccurate data.

“What happens is that you get conclusions that are derived from assumptions that are wrong and when assumptions are wrong, all the decisions that flow from that are also wrong. It’s like the Bernoulli effect in engineering – everything gets more wrong the farther out you get from that wrong assumption. That’s why the question is so important.”

It’s even more significant in a moment of momentous change such as the present, when big decisions are being contemplated in several corners of the globe that could define the next couple of centuries. That is a burden that Gallup and other firms in the business should bear delicately yet boldly.

The Babacar Ndiaye Lecture is an annual lecture hosted by the African Export Import Bank (Afreximbank) in memory of the late Dr Babacar Ndiaye, President of the African Development Bank, who was instrumental in the founding of Afreximbank. This year’s lecture will take place on the sidelines of the IMF/World Bank Meetings at a Gala Dinner on the 14^th October.