Practical intelligence is the ability that individuals use to

find the best fit between themselves and the demands of the
environment.
Robert J. Sternberg proposes three intelligences in human
cognition.
Analytical intelligence is the ability to analyze and
evaluate ideas, solve problems and make decisions.
Creative intelligence involves going beyond what is
given to generate novel and interesting ideas.
Practical intelligence is the ability that individuals use
to find the best fit between themselves and the
demands of the environment.
The three intelligences, or as he also calls them three
abilities, comprise what Sternberg calls Successful
Intelligence: "the integrated set of abilities needed to
attain success in life, however an individuals defines it,
within his or her sociocultural context."
Sternberg's attempts to establish the validity of practical
intelligence as a construct have yielded significant
empirical work and criticism. As such, it provides a
window on the issues and ideas at the core of this debate.
To measure practical intelligence, Sternberg relies on a
concept called tacit knowledge (Sternberg et al., 2000).
As the name implies, tacit knowledge is knowledge that is
hard to express in words. Sternberg posits three
characteristics of tacit knowledge.

 It is procedural rather than factual, which means it is

knowledge about how to do something rather than
knowledge about something.
It is usually learned without the help of others or
explicit instruction.
It is knowledge about
important to the learner.

things

that

personally

Sternberg has developed domain-specific tests of tacit

knowledge that are based on situations that an individual
might face in the real world. Those who answer more like
experts and leaders in their fields are judged to have
acquired more tacit knowledge in that domain. Sternberg
has argued that tacit knowledge tests are better
predictors of career success than measures of g or at
least the best secondary predictors of career success
after taking g into account. People who are more skilled
at acquiring tacit knowledge, he asserts, do better in a
variety of fields including sales, business management,
academic psychology, and military leadership.

The Three Types of Intelligence

Required for Successful
Entrepreneurship1
Successful entrepreneurship requires the acquisition and application of a
full range of intellectual skills.
1 http://spinnakr.com/blog/start-ups/2013/03/the-three-types-of-intelligence-required-forsuccessful-entrepreneurship/

Dr. Sternberg, a researcher from Yale University, proposes that successful

entrepreneurship requires the strategic merger of analytical, creative and
practical aspects of intelligence, which together constitute successful
intelligence.
A successful entrepreneur needs the creative intelligence to come up with
new ideas, the analytical intelligence to evaluate whether the ideas are
good ones and the practical intelligence to figure out a way to sell the ideas.
They succeed by identifying their strengths and capitalizing on them and by
identifying their weaknesses and either remediating them or compensating
for them.
According to Dr. Sternberg, successful intelligence in entrepreneurship
requires:

Creative intelligence
The ability to generate novel ideas, redefine problems
and sell ideas

Evoked when: creating, designing, inventing, imagining and

supposing

Requires: innovation, flexibility, self-efficacy, perseverance,

tolerance of ambiguity and unconventional thinking

Examples of creative thought in entrepreneurship: To what

extent is the product informed, novel, compelling and taskappropriate?

Analytical intelligence

The ability to recognize and define the problem,

formulate problem solving strategies, allocate
appropriate resources to solve the problem, monitor
problem solving strategies and evaluate solutions

Evoked when: analyzing, comparing and contrasting,

evaluating, explaining, judging and critiquing
Requires: IQ-based skills
Examples of analytical thinking in entrepreneurship: To what
extent is the product informed, logical, organized and balanced?

Practical intelligence
The ability to find the best fit between yourself and the
demands of your environment, use acquired knowledge
and put problems in real-world context

Evoked when: using, applying, implementing, employing and

contextualizing

Requires: Correct application of analytical tools to solve

problems

Examples of the application of practical intelligence: To what

extent is the proposed idea feasible with respect to time and
place, human resources and material resources?

In order to be a successful entrepreneur, it is not sufficient to

simply possess these three types of intelligence, but they must
be applied in a consistent manner and refined over time.
Successful entrepreneurs must constantly:
1. Question assumptions
2. Consider risk-rewards ratios
3. Take sensible risks
4. Allow themselves and others to make mistakes
5. Recognize problems before they get out of hand
6. Solve the most important problems, rather than extraneous
ones
7. Define and redefine problems
8. Formulate strategies for problem solving
9. Focus on long-range planning
10. Evaluate decisions
11. Correct errors as they discover them
12. Seek tasks that allow for creativity
13. Allow time to think creatively
14. Tolerate ambiguity

15. Understand the obstacles that they must face and overcome
16. Be willing to grow
17. Recognize the importance of the person-environment fit
18. Actively seek out, and later become, role models

Creative, analytical and practical intelligence can all be acquired

and refined over time. In order to progress personally and
professionally, entrepreneurs should strive to develop all three
types of intelligence.
The most amazing aspect of being an entrepreneur is that you
are in a position with limitless opportunities for development.
You are not bound by the confines of a monotonous job. You
are the only limiting factor.
Guest author Tiago Paiva is the CEO and Co-Founder of
Talkdesk, a call center softwarefor small businesses. In his
spare time he likes to hit the slopes in Tahoe, down a good
burrito and travel around the world. Tiagos post draws on an
original work by R. Sternberg, called Successful intelligence as
a basis for entrepreneurship, published in the Journal of
Business Venturing, 19, 189-201 in 2004