Hope, Trust, and Belonging: New Predictors of Small Business Resiliency
Which factors contribute most to business resiliency? To the resilience of innovation ecosystems and economies? It may surprise you to learn that the mindsets of people within the business are as predictive as use of technology or access to capital.
That’s the message of Theo Edmonds, JD, MHA, MFA, and Cameron Lister, MPH, co-founders of UPOP, a research firm that uses a data-based approach to look at “specific culture signals that reliably predict performance outcomes, employee wellbeing, and growth.” UPOP helps companies see cultural factors that point to resilience in their future.
Edmonds and Lister started UPOP as a research project within a National Science Foundation-sponsored research center in Louisville, Kentucky. In 2021, they moved operations to Denver and played a leading role in structuring Energize Colorado’s Small Business Resilience Index (SBRI), a tool we designed to help businesses and policy makers better understand Colorado’s current small business landscape.
SBRI Spotlights the Whole Human
The SBRI includes data from surveys sent to approximately 14,000 small business owners from Energize Colorado’s database. Incorporating Edmonds’ and Lister’s holistic approach to business health, the SBRI analyzes metrics of social capital with those of operational capital. More typical business metrics (operations and technology) are measured alongside those of hope, trust, and belonging—the “whole human.”
What do hope, trust, and belonging mean in business? Hope measures how businesses set goals for the future and find ways around barriers to success. Trust includes receiving guidance from the state and trusting state leadership. Belonging measures how owners feel the business and they belong in the broader community, crucial to shared success.
“What has surprised people most is that hope, trust, and belonging are so strongly predictive of success as opposed to operational metrics, like cash on hand, sales, profit, and so on,” says Lister.
The Challenge—and the Opportunity
The SBRI reveals opportunities to improve factors that contribute to resilience among Colorado’s small businesses. For example, during the last two years, a lack of timely and consistent information from all levels of government led many businesses to distrust the wide range of programs made available to them. That distrust further reduced their access to capital, technical assistance, and other resources that could have directly supported them and contributed to the state’s small business economic recovery. Trust was even further eroded among BIPOC and Veteran communities.
Many small businesses also lacked a strong future orientation (hope). Those with higher levels of optimism and adaptability fared far better in economic recovery.
“We’re used to thinking about business in linear processes,” says Edmonds. “Looking at people and businesses—at innovation ecosystems—in that way is no longer serving most of us by any data measure. Research has clearly shown that hope, belonging, and trust are predictive of how willing or not willing people are to engage, to create social capital, to utilize resources offered to them, all of which contributes to business resilience.”
The Future: Culturally Responsive Economies
The SBRI provides an efficient way to identify the earliest signals of where the economic and business market may be going, and how to unlock the dormant capacity of diverse entrepreneurs to build those markets. “What we’ve done over the last several years is essentially find a Rosetta stone for understanding different types of groups that allows us to understand where people might fall within resilience and innovation,” says Edmonds.
When state economic leaders address cultural factors, explains Lister, “not only will you solve economic issues and problems, but at the same time, you’ll solve human issues and problems, which will provide more resiliency in the face of challenges in the future.”
“Let’s get state and local leaders to understand the role hope, trust, and belonging have on economic development” says Lister. “Let’s take the measures to start figuring out culturally responsive approaches to solving system problems that impact our economy.”