Creating Lasting Change: Why Entrepreneurs Should Focus on Identity, Not Just Actions

When it comes to real transformation, most people get it wrong. They focus on action, assuming that merely doing things differently will yield new outcomes. But research and psychology reveal a more profound truth: actions are just the surface. Underneath lies a deeper, often overlooked layer—Identity.

This isn’t simply about confidence or self-image; it’s a construct that encompasses subconscious beliefs, values, and your perception of self-efficacy and potential. Psychologists have found that identity drives both conscious and unconscious choices, leading to behaviors that are either aligned or misaligned with one’s goals. Research published in the Journal of Personality and Social Psychology supports this by showing that identity and self-concept are primary predictors of behavior change. Transforming this inner foundation creates a ripple effect, making growth inevitable.

Identity as the Key to Sustainable Change

Psychological studies have long shown that sustainable change is achieved not by addressing isolated behaviors but by redefining identity.

In Atomic Habits, James Clear writes, “Every action you take is a vote for the type of person you wish to become.”

Similarly, social scientists believe that identity, made up of beliefs, values, environment, and behavior, shapes our every action and choice. Without redefining this foundation, change is often temporary and superficial.

The identity-centered model I use in coaching involves addressing these core areas, each of which plays an integral role in how identity is formed and reinforced.

1. Beliefs: The Invisible Root System

Beliefs are the subconscious drivers behind your daily actions, shaping how you interpret the world and what you perceive as possible. These are deeply embedded ideas about yourself and your capabilities, often formed early in life. According to cognitive-behavioral psychology, these “core beliefs” can be limiting or empowering. Research from the field of neuroplasticity shows that these beliefs can be rewired, creating new neural pathways that support growth and resilience.

For example, if you hold a belief like “I’m not a risk-taker,” this mindset will inhibit you from exploring opportunities essential to entrepreneurial success. Psychologist Albert Ellis, the founder of Rational Emotive Behavioral Therapy, argued that limiting beliefs are “irrational” and are the root cause of much psychological distress.

In the words of Stephen Covey: “If you want small changes in your life, work on your attitude. But if you want big and primary changes, work on your paradigm (beliefs).”

"Beliefs are like the lenses through which we see the world." Just as wearing tinted glasses changes how we perceive colors, our beliefs shape our interpretation of every experience.

2. Values: Your Internal Compass

Values serve as the underlying principles that drive decisions, often subconsciously. Defined in academic terms, values are “enduring beliefs about what is important in life,” providing a compass that influences choices, actions, and priorities. This compass is critical for entrepreneurs, who frequently face decisions that can pull them in different directions. Research on values-based coaching indicates that individuals who align their actions with core values experience greater fulfillment, resilience, and motivation.

For instance, one client may hold freedom as a core value, while another prioritizes impact. If these values aren’t considered, one may pursue ventures that don’t satisfy their intrinsic motivations, leading to burnout or dissatisfaction. The alignment of goals with personal values is fundamental, as discussed in Psychological Review, where values alignment has been linked to sustainable goal attainment.

Roy Disney noted, “When your values are clear to you, making decisions becomes easier.” This clarity helps individuals and leaders make decisions that reflect their true selves, naturally guiding them toward meaningful actions.

"Values are like the compass that points you to true north." When we ignore our values, it’s like trying to navigate without direction—moving, but not necessarily progressing toward fulfillment.

3. Environment: The Power of Surrounding Influence

Environment is often the most overlooked but highly impactful aspect of identity. The American Psychological Association highlights that people’s behaviors, beliefs, and even values are shaped by their surroundings. Psychologist Kurt Lewin, often regarded as the father of social psychology, famously stated, “Behavior is a function of the person in their environment.” For entrepreneurs, this is crucial: your success is directly influenced by your proximity to individuals and settings that inspire, challenge, and support your goals.

Think about an entrepreneur working to scale a business while surrounded by risk-averse or small-minded peers. Their progress will often reflect the limitations of their surroundings, a concept explored extensively in social and behavioral research. Shifting into a “growth-oriented environment” can dramatically elevate one’s ability to think creatively, act decisively, and build confidence.

Jim Rohn perfectly captured this when he said, “You are the average of the five people you spend the most time with.” Our relationships and environments actively shape our beliefs and behavior, reinforcing or challenging our identity.

"Environment is the soil where your growth happens." Just as plants thrive in fertile soil, people grow when their surroundings encourage and support their development.

4. Behavior: The Link Between Identity and Reality

Behavior is the outward expression of identity. Every action, from the most deliberate to the automatic, reflects how you see yourself and your place in the world. Behavior, according to The Journal of Applied Psychology, serves as both a feedback loop and a reinforcement for identity. Repeated behaviors shape neural pathways that solidify one’s self-image. By consciously choosing behaviors aligned with your goals, you can shift your sense of self toward that of a successful, resilient entrepreneur.

In coaching, behavior is often a bridge to achieving personal transformation. Rather than forcing change through sheer will, behaviors that align with one’s deeper identity flow naturally. In the words of Aristotle: “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” This quote underscores that identity isn’t just a goal; it’s a state of being shaped by regular, conscious choices.

"Behavior is the bridge between intention and reality." Our actions reveal our commitment to growth, serving as both a mirror and a builder of identity.

5. Goals: Shaping the Future You

Goals are often seen as simple benchmarks or targets. Yet, according to Dr. Benjamin Hardy, goals are much more than milestones—they’re the path to becoming who you truly want to be. Hardy emphasizes that goals should be set not just with achievement in mind but with a vision of identity transformation. In his book Personality Isn’t Permanent, Hardy argues that “your future self is the most important person in your life.” By choosing goals that align with the person you want to become, you create a direct bridge from your present identity to your desired future self.

Unlike setting arbitrary targets, identity-based goals shift the focus from mere results to transformation. Instead of simply aiming to “increase revenue by 10%,” for instance, a goal rooted in identity might sound like, “I am building a company that values innovation and resilience.” This type of goal becomes part of your identity, infusing your actions with purpose and direction. Research on self-concept and goal-setting by Hardy and other psychologists shows that people who set identity-based goals experience greater motivation and are more resilient in the face of challenges, because they’re not just achieving outcomes—they’re becoming someone new.

Dr. Benjamin Hardy writes, “You are not your past self. You are a constantly evolving individual with the power to change your future by aligning with the person you want to be.” By viewing goals as identity-shaping forces, you’re not just reaching for success; you’re consciously choosing who you’re becoming in the process.

"Goals are like the sculptor’s chisel." Just as a chisel shapes a raw stone into a masterpiece, identity-based goals carve out the person you’re destined to become. Integrating Identity for Lasting Change

True transformation is achieved when all of these elements—beliefs, values, environment, behavior and goals —align with one’s desired identity. Research by Dr. Carol Dweck on growth mindset and identity-based change supports the idea that seeing oneself as capable of growth has profound effects on resilience and long-term success. Identity, in this model, is the core that ties beliefs, values, behavior, and environment together, enabling rapid and permanent change.

Carl Jung once said, “Until you make the unconscious conscious, it will direct your life, and you will call it fate.” By making identity an intentional part of change, entrepreneurs can achieve transformation that feels inevitable and permanent.

Interested in Rapid Transformation for Yourself or Your Business?

Are you ready to make a transformation that sticks? If you’re seeking more than surface-level success and want to become the person who achieves with ease, let’s talk. This isn’t just coaching; it’s a full integration of who you are and who you wish to become. Reach out to learn more about how I guide entrepreneurs to reach their highest potential by transforming from the inside out.