While having an entrepreneurial personality can be the cornerstone of success, research shows it has its drawbacks.
In his article, “A Downside to the Entrepreneurial Personality” published in Entrepreneurship Theory and Practice, Danny Miller suggests that entrepreneurship “bears a distinctly positive cast” with attributes such as “energy, self-confidence, need for achievement, and independence.”
The demands of building a business from scratch, raising capital, managing resources and capturing trade from rivals requires a special type of individual who is willing to risk “funds, energy and even reputation — on a venture that stands a good chance of failing”.
Miller’s article suggests that in the face of such obstacles, entrepreneurs have a greater willingness to take initiative, tolerate risk and uncertainty and be persistent.
But while these characteristics are central to entrepreneurial success, Miller does point out that this can devolve into “self-confidence, vigor, aggressiveness… autonomy, and power.”
Miller borrows principles from academics to show this: “narcissistic personalities are often driven by intense needs for power and prestige to assume positions of authority and leadership.”
He also points out that entrepreneurs have a need for power and achievement, which when taken to the extreme, can lead to aggressive and ruthless behaviour.
“Finally, the need for control and dominance, which is intrinsic to some entrepreneurs as they strive to guide a nascent venture, can ultimately devolve into behaviors such as an obsessive wish to control the details of a business,” Miller writes.
“In some cases, this tendency may be accompanied by mistrust and a groundless suspicion of partners, employees, and competitors.”
The article suggests these behaviours also extend beyond entrepreneurs to include “professional” executives of public companies and is not limited to “the average” entrepreneur who must struggle to get their business up and running.
It looks at those “who have built large firms and achieved, often early in the development of an industry, and who have achieved a good deal of financial success, for a protracted period of time”.
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