New research from the Australian School of Business at UNSW Australia suggests that some underlying causes of psychopathy may help entrepreneurs. While psychopaths are perceived as scary and a menace to society due to their fearlessness and insensitivity to punishment, these same characteristics in entrepreneurs mean that they can persist in risk-taking, and succeed in business.
PhD student Benjamin Walker and
Professor of Business Psychology Chris Jackson found that participants high in either psychopathic tendency or entrepreneurial intentions persisted through adversity in a risk-taking task. Mr Walker said "even when the experimental conditions changed from rewarding to punishing, participants who were high in either psychopathic tendencies or entrepreneurial intentions continued to behave as if still rewarded. There was a marked difference in participants who were low in either of these areas."
Using 605 participants across three laboratory studies, the researchers concluded that some entrepreneurs start a business, have it fail, then go straight out and start another business, because they are less fearful and concerned about negative consequences. Mr Walker said "the researchers expected participants high in psychopathic tendency to be fearless and insensitive to punishment. Psychopaths commit an offence, go to prison, then come out and commit the offence again, because they fail to learn from the prison experience. Our study showed the novel result is that participants high in entrepreneurial intentions showed the same pattern of results."
He added "it's no surprise that some entrepreneurs do adventure sports in their spare time. The personality traits of fearlessness and insensitivity to punishment lead entrepreneurs to jump off buildings - and that is why they may also be unafraid to start multiple businesses. Look at serial entrepreneurs like Richard Branson - if a business fails, he shrugs it off and says: 'businesses opportunities are like buses, there's always another one coming'."
The results indicate a certain degree of persistence in adversity can have a huge advantage for a CEO. "Sometimes market conditions change quickly," he said. "Entrepreneurs who continue risk-taking benefit from these market changes much more quickly. For some, the risk-taking may succeed, with very high returns because others have withdrawn from the marketplace. Quite simply - they are ready to take advantage when the market turns good again. However higher risk-taking can also increase losses - and that can be why so many entrepreneurs end up with a series of bankrupt ventures."
He said "this study suggests that organisations should be careful who they promote to CEO level. While risk-taking during punishing circumstances can be advantageous, in many cases it can be a problem. It is important that the CEO is supported by more inhibited staff members to ensure appropriate risk-taking within a company."
For his thesis, Ben Walker won First Place in the Australian School of Business Three Minute Thesis competition. He will now compete in the UNSW 2013 3MT Interfaculty Final hosted by the Graduate Research School on Thursday September 5th 2013.
For further comment call Benjamin Walker on 0405 679 100, or email firstname.lastname@example.org
Media contact: Julian Lorkin: 02 9385 4704