Current television shows chronicling these stories of the rise and fall of disgraced entrepreneurs are The stall (Elizabeth Holmes of Theranos), We crashed (Adam Neumann of WeWork) and super pumped (Uber’s Travis Kalanick), all of which give viewers a taste of what can happen when a business founder will stop at nothing to evolve their vision, creating a path of destruction that ends up wiping them out too. And while the specifics of the immoral, illegal, or just plain ill-conceived actions of these three entrepreneurs are unique, they tend to stem from a few common personality traits among toxic business founders.
For starters, anyone who calls themselves a “disruptor” – in light of innovation within a well-established industry like, say, health testing or real estate – is likely to be, well , disruptive, for the better Where worse. Specifically, the founders of large companies tend to take risks and be overconfident, displaying the kind of overt courage and resilience that have long been attributed to entrepreneurs of all kinds. But, for the particularly toxic founders of new television fame, it was when the size and scope of their powers began to grow exponentially that a much darker side to these personality traits emerged.
“An entrepreneur has to be a bulldozer to get things done, but that can absolutely go too far.” —Michael Frese, PhD, Psychologist
In other words? These founders simply didn’t – or couldn’t – curb their ambition (even in the face of obstacles to their visions), and the unforgiving tech start-up environment only fueled their delusions of grandeur. “At the start of a business start-up, it’s normal not to worry about the practicalities of appropriate behavior,” says work and organizational psychologist Michael Frese, PhD, whose research focuses on entrepreneurship. “You have to be a bulldozer to get things done, but it can absolutely go too far.” In other words, when an overly ambitious founder starts razing important people and practices, things can quickly turn toxic.
So how do you spot such behavior in practice? Below are the common personality traits of these toxic business founders who just can’t give up.
Here Are 5 Personality Traits Toxic Business Founders May Share, According To Psychologists
When the high-key enthusiasm of a charismatic entrepreneur reaches an extreme, you have hypomania, or a period of accelerated excitement which is essentially a milder version of a manic episode common in leaders. “That kind of energy can really motivate people around a founder by convincing them that the person totally believes in what they’re doing,” says organizational psychologist Tasha Eurich, PhD, author of Overview. “It’s the hypomania that serves to really onboard people and fuel the big ideas of these founders.” And, of course, with more support comes implicit permission for them to go even further with their ambitions (and toxic with their behaviors).
To imagine hypomanic behavior in practice, just consider Holmes’ enthusiasm for doing something no one had ever done before, which rattled investors despite the fact that she had no working technology to reach its goal. Or Neumann’s famous 12-minute visit to WeWork headquarters that was somehow so motivational that it resulted in SoftBank’s initial $4 billion investment.
With exaggerated beliefs about their own importance and accomplishments, grandiose people assume they are destined for greatness. And the same is often true for toxic founders who become emboldened by the many hoops and obstacles they’ve successfully cleared and the receipt of fantastical nicknames, like “unicorn.” “Entrepreneurs are certainly prone to exaggerate the positivity and power of their own inventions,” says Dr. Frese. “Even if there are issues they are aware of, they are likely to ignore them.”
“The more the power of a leader increases, the more his degree of more thanassessment of their own skills, abilities and contributions. —Tasha Eurich, PhD, Psychologist
When such grandiose inclinations are met with praise and support from investors and employees, things tend to get toxic, says Dr. Eurich: “As a leader’s power increases, his degree of more thanassessment of their own skills, abilities and contributions.
Toxic business founders don’t just start something new to add value to the world; they often assume they’ve been somehow “chosen or selected by God, or by fate, or by some higher power, or even just by banks to do something decisive, special, or important,” explains the Dr Frese. This narcissistically inclined belief can act as a huge motivation for the founder whenever they face setbacks, which can work as a good thing, he adds. But in other cases, it can easily lead to greed or entitlement (both of which are equally toxic in nature).
Because narcissistic founders tend to be drawn to power and success, they may also find themselves in leadership roles that serve to reinforce their narcissism, according to Dr. Eurich. “They’re surrounded by people who tell them how great they are, both employees and board members, who reward overconfidence,” she says. “In fact, overconfident CEOs tend to be paid more than their peers, and as their compensation increases, their level of overconfidence also increases, allowing narcissistic tendencies to go unchecked.”
For a functional (i.e., non-toxic) business founder, any action that could physically or emotionally hurt someone else would be a sign of a complete stop: sure, they are ambitious, but they will not verifiably exploit someone to move forward. Not so for the toxic company founder who tends to show some version of Machiavellianism or a willingness to manipulate anyone around them like chess pawns in their own game of success, explains Dr Frese.
Dr Eurich cites Holmes – who is known for only seeing people for the way they could serve her purposes, and dismissing them as soon as they didn’t – as an example of what a Machiavellian behavior. “Founders like this make their employees feel valuable until they stop delivering the results that they or they need to verify their own identity and particularity,” she says.
While this trait may encompass a range of behaviors related to thwarting societal norms and expectations, at its core there is a strong antisocial component: the psychopath is for himself and for himself, and “does not co -not riot with the suffering of others”. said Dr. Frese. Often, this makes a founder totally brazen in the face of risk or danger, and even driven by it, which can work to their advantage, he adds. But, of course, that same psychopathy could quickly spawn immoral or illegal behavior in a fearless or seemingly unaware Founder of the consequences.
For example, “Kalanick’s victory at all The “cost” mentality could be indicative of psychopathy, says Dr. Eurich. Unfortunately, these “costs” were very real and unforgivable, including multiple cases of sexual harassment and abuse and class action lawsuits for unfair labor practices. And yet he forged ahead for years, demonstrating the classic psychopathic tendency to have no real moral compass.
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