FORBES INTERVIEW: Why Is Entrepreneurship Bad For Our Mental Health?
Entrepreneurship is the route to freedom, wealth and everlasting happiness, right? Well, the truth is that it can be for some people. For others, entrepreneurship brings stress, uncertainty, financial pressure and relationship breakdowns. There is no guarantee of success with entrepreneurship. In fact, we know that despite the money, sweat and tears invested in them by their founders, start-ups have alarmingly high failure rates. It’s no wonder, then, that many entrepreneurs struggle with mental health issues. In her new book The Entrepreneurial Myth, Louise Nicolson, an entrepreneur, coach and consultant, challenges some of the illusions that abound when it comes to entrepreneurs. In this Q&A, she explains why poor mental health, in particular, is a major issue for entrepreneurs and the implications of this for organizations that encourage their people to have an “entrepreneurial mindset”.
Sally Percy: Why do entrepreneurs tend to suffer more with mental health issues than people in paid employment?
Louise Nicolson: Research reveals that entrepreneurial work is more uncertain, more complex, more stressful, more pressured and less lucrative than corporate work. Nevertheless, entrepreneurial success is oversimplified, failure is romanticized and churn – the rolling pace of business creation and insolvency – is celebrated. There is a cultural clash between this entrepreneurial myth and the brutal, messy reality of a small business.
One of the first studies to link higher rates of mental health issues with entrepreneurship was led by Dr Michael Freeman at the University of California. He found that 49% of the sampled US entrepreneurs reported mental health conditions. Furthermore, 30% of sampled entrepreneurs experienced depression compared with 15% of the study’s non-entrepreneurial control group.
Percy: Do you think people go into entrepreneurship with expectations that don’t live up to reality? Why is this?
Nicolson: Many people enter entrepreneurship for freedom, money and a dash of glamour. Sometimes there are glorious surprises and triumphant stories, but this isn’t the real business experience for the majority.
Compare the entrepreneurial myth that is promoted through politics, education and the media with the real-life, first-person experience of running a business. In newspaper pages, the entrepreneur fizzes with energy. He or she is bold and creative, comfortable with risk and uncertainty.
But in the cold light of day, the founder at the heart of real business is just a man or a woman. Invisible to most, he or she shoulders grueling hard work and the gnawing anxieties that come with running small business.
Percy: What is the truth about entrepreneurship?
Nicolson: The truth is that success doesn’t always involve a sale. There is an assumption that a proper entrepreneurial business involves a glossy multi-million-dollar exit. The truth about the entrepreneurial journey is more interesting – and satisfying – than that.
Also, the truth is that success takes time. There is an assumption that an entrepreneurial business is a high-growth business. But bursts of rapid growth often follow years in a market. We expect entrepreneurs to move fast, shake things up and break things, to work from accelerators, to hustle, crush it and kill it. But what is the rush? Let’s slow down, stretch and think. A more reflective, contemplative approach would refine business decision-making.
And the truth is that failure isn’t always personal. Attitudes to failure burden and isolate entrepreneurs. Statistically, most entrepreneurs and businesses will fail, but systematic study of this failure is muted. Ironically, systematic analysis of business failure would empower more businesses to succeed.
Percy: Which lessons could leaders in large organizations learn from the mental health challenges faced by entrepreneurs?
Nicolson: If your business nurtures opportunities for entrepreneurial thinking and innovation, the entrepreneurial myth is at play. Many people claim that entrepreneurs are psychologically different, marked out from the crowd by distinct traits. The label is permanent: once an entrepreneur, always an entrepreneur. Others reject this trait theory and consider entrepreneurship as an activity completed by different actors, at different times. Like basketball, entrepreneurship is a game you can start, stop, then start again later if it suits. So, how do your employees play? Does your business value entrepreneurial behaviours? Where are the invisible lines for what you want the team to do and how you want them to act? Entrepreneurship is an expectation, an action, and a decision. Just as creativity or safety or fiscal responsibility can’t be siloed in healthy businesses, you won’t find entrepreneurship buried in the guts of a special individual. It is cultural.
So, learn from the entrepreneurial myth. Is your business broad enough for struggle and failure? Do you speak a business language that includes “but”, “not too good” and “help”? “Resilience” risks becoming a buzzword that fizzes through corporate culture without settling. At first glance, it is a defensive construct to bolster people under pressure – sell a personal solution to mitigate an institutional pressure. But resilience is really about becoming stronger or more resourceful as a result of experience.
Finally, does your success rest on entrepreneurial shoulders or a community of talents? Moving from your star performer as hero, to the team as hero, is a delicate but essential strategy. It is the first step toward redesigning an entrepreneurial business for the next generation.