The psychology of small business ownership seems to be an area of growing interest for researchers (1,2,3). As a business coach and consultant who has spent many years trying to improve my performance in those roles by understanding business owners better, I am naturally interested in this sort of stuff.
By way of a disclaimer: a) I have no psychology qualifications b) my own meta-research into publications in this area has been limited to reading papers that catch my eye - not really what you might call exhaustive. Even so, I feel a sense of disappointment with the premise and the results of much of this research. Not sufficient you understand for me to attempt my own doctoral thesis, but sufficient for a short blog.
Most of the research seems to take the following form: First, choose a set of personality traits for which there exist accepted tests. Second, choose some easily-measured business success criteria, such as turnover growth, profitability and so on. Thirdly, put these things into a questionnaire and get a couple of hundred business owners to complete it. Finally, use a spreadsheet or stats package to look for correlation and publish your results.
My misgivings are:
- This approach pretty much ignores market factors. You'd have to use a sample from the same market sector across a complete business cycle, or sample so many owners over that cycle that you could segment by sector, to eliminate this major determinant of success from the equation.
- The preponderance of "entrepreneurs" in the samples. Cynically I might suggest that business schools have a ready supply of these retiring creatures to hand, whereas the majority of "real" business owners a) are too busy to take part in surveys and b) have ended up runnimg a business for much more prosaic reasons, and probably wouldn't call themeselves entrepreneurs.
- The assumption, evident in the use of general personality tests, that business owners are a representative sample of the population who just happened to end up running a business. In my experience the act of starting a business is often as much a response to a psychological imperative as an economic one, and this foundation has a significant impact on the resulting business performance.
- The dismal view that business success is down to some inherent combination of personality type and natural aptitude. You will be wasting your time trying to change either of these things, and if research does not provide a basis for action what on earth is it for? (Apart from getting your PhD or MBA, I mean).
The last point is the one that troubles me most. Survey and trait-based research doesn't really shed any light on the complex problems I try to help with. There will be some flashes of the blindingly obvious (founders who set clear goals fare better than those who don't, for instance) but these don't usually go beyond basic management concepts.
What about the business owner who hires incompetents and spends her time undermining them and then complaining about how much work she has to do (because, my premise is, this gives her a sense of control and worth missing from every other part of her life)? Her business could be great (it has worldwide sales for its niche specialism) but the problem is so deeply rooted in the owner that almost all attempts to help her make changes to the business or the way she runs it are seen as threatening. This owner has had psychological support for some years, by the way. Its main effect seems to be to make her swearier.
Or the business owner who has fashioned a business from caring for an autistic son, is driven to help others in the same boat and has grown a viable market and unique solution to do this - but struggles to use a computer, holds everything in her head, distrusts accountants, distrusts the tax man, doesn't want to employ people and so has every worker as a temp. This again could be a much more successful business but the challenge is to separate the business problem from the individual, to treat the disease without killing the patient.
Don't get me wrong - I have wonderful, easy, rewarding clients as well. Clients who push me, learn quickly, apply the learning, and whose businesses surge forward as a result. Should I just focus on them, qualifying out the problem ones? I don't want to imply that this would offend some saintly sense of mission but it does seem a bit of a cop-out to simply abandon them - and actually, they are often the more interesting clients to work with (even if they are exhausting and not that profitable).
I don't have the knowledge, time or, frankly, the inclination to do it but seems to me that there is scope for some less superficial research that starts with the why - why is it that some people embark on the hazardous career of a business owner, and how does that why affect their success or lack of it.
I don't think these two things can or should be separated.
PS If you'd like to learn more about systemising and scaling your business take a look at these events.
1. The Psychology of Small Business Owners https://www.frontiersin.org/research-topics/10831/the-psychology-of-small-business-owners
2. Personality correlates of self-employed small business owners' success https://pubmed.ncbi.nlm.nih.gov/23241705/
3. An Investigation of Personality Correlates of Small Business Success https://trace.tennessee.edu/cgi/viewcontent.cgi?article=3760
