Entrepreneurs have been found to share many characteristics with psychopaths, in a new study conducted by one of Australia’s top business schools.
Fearlessness, insensitivity to punishment and boldness are some of the characteristics shared by psychopaths and entrepreneurs.
The study, conducted by PhD student Benjamin Walker and professor of business psychology Chris Jackson from the University of New South Wales Australian School of Business, shows while psychopaths are perceived as menaces to society, the same characteristics in entrepreneurs allow them to be risk-taking and more likely to succeed in business.
The pair studied 605 participants and determined a “statistically significant” number of entrepreneurs start a business, have it fail and then go straight out and start another business because they are less fearful than the rest of the population and have less regard for the negative consequences.
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Walker told SmartCompany in a similar way, people whose psychopathic tendencies influence them negatively are often repeat offenders.
“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 says.
Walker says it’s also not surprising that many entrepreneurs like to participate in high-adrenaline activities such as adventure sports.
Walker says his research was based on the principle that people can have either functional or dysfunctional outcomes from biological psychopathic traits.
“These underlying characteristics can also lead to good qualities, with someone becoming an entrepreneur or an innovator and provide good motivation to start a business or to go out and be a leader.
“With the word psychopath, it’s actually a dimension, it’s not you are or you aren’t. Often people have some kind of dimension of these qualities,” he says.
The participants undertook a risk-taking task and were either rewarded, punished, or given mixed treatment.
“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,” he says.
These findings indicated a degree of persistence in adversity can advantage a chief executive.
“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.
“But there can be some negative consequences to it as well,” he says.
Other research has showed high-risk taking behaviour also often leads to huge losses, and chief executives likely to take risks are likely to experience high rewards but also lows.
“It’s like investments, higher risk can equal higher rewards, but there is always a risk.
“Organisations should be careful who they promote to the chief executive level… it is important the chief executive is supported by more inhibited staff members to ensure appropriate risk –taking within a company,” Walker says.
He says people who are not naturally fearless could try and adopt some of these characteristics in high-risk or stressful situations.
“Since doing the research, if I’m in an anxiety filled situation, I think about how one of these people would feel.
“They’d be completely calm, go for it and not think about the consequences and this makes them more likely to take chances,” he says.