Entrepreneurial Ego

The rapid change that characterizes the market-sensitive companies of the 1990s has obliterated the traditional benchmarks of success

Ah, these are halcyon days. Now that you've left corporate life to start your own company, you no longer need to struggle to define yourself by external indexes of status. Your entrepreneurial spirit has forged a radical change in how you work with others at your business. Titles designating which department a person works in or for and what that person does may not even exist in your company. Ain't it great to be free from the politics of structured promotions and perks?

In truth, I'm not so certain. Like it or not, when it comes to psychological gratification, the old system of demarcations that let everyone know who held power resolved one concern that is critical to self-esteem: status within a system. While not the sole--nor necessarily the best--indicator of competence, the perquisites of success, like the loftiness of one's title, the location of one's parking space, and the size and grandeur of one's office, all told a person how he or she rated. In the absence of those symbols of status within an organization, feelings of competence are often harder to attain because of the ambiguity that exists when you cannot compare where you are with some external standard of goodness.

The notion that we derive self-esteem from measuring ourselves against allegedly objective external benchmarks is well established in the psychological sciences. Formally known as social comparison theory, this body of research shows that feeling able and competent along an "ability dimension" (such as one's profession) requires some knowledge of how your performance compares with what is judged good. That is not to say that you cannot have a sense of self-worth or value as a human being without reference to some external yardstick, only that to be certain you are valued as a producer, you need a standard of performance to compare yourself against.

In a world without reference points for judging competence, ambiguity is rampant. And what's more, the rapid change, growth, and development that characterize the market-sensitive companies of the 1990s inadvertently obliterate the traditional benchmarks of success. Businesses are forced to constantly reinvent their standards of what's good or what sells. The criteria for being judged "talented" can shift as rapidly as the whims of your customers.

Decades ago the French sociologist Émile Durkheim noted that an ambiguous state of normlessness, or anomie, typically afflicted immigrant groups as they attempted to fit into new cultures. In essence, the immigrants had nothing to guide them in determining social status or worth. More than just disrupting a person's self-esteem, anomie, Durkheim found, often led to severe mental illness and, in the extreme, suicide. Tearing down office walls shouldn't cause pandemonium, but workers who no longer have universally recognized indicators that they have climbed a rung or two up the ladder of success find it more difficult to feel professionally fulfilled.

So what's an achievement-oriented person to do to feel self-worth in today's ambiguous workplace? Today businesses are ruled by knowledge and responsiveness both to customers' needs and to rapid changes in the marketplace. Consequently, holding the key to information--not to the executive washroom--connotes status. You can tell how much you matter in an organization by counting the number of questions you're asked, E-mail messages or calls you receive, and decisions you're involved in.

Knowledge has always mattered most in an organization, even in the old system. Executives who were granted status because they were related to, or kissed up to, the right people have always been known as frauds. The difference is that two decades ago, the glacial slowness with which markets changed afforded those pampered pets the luxury of dying on the job. Today, because a company's hold on a market is so ephemeral and the need for people who can help capture a customer base is so great, an inflexible executive hierarchy predicated on external indexes of power cannot be tolerated.

The bad news about the new status system is that resting on one's laurels is a thing of the past. Because constantly evolving knowledge is power, today's businesses force executives to keep climbing the so-called learning curve. But that climb is onerous only if the subject bores you. If you're challenged by what you make, distribute, or sell, then gaining new knowledge is a joy.

With its informality, frenetic activity, and constant good-natured competition, the workplace of the 1990s feels more like a playground than a sweatshop. That's good for businesses and workers if the workers have the desire to play. But if you think you can get into the game just because you own the ball or your cousin owns the stadium, forget about it.