Can you separate yourself from your business?
Can you separate yourself from your business?
Paul Bennett learned the dangers of overidentifying with his business one day in 2003. Coping with the failure of a company that had absorbed every amp of his mental energy for seven years, he popped one too many Xanaxes and his Infinity J30T became one with the guardrail of California's Highway 60.
Bennett, now 55, had launched the peer-to-peer network RoomsOf.com in Joshua Tree, California, in 1996. Back then, he had envisioned millions of subscribers roaming virtual rooms of their own design, enjoying one another's music, art, books, and conversation and bartering their wares. Big-shot strategic partners like Barnes & Noble (NYSE:BKS) and Playboy (NYSE:PLA) would use the network as a distribution channel. "My mind was on fire," Bennett recalls of the company's beginnings. "I was living, breathing it every second."
Bennett invested all of his personal savings in the venture, hundreds of thousands of dollars. He put in 14-hour days, controlling every aspect of the business. On a moment's notice, he flew to Germany to investigate the 3-D software that had sparked his initial zeal. He built the portal and maintained the network nearly single-handedly. A devotee of film, he approached Leonardo DiCaprio's Web-design team as a potential partner. A lover of music, he courted the retail chain National Record Mart in Pittsburgh for two years--even though the company president never climbed onboard.
The money dried up in 2003. And as the walls of RoomsOf.com came tumbling down, Bennett crashed too. "Each day, it seemed that it took more Xanax to accomplish less and less," Bennett says. "One day, I was driving on this highway and I was very, very groggy. The next thing I knew, I heard the loudest noise. I shot awake and realized what the noise was: I was driving along the metal guardrail. It was like a can opener, slicing open the right side of my car."
The cause of his despair? "I couldn't separate myself from my business," he says. "When it failed, I failed."
Not all founders fall as hard as Bennett when their businesses go south. But the state of mind that sank him--overidentification with his company--is common to the breed. Entrepreneurs are up to their elbows in every aspect of their businesses. They create their products or services and make most of the decisions about bringing them to market. They determine the company culture, hiring people who share their values, and even decorate the offices to suit their own tastes. When their "baby" is still a gleam in their eyes, they name it--often after themselves. Indeed, only parents rival entrepreneurs in attachment to their conceptions.
Company creation is a birthing process, says Randall P. White, a principal in the Executive Development Group, in Greensboro, North Carolina, and co-author of Breaking the Glass Ceiling. "For guys, it's the closest thing they have to the maternal feeling of having a child. The organization becomes a projection of themselves, which is why it's so difficult to hand it off to more seasoned management. You want to say to someone like that: 'Get a life.' But they would say, 'What I'm doing is my life."
Overidentifying with your company can lead to a kind of unhealthy narcissism, where the founder must see the business--and himself--as grand in order to feel complete.
Many companies, of course, benefit greatly from the mental and emotional investment of their creators. They thrive on the founders' passion and on the passion of like-minded employees. Their products or services--born of extreme attention to detail--are often of the highest quality. And founders with strong personalities may imbue their progeny with distinctive identities that can be exploited in marketing.
But there's a downside, too. Specifically, an entrepreneur who identifies too strongly with his business may equate its fortunes with his own worth. In extreme cases, the overidentification can tip into a kind of unhealthy narcissism, where the founder must see the company (and hence himself) as grand in order to feel complete. The flip side is that he also sees the company's flaws as his own. "It's not, 'The third quarter was bad and I feel terrible about it," says Howard Book, a psychiatrist and organizational consultant based in Toronto. "It's, 'The third quarter was bad and there's something wrong with me." That kind of thinking can strangle growth by reducing the tolerance for risk. If mistakes devastate you to the core, why take the chance?
An overidentifier may also conflate controlling her business with controlling her life--and lo, a micromanager is born. "One reason these people often refuse to delegate is because they want the company to express their sense of what's right," says Michael Maccoby, president of the Maccoby Group, a management consultancy in Washington, D.C. "But people who make the business an extension of themselves can't grow because they can't give up anything to anyone else--it's all them."
Perhaps the greatest danger of equating yourself with your company is that it can lead to an unwillingness to incorporate elements that don't look like you. Homogeneity is bad for the gene pool; yet entrepreneurs routinely hire people who replicate their own strengths and weaknesses, sometimes using phrases like "not a good cultural fit" to disguise their true feelings.
David Dotlich encountered that particular trap while running CDR International, a $20 million executive-development firm that he sold to Mercer Delta two years ago. (He is now president of Mercer Delta Executive Learning Center, in Portland, Oregon.) Dotlich admits that for some time he valued only the opinions of those managers cast in his likeness: entrepreneurial types focused on growth. He saw himself as a marketing and client- development guy, and so he built a business where marketing and client-development guys ruled.
Many years, many near deadline misses, and many cost overruns later, Dotlich finally created an environment where both top- and bottom-line managers could challenge him, and he would listen. "If you want commitment, you've got to give people voice," Dotlich says. "I lost good people from not knowing that. Of course, at the time I thought they were bad people."
The true acid test comes when an entrepreneur is urged to hand the reins of leadership to someone else. At that point, many CEOs still feel as though they are their companies. But they must accept that their companies are going to stop feeling like them. "If you're going to grow a company you've got to be able to let go," says Maccoby. "Bill Gates doesn't think Steve Ballmer is like him, and Bill Gates is not interested that Microsoft (NASDAQ:MSFT) is Bill Gates. He's interested that Ballmer creates."
So how do you avoid excessive identification with your company? One approach may be to minimize the time you're alone at the top. Develop internal talent by all means, but also recruit senior managers who haven't imprinted on you, as baby ducks do on their parents. Set up mechanisms to keep your own role in perspective, such as 360-degree feedback in which a partner, a second-in-command--or even a coach--will warn you if you're taking things too personally. And adopt team decision making from the get-go. Collaboration is an antidote to overidentification.
"What's most important to avoid overidentifying is to be completely honest with yourself--to listen to your voices of doubt," says Bennett, who's taking a breather from entrepreneurship to consult as a Web developer. (He still dreams of resuscitating RoomsOf.com.) After all, if the failure of your company means the failure of you, you're going to do your damnedest to pretend that all's going swimmingly, even when it's not. Bennett says that had he listened more closely to his own doubts he would have spent less time obsessing about his product and more time renegotiating the contract with his software licenser to come up with a better revenue model.
You also might take a page from serial entrepreneurs. Indeed, serial entrepreneurs may be the antithesis of overidentifiers. That's because they get their thrills not so much from the thing created as from the act of creation. "I intend to create companies until I die," says Nathaniel David, 38, who is on his third biotech firm, Kythera Biopharmaceuticals, based in Woodland Hills, California. "I don't think I identify really strongly with the companies I create," says David. "I resonate with teams of people. And so I define myself based on the mission and the team as opposed to the thing."