Entrepreneurial Ego

By the time an entrepreneur is setting fires to shore up a fragile sense of self-worth, the risks of letting go are too high

The restaurateur responsible for making T.G.I. Friday's a nationwide success, Dan Scoggin, was noted for eating every meal he could at competitors' restaurants, finding out what was hot, and then challenging his own staff to outdo the other guys.

What could be more appropriate for an entrepreneurial CEO than to follow Scoggin's lead and regularly light matches under employees whose creative fires have stopped burning? What could be a better way to prevent people from becoming lazy than by keeping them forever on their toes?

Nothing, unless the entrepreneur is the type of "arsonist" who lights fires in his business because he fears that unless there's chaos afoot, he'll no longer be needed. Strange as it may sound, real-world arsonists are often professional firefighters who, for a variety of reasons, have a need to try to destroy the properties that their careers are devoted to protecting. It often thrills them, in a highly disturbed psychological sense, to be in the heat of battle against a raging blaze as opposed to sitting idly in a firehouse waiting for the bell to ring. Similarly, many entrepreneurs who began their careers with nothing but healthy creative zeal become filled with dread if they sense that their company no longer lets them show their stuff by conquering crisis after crisis. Unwilling to sacrifice their creative edge to the atrophy imposed by success, those entrepreneurial arsonists avoid assimilation into the bland morass of mainstream corporate stewardship by setting fires and being first on the scene with hoses and axes.

How can you tell if the fires you set are those of the healthy entrepreneur or the unhealthy entrepreneurial arsonist? Two rules of thumb will help in your diagnosis:

Rule 1. Discern whether the pattern of fire setting is systematic or random. The entrepreneurial arsonist follows an "any fire is a good fire" pattern of causing crises, while the entrepreneur bent on preventing stagnation usually moves in a systematic manner through departments, issues, or company needs. Let's say a company founder kicks the collective butt of a sales team that's resting on laurels of 10%-a-year growth because he fears that a competitor growing at a 13% rate will soon dominate the market. Then, two weeks later, he chews out the marketing department for the same reason. More likely than not, this guy's concerned about the viability of his organization. Contrast that systematized call to arms with the flamethrower who one day explodes at the sales force, the next day reams out the human-resources department, and subsequently fires the receptionist for one-too-many cigarette breaks. This guy's smoke reflects a dangerous wildfire.

Rule 2. Determine whether the guy setting the fires is willing to let others sit and fan their own creative flames. The healthy CEO effectively motivates his employees to come up with their own innovative ideas. But consider the CEO who denigrates every suggested application for his company's product and then chastises everyone from research to sales for not developing the company's core business. That CEO is just hogging the credit for his company's growth strategies to guarantee himself a central role in a business he fears could flourish without him.

Entrepreneurial arson is more easily prevented than cured. By the time an entrepreneur is setting fires to shore up a fragile sense of self-worth or to feed an addiction to the status he's attained from running XYZ Corp., the risks of letting go of his behavior are too high.

So what to do? Simple. The solution involves both your personal life and your business life. It all comes down to diversification. Here's what I mean: First, take your personal life. Entrepreneurial arson can be more readily cured off the job than on. Anyone who sets fires at work needs to get a life. Who in his right mind would be obsessed with the minutiae of his company's internal politics, gossip, or petty status symbols, other than the guy who isn't hurrying home to an avocation, a family, or both? The sad thing about those who need to get a life--and need to substitute fire setting at work for something like firing pottery in a kiln or firing up the youth group at their local church--is that they probably have the skills to diversify into an infinite number of hobbies but don't have the guts to risk doing so. Entrepreneurial big shots are often too scared to risk abandoning their CEO persona to get down and dirty in a softball league, because all they've developed since they were playing ball in sandlots are the skills associated with business development. Having forgotten that social skills, like most talents, succumb to a use-it-or-lose-it law of diminishing returns, these guys feel safe only if they're at the office. When they're threatened with the possibility of embarrassing themselves in another arena, they'd rather burn the business down than find themselves shamefaced.

To get a life, all you have to do is accept the downside of rookiehood: bumps to your ego, bruises to your shins, and gales of laughter from those who'll watch you falter--but who will surely applaud when you finally prevail. Besides those insignificant indignities, all you get from starting a novel avocation is the potential to feel joy akin to what a child experiences when conquering a two-wheeler--in addition to saving your business the cost of cleaning up your messes.

Now consider your business life. To make a success of your business, you need to diversify there, too. Even before you start looking for start-up capital, you should start to plan for what will come after your business's first big success. OK, so it would be imprudent to ignore the needs of a start-up by planning too far ahead, but it's not unwise to imagine "what if" scenarios, since you know how readily success can induce lethargy, boredom, and other forms of malaise.

Let's call this an a prior diversification strategy, which might proceed as follows: Say you're convinced there's still room in the bakery-foods industry for a product that can compete with Mrs. Fields at the high end and Dunkin' Donuts at the low end of the market. Knowing how both of those flourishing franchises have gone well beyond their core competencies--cookies and doughnuts, respectively--as they have matured, you could plan beyond your original bakery product and have phase two of your start-up, Olestra Oreos: Cookies for the Calorie Conscious, in place before you test-market your first batch of basic doughnuts.

Whether you spin off into beneficial brownies or power pretzels, planning the follow-up to your first success--or at least having it on the drawing board--can forestall the need for you to act in a disruptive manner just to fulfill your sense of self-worth should your product end up moving like hotcakes. The bottom line: by planning in advance to set creativity-inducing fires at your bakery, you'll prevent all the dough you've amassed from going up in smoke.

Published on: Dec 1, 1996