First published in the Sunday Times on 9th October 2016.
Various brain studies indicate that emotions rather than reason dominate our behaviour. Even in a business context, it is suggested, as many as 80% of our decisions are based not on facts, but feelings.
So, if we wish to understand their psychology, it is worth considering carefully which are the most important emotions among entrepreneurs. Founding and developing an enterprise might seem a rational exercise, but in my experience the abilities of the founders to motivate, negotiate, sell, hire and innovate are generally based more on emotions than logic and intellect.
Ambition must surely be the primary emotion of every entrepreneur — that lust for glory, the need for self-promotion and self-validation, the surging desire for worldly success. Ambition is about choosing how we live our lives; rather than let things happen to them, entrepreneurs attempt to determine their own fate and become masters of their own destiny. Some fail, while some achieve their dreams.
Ambition is not an easy taskmaster; if it remains unfulfilled, it can lead to bitterness, and it can occasionally mutate into megalomania. But it has been the catalyst for every advance for humankind since time began; apathy has contributed nothing.
Very closely related to ambition is the emotion of pride. For entrepreneurs, it is often the driving force — the wish to master a challenge, to show the world their victories, to impress others. As Ray Kelvin, boss of the fashion retailer Ted Baker, said: “I love my mum and dad so much, I think that spurred me . . . I wanted to make them proud.”
Of course it all too often deteriorates into hubris. I have seen many companies and leaders brought low through excessive praise, and a false view of their own merits. Pride is a necessary but volatile ingredient in the cocktail that each entrepreneur should swallow before embarking on their adventures.
Confidence overlaps with pride and ambition. More than almost any other emotion, it is one that should, by rights, be within our control. Yet for many it can remain frustratingly elusive, especially at that critical moment when boldness is required. Confidence is not merely the act of being an extrovert; rather it is an inner sense of self-belief that powers every entrepreneur through the inevitable obstacles and setbacks.
Since commerce began, there has been a fine line between the heroic industrialist and the “confidence man” — the former an economic dynamo, the latter a fraudster. Both have plenty of confidence — but only one is productive and a force for good.
A number of emotions, all slightly different, influence the personality of the entrepreneur. Here I refer to competitiveness, rivalry, envy and jealousy.
Every entrepreneur has relationships — both constructive and destructive — with other players in the great game of business. Alpha personalities feel the need to win. As the writer Gore Vidal said: “It is not enough to succeed. Others must fail.”
The media tycoon Richard Desmond once said: “The non-posh people like me are jealous of the posh people because they have the confidence.”
After his parents split up when he was 12, Desmond went to live with his mother in a tiny flat above a shop in north London. It was this glimpse of poverty that spurred his yearning to do well.
Three positive emotions with which almost all entrepreneurs are endowed are optimism, exhilaration and enthusiasm. You must have faith in a positive outcome if you are to embark on a start-up; and if you want to make it grow, you need to make it exciting and encourage others to jump on board — be they partners, customers, suppliers, staff, investors or lenders.
Knowing how to recruit followers is not a subject they teach in a classroom, but it is an essential skill for every business builder. And you must possess the right emotional attitude — a contagious feeling that joining your venture will prove fun and financially rewarding. I have never met a pessimist or cynic who has created a substantial business from scratch.
Of course, emotions are a product of changes in the brain, as well as experience. Neurotransmitters and hormones, from dopamine to testosterone, interact with the body’s neurochemical systems to determine behaviour. Our understanding of how these highly complex reactions underpin conscious and subconscious decisions is not sufficiently advanced to tell us exactly how the emotions arise and work.
But we do know that biology inevitably governs how we function, be it head, heart or gut. Physiology controls our emotions. We are the products of our brain chemicals and electrical impulses — memories, thoughts, feelings and moods all derive from them — and actions follow.
In my opinion, assessing emotions is a very important element when judging potential entrepreneurship. I believe that, by the age of 18, a thoughtful test measuring emotional quotient would provide a better indicator than any IQ test of those most likely to become successful entrepreneurs. The psychologists who developed such material would be providing both investors and society with great benefit.