We recently explored the toxic effects on a business that can result where people in influential positions exhibit one or more extreme versions of the psychologists’ Dark Triad of psychotic behaviours.
All three, Machiavellianism, Narcissism and Corporate Psychopathy, could be described as selfish, arrogant and demonstrations of supreme confidence.
But what about the effects on a business of their opposite, a leader who lacks conviction and confidence?
Recently, venture capital company Highland Europe, carried out research among 173 European company leaders, of whom two-thirds were their companies’ founders. The respondents were from a mix of start-ups and companies that might be regarded as scale ups.
Highland Europe, founded in 2012, invests in growing European internet, mobile and software companies but their findings have wider implications than this sector only. They wanted to find out more about how these people saw themselves and their ability to adapt to the transition from founder to CEO of their growing business.
The research found that almost half of the respondents saw the founder’s ability to effectively manage growth and their ability to implement new strategy quickly as key risks.
Interestingly, among the start-ups UK respondents were consistently less confident than those in similar European companies.
Among the challenges mentioned by the start-up group were doubts about building sales, about finding the right senior talent, about establishing the right organisational structure and about access to capital. For the scale-up group that were already on the growth track the same key issues cropped up but in a different order, with senior talent first, followed by organisational structure.
The components of lack of confidence
Lack of confidence can be the result of external factors, such as the uncertain economic conditions that have prevailed in the UK since the 2008 Financial Crash and, more recently, following the June 2016 decision for the UK to leave the EU.
As we have pointed out many times, an excess of caution has deterred businesses and investors from taking risks and investing capital in growth for some years. In other words, lack of confidence can inhibit innovation and arguably business growth.
But lack of confidence can also manifest more personally in doubts about one’s own abilities and the research found that it was considered crucial for founders to be able to adapt and change as their business grew. Many cited this as their biggest challenge along with having difficulty in staying focused on the bigger picture rather than operational detail and in delegating effectively.
Plainly, while the extreme behaviour characterised by the Dark Triad can be toxic for a business, as we found, the same is true for its opposite.
A growing business needs a confident leader who has conviction in the business, who is able to take risks, to think strategically and to manage people.
It would be unrealistic to assume the founder of a small start-up automatically has all these qualities, even where they had the entrepreneurial vision to take the first step.
There is no shame in looking around for advice and guidance, whether from a mentor or a business coach, to develop the qualities – and therefore the self-confidence – to take their business to the next level or hand over to others who can.