What would likely stop someone from starting a new venture? If you ask people this question, chances are the answer would be “fear of failure.”
But when Ivey Professor Rob Mitchell asks this question of entrepreneurs, he gets different responses. “In some cases fear of failure can actually be a driving force, leading to action rather than inaction,” he says.
Mitchell holds the Donald G. and Elizabeth R. Ness Fellowship in Entrepreneurship. Existing research on fear of failure tends to focus on what motivates individuals to not act on an opportunity, rather than what might lead them to act. In two recent studies, Mitchell focused on fear of failure and its role in entrepreneurial action. The question for Mitchell was this: when does fear of failure inhibit the likelihood to act, when does it enhance it, and what is the role of hope in differentiating between inaction and action?
In the first study Mitchell and co-author Dean Shepherd surveyed and collected data from 120 CEOs of technology companies. The researchers identified three separate fears of failure: fear of devaluing one’s self-estimate, fear of upsetting important others, and fear of having an uncertain future. They found that entrepreneurs reacted to these different fears in different ways.
For example, entrepreneurs who have the hope that stems from startup experience and a strong belief in themselves, were not deterred by a fear of failure related to upsetting people with whom they have significant relationships. In fact, they were more likely to act on an opportunity. On the other hand, the fear of devaluing one’s self-estimate was likely to prevent an entrepreneur from acting, even when startup experience was high.
The study underscores the importance of hope stemming from experience and self-belief in entrepreneurs. “We can’t get rid of fear of failure among potential entrepreneurs,” says Mitchell, “but we can help give them hope by giving them experiences and teaching them to increase their self-knowledge.”
Mitchell recently teamed up with James Hayton, Gabriella Cacciotti, Andreas Giazitzoglu, and Chris Ainge, a PhD candidate at Ivey, in a study that won a research award at the Babson College Entrepreneurship Research Conference. The researchers developed a framework to help understand the cognitive underpinnings of fear of failure. “Clearly there are many people for whom fear of failure leads to inaction, but that’s not always the case,” says Mitchell. “Why is that not always the case? That’s what we were seeking to understand.”
The researchers conducted interviews with 36 subjects from the UK and 30 from Canada, some who were active entrepreneurs and others who were emerging. From these interviews they developed a framework that began with a set of external fears, and then moved through a cognitive process that ultimately led to action or avoidance of action. “Through this framework we’re trying to tease out all the factors that lead to action in some cases where there is a fear of failure, and not in others,” says Mitchell. “We’re trying to get a sense of what’s going on in an individual’s mind.”
People respond to threats in different ways, depending on a number of factors, such as how they evaluate the threat, the emotions they have, and their beliefs about themselves. Some respond by repressing or ignoring their feelings, or by simply procrastinating. Others will seek out social supports, or engage in learning or problem solving to deal directly with their fears. Ultimately all these factors work together in an integrated framework that connects sources of threats, internal evaluations, positive or negative feelings, response strategies, and ultimate outcomes.
A key implication of the study is that fear of failure does influence behaviour, but not always in the anticipated direction. In some cases, those who experience fear devote more effort to achieving their goal, rather than simply avoiding it. This research helps entrepreneurs understand the cognitive process involved, so they can engage their fears in a positive way, sometimes leading to action and ultimately well-being.
Another big contribution of this study is that it sets the stage for further research. “Cognition is not an isolated process, but is really situated in a larger social context,” says Mitchell. “With this research we now have a better understanding of what that larger social context might look like for fear of failure in entrepreneurship.”
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