CMA Innovation Centre: Measuring entrepreneurial resilience in five brothersAug 13, 2014
Over the course of a decade, five brothers in Bavaria, Germany all started business ventures in the food service industry with varying degrees of success. Given their near-identical backgrounds, what are the psychological and micro-social factors that affected the subjects’ entrepreneurial resilience, ultimately leading to their success and failure?
Jessica Di Bella, Head of Mannheim Center for Entrepreneurship and Innovation at the University of Mannheim in Germany, explored this topic in a fascinating presentation in a special CMA Innovation Centre event on August 12 at the Segal Graduate School of Business.
Opening with an explanation of her interest in entrepreneurial resilience – why do some entrepreneurs thrive despite significant adversity while others fail – Di Bella related it to stories of successful entrepreneurs such as Steve Jobs, Bill Gates, and even Madonna, who had experienced risky starting conditions yet ultimately succeeded in building flourishing businesses.
The case study explores the concept of positive development in high-risk status or consistent competence under conditions of extreme stress. The brothers’ similar backgrounds provided Di Bella with a consistent test group for the study, with the three elements necessary to evaluate the subjects all present: multiple risk factors; measurement of entrepreneurial success; and a moderating effect of some kind of protection.
The five brothers’ experience as entrepreneurs had resulted in two being regarded as successful, two failing to a degree, and one who had given up on entrepreneurship after his first venture failed after six months and been in stable employment since then.
Utilizing both quantitative and qualitative methods of data gathering – including bio-data questionnaires, measurement of entrepreneurial success, resilience scales, micro-network analysis, and semi-structured interviews – Di Bella’s research revealed a number of factors related to resilience which dictated the success of the brothers. These included the support network available, personal relationship security, and adaptive and innovative capacity.
Interestingly, when conducting interviews between the individual subjects themselves and external parties to evaluate how successful they perceived the subject to have been, Di Bella discovered that the widest disparity existed for the brothers who had been entrepreneurial failures.
This showed that the wider the gap between personal assessment and external assessment, the greater the predictor of failure was. “The more adversity they faced, the more they estimated that they must be resilient and are therefore still successful,” said Di Bella.
Much of the adversity that had led to the brothers struggling revolved around personal circumstances, such as trouble in their marriages or illness. Di Bella concluded that individuals can train for all forms of resilience, but that personal circumstances are difficult to account for. “It is possible to reduce risk but you cannot predict life events – risk is about multiple factors, and you cannot prevent all life factors by building a protective portfolio,” she said.
Concluding the presentation, Ian McCarthy, director of the CMA Innovation Centre and associate dean of graduate programs at the Beedie School of Business, remarked that the research had left him with a number of key takeaways. He cited the extent of keeping fit and healthy as a factor in success and resilience; the effect of the order of birth in a family on success; and spousal commitment to supporting entrepreneurial ventures as areas in which he would like to see further research conducted.
For more information on the CMA Innovation Centre, visit http://beedie.sfu.ca/cma-centre/, or watch the full presentation on the video below.