Differentiating the entrepreneurial life story: investigating narrative identity in relation to business failure

Despite much research, the distinctive personality characteristics of entrepreneurs are yet to be established and the influence of personality on entrepreneurial behaviour remains unclear. This is particularly evident in our understanding of the personal response of entrepreneurs to business failure. In this thesis the Life Story Model of Identity proposed by McAdams' (1993; McAdams & Pals, 2006) narrative theory of personality formed the main theoretical approach to investigating these two related aspects in the psychological understanding of entrepreneurs. This model overcomes some of the limitations of previous personality research by permitting investigation of personality within the entrepreneurial environment and provides a wholistic and complex view of personality as expressed in the entrepreneurs' own words. The model's qualitative methodology and theoretical emphasis on personal meaning making also rendered it most suitable for exploring entrepreneurs' personal response to business failure. McAdams' (1993; McAdams & Pals, 2006) Life Story Interview was employed to explore the self-narrative identities of 40 highly successful entrepreneurs (39 males, one female). Participants were managing directors of businesses sourced from two lists of the fastest growing small to medium companies in Australia, as compiled by the Australian business magazine, the 'Business Review Weekly'. Participants were the founders of their businesses, and had been pursuing entrepreneurship for at least five years. A broad range of business sectors were represented, including computer services, manufacturing, engineering and communications. Prior to interviews, participants completed the Life Story Interview Questionnaire (LSIQ), which was an adapted form of the Life Story Interview that requested written responses to open-ended questions about the content of participants' life stories. A section requesting affective ratings for key events, derived from Herman’s (Hermans & Hermans-Jansen, 1995) Extended List of Affect Terms, was included to further the exploration of life story themes. A second questionnaire, comprised of measures of personality and a measure of psychological symptoms was also completed. During interviews, participants' responses to the LSIQ were discussed, concentrating on further investigation of the key events that defined their life stories. Findings revealed a prototypical life story of the entrepreneur, highlighting distinctive, commonly shared personality characteristics, with much of their selfnarrative identity grounded in experiences within the entrepreneurial environment. The prototypical life story contained a core theme with an agentic-type emphasis on strengthening the self, and a lesser theme with a communion-type emphasis on valuing relationships. Each of these themes comprised two further themes. The selfstrengthening theme included a redemptive theme of overcoming difficulties in a way that left the protagonist feeling stronger and more able to influence their environment, and a positively toned theme of drawing strength and confidence in one's abilities from achievements and successes. The relational theme included a redemptive theme of responding to private relationship difficulties and losses in one area by strengthening other private relationships, and a negatively toned, sometimes contaminated theme, of experiencing either private or professional relational difficulties and losses as irresolvable. The resulting prototypical life story of the entrepreneur was a story centred upon overcoming adversity and celebrating personal achievement, of confirming and boosting confidence in one’s abilities and a sense of personal power to influence their environment. Running parallel to this main storyline was a less prominent plot involving the importance of relationships, with difficulties and losses sometimes redeemed and sometimes left unresolved. To investigate the impact of business failure, participants were asked to describe their experience of business failure as a key life story event during the Life Story Interview. Additional open-ended questions explored important elements of their critical and retrospective responses. A commonly shared personal response was evidenced. Despite being strongly identified with their business at the time, the failure was evaluated in business rather than personal terms. The causes were most often attributed to a combination of internal and external factors, but business recovery was attributed exclusively to their own actions. The self-narrative meanings given to this event centred upon overcoming the business failure in a self-strengthening way as either: mastering business conflict situations; learning entrepreneurial skills; or affirming entrepreneurial self-confidence. In the midst of the failure, most entrepreneurs remained highly optimistic about their chances of success in the future, based largely upon confidence in their ability to bring about business recovery. Practised coping skills were used to manage negative feelings arising from the failure, and an active problem-solving approach was adopted. When reflecting upon their experience, there was an absence of rumination and regret about the business failure. Instead, it was regarded as an inevitable and even welcome event that provided valuable entrepreneurial learning. In making sense of the failure in relation to the rest of their self-narrative identity, most entrepreneurs were able to integrate its meaning within their larger self-story. This was done by relating the business’ recovery to a story of overcoming obstacles, or by containing the business’ failure within a story of either repeated success or sustained self-confidence in one's ability. It was concluded that these entrepreneurs shared a particular type of selfnarrative identity that was conducive to the pursuit of entrepreneurship; positively influencing their behaviour within the entrepreneurial environment and having particular relevance to how they personally responded to business failure. These findings advance understanding of the personality of entrepreneurs, and begin to inform what constitutes a constructive personal response to the event of business failure.