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Want entrepreneurs to work harder? Tell them they’ll fail

Most entrepreneurs – people who start their own businesses – actually identify with the business they’re running. So being told that your business, your idea that you are committed to, will be a failure can almost seem like a personal attack.

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A new study finds entrepreneurs become more committed to their business ventures when they are told they will fail, increasing their efforts to make those businesses successful.

“Most entrepreneurs – people who start their own businesses – actually identify with the business they’re running,” says Tim Michaelis, corresponding author of a paper on the work and an assistant professor of psychology at North Carolina State University. “So being told that your business, your idea that you are committed to, will be a failure can almost seem like a personal attack.”

“We wanted to see if being told that their business will fail actually gets entrepreneurs to commit even more deeply,” Michaelis says. “We were somewhat surprised that researchers had not already examined this. Most of the literature in this area is from the field of developmental psychology and hadn’t explored potential business implications. Fundamentally, we wanted to know if having an underdog mentality can motivate entrepreneurs.”

To explore the subject, the researchers conducted three studies.

For the first study, the researchers recruited 423 entrepreneurs; of those, 213 were in a control group that was not asked about a time they had been told they would fail. One hundred and seven participants were asked about, but could not recall, a time they were told they would fail. The remaining 103 participants did recall a time they were told they would fail. The researchers then asked all study participants questions designed to capture how committed they were to persisting with their new businesses.

“We found that entrepreneurs who could recall being told their business would fail displayed a deeper commitment to persisting with their business ventures,” Michaelis says.

For the second study, the researchers worked with 579 entrepreneurs. In this study, the control group consisted of 289 participants; 234 participants couldn’t remember being told they would fail; and 56 could recall a time they were told they would fail.

This time the researchers essentially replicated the first study, but rather than asking questions designed to measure persistence, they asked questions designed to measure the extent to which study participants were motivated to prove someone wrong. The 56 participants who could recall being told they would fail were asked about their motivation to prove that specific naysayer wrong – the so-called “underdog effect.” The remaining study participants were simply asked about their motivation to prove something to general stakeholders.

“The results here were consistent with the first study – recalling a time when someone told them they would fail led to increased motivation to persist with their business venture,” says Michaelis.

For study three, the researchers recruited 417 entrepreneurs. The study participants were surveyed once per month for three months. The first month’s survey served to establish a baseline, measuring the extent to which each study participant was motivated to persist with their venture by the underdog effect – a desire to prove any doubters wrong.

The second and third surveys varied slightly, but were essentially designed to assess the extent to which motivation and persistence were driven by the underdog effect. The surveys also accounted for other variables associated with motivation and persistence, such as confidence, past experience, financial benefit and passion for the work.

“The third study reinforced what we found in studies one and two – the underdog effect is a powerful motivator that increases an entrepreneur’s motivation and persistence regarding their venture,” says Michaelis. “In other words, the underdog effect leads to people working harder, focusing on their venture, and really committing to the success of their business.”

But the studies also revealed something unexpected.

“There were a surprisingly large number of study participants who had never been told that they would fail – they had only ever received positive feedback, or possibly no feedback, about their business ideas,” says Michaelis. “And we found that those study participants were less committed to their business ideas and had lower levels of persistence.

“This work offers real insight into what motivates entrepreneurs, and it raises some interesting questions,” says Michaelis.

“How do you give entrepreneurs enough support to encourage their initiative, but enough resistance to help them develop the drive they need to succeed? How can we train entrepreneurs to distinguish between doubts that can serve as motivational fuel and constructive criticism that highlights real flaws in a business plan? These are issues we can explore moving forward.”

The paper, “I’ll prove you wrong! The underdog effect as an antecedent to entrepreneurial action and venture persistence,” is published in the Journal of Business Venturing. The paper was co-authored by Jeffrey Pollack, the Lynn T. Clark II Distinguished Professor of Entrepreneurship in NC State’s Poole College of Management; Jon Carr, the Jenkins Distinguished Professor of Entrepreneurship in NC State’s Poole College of Management; April Spivack of the Hanken School of Economics in Finland; Nicholas Smith of Northern Illinois University; and Alexander McKelvie of Syracuse University.

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Modern slavery is a business decision – not an accident

Many organisations focus on compliance, reporting and audits, yet fail to build the relationships and trust needed to identify and tackle exploitation. In some cases, competitive pressures and mistrust between firms actively prevent collaboration that could reduce risks. 

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Modern slavery persists because the way global supply chains are designed allows it to remain hidden, according to new research led by Professor Glenn Parry from the University of Surrey and Dr Mike Rogerson at the University of Sussex.  The findings argue that exploitation often stems from business decisions that cut costs by pushing work further down the supply chain, leaving companies with little direct contact with workers and less visibility over how they are treated. 

Around 27 million people worldwide are estimated to be living in conditions of modern slavery, embedded within the production of everyday goods and services. While governments have introduced laws to force companies to report on risks, the research suggests that disclosure alone is not changing behaviour in a meaningful way. 

Instead, firms often maintain distance from the most vulnerable parts of their supply chains. This distance can be geographical, organisational or even digital, such as the use of algorithms that control workers without direct oversight. As a result, companies rely on indirect signals rather than engaging directly with workers, leaving serious gaps in knowledge and accountability. 

The special issue on “Modern Slavery and Supply Chain Management”, published in Supply Chain Management, brings together insights from multiple international studies across sectors including construction, social care, logistics and global manufacturing. Drawing on interviews with practitioners, workers and experts, as well as analysis of corporate reports and policy frameworks, the work examines how governance, partnerships and digital systems shape labour conditions across complex supply networks. 

Glenn Parry, co-editor of the issue and Professor of Digital Transformation at the University of Surrey, said: “Modern slavery is a problem buried in supply chain structures and it is often the result of how those chains are built and managed. When companies prioritise cost and efficiency above all else, they create the conditions where exploitation can thrive.”

The research found that many organisations focus on compliance, reporting and audits, yet fail to build the relationships and trust needed to identify and tackle exploitation. In some cases, competitive pressures and mistrust between firms actively prevent collaboration that could reduce risks. 

It also finds that partnerships between businesses, governments and NGOs can help, but only when they are built on genuine understanding and shared goals. Superficial collaboration risks becoming a tick-box exercise rather than a driver of real change. 

A major recommendation is to shift focus from reporting to knowledge. Companies need to invest in understanding their supply chains in depth, including listening directly to workers. Bringing “upstream voices” into decision making is seen as critical to designing effective anti-slavery measures. 

Professor Glenn Parry added: “If we are serious about tackling modern slavery, we need to stop treating supply chain complexity as an excuse. It is often a choice. That means it can be changed.” 

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Long-serving CEOs may weaken innovation, study finds

Companies led by long-serving chief executives may become less innovative over time unless challenged by strong independent boards.

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A new study from the University of East London has found that companies led by long-serving chief executives may become less innovative over time unless challenged by strong independent boards.

The research examined 215 FTSE 350 companies over an 11-year period between 2010 and 2021. It explored how CEO tenure and independent directors influence a company’s “R&D knowledge stock”, which is the research, expertise and technological capability built through investment in innovation.

The study published in the journal Corporate Governance found that CEOs who remain in office for many years often become more cautious and less willing to back risky research and development projects. These companies were more likely to reduce investment in innovation and long-term technological growth.

Firms with higher numbers of independent directors were more likely to continue building innovation capacity with experienced CEOs and independent directors forming an effective partnership, to combine deep company knowledge with outside challenge.

However, both experienced CEOs and independent directors become more cautious and less willing to back risky research and development projects when the company fails to meet performance aspirations, suggesting that independent directors do not have stable risk preferences.

The findings suggest that innovation is shaped not only by technology and finance, but also by leadership culture and corporate governance structures.

Author Dr Igbekele Sunday Osinubi, of the Royal Docks School of Business and Law, said: “Long-serving CEOs can bring valuable experience and stability, but there is also a risk that leaders become too cautious or too attached to existing ways of thinking. Our findings show that independent directors play an important role in encouraging companies to continue investing in innovation, especially during difficult periods when firms may otherwise retreat from long-term research and development.”

He added: “This matters beyond individual companies. Innovation drives productivity, competitiveness and economic growth. The study highlights how governance structures can influence whether firms continue building the knowledge and technologies that shape future industries.”

The paper argues that regulators and policymakers should consider governance reforms and incentives that encourage long-term innovation strategies, particularly in firms led by long-serving executives. The findings may also influence how boards think about CEO succession planning, oversight and the balance between short-term financial pressures and long-term investment.

Osinubi’s research, “Long CEO tenure, independent directors and R&D knowledge stock: the moderating effect of performance shortfalls”, was published in the Corporate Governance: The International Journal of Business in Society

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Office owners or managers, take note: Increased risk of bullying in open-plan offices

In traditional open-plan offices it is easier to notice colleagues’ shortcomings and become irritated by them. If someone gets frustrated and takes it upon themselves to “do something about” a colleague’s behaviour, and there are no clear guidelines for handling such situations, there is a risk that it may escalate into bullying. Those who are subjected to bullying lack access to a private space for retreat. 

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Open-plan offices entail a clearly increased risk of workplace bullying compared with employees having their own office or sharing with just a few colleagues. This is shown in research from Linköping University, Sweden. 

“Increased bullying is a tangible negative consequence of how you choose to organise the workplace. It’s important to highlight this, as it hasn’t previously been examined,” says Michael Rosander, professor at the Division of Psychology at Linköping University.

Open-plan offices, where many employees share the same space, have become increasingly common. Employers often justify this development as a way to use premises more efficiently and to encourage creative interactions between employees. However, research has shown that open-plan offices do not promote health, job satisfaction or productivity.  

Until now, it has been unclear whether open-plan offices also affect the risk of bullying and employees’ motivation to look for another job. Through surveys of more than 3,300 randomly selected individuals in employment in Sweden, Michael Rosander has now provided an answer. The results are published in the journal Occupational Health Science. 

Thirty per cent of those with some form of office-based work reported that they worked in a traditional open-plan office with no access to private space. Thirteen per cent worked in so-called activity-based offices, where employees spend part of their time in an open-plan environment but also have access to designated rooms for tasks requiring peace and quiet. The remainder had their own office or shared one with only a few colleagues.

For traditional open-plan offices, the survey responses showed a clearly increased risk of bullying compared with those who had their own office or shared an office with only a few colleagues. The difference remained regardless of factors such as personality traits and the extent of remote working. This suggests that the problems are indeed caused by the work environment in the office.  

The researchers’ explanation is that in traditional open-plan offices it is easier to notice colleagues’ shortcomings and become irritated by them. If someone gets frustrated and takes it upon themselves to “do something about” a colleague’s behaviour, and there are no clear guidelines for handling such situations, there is a risk that it may escalate into bullying. Those who are subjected to bullying lack access to a private space for retreat. 

Activity-based open-plan offices, by contrast, showed no increased risk of bullying, likely due to the availability of private spaces. However, in both types of open-plan office, employees were more likely to consider changing jobs. One possible explanation is that activity-based offices also involve more distractions, according to Michael Rosander.

For employers who have introduced, or are planning to introduce, open-plan offices, there are some lessons to be learned. One is to be prepared to deal with irritation and conflicts before they escalate. Another is the importance of providing rooms where employees can work undisturbed. Placing individuals with similar needs and tasks near one another may also reduce the risk of disruption.

“Traditional open-plan offices are in themselves negative for the individual, for productivity, and make people more likely to leave their job. Social interaction also suffers. So it’s worth considering how to handle it,” says Michael Rosander.

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