Why Do Good Entrepreneurs Do Bad Things?

Eight Tips for More Effective Generative AI Prompts

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By Daniel Butcher

Academy of Management Scholar Herman Aguinis of the George Washington University School of Business, one of the most influential management professors and researchers, said creating prompts is the key to using ChatGPT and other generative-AI software effectively. When users input prompts that lack specificity and crucial contextual information, generative-AI platforms generate too many, too few, or vague recommendations and results that aren’t useful.

The following guidelines were designed by Aguinis and coauthors Jose Beltran of Rutgers University and Amando Cope of the George Washington University to give leaders tools to improve their ability to write AI prompts and generate more precise, relevant responses:

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1. Clarify the topic or issue:

Specify the particular area that you’re inquiring about (e.g., recruitment, diversity, or performance management). State the question or problem clearly. For instance, “What are best practices in recruitment for tech startups?” is more specific than “Tell me about recruitment.”

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2. Provide relevant organizational context:

Include details about the industry, company size, region, or any specific policies that may apply. Mention any unique organizational culture or constraints. “Given that we are a mid-sized software company with a diverse workforce, how should we structure our diversity and inclusion initiatives?” or “How can we tailor our training programs for our Gen Z employees?”

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3. Use precise and standard terminology:

Employ clear and specific terms to guide the model and avoid ambiguity. Use standard language that aligns with industry best practices. For example, “How can we enhance our employee value proposition (EVP) to attract top talent?”

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4. Indicate the desired outcome or action:

Explain what you hope to achieve or the recommendation you seek. Specify if you need a strategic overview or tactical steps. “What strategies can we implement to reduce employee turnover by 10% in the next year?”

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5. Request evidence-based recommendations if needed:

Ask for supporting evidence, research, or citations if you need substantiated information. Ask for case studies or examples to understand the practical applications of certain strategies. You can ask, “Can you provide a case study, research study or paper, expert testimonial, or a citation from an authoritative source, that describes a company that successfully revamped its performance management system?”

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6. Adhere to established best practices:

Adhering to best practices mitigates the need for costly and time-consuming corrective measures, optimizing operational efficiency and resource allocation. Ask ChatGPT to give detailed recommendations based on established best practices in a specific field and emphasize critical strategies and principles for achieving an optimal outcome.

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7. Maintain confidentiality:

Don’t sharesensitive or personal information about employees or the organization. Use general or anonymized terms if describing confidential scenarios.

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8. Engage in follow-up communication:

Ask follow-up questions for clarification or more information. Provide feedback if the initial response needs refinement. Take an interactive prompting approach by asking multi-step questions (10 to 20 iterations). Approach ChatGPT as though you are talking with a coworker.

Source: “How to use generative AI as a human resource management assistant,” Organizational Dynamics, Vol. 53, Issue 1, January–March 2024, https://doi.org/10.1016/j.orgdyn.2024.101029

Pay Gaps Undermine Diversity and Inclusion

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By Daniel Butcher

Lack of pay equity can undermine an organization’s efforts to improve diversity and hurt the effectiveness of the leadership team.

Academy of Management Scholar Carol Kulik of the University of South Australia said that her research has found that in organizations that had pay gaps within their executive teams, as organizations added more women to executive teams, the companies’ financial performance actually went down.

“In other words, the firms are shooting themselves in the foot, as they’re trying to have more gender diversity in the senior team, but they simultaneously have this gender inequality in pay,” Kulik said. “They are sending a signal to the leadership team: ‘We’re putting women on the team, but we don’t value them as much,’ so as a result, the team doesn’t operate as effectively as it should.

“The leadership team isn’t able to take advantage of the gender diversity that it has,” she said. “I’m really proud of that research, because we often think about gender pay gaps as being a problem for women, but our research shows that gender pay gaps are a problem for women’s employers, that when they have gender pay gaps at the top, they’re actually making their whole executive team function less effectively.”

Women tend to be paid less than their male counterparts in the same leadership group, regardless of the quality of their respective performance. Kulik and fellow researchers suggest that the voices of these underpaid women exert less influence on the leadership team’s decisions and activities. Unheard and discounted, the women become demotivated and less engaged in the leadership team.

“It’s actually an interaction effect, so it’s not the gap itself that lowers performance; rather, it’s the exacerbating effects of the gap as you add more women to the team,” Kulik said. “So if you have one woman on the team, you’re probably not going to see that drop quite as strongly.

“But the more women you have on the team, the clearer it becomes that this is a function of gender, and not one person having less skills or less experience, the more it becomes clearly a gender gap,” she said. “And so that’s when it becomes a problem for the organization.”

A sample of Kulik’s AOM research findings:

• Keeping Older Workers Engaged
• Engage Me: The Mature-Age Worker and Stereotype Threat
• Aging Populations and Management
• Physical Environments and Employee Reactions: Effects of Stimulus-Screening Skills and Job Complexity
• Relations Between Situational Factors and the Comparative Referents Used by Employees

Gender Diversity in Senior Leadership Boosts Corporate Citizenship

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By Daniel Butcher

Organizations don’t always appreciate the value that gender diversity in leadership roles can bring. Academy of Management Scholar Carol Kulik of the University of South Australia said that organizations have been reluctant to increase gender diversity in their senior leadership.

“We’ve put a lot of regulatory pressure on organizations to increase gender representation in senior levels.” Kulik said. “Some organizations respond to that pressure by doing the minimum; they’ll make a couple of appointments and then they are ‘one and done’ or ‘two and through.’

“However, having women in the leadership team can deliver major benefits to organizations,” she said. “We know that organizations that have more gender diversity in senior leadership are better corporate citizens.

“They’re less likely to engage in unethical behavior; they engage in more philanthropy and corporate social responsibility; they have smaller gender pay gaps; they offer more employee participation; they actually become better organizations.”

The effects of diversity in senior leadership aren’t as straightforward as many assume.

“It’s not because the women are so good on their own; it’s because anytime you have a decision-making group that has visible demographic diversity, they’re sitting around the boardroom and see there’s some men and there’s some women, the group acts differently,” Kulik said.

“The group automatically assumes that there are some hidden differences that they need to explore; they ask more questions, and they consider more solutions; they look at more data,” she said. “So they make more thoughtful and better decisions—it’s a really powerful effect.”

Kulik said that if leaders make organizations more inclusive and better for women and people with cultural and racial variations, then they’re actually creating better organizations.

“We see the same sorts of beneficial effects of diversity in any kind of decision-making group,” Kulik said. “And because of trickle-down effects, increasing diversity at a senior level increases diversity at lower levels too.

“So choose any level to start with and increase diversity at that level,” she said. “You’ll soon see more diversity at other levels and you’ll create a more inclusive organization.”

A sample of Kulik’s AOM research findings:

• Keeping Older Workers Engaged
• Engage Me: The Mature-Age Worker and Stereotype Threat
• Aging Populations and Management
• Physical Environments and Employee Reactions: Effects of Stimulus-Screening Skills and Job Complexity
• Relations Between Situational Factors and the Comparative Referents Used by Employees

Two Creators Working Together Are Better Than One

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By Daniel Butcher

There are many examples of creative and productive partners, including John Lennon and Paul McCartney, the Coen brothers, Warren Buffett and Charlie Munger, Steve Jobs and Steve Wozniak, William Procter and James Gamble, Bill Hewlett and Dave Packard; the list goes on and on.

Academy of Management Scholar Bess Rouse of Boston College said that people who create together engage in intimate creative interactions that lead to a shared interpersonal boundary—“I created it” becomes “We created it.” This shared interpersonal boundary influences creativity by forming a closed, safe space in which duos can explore divergent ideas and navigate creative blocks.

“We know a lot about team creativity, and we know a lot about individual creativity, and one of the things I was really interested in exploring is this idea of two people working together and the balance that happens in that space,” Rouse said. “You look at a lot of successful, creative people in the world, and they’re often working in pairs, and it’s either a very explicit pair or a well-known person who works with a shadow person.

“It might be a husband and wife, or it might be a more dominant person and a secondary person who are working together,” she said. “That creative space is really special, because you can challenge that person and they’re trusted, and it’s in this bounded space where you develop the sense of a shared interpersonal boundary, where you feel very connected to this other person, and so they’re able to challenge each other and get some of the benefits of having an outsider voice.

“Yet the trust and the support are built into the relationship as well, and that seems to be a really powerful dynamic for developing really high-quality creativity and sustaining it over time.”

An example that Rouse cited in an Academy of Management Review article is from Michael Lewis’s book, The Undoing Project: A Friendship That Changed Our Minds, on social psychologists Daniel Kahneman and Amos Tversky.

“They were social psychologists very well known for doing their work together, and Lewis does a really good job of fleshing out the sorts of tensions in that kind of relationship, but they’re also a very powerful example of two people collaborating and working together successfully and bringing out the best in each other over time,” Rouse said.

The “Lone Genius” Myth Overshadows One of the Partners

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By Daniel Butcher

Professional creative partners—such as Lennon and McCartney, Rodgers and Hammerstein, the Coen brothers, and Jerry Seinfeld and Larry David provide evidence that the pair is the primary creative unit. But countless examples show when one of a pair gets more credit than the other—think Duke Ellington and Billy Strayhorn, Dave Chappelle and Neil Brennan, Simon and Garfunkel, as well as whoever was the wind beneath Bette Midler’s wings.

Academy of Management Scholar Bess Rouse of Boston College said that many organizational stories feature duos who create together:

• Steve Jobs and Steve Wozniak propelled the personal computer revolution.
• Sergey Brin and Larry Page provided new ways to find information through Google.
• Ben Cohen and Jerry Greenfield shifted our expectations about ice cream with flavors such as Cherry Garcia and Phish Food.

Such creative pairs often start their own companies, but when they work within organizations, they change them.

“We have this very this myth of the lone genius—this is woven through the creativity literature where we really want to assign credit to one person,” Rouse said. “This idea can be very rupturing to a creative dyad, if somebody’s trying to assign more credit to one than the other or saying, ‘This is really that one person’s idea—that other person didn’t do very much.’

“Our societal and organizational incentives—both financial rewards and recognition—are generally not aligned well with this idea that we actually do creativity as a very social process,” she said. “It isn’t just in entertainment and business; also in medical fields, an important question is, ‘Who came up with what discovery?’ and we’ve gotten a little looser on attribution of credit, being able to say, ‘This team of people came up with this discovery,’ but often you will hear people still continue to pick apart who did what and say, ‘That was really this one person’s idea, and this other person was just helpful.’

“I don’t think we’ve figured out a very good way of rewarding or acknowledging the power that happens in a group or particularly in a dyad around creativity—we still really want to assign ownership or credit to one person.”

In some cases, different personality types determine which half of a duo is more celebrated by the media.

“You definitely see these examples where there’s one person in a duo who becomes a media darling, and sometimes this is by choice, when one person likes being in the spotlight more than another person, and they’re willing to fly under the radar, like Steve Jobs and Steve Wozniak,” Rouse said.

“You can think about social dynamics there, and in some situations, one person loves being in front of the camera and getting those kinds of accolades, and another person would prefer to be in the background,” she said.

“But sometimes it isn’t an individual choice—that is, there are other factors that come into play that shape who we pay attention to.”

Taming Toxic Workplaces

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By Daniel Butcher

If you work for a bad boss at a dysfunctional or toxic organization, you can either find a new job or learn to cope with stressful conditions. But if you can get middle managers on your side, then you might even be able to start changing the toxic culture.

Academy of Management Scholar Bess Rouse of Boston College, who coauthored an Academy of Management Journal article with William Kahn of Boston University on this topic, said that toxicity appears in organizations as intolerance, bullying, narcissism, and other forms of destructiveness that demoralize employees and undermine organizational success. Senior leaders often perpetrate toxicity or fail to stem destructive behaviors.

“How do the people working underneath these intolerant, narcissistic, or destructive leaders respond in these toxic situations?” Rouse said. “It isn’t uncommon for me to talk to somebody who feels like they have one of these toxic leaders that they’re working under, but they don’t always have an idea of how to handle it.

“One option is to just leave, but we don’t always have that option to just leave, so then we think about, ‘How do we want to be? What kind of middle manager, if we’re in that position, do we want to be?” she said. “Do we want to be somebody who protects ourselves and has that toxicity cascade down the organization, or do we want to be somebody who buffers our employees and makes them feel protected?

“There are different ways of thinking about coping with a toxic workplace; we talk about this as workarounds for how you think about responding to those toxic leaders.”

Toxic organizations drain workers’ personal agency, undermining their capacity to act independently and make choices.

“Leaders’ toxic behaviors such as intolerance, bullying, narcissism, and destructiveness are all red flags, and we can be good leaders without having those behaviors,” Rouse said. “What we saw in that study was that these weren’t bad people—they were driven by anxiety about a lot of external challenges that were happening in the organization, and they just managed that anxiety by belittling other people and diminishing them.

“Obviously it wasn’t the most effective way, but that was their way of dealing with that pressure, and then we also found that that stayed in place because the senior team colluded around that, essentially, and no one stepped up and said, ‘We can’t keep behaving this way,’” she said. “It was actually the middle managers, those people who were better at shifting from absorption to differentiating among team members, which ended up challenging that structure in that type of toxic organization.

“Especially when that that top leadership team has become very insular and supporting of one another in a way that there are no new voices coming into that senior team, then the middle managers are left to have to do that that work of changing the toxic organizational culture.”

How Teams Achieve the Coveted State of “Group Flow”

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By Daniel Butcher

Too often, teams in sports, music, and business fail to gel for many reasons. Sometimes, though, teams achieve “group flow,” when interactions seem effortless, and team members contribute ideas and complete tasks in synchrony to reach peak levels of collaborative performance.

Academy of Management Scholar Bess Rouse of Boston College said that team members contributing swiftly and additively—extending a prior contribution, is crucial for creating a sense of momentum. Increasing momentum, in turn, influences changes in emotions, thought processes, and behavior that result in group flow.

“The delicacy of group flow makes it very hard to maintain,” Rouse said. “When we’re theorizing about it, we’re really careful about this idea of coming in and out of group flow, and that it is very hard to sustain over time.

“When you’re thinking about it in the context of a group at work, in particular, it’s helpful to think about things like, ‘How do we focus our attention on each other and keep that momentum going?’—so you could imagine that a lot of interruptions are problematic in that sense,” she said.

“If somebody is interrupting you, or you don’t have dedicated space, it’s going to be very hard to get into that sense of group flow.”

Rouse and her research colleagues theorize that a lot of the factors that contribute to good group functioning, such as feeling comfortable in the workplace and feeling trust from senior management and colleagues, help get individuals and, by extension, teams in that flow.

“When we think about this state of flow at the group level versus the individual level, the idea that this is something like improv is instructive—responding to a team member by saying ‘yes, and…’ contributes to the idea that you’re building on each other,” Rouse said. “You actually want to be there for that purpose, and you want to build on other team members’ ideas.

“And this can be difficult in the context of organizations, because we have political motivations; we have our own agendas,” she said. “We have different things we’re doing at work that hopefully are related to the work assignments or objectives but may be actually getting in the way of you feeling that necessary trust and willingness to build on other people’s ideas.”

Why Some People with Mental Disorders Thrive as Entrepreneurs

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By Daniel Butcher

Symptoms and traits associated with certain mental disorders, including attention deficit/hyperactivity disorder (ADHD), bipolar disorder, dyslexia, and autism, may help entrepreneurs and other businesspeople succeed, noted Academy of Management Scholar Dean Shepherd of the University of Notre Dame.

Shepherd said that conditions that might be seen as a negative, particularly in employment, can sometimes be an advantage in entrepreneurship.

“Some mental disorders are perceived to negatively impact reliability in traditional nine-to-five employment but can actually be an asset in entrepreneurship,” Shepherd said. “Research has found that people with dyslexia tend to have weaker aspects in their left hemisphere of their brain, but their right hemisphere is stronger, and so therefore they can enter entrepreneurship and be successful in it.

“We have the statistics to say that the people with dyslexia are more likely to become entrepreneurs than the general population—in fact, it’s true for many groups who feel like they’re constrained in being promoted in corporate employment turned to self-employment or entrepreneurship,” he said.

“That includes minorities, marginalized groups, and people with all sorts of disabilities, for example, women and immigrants, because they feel like they have constraints or face discrimination in the workplace and that they don’t have those as much in entrepreneurship.”

Research has found that people with ADHD are more likely to become entrepreneurs.

“People with ADHD are more prepared to engage in risk taking, they’re more proactive, and they’re more innovative, and we also found that people with autism are actually getting used by companies engaging in software testing, because they have some advantages in being able to test software,” Shepherd said.

“Entrepreneurship may cause some mental disorders through high stress or loss when a business fails, which can be an important point to consider when deciding on your career path, but people with disorders are also drawn to entrepreneurship,” he said.

Disabled U.S. Veterans Are Finding Success as Entrepreneurs

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By Daniel Butcher

A higher percentage of disabled U.S. military veterans become entrepreneurs compared to the general population due to their experiences both before and after getting injured, according to research by Academy of Management Scholar Dean Shepherd of the University of Notre Dame and his colleagues. Most of the disabled veterans returning from Afghanistan and Iraq who became entrepreneurs did so for two main reasons.

“The first reason is they felt that following orders were the things that almost got them killed, and what they wanted to do now was to run their own businesses where they were the boss and they weren’t following someone else’s orders,” Shepherd said. “There’s a mental aspect here that causes them to say, ‘I cannot work with someone who’s telling me what to do—I must have that kind of freedom and independence.’

“And in a related issue, they spent so much time in hospitals being told what to do by doctors and nurses that, again, they had this strong desire to become entrepreneurs because they could follow their own orders,” he said. “And the other thing was, because of their disabilities, they still had a lot of medical work that they needed to go on, but also sometimes they’ve had traumatic headaches and different symptoms, which meant that they couldn’t be regular about when they could attend and perform work.

“And under those circumstances, an entrepreneurial career gives them the freedom and flexibility about when they work, and they can work when they’re feeling good—they can work around their medical visits and things like that—and so that’s why entrepreneurship was a good career for those people.”

Entrepreneurs’ Taboo F-Word

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By Daniel Butcher

There’s an F-word that used to be taboo among entrepreneurs and researchers who study them: failure.

Academy of Management Scholar Dean Shepherd of the University of Notre Dame said that when he was a doctoral student at Bond University in Australia teaching entrepreneurship to undergraduates and MBAs, the assigned texts on entrepreneurship rarely mentioned failure.

“On the one instance that one of them did, the textbook said, ‘Entrepreneurs don’t fail—businesses do, but entrepreneurs are just motivated to try again,’” Shepherd said. “Then one day, I got a phone call from my father, and the family business that he’d created and run as long as I’d been alive was failing badly, and I said, ‘You have to close it down,’ and that caused him and me great distress and anxiety.

“And so it felt funny going back into the classroom and trying to encourage everyone to become an entrepreneur and not be able to say, ‘There is a chance that it’ll fail,’ and also not give them the tools to say that, if you do fail, this is how you cope with it,” he said. “I waited for quite a few years before I wrote a paper about it, and I went into the psychology literature on bereavement and grief, because there, psychologists had tools to help people overcome grief.

“And I thought, ‘My dad’s reaction wasn’t as bad as losing a loved one, but in some ways, it’s still grief, where grief is the negative emotional reaction to the loss of something important.”

Some entrepreneurs even call the business they start—or help launch—their baby. Their ventures are entwined with their own identities.

“When people ask them, ‘What do you do?’ they say, ‘I’m an entrepreneur,’” Shepherd said. “Are you still an entrepreneur once your business fails?

“And so the psychology literature really gave us some good tools to say that maybe you do a bit of grief work; you talk it through with someone, and as you come up with a story for why it failed, then it makes it a little less painful,” he said. “The negative emotional reaction can diminish.”