Researchers find that negative events at work may inspire aspirational employees to leave their jobs and pursue work as entrepreneurs.

Article: Awakening the Entrepreneur Within: Entrepreneurial Aspiration and the Role of Displacing Work Events  

Publication: Journal of Applied Psychology (2021)

Authors: S. E. Seibert, J. D. Nielsen, & M. L. Kraimer   

Reviewed By: David Facteau

Leaving a safe and secure job to pursue a business venture as an entrepreneur can be a daunting endeavor. What motivates these people to take the leap of faith? New research (Seibert et al., 2021) examines events that may motivate people to leave their employment and pursue entrepreneurship.

The Role of Displacing Events

Researchers surveyed 226 individuals working across multiple industries at two time points. They measured entrepreneurial identity aspiration, which means how much people see their future selves as entrepreneurs. They also measured discovery-oriented entrepreneurial behavior, such as identifying and developing new business opportunities. Results from their analyses indicated that entrepreneurial identity aspiration was positively related to discovery-oriented behaviors—meaning that as aspirations increased, so did discovery-oriented behavior.

The researchers also examined the role of negative occurrences at work, which they call “displacing events.” These can include failing to receive an expected raise or bonus, a cut in pay, a business idea being ignored or rejected, or an organizational disruption. Further analysis indicated that the relationship between entrepreneurial identity and discovery-oriented behaviors became stronger as employees experienced displacing events. This means that these negative displacing events may help some people “get over the hump” in becoming an entrepreneur.

Practical Implications for Organizations

The results of this study provide implications for both managers and organizations. The researchers note that for organizations, employees leaving to pursue new ventures leads to turnover costs and a loss of human capital. This could be particularly harmful if entrepreneurs were to use their creative business ideas to compete with their former organization. Further, even if people do not leave their primary employment but choose to pursue their ideas on the side, the organization risks losing the employees’ best ideas and effort.

To mitigate these potential risks, managers should recognize that displacing events may push entrepreneurs out the door. Managers can retain top talent by ensuring job security and avoiding displacing events. Further, managers should allow employees to express their entrepreneurial identity within the organization. The researchers suggest that managers can do this by fostering a climate that supports innovation and is receptive to creative ideas.