Burnout is a complex phenomenon that affects individuals differently and can serve as a significant threat to organisations and investors with significant capital at stake. Stress can be expected, but at what point does it turn into a material risk, known as burnout? What are the antecedents to burnout? How and when should this be accounted for?
Stress is a normal physiological and psychological response to perceived threats or challenges in one’s environment. It can be acute (short-term) or chronic (long-term) and can manifest in physical, emotional, cognitive, and behavioural symptoms. Stress can be manageable and can even be beneficial when it motivates one to take action.
Burnout, on the other hand, is a more severe state of physical, emotional and mental exhaustion caused by prolonged stress. It is characterised by feelings of apathy, irritability and detachment, and can lead to a decrease in productivity and an increased risk of error and misjudgement. It is a long-term condition that results from chronic stress, and if not identified at an early stage can be difficult to recover from.
At the verge of burnout, individuals experience depersonalisation, heightened cynicism and persistent negative attitudes and feelings about colleagues and clients who they perceive to have challenging behaviour. They feel ineffective and focus mainly on their failures as catastrophic rather than opportunities for growth and learning. They engage persistent and unhelpful or unconstructive analysis and do not pay attention to their successes. They are emotionally and physically drained and exhausted and their high levels of stress and fatigue lead to sickness.
Why is it that some individuals develop mental health problems while others with similar experiences and backgrounds do not? This is where we understand the importance of ‘resilience’ or ‘protective’ factors. The aim is to identify and then reduce risk factors and increase resilience factors.
By taking into account psychological profiles and assessing both high performance and covert behaviours, investors can gain invaluable insights into a founder’s strengths and weaknesses – which will ultimately help them make better decisions about which investments are worth pursuing and which ones should be avoided altogether.
Understanding the science behind burnout – including its potential causes in relation to success – is essential when evaluating any potential investment into a Founder and their company. It is possible to identify their vulnerability to burnout through psychological profiling, assessing temperament and identifying trigger factors that may signal that an individual is unable to handle the pressures of a high stake position. Through a deep, reliable and accurate vetting process, investors can mitigate their overall risk exposure and gain a sense of assurance through understanding a Founder’s vulnerabilities.
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