Entrepreneur Burnout

Entrepreneur Burnout - Significance, predictors, prevention
The metaphor of “burning out” holds at least two interpretations. The first is that any fire requires resources (e.g. wood) to continue to burn. In the working context this relates to the fact that humans have limited resources available that deplete as we put energy into our work.

The metaphor of “burning out” holds at least two interpretations. The first is that any fire requires resources (e.g. wood) to continue to burn. In the working context this relates to the fact that humans have limited resources available that deplete as we put energy into our work. This energy needs to be replenished. A process that involves the work organization (i.e. the employer), the individual (i.e. the employee), and his/her social environment.

The second interpretation is that to “burn out” one has to be “on fire” for something. Being “on fire” in the workplace might be translated with high-commitment, passionate engagement, or a total focus on a given task. It is a tragic element of burnout that often the most capable, productive, and determined people suffer most from this chronic workplace-related stress syndrome.

This paper focuses on the significance, the predictors, and treatment options of entrepreneur burnout.

A brief history of burnout

“Burnout as a phenomenon has probably existed at all times and in all cultures.” (Kaschka, et al., 2011). Kaschka et at. highlights literature sources for phenomena related to burnout going back to the Old Testament (Exodus18: 17–1: the “wariness of Elijah”). It is suggested that the first printed use of the term was in Shakespeare’s “The Passionate Pilgrim”: “She burnt with loue, as straw with fire flameth. She burnt out loue, as soon as straw out burneth” (cited from (Enzmann & Dleiber, 1989)). The first case study relating to the burnout syndrome, long-before the term was officially established, was the case of Miss Jones, a psychiatric nurse, discussed in Psychiatry in 1953 (Schwartz & Will, 1953).

The coining of the term “burnout” is attributed to the Germany-born American psychologist and psychoanalyst Herbert Freudenberger (1926 – 1999). In his article published in 1974 (Freudenberger, 1974) he defined burnout to be a “state of mental and physical exhaustion caused by one's professional life". Together with Gail North he also created the first phase-model for understanding the development of burnout. If this is a correct attribution of the term “burnout” to Freudenberger is in doubt, as more or less at the same time, the New Yorker Management Professor Sigmund Ginsburg published an article about “The problem of the burned out executive” (Ginsberg, 1974).

A landmark study in the early understanding of burnout was initiated with 415 air traffic controllers after a series of fatal mid-air collisions linked to human error ( (Samra, 2018) citing (Calabrese, 1971)). This study unveiled some, at that point in time, counter-intuitive aspects of workers who developed burnout. Those who have been impacted by burnout were the more competent individuals, with better health, less anxiety, and less alcohol intake at the beginning of the study. Workers who strove hardest to meet their internal and external ideals increased their risk of burnout and thereby reducing the odds of achieving those ideals.

Searching for “burnout” on Google Scholar as of today (October 12, 2022) returns over 1.3M papers. There are over 38,000 articles about burnout in peer-reviewed journals and more than 1,000 books about the burnout syndrome. In the first nine months of 2022 Google Scholar lists 33,900 new articles on burnout, many of those focusing on the impact the COVID pandemic had on the proliferation of burnout. While in the 70s and 80s the focus of burnout research was mainly on caring professions, this has now expanded to cover all professions and industries.

Definitions and classifications of burnout

More than 140 definitions of “burnout” have been suggested in literature since the term was first coined in 1974 (Hillert, et al., 2020).

Despite a high number of different definitions in literature, the description of its etiology and symptoms are consistent amongst most of them. It’s about an experience of

a.    Exhaustion,

b.    Depersonalization, and

c.     Reduced professional efficacy.

Globally there are two main classification systems for psychological disorders. The “International Classification of Diseases” (ICD) by the World Health Organization, and the “Diagnostic and Statistical Manual of Mental Disorders” (DSM) by the American Psychiatric Association.

Burnout is not recognized as a distinct medical condition in DSM-5 or it’s latest update DSM-5-TR (published in 2013 and 2022 respectively). Symptoms of burnout can be found in other DSM conditions, specifically in “Adjustment Disorders” and “Unspecified Trauma- and Stressor-Related Disorders” (American Psychiatric Association (APA), 2013).

ICD definition

The latest ICD-11, which went into effect January 2022, defines burnout as an occupational phenomenon. It is not classified as a medical condition. It's described as: “… a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed”.

According to ICD it is characterized by three dimensions:

a.    feelings of energy depletion or exhaustion;

b.    increased mental distance from one’s job, or feelings of negativism or cynicism related to one's job; and

c.    reduced professional efficacy.

“Burn-out refers specifically to phenomena in the occupational context and should not be applied to describe experiences in other areas of life.” (World Health Organization, 2022)

Other disorders that are similar but different from burnout

Burnout is explicitely linked to a phenomenon in the context of work and should not be confused with related but broader terms like stress reactions, depression, and post-traumatic stress disorder (PTSD). “Stress can intensify burnout but is not the main cause of burnout” (Burisch, 2006). Stress may be more physical rather than emotional and may produce urgency and hyperactivity. In contrast burnout triggers helplessness.

While burnout is specific to the professional context, depression spans over all domains of life including but not limited to work. PTSD is “caused by the exposure to a traumatic event or extreme stressor that is responded to with fear, helplessness, or horror” (Mealer, 2009), whereas burnout is caused mainly by “interpersonal and emotional stressors in the workplace and is characterized by different reactions (e.g., exhaustion)” (Korunka, et al., 2020).

The potential overlap between burnout and depression remains a subject for discussion. A detailed review of the current academic discussion can be found in (Bianchi, et al., 2015).

Symptoms and diagnosis of burnout

As discussed earlier, burnout is currently considered to consist of three key elements: exhaustion, depersonalization, and reduced professional efficacy. Exhaustion refers to the feelings of being emotionally drained and physically overextended. A state where energy is lacking, and mood is low. Depersonalization or Cynicism characterizes a distant and callous attitude toward one's job. The individual is de-motivated and withdraws from his/her work. Lastly, a reduced professional efficacy includes feelings of inadequacy and incompetence associated with loss of self-confidence. (Bianchi, et al., 2015)

Often burnout self-assessment tools, such as questionnaires on websites, are helpful as a first step to understand one’s condition and the likelihood of a burnout diagnosis better. While there is a vast number of tools available on the internet, only two are based on significant psychometric research: Burnout Measure (BM) and Maslach Burnout Inventory (MBI). A study by Schaufeli et al. tested both test protocols and found that the MBI provides more accurate results for individual assessments, mainly due to its differentiation between clinical burnout and other related diagnosis (Schaufeli, et al., 2001).

The significant economic impact of burnout

The World Health Organization (WHO) estimates that 20% of today’s children or teenagers, and 25% of adults will be impacted by burnout at some point in their life (World Economic Forum, 2019). A Gallup poll of 7,500 full-time employees shows that 23% of employees feel burned out at work very often or always, while 44% report feeling it sometimes (Gallup, 2018). And according to Deloitte which conducted a study on workplace health in the US, 84% of millennials have experienced burnout in their current job. Women are more likely to suffer from the syndrome than their male counterparts. (Deloitte, 2015)

Geographically, the percentages of employees reporting burnout varies between 19% and 38% across different countries. A recent McKinsey report surveyed 14 countries including Australia, China, Germany, India, South Africa, the UK, and the US. The lowest percentage of employees reporting burnout syndromes have been found in Mexico with 19%, the highest in India with 38% (McKinsey & Company, 2022).

Assessing the economic costs of burnout requires to look at the issue not only from an employers’, but also from a country perspective. From an employers’ point of view, the cost of burnout is mainly accumulated through a loss of productivity, absenteeism, and early retirement.  From a country perspective the costs are mainly occurring in corporate and individual taxes, as well as within the healthcare system. A study examining the cost of stress related mental issues in the UK found that in 2017 12.5 million working days were lost leading to an output gap of GBP33.4 – GBP43.0 billion per year. In addition, GBP10.8 – GBP14.4 billion were lost in tax and insurance revenues (Arnold, 2018).

Given that many studies have shown the global presence of burnout it can be assumed that similar costs, adjusted for national productivity and taxation levels and in relative terms, can be applied for most countries.

Entrepreneurs a diverse group

When looking at entrepreneur burnout it's important to define the term "entrepreneur". There is a vast range of meanings associated with the term. It can be defined legally, but also psychologically. Legally, entrepreneurs may be owners of large businesses that employ hundreds of thousands of people, but also solopreneurs that don't have staff and sell their own workforce. The term also spans different company types: from traditional family-owned businesses like at-the-corner grocery stores to venture-backed fast-growing tech startups. From a psychological perspectives entrepreneurs were described as “innovators and catalysts of change who continuously do things that have not been done before and do not fit established societal patterns” (Schumpeter, 1965).

This paper defines entrepreneurs broadly, including all company types described above and not limiting it to Schumpeter’s definition of innovators and catalysts of change.

Factors predicting entrepreneur burnout

A factor to look at when thinking about entrepreneur burnout is why the individual decided to pursue the career of entrepreneurship. The psychodynamic existential approach considers two assumptions as relevant for this career decision. (Pines, 2002)

First, that people have to believe that their life is meaningful, that the things they do – and consequently they themselves – are important and significant. Second, that people tend to choose careers that enables them to replicate significant childhood experiences, gratify needs that were ungratified in their childhood, and actualize occupational dreams and professional expectations passed on to them by their familial heritage. (Pines & Yanai, 2000)

Finding an entrepreneurial journey that fulfills those two assumptions is what Simon Sinek would call, “finding the WHY” (Sinek, 2011). A significant contributor not only to personal job satisfaction, but also – if communicated appropriately – to overall business success.

The choice for entrepreneurship based on the above-described existential motivations is highly loaded with emotions, hopes, and expectations. It requires high ego involvement and passion. With such high investment and stakes at play, success provides existential significance, but failure takes away this sense of meaning and entrepreneurs are exposed to the risk of burning out (Pines, 2002).

This process from high hopes and ambition to sliding into burnout is well described by the different stage-models. The 12-step model by Freudenberger (Freudenberger, 1982), the four stage model by Edelwich et al. (Edelwich & Brodsky, 1980), and the five stage model by De Hert (De Hert, 2020). As an example, the five-stage model of De Hert consists of:

1)    The honeymoon phase characterized by enthusiasm,

2)    The onset of stress with a feeling of stagnation,

3)    The chronification of stress and upcoming frustration,

4)    Burnout and apathy, and

5)    Habitual burnout which requires intervention.

The final stage of burnout is different from stage four, as the symptoms are so engrained in the patient’s life that the consequence is significant and ongoing psychological and physical problems. It’s no longer appearing occasional. It became chronic.

Beyond the core driver of failing to satisfy ones deep rooted existential motivation, there are other individual, job-related, business-, and social factors that are statistically significant predictors of entrepreneur burnout.

Mäkiniemi et al. provide a qualitative review of eight studies (three in North America, three in Europe, one in Asia, and one in Australia), comprised of a total of 2,380 participants (Mäkiniemi, et al., 2021). The below table summarizes the key elements of this meta-study in terms of positive or negative correlation with entrepreneur burnout.

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Treating entrepreneur burnout

When looking at the table above describing key predictors and inhibitors of entrepreneurial burnout, it’s obvious that an effective therapy would focus on helping the patient to strength those items that have a negative correlation with burnout and weaken those items that have a positive correlation with burnout.

On an individual level this requires to learn strategies on how to handle stress, how to detach from work, how to manage one’s time and priorities (to improve work and life harmony), as well as tools to improve the sense of self-efficacy. Such learning can be well achieved with all schools of Psychotherapy but is historically at the core of what the cognitive-behavioral school provides.

When issues are deeper and relating to the existential drivers of meaning as described earlier, a therapy would need to address this more substantially. Pines describes a psychodynamic existential approach for burnout treatment with three key steps: (Pines, 2002).

1.     Identifying the conscious and unconscious reasons for the individual’s career choice and how the chosen career was expected to provide a sense of existential significance.

2.     Identifying the reasons for the individual’s failure to derive a sense of existential significance from the work and how this sense of failure is related to burnout.

3.    Identifying changes that will enable the individual to derive a sense of existential significance from work.

Existential analysis and Logotherapy would base the treatment of burnout on the four fundamental conditions for a fulfilled existence (Längle, 2004). Ulrichova describes a therapy based on existential analysis as a two-phased approach (Ulrichová, 2012).

1.     Relieving: Helping the individual to set boundaries, to set realistic aims, and to understand dysfunctional patterns.

2.     Broadening: Appeal to values the client wants to live by, but can’t. Help the individual to understand what “work” provides them with, and what it might substitute for. Identify and process deficiencies in the patients basic personal motivation (security, safety, relations, emotionality, need of appreciation, need of being seen).

Avoiding entrepreneur burnout

Entrepreneurs can do a lot to decrease the likelihood of developing a burnout. Focusing on basic psycho-hygiene factors can tremendously improve living quality and the odds for mental healthiness throughout the tough entrepreneurial journey. Lomer recommends the following seven actions for entrepreneurs with a heavy workload (Lomer, 2008).

1.    Stay abstinent from addictive substances.

2.    Ensure sufficient high-quality sleep. Make it a priority to sleep 8 hours a day.

3.    Develop a habit of healthy and regular nutrition.

4.    Plan time for exercising and relaxation.

5.    Schedule work breaks to reflect on your business and your individual situation.

6.     Re-establish recreational and social activities.

7.    Open-up and share issues with your partner or a close friend.

From an existential perspective reflection on the following questions might help entrepreneurs to make the right decisions for their mental health (Ulrichová, 2012):

“Why am I doing what I do?”

“Do I enjoy what I do?”

“Do I want this to be my life?”

“Do I want my past to be created out of these?”

“Do I want to live as I am living now?”

Working with an executive coach can help entrepreneurs reflecting on these questions.


Entrepreneurs are special “creatures”. Often characterized by initiative, passion, optimism, decisiveness, competitiveness, stubbornness, and a desire for applause and risk taking. Those traits are necessary to create something new, to lead a venture to success, to motivate great people to join one’s company, and to keep on pushing through hard times. It seems like they never run out of energy, driven by their existential motivation to live a life full of meaning. However exactly these characteristics can also lead to work-addiction, chronical stress, frustration, apathy and ultimately burnout.

Understanding the stages to burnout and taking care of one’s own psycho-hygiene are effective ways to avoid suffering from the consequences of burnout. Mental health has become a main issue in many industries. The most effective method to tackle mental health issues is to ensure that the company’s leadership is mentally healthy and aware on how to create environments that foster mental health and protects its employees from burning out.

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