The inner gaze

(Fortune Small Business) – We’ve all been there: a crisis erupts in your business, and because you’re the boss, everyone turns to you for a solution. The little voice in your head wails, “Don’t look at me! I have no idea!” To make matters worse, you think the whole world can see your inner lack of confidence.

So how do you fix it? Meet Andrew S., 49, president of a New York City firm that manages social service organizations (I’ve altered certain details to conceal his identity). Guided by a strong sense of civic responsibility and the desire to help others, Andrew seems ideally suited to his work. And the business has performed well during his 15 years at the helm.

Interestingly, Andrew hired me as an executive coach after receiving an extremely positive annual review from his board. “Everyone thinks I’m doing great – my staff, my board, the agencies that hire my company, people I do fund-raising with,” he told me. “But I don’t agree. I know I’m underperforming as a leader, and I feel like a fraud.”

Like most entrepreneurs these days, Andrew is anxious about the economy. “My client agencies are battered by dwindling funding, causing them to scale back their use of my company,” he said. “Of course, this comes just as their clients need them more than ever.”

Andrew identifies deeply with the people he serves; he feels their pain, and he’s experiencing some guilt about being successful when so many others are failing. But would he be just as stressed in a boom economy?

I think the answer is yes. Andrew’s issues transcend the business cycle. Beneath his smart, generous, unflappable exterior lurks massive insecurity. In Andrew’s imagination everyone around him thinks (or will soon discover) that he’s really worthless, conniving and self-involved. “I can’t believe I’m not transparent,” he told me with obvious discomfort.

The technical term for this is projection. Andrew attributes his negative self-image to the people around him. He assumes that his colleagues and clients are perpetually on the verge of attacking him, when in reality he’s attacking himself. As a result, it hardly matters whether or not Andrew faces a real, objective threat. The entire emotional game is taking place inside his head.

There’s no Pentium undo button for this one. Andrew’s template for the fraudulent leader comes from his father. Andrew describes him as respected and authoritative in the outside world but passive, unpredictable and rageful at home. Andrew’s mother was depressed and narcissistic, he says; she leaned on him for emotional support without ever praising his efforts. At school he struggled socially but managed to conceal his anger and timidity behind a mask of stoic resolve.

In short, Andrew’s history conditioned him to associate authority with duplicity. That’s why he feels like a false leader today. But by acknowledging and understanding what’s going on in his head, he can learn how to handle his emotions so that he can stay on point in his job.

Step One: Andrew needs to give himself credit for his advantages. His past may have been unhappy, and it may have made it difficult for him to distinguish real threats from imaginary ones. But his early relationships also prepared him to succeed in his chosen career. Having lived through an emotional battering, he knows how to lead a business dedicated to helping others survive difficult times.

Step Two: Andrew must understand that his feelings are normal and acceptable. Everyone feels fraudulent sometimes; that’s part of being human.

Step Three: Dialogue. Andrew has been trapped inside himself. He grew up with nobody listening to him and has made helping others his profession. His corrosive projections are generated partly, I think, by the fact that he wants the people in his life to know him better. It helps to air out these projections with me, rather than at work.

Self-examination is hard work. It’s also worth the investment, for both you and your business. No company can thrive under misaligned leadership. In a tough economy, it’s especially important for entrepreneurs to focus on the business issue that matters most — themselves.

Alexander Stein, Ph.D., is a practicing psychoanalyst in New York City and a principal in the Boswell Group, a consulting firm.

Make your partnership work

(Fortune Small Business) – Successful partnerships account for some of the best companies in entrepreneurial history. Think Ben Cohen and Jerry Greenfield, Bill Hewlett and Dave Packard or Burt Baskin and Irv Robbins. These dynamic duos harnessed shared vision and complementary talents to create a whole greater than the sum of its parts.

But like all intense relationships, partnerships aren’t always sunshine and profit. In last month’s column I mentioned Mike F., one of three partners in a boutique financial services firm. Mike, you’ll recall, felt trapped. Pressing on one side was his loyalty to clients and staff and a dog-with-a-bone refusal to let go of the hand that beats him; on the other, a growing, healthy urge to get away from Don, the firm’s passive, nonconfrontational founder, and Lorraine, their self-aggrandizing, melodramatic colleague.

As a client, you see what the glossy brochure depicts: high-level professionalism and concierge service. Roiling underneath are power politics, smoldering resentments and rabid disrespect.

The three partners are perfectly right for one another in all the wrong ways. Mike, raised not to expect anything for himself, is Bob Cratchit, toiling to make sure everything and everybody is taken care of while the midnight oil burns low. He’s perfectly suited to the firm’s culture, which outwardly valorizes self-sacrifice. Lorraine is like Lucy from Peanuts, perpetually snatching the football away from the hapless Charlie Brown just before he kicks it. Lorraine’s personal addiction: making herself out as the victim of Mike’s incompetence, then swooping in to save the day. At the top of this pyramid sits Don, always in late and out early, a do-as-I-say-not-as-I-do, “why should I do it when you can do it for me” kind of boss.

If this sounds like a nasty situation, it is. But you’d never know that if you hired them, because it all fits together seamlessly. They work in this perverse disharmony like a well-oiled Wankel rotary, each doing his or her part to propel the others around and around. Whatever his shortcomings as a leader, Don was smart enough to hire Mike and Lorraine. Intuition told him it would be productive to pit them against each other like piglets jockeying for a teat. Lorraine’s cruel mistreatment of Mike only incites him to do more, trying to outdo her and regain some advantage. And Don’s noninvolvement in Mike and Lorraine’s mutually demeaning shenanigans and his callous disregard for their 100-hour weeks just push them harder, with each trying in vain to land his praise.

In business terms, this partnership works: The company makes money and the clients are satisfied. The problem is that Don, Mike and Lorraine aren’t. They’re stuck, but they don’t know exactly why, or how to change things. So now what? Obviously, the bad behavior has to stop (or at least there has to be less of it), and communication must improve. But the underlying problem is that Don, Mike and Lorraine relate to one another like warring parents, children and siblings, not like professional colleagues.

The partners must acknowledge boundaries, be respectful and fair, give due praise and appropriate criticism and transcend inhibitions to frank discussion. Don, as managing partner, must confront the difficulties he has being an effective leader and exercise real authority (not waver between authoritarianism and absenteeism). This is already a tall order, but Mike and Lorraine may have the hardest road ahead. To begin, both must stop trying to make Don be somebody he’s not – caring or communicative. Of the roles he can (and should) successfully fill in the firm, surrogate father isn’t one of them.

If Mike weren’t so invested in fighting Lorraine for Daddy’s attention, he would probably start to see her legitimate contributions. He might also stand a better chance of helping Don recognize his tremendous stamina and skill. Lorraine, in turn, must stop making Mike into roadkill while racing to win Don’s approval. Note to Lorraine: Driving a truck through the firm isn’t winning you friends or respect.

And then? Think of it this way: These partners expend 85% of their energy settling scores, avoiding responsibility, lighting or putting out brush fires and managing emotional flare-ups. Yet they still manage to turn a profit. Imagine how well they could do if they focused on business.

Alexander Stein, Ph.D., is a practicing psychoanalyst in New York City and a principal in theBoswell Group, a consulting firm.

How to control negative emotions

(Fortune Small Business) – During an economic storm, everything solid melts into air. When it’s not clear if there’s a tomorrow to work toward, how do you keep morale up and communication channels open? To help you stay afloat, here’s my brief field guide to anger, fear and ambivalence, three negative emotions that many business owners wrestle with today.

Anger – Mark B., founder and president of a textile manufacturing company, is upset about the state of the world in general and of his industry in particular. “I feel angry nearly all the time,” he told me. “I’m lashing out at my employees, vendors and clients.”

Fear – John M. runs a successful mid-size telecommunications company that he inherited from his father 14 years ago. With the headlines full of bleak economic news, John fears imminent failure. He’s melancholic and pessimistic, feeling like “an all-around wet blanket.” “I’m convinced my talented team and loyal customers will head for the hills any day now,” he says.

Ambivalence – Mike F. is a partner in a boutique financial services firm. He sees his managing partner, Don, as passive, indecisive and nonconfrontational. Forever compensating for Don’s shortcomings without acknowledgment or reward, Mike is torn between loyalty to his firm, clients and staff on the one hand and his desire to migrate to a more positive work environment on the other.

How to calm Mark’s anger so that he can stay focused on his business, even when he doesn’t know how it might evolve? Can John turn his pessimism into something more constructive? Is Mike an unsung hero or a naive patsy? After he figures out the answer, what are his options?

Sigmund Freud famously said that in case of fire, the first task of firefighters is to extinguish the flames before seeking the cause. His advice holds today: Help individuals (and businesses) cope with their immediate problems, but keep an eye on root motivations and recurrent patterns.

Contrary to popular stereotypes of psychoanalysis, this doesn’t mean that Mark, John and Mike must put their family histories on the couch. It’s more about helping each of them calm down, move forward and feel stronger by recognizing old behavioral templates, revising the outmoded responses they generate and creating solutions that are appropriate to the present day.

Chipping away at walls

When Mark and I met one afternoon, he seemed ready to bite somebody’s head off. “You’re angry,” I observed. He hadn’t noticed – sometimes people have no idea what they’re feeling. When I asked what was going on in his life, Mark started fuming about the incompetence of his staff.

“What did they do wrong?” I asked. The infractions were minor, and in enumerating them aloud Mark saw how disproportionate his fury was to its catalyst. In addition, just telling me brought his temperature down a few degrees. Now he’s learning to articulate what’s bothering him in the moment. A little steam now is better than lava later.

By contrast, John suffers from feelings of dread that predate the recession by many years. The story is simple and painful. John’s mom didn’t punish; his dad did. “She made me wait for him,” John recalled. “He wouldn’t say a word – he just hit. It seemed like forever while he took off his belt, lifted it up and let loose. I’m always waiting to be hit.”

Fears like that don’t vanish overnight, but you have to start somewhere. “Can you see the downturn as just that, and not as a belt?” I asked. He’s working on it. Meanwhile, John holds an ace in the hole that many of his type A competitors lack. All that childhood waiting made him a very patient man, and you need patience to survive crises, economic or otherwise.

As for Mike, he looks better than he feels. Outside: big job, big salary. Inside: He feels muzzled and on a short leash. “Why can’t I tell Don to take care of all this admin sh-t himself?” he complained. “I’m not his chore boy. I’m a partner with high-value clients. Why does he make me do it? Why don’t I leave?”

“What would happen if you said something to Don?” I asked. “He’d be upset and then ignore me,” Mike replied. That may be true, but it’s probably not the real impediment. At bottom, Mike hates to upset people. Understanding this is the first step to building a healthier relationship with his partner. Eventually, Mike will figure out that he’s neither hero nor patsy, but simply himself. That’s a worthy goal for all of us.

Alexander Stein, Ph.D., is a practicing psychoanalyst in New York City and a principal in theBoswell Group, a consulting firm.

Fear of flying

(Fortune Small Business) – The doors have closed and my seat belt is buckled tight. Flight attendants are rushing to close the overhead bins. I feel a lurch, and out the window I see the terminal recede as the plane taxis toward the runway. But I don’t really notice any of this. My chest is pounding. My stomach is a churning pit – I’m nauseous. My shirt is drenched in sweat, and I can barely breathe.

That’s how Nick Warner imagines himself flying. The real thing? Not gonna happen. Warner, 33, is a tech entrepreneur based in the Midwest. (I’ve changed his name and some biographical details to protect his privacy.) He creates visualization technology for computer users, and then assembles hives of code writers and businesspeople to develop and deploy it. Even though Warner is a successful entrepreneur, his fear of flying – aviophobia – is paralyzing. He’s concerned that his business will eventually suffer if he can’t travel to trade conferences and client meetings.

Warner has tried to conquer his fear of flying by using alcohol, antidepressants, anti-anxiety drugs, hypnosis, meditation and cognitive behavioral therapy. Nothing has helped. Realizing that aviophobia was affecting him both professionally and personally, Warner phoned me.

We met in his home office because, obviously, he wasn’t going to get to mine in New York City. Flat-screen monitors surrounded us. Over the quiet whir of computer fans, I could hear his 11-month-old son playing in a nearby room. “The most upsetting thing is not being able to take him to Grandma and Grandpa’s for Christmas,” he told me.

“I feel bad that everybody else on the plane has to die too,” he continued in a chillingly matter-of-fact tone. “It’s not fair. They’re innocent. I’m the only one who has to be punished.” Why so? “I know the plane will crash because I’m not supposed to go,” he explained. “I’m not allowed to go anyplace.”

Phobias are exaggerated fears accompanied by avoidance behavior – not flying, in Warner’s case. Psychiatrists typically classify them as a form of panic disorder. Common phobias include fear of public speaking, crowds and confined spaces. Of course, not every fear is a phobia. There’s nothing irrational about occasionally feeling nervous in the air, even though the risk of disaster is statistically minuscule.

But Warner’s fear goes way past planes falling from the sky. For him, flying is a punishable offense. That’s an important clue in discovering the roots of his phobia. Like many entrepreneurs, Warner was drawn to both the challenges and rewards of starting and running his own business: no boss, lots of responsibility, full accountability, setting and exceeding self-appointed goals. Entrepreneurship seemed like the epitome of independence.

Nice work if you can get it. But this type of freedom has a counterpart – psychological independence – that’s more complicated to achieve. It’s not just a matter of having a life on your own or a mind of your own. It’s also about shedding fears and inhibitions.

A common misconception is that bad mothers lie at the root of most psychological problems, but in Warner’s case it happens to be true. When he was growing up, his mother was needy, intrusive and self-involved. To this day, Warner lives as though he were tethered to her – this doesn’t fully explain his personality, but it’s a central code sequence in his operating system. (To be clear, this relationship exists mainly in his mind. In reality, Warner and his mother live far apart and speak only occasionally.)

As an adult, Warner is haunted by the fear that his mom can’t survive without him. When he tries to mentally distance himself – something flying represents more vividly than any other mode of transport – images of his mother’s distress snap him back. Result: His flight (think airplanes and fleeing) is canceled. Hence his phobic vision of crashing planes and innocent victims.

Warner’s cure won’t come overnight, but there’s cause for optimism. By taking action and getting help, this dynamic entrepreneur has already shown that he’s got the right stuff. Every pilot learns in a flight simulator, a safe place to practice landing and taking off.

Alexander Stein, Ph.D., is a practicing psychoanalyst in New York City and a principal in theBoswell Group, a consulting firm.

An entrepreneur struggles to shake off her past

(Fortune Small Business) – Debra Cullen (not her real name) has spent her life trying to keep things the same. “I don’t like change,” Cullen told me during our first therapy session. But her life has changed, and she’s at a loss.

Cullen, 44, owns and runs a mid-size East Coast sports-management agency. For two years she was sexually harassed by one of her best employees – let’s call him Todd. Cullen had hired Todd away from a rival agency. He was married and 15 years her senior. For a while they worked well together; Todd was a star agent and trusted confidant.

And then he changed. Cullen is tall and athletically slender, with blonde hair and sparkling blue eyes. She’s single, and in a male-dominated industry, her good looks had always been a strategic advantage. Until now.

Beginning as suggestive compliments about her appearance, Todd’s insinuations rapidly became explicit propositions. Distraught, Cullen considered jumping her own ship to escape. Then Todd announced that he was leaving and relocating to a distant city. Bullet dodged. But the pressure of fending him off and hiding the matter from her staff and friends had taken its toll.

Cullen was upset when she walked into my office, and I could understand why. But I was filled with questions. What had prevented this apparently strong, capable businesswoman from ending an abusive relationship? Why would she consider abandoning her business instead of firing Todd, her employee? Why the secrecy? And given her apparent passivity, how had Cullen built a successful business in a cutthroat industry dominated by powerful men?

Many folks behave self-destructively, despite knowing better. But most successful entrepreneurs are able to formulate a positive image of the future (also known as a goal) and then take concrete steps to realize that image. In other words, they embrace change.

Shadows of the past

But Cullen’s childhood experiences had left her with an abiding fear of change – at least in her personal life. By the time she was 12, Cullen and her family had moved 10 times, following her father, a college athletics coach, from job to job. “We left our house, school and friends one day, and the next, moved into a new house, started a new school and charged ahead without a hiccup,” she told me. No complaints. No whining. Just do it.

At critical junctures she was forced to abandon familiar surroundings and end important relationships. Her rare displays of sadness or anger were usually met with derision. “I tried to be perfect,” Cullen said. “I did everything I was supposed to, but nobody said ‘Thanks’ or ‘Good job,’ because we didn’t consider it anything special.”

I’m not suggesting a migrant childhood is traumatic by definition; a lot of families move around. But Cullen’s parents and siblings never let her adjust to all the changes or even express her true feelings about them. “I’d come home from school, Mom would tell me to pack, and we’d move the next day,” she recalls.

To a great extent, this childhood pattern explains why Cullen was unable to dismiss her obnoxious subordinate. He triggered painful memories of being pressured to do things she didn’t want to do. He made her feel weak, over-powered and humiliated – just like when she was a child.

Fortunately, in her analytic work with me, Cullen is gradually confronting and revising those debilitating ideas about strength and weakness, about admitting vulnerability and expressing feelings. At the same time, she’s learning to value the assets that made her successful in the first place: a deep understanding of her clients’ issues and an extraordinary ability to advocate their interests.

Slowly Cullen is learning to embrace change, not fear it. And that’s a lesson we can all take to heart in uncertain times.

Alexander Stein, Ph.D., is a practicing psychoanalyst in New York City and a principal in theBoswell Group, a consulting firm.

What entrepreneurs are feeling: Fear

(Fortune Small Business) – Meeting Ed Sherman, you’d never guess how frightened he is. Debonair and self-assured, he’s the founder and creative force behind a reputable boutique ad agency. To all outward appearances, he epitomizes success. But beneath his polished surface, Sherman is struggling to navigate the financial crisis, keep his business viable and, more than anything else, manage his crushing anxieties.

“I’m respected and established,” Sherman (not his real name) told me recently. “I have a good stable of upmarket clients, and new business is coming in. But outstanding receivables are substantial, and cash on-hand won’t cover my current or near-term expenses.” At this point, his voice started to crack. “I’m not sure I’ll make it to the end of the year,” he said quietly.

Sherman’s business problems were mounting just as Wall Street collapsed and the global economy slid toward recession. His suppliers and vendors demanded payment for services rendered. Banks were reluctant to extend credit. His clients were tightening their belts, not writing checks. And unlike Bear Stearns or AIG (AIG, Fortune 500), Sherman’s business wasn’t eligible for a government bailout.

Most entrepreneurs have experienced some version of his crisis. In the startup world, volatility and insecurity go with the territory. But Sherman’s problems aren’t simply the result of tight cash flow and the national economic meltdown. I’m a psychoanalyst, and he turned to me rather than a traditional business consultant because he sensed that his core issues were emotional, not financial.

Early in our conversations it became clear that Sherman, 35, understood what steps he needed to take to fix his business: collect late receivables, trim expenses and negotiate larger upfront retainers from new clients. But he was paralyzed by the mere prospect of pressing customers to pay those overdue invoices. Actually make the call? Impossible. The mere thought of asking a client for more money made him feel like Albert Brooks’s sweaty, hyperventilating character in Broadcast News.

The more his business and the economy suffered, the more distraught he felt. That’s true for a lot of us, of course. As many as 80% of Americans currently feel stressed about the economy and their personal finances, according to a recent survey by the American Psychological Association. No less an authority than Warren Buffett, writing recently in the New York Times, argued that fear was “widespread, gripping even seasoned investors.” But Buffett also suggested that fears “regarding the long-term prosperity of the nation’s many sound companies make no sense.”

Buffett is onto something: Anxiety isn’t always rational. But that doesn’t make it any less real from an emotional perspective. Running a small business requires enormous psychological resources in the best of times. It’s even harder to stay focused and positive while the pundits predict economic Armageddon and the Chicago Board Options Exchange Volatility Index reaches triple digits. Sherman and other entrepreneurs I work with feel pressured and concerned; they want to know what to do.

Sometimes the best response is not doing. That doesn’t mean doing nothing, but rather not taking action. This doesn’t come naturally, especially for entrepreneurs. Humans are hardwired to fight, flee or otherwise act in response to threatening situations. Our cultural admiration of people who manage to remain calm under duress comes from our visceral understanding of how difficult this is.

Business owners may be particularly susceptible to the corrosive effects of fear and anxiety because they’re professionally more isolated than most, having no peers or superiors, only employees, clients and competitors. Especially in high-stress situations, having partners (or a trusted confidant) can make all the difference.

The four founders of Elemental Architecture and Sine Elemental, a New York City architecture, design and branding collaborative, operate like a high-wire acrobatic team: Each partner depends on the others for support and balance. I met with them recently as they prepared a presentation for a prospective client. David O’Higgins, 50, Elemental’s lead creative, was feeling particularly stressed. In a poignant, staccato voice, he listed the flavors of his anxiety: “Did I pack my daughter’s apple? My vision isn’t as good as it was. Your call cannot be completed as dialed. If I’m so visionary, how come I’m not getting paid? Fear of never sighting land. Fear of being wrong.”

His partner, Tom Abraham, didn’t miss a beat. “Each of us has had the cold-sweat-in-the-middle-of-the-night moment,” he said, as the others nodded. “We trust you.” (Update: Negotiations with that client continue, but working as a team with one soloist, Elemental was still in the running.)

Let’s take a closer look at fear and anxiety. They get a lot of bad press, but both serve important functions. They’re also different. Fear is normal and useful. It’s what you experience when you smell smoke, see a bear in the woods or spot a bus bearing down on you while crossing the street. It comes with a menu of physical signals: sweaty palms, racing pulse, trembling. Fear in this context is a life-preserving reaction to a recognizable danger. Optimally, it will help you get out of a jam.

At its worst, anxiety makes you feel straitjacketed by the idea of the bear or that oncoming bus. You experience an astringent emotional state in anticipation of possible danger, not as the result of an immediate threat. Then maybe you focus on everything but where you’re going – or you never even leave the house. But transient or episodic anxiety (such as those nerves you might notice before the big pitch meeting with a prospective client) can also be harnessed for creative productivity.

Some entrepreneurs freeze up in those situations, like the proverbial deer in the headlights; others develop more productive reflexes. Consider Mark Robin, owner of the Hungry Moose Market & Deli in Big Sky, Mont.

“I make hundreds of quick decisions all day,” Robin told me. “There’s no time for fear and anxiety in the daily running of a grocery store. If I stood there debating or floundering, everything would come to a standstill.”

I asked Robin how the current economic downturn was affecting him. “Luckily for us, people always need to eat,” he replied. “Business is definitely down, and the upcoming winter season looks a bit iffy, but Christmas week should be crazy-busy as always. It’s probably time to do some belt-tightening, but in the end we should be fine. I really take it day by day.”

Robin’s grocery store and Sherman’s advertising agency have little in common from a business perspective, but it’s not about comparing apples and ad campaigns. The real issue is that they display different emotional responses to similar types of stress. Why is that?

Sherman tends to project difficult childhood memories onto his business relationships. Robin’s formative memories involve working in his parents’ retail business, where he often watched his mom and dad take crises in stride. Those experiences helped him develop effective strategies to cope with stress.

Even so, he is hardly a nerveless robo-grocer. “Anxiety comes into play with bigger decisions,” he admitted.

Still, his childhood prepared him to manage his natural anxieties without letting them get in the way of his decision-making. That’s harder for Sherman. Despite his outward composure, I’ve learned to recognize (mostly from his voice) how little confidence or optimism he feels. Today’s economic crisis is his worst nightmare come to life. The world is objectively threatening for him in ways that match his most dreaded anxieties: doing well, then teetering on the edge of ruin and feeling unable to step away from the brink. Disaster. Cut to black.

Incessant scrutiny

Sherman and I looked to his childhood for the origins and composition of his internal strife. Sherman’s family lived comfortably, but to his father, a senior executive with a national mortgage lender, nothing was more important than financial security. Deeply pessimistic by nature, his father saved because he was always worried about losing everything. Although the family never ran short of cash, money was doled out sparingly and ungenerously, except toward his mother’s home-decorating projects.

His mother was a merciless perfectionist. “I was always scrutinized and under surveillance,” Sherman recalled in one of our sessions. He remembered working constantly as a child. Chores weren’t done until every shred of lint or speck of dust was gone. A bed wasn’t made unless it could pass a Marine sergeant’s muster. And his hard work earned him no praise, only escape from punishment.

Although he now runs a successful business, Sherman unconsciously relives these painful early experiences in his client relationships. He feels incessantly scrutinized and imagines that punishment is just around the corner. And he’s unable to enjoy his success because he fundamentally believes that good things don’t last.

He told me that, as a boy, he concocted “schemes.” Under his compliant fa�ade lived a little rebel. He’d postpone chores until just before his mother’s inspection, clocking how fast – and flawlessly, of course – he could get everything done. He’d deliberately break rules and then fastidiously cover the evidence, trying to get away with more and more without getting caught. While the tasks were mundane, the emotional risks were great.

Thriving in crisis

As a group, entrepreneurs are more likely than not to feel comfortable in crisis situations. So Sherman’s youthful machinations may have contributed to his career choice. That’s fine, as long as being an adrenaline junkie works for you. Problems arise, however, when you become disabled by panic, fixated on the idea of cataclysm or stuck in dangerous behavior patterns because you need that adrenaline high.

What’s not working for Sherman is his unconscious confusion of the past and the present. Emotionally, he’s convinced that his business isn’t temporarily faltering in a recession environment but failing altogether because he didn’t heed his father’s dire warnings about financial overextension. He identifies late-paying clients with his domineering, unappreciative mother. Frustrating business transactions become recurrences of traumatic rejection. No wonder he’s anxious.

So would the anxiety go away if Sherman’s balance sheet improved? Not necessarily. It’s certainly true that a cash infusion would reduce his situational panic. But it wouldn’t change the underlying risk-anxiety paradigm, which needs only the next incident to become activated.

Sherman’s work with me continues, so I can’t say how the story ends. On the bright side, he has developed a better understanding of his anxieties – where they come from, what triggers them and how they affect his life and business. Recently he’s been picking up the phone and calling some of those deadbeat clients. He was pleasantly surprised when nothing bad happened. On the contrary, money started to come in.

Dr. Alexander Stein is a practicing psychoanalyst in New York City and a principal in the Boswell Group, a consulting firm.

War demons haunt Iraq vet’s new venture

(Fortune Small Business) – These days, Will Payton avoids crowds. They petrify him. The entrepreneur and Iraq war veteran recently overheard his 9-year-old daughter telling her 14-year old sister how excited she was about visiting Disneyland.

The older girl replied: “You know how anxious Dad gets in places like that. I don’t think we’ll be able to go.”

“That isn’t a conversation kids should be having about their father,” Payton told me. Sad and racked by guilt, he hardly knows how to change things.

A National Guardsman for 13 years, Payton (not his real name) was put on active duty and sent to Iraq in 2003. He was 34, and left behind a wife, four children (then aged 3, 5, 8, and 10), and a career as a broker and financial planner.

Stationed outside of Balad in the north and then Nazaria in the south, he served as a combat medic – the only one for a company of 160 soldiers. He stayed on active duty for four years, except for a single two-week furlough.

Payton won’t – he can’t – talk in specifics about what he saw and experienced in Iraq. For people like him who suffer from combat-related PTSD (post-traumatic stress disorder), verbalizing past horrors can be more re-traumatizing than therapeutic.

For the listener, no matter how gruesome, it’s only a story. But the telling can trigger flashbacks. Time and space distort, rationality peels away, and all of a sudden that loud noise in the mall is a bomb exploding in a crowded market. Instead of wiping tears off your daughter’s face, you’re drenched in blood while you compress a pulsing, shredded stump.

I could tell that Payton was driving his car during our phone conversation. I was frankly concerned about his driving while we were talking, given the subject. Was it a coping device for Payton, putting him in control while distancing his conscious mind from traumatic war memories? Or could it be reckless behavior prompted by his fragile emotional state?

One psychoanalytic tool I use is called “countertransference” – closely monitoring my thoughts and feelings as clues to what my patient is experiencing in his own mind. Guided by clinical experience, I took my pulse and made a calculated judgment call: Payton wasn’t going to crash from talking to me. But just to be sure, I asked whether he was safe to drive.

“I can talk about this and drive at the same time,” he said laconically. I believed him.

Though Payton came through Iraq physically unscathed, his tour of duty scarred him permanently.

“I used to be open and caring,” Payton said. “But that guy died and somebody else came back.”

A daily fight

Payton struggles daily with fear, anger, and depression. He avoids the Magic Kingdom, and places like it, because crowds make him feel agitated, insecure and hyper-vigilant. By attending therapy and support groups for veterans, he has learned how to intellectualize his issues; he knows the psychiatric lingo. But the word he uses for himself is “crazy.”

I asked Payton what “crazy” meant to him.

“Out of control in how I feel and respond,” he replied. “I have a heightened sense of alertness to danger and death. I live in constant anxiety.”

Payton used to help people plan for retirement. But Iraq killed his interest in selling financial advice: “Plugging numbers into spreadsheets just seemed idiotic to me,” he said. “The first time I lost a soldier in my battalion, I realized that we only have so much time here.”

So Payton quit his job and launched a small video-production business. The company’s first project, the lure for this particular career-switching opportunity, was an instructional video that a friend’s husband had made about how to survive radiation exposure and terrorist attacks.

At first, the business seemed promising. Payton threw himself into his role as CEO and developed good working relationships with his business partner and their investors. A major national retailer expressed interest in distributing the video, promising more than $1 million in first-year revenue.

But the retailer asked for changes to the video. Although the requested edits were relatively insignificant (trimming some transitional material to quicken the pacing), Payton’s partner refused to make them, and negotiations collapsed. Payton became enraged. He quarreled with his partner, and verbally attacked him. Not surprisingly, the partnership ended.

Although he started the video business because combat had changed his outlook on life, Payton was unprepared for how drastically his response mechanisms and decision-making skills had been altered.

How, specifically?

“Before the war, I’d probably have been able to suggest compromises, been less confrontational, and able to nurse the enterprise to smaller-scale objectives,” he replied.

Like many returning veterans, Payton is still at war. But the battlefront is now internal: He’s struggling to live a positive, productive life, but his combat experiences have conditioned him to see danger and uncertainty at every turn.

I think that when Payton’s business partner wrecked their plans, Payton reacted as if his life had literally been threatened. As a result, his goals of growing his business and providing for his family were overridden by rage and fear.

By the time Payton and I spoke, he was in triage mode. He’d reconciled, tentatively, with his former partner, and was again trying to move the video business forward. His ambitions now include releasing a series of instructional videos (not just one). He hopes to network more effectively and develop new marketing and distribution strategies.

But for Payton, reality still feels as harsh and random as an Iraqi sandstorm. Depression is a frequent companion. Sometimes, not even the prospect of spending time with his wife and kids or meeting a business challenge can pull him out of bed.

But there are also good days, when he’s filled with energy and plans for the future. Payton told me that what motivates him most powerfully now is recouping his investors’ money.

It’s not just the investors whom he’s trying to make whole. At bottom, Will Payton is still working to reclaim the self he left on a dusty, bloodied roadside in Iraq.

Dr. Alexander Stein is a psychoanalyst and consultant in practice in New York City. He is also a training analyst and faculty member of The National Psychological Association for Psychoanalysis, and a principal in the Boswell Group.

Disclaimer: This column is designed for educational purposes only. Due to the individual nature of each situation, Dr. Stein cannot offer advice or suggestions beyond what is presented here. You should not rely on this information as a substitute for personal therapy, or construe it as the offering of a diagnosis or remedy.

Blood feud

(FORTUNE Small Business) – “Happy family businesses are all alike; every unhappy family business is unhappy in its own way.”

While that’s not exactly what Leo Tolstoy wrote – and with my apologies to high school English teachers everywhere – it perfectly captures Cindy Conklin’s plight. Conklin (not her real name) is CEO of a small manufacturing company in the Midwest. Her father started the business in a garage 34 years ago.

Now in her early fifties, Conklin took the helm after her dad died of cancer two years ago, leaving no succession plan (we’ll come back to this issue). Last year’s revenues were $2.1 million, up 16% from the prior fiscal year. Although the business is doing well, the same can’t be said for the Conklin family. Today, Conklin runs the company with her husband, older brother, and sister-in-law. She hasn’t spoken to her three other siblings for more than a year.

In conversation with Conklin, I learned that today’s crisis is rooted in a lifetime of buried, simmering rivalries and resentments among the siblings. Conklin’s youngest brother, for example was rebellious from an early age.

“He always wanted to do his own thing,” Conklin recalls. He gravitated to alternative (read, “disapproved of”) behavior and, eventually, drug use. According to Conklin, he also came to resent their father for trying to inhibit his struggle for independence.

By Conklin’s account, her younger sister has been the “prime instigator” in the family conflagration. Conklin recalls that this sister was not particularly close to their father and experienced a difficult transition from adolescence to adulthood. She married but then quickly divorced a career military man who turned out to be abusive.

By contrast, Conklin was always very close to both her parents. Growing up, her father always said that he wanted Conklin to run the company after he died. While Conklin and her siblings were all still at home, their mother went back to school to become a nurse. Conklin remembers coming home from high school to study with her mom, helping her learn medical terminology.

How did her siblings feel about the privileged relationship that Conklin enjoyed with their parents? Conklin’s unequivocal answer: “Resentment. I stepped up; they didn’t.”

As children, the two younger sisters paired off early, joining a community of school friends from which Conklin felt excluded. She and her older brother, by contrast, had an “unshakeable bond” from the start. This early division remains in effect today.

In all of this, the 800-pound question sitting in the company boardroom with no apparent answer remains: Why would a man who spent his life to build a business from the ground up, grooming his own daughter to take his place, knowingly leave no succession plan?

That’s actually a pretty common scenario in family-owned businesses. According to a 2007 survey by Oregon State University and Seattle University, nearly 60% of majority shareholders of family-owned firms are 55 or older, but only 29% of the firms have a written succession plan. Only 40.6% have named a successor and are prepared for transition. Not surprisingly, 50% of family-owned business fail to last beyond one generation.

To me, these statistics point to pathology of near epidemic proportions. Given the importance of family businesses within the general economy, we might consider implementing a national family business triage initiative!

In the months before his death, the elder Conklin’s cancer metastasized to his brain, causing cognitive impairment and profound personality alterations. He became confused, contradictory, and aggressive. One day he would tell Conklin that he wanted her to run the business after he died. The next day he’d tell her siblings something completely different. Although she doesn’t believe he meant it, Conklin once heard him say: “I don’t care what happens after [I die]. It’s not my concern.”

Just the same, there’s ferocious hostility in this statement. Was it really the uncharacteristic outburst of a dying man? His illness was not sudden; there was time for planning. Before the cancer, Conklin says, he was hard working, loving, supportive, and helpful. So why is it that all of Conklin’s siblings left home early, one married an abusive man, one abused drugs, and another became a family therapist?

For whatever reason, the father’s death catalyzed a family breakdown. Rather than banding together to mourn their father and preserve his legacy, the children turned their anger at him – and at Conklin – on each other.

In the year just preceding and just following her father’s death, Conklin struggled to maintain steady revenue; with her attention diverted, the business flatlined but has since recovered. For now, I hear no evidence that the business is faltering as a direct consequence of these familial problems. The major damage is emotional, not financial.

So now what? Freud once said that in case of fire it’s the first task of firemen to extinguish the flames, before seeking the cause. For Conklin, even if I’m right that the inferno consuming her life and business has been smoldering for decades, there’s an obvious urgency to her situation now.

For the business to thrive long-term, Conklin and her siblings must confront and hopefully resolve their accumulated animosities, resentments, and rivalries. Businesses and families can survive for a time while their members torch one another. But there will come a point, as the statistics show, when the fire wins.

Dr. Alexander Stein is a psychoanalyst and consultant in practice in New York City. He is also a training analyst and faculty member of The National Psychological Association for Psychoanalysis, and a principal in the Boswell Group.

Disclaimer: This column is designed for educational purposes only. Due to the individual nature of each situation, Dr. Stein cannot offer advice or suggestions beyond what is presented here. You should not rely on this information as a substitute for personal therapy, or construe it as the offering of a diagnosis or remedy.

Turning garbage into gold

(FORTUNE Small Business) – Zach Wieder loves garbage.

Though still on the south side of 30, Wieder (a pseudonym) is founder and CEO of a successful East Coast green-manufacturing company. Founded in 2001, Wieder’s company converts waste materials into hip, desirable, ecologically sound products. His profits have tripled since 2004. He posted $3.5 million in sales in 2007, and expects to grow by 300% this year.

Wieder’s impressive numbers conceal a fascinating psychological narrative. Mind you, this was not immediately apparent: Even media-savvy entrepreneurs who make their living from trash don’t usually just open their inner dumpsters for inspection.

My psychoanalytic radar went up when Wieder – who’d initially seemed as gung-ho as a racehorse to speak with me – blew me off several times at the last minute. I was curious: why couldn’t he connect, and why were all our plans being abruptly scuttled?

Initially, this didn’t compute: I’d heard that one of the cornerstones of Wieder’s success was his ability to conscript the media as an ally. A few years earlier, he had prevailed against all odds in a devastating legal attack that a juggernaut competitor waged against his fledgling company. With none of the resources needed to combat such an overwhelming assault, his little startup was staring into the abyss.

Like Giants quarterback Eli Manning in Super Bowl XLII, Wieder added his own chapter to the converting-defeat-into-victory playbook. His success had much to do with masterful media manipulation. During his legal battle, Wieder succeeded in mustering grassroots support through a blitz of media appearances and by marshalling arguments on his company’s website.

Wieder’s media campaign yielded consumer sympathy, product allegiance, a rapid surge in sales, and renewed investor confidence. Eventually, his behemoth competitor backed off and settled. Score one for the underdog.

Where David used a slingshot and a rock to slay Goliath, Wieder used communication; instead of hunkering down in barricaded silence, he spoke out. In short, Wieder boldly and imaginatively used a desperate situation to catapult his company into the stratosphere.

Which brings me back to the incomplete phone calls. I wanted to know what Wieder might be communicating by his apparent difficulty in speaking with me. As a busy executive, his apologetic claims of a crammed schedule were doubtless entirely real. But I also heard another signal. Was it ambivalence? Hostility? Anxiety?

When we finally connected, I learned that in addition to being extremely busy, Wieder was also subtly, and unconsciously, clueing me in on a family history of not talking about things.

Born in an Eastern European country, Wieder emigrated to the West as a young boy with his parents, both medical doctors. Coming from a socialist regime, he was mesmerized by capitalism, and especially by the wasteful extravagances of Western consumer culture. He remembers stumbling upon a cache of discarded TV’s and stereos in the basement of his family’s apartment complex.

“We never even had these back home, and here people just throw them away,” he remembers thinking.

In Wieder’s personal mythology, the moment crystallizes the genesis of the source-code for his business model and worldview – waste as a metaphor for turning something negative into a positive.

Wieder watched his parents struggle to relaunch their careers. Both had to retrain and recertify in order to practice as physicians in their new country. His mother, a nephrologist (a specialist in treating disorders of the kidney, organs that process body waste), had to work delivering food in a nursing home. His father landed a job as an assistant medical researcher.

I asked him to tell me more. After a moment’s silence, Wieder recalled that as a 10-year-old snooping around his father’s research lab, he found a box of photos of a child’s body after an autopsy. He found the experience exciting but also frightening, combining the thrill of doing something forbidden with the risk of being caught, and the trauma of seeing something horrifying.

That same year, Wieder’s parents had another child who died soon after his birth. They told Wieder what had happened, but after that the little brother who never came home was never discussed.

Children try to absorb the inconceivable through imaginative distortions grounded in what they know. In other words, Wieder probably conflated the accessible memory of the disemboweled child in the photographs with the doleful mystery of his missing brother.

As Wieder related this buried piece of history, a door from his boyhood seemed to open. He told me of other major events in his parents’ lives – deaths and divorces, private worlds of grief and loss – that he had only learned about much later, and then only indirectly, from friends of his parents.

Growing up, Wieder was assiduously insulated from everything below the surface of his parents’ world. This reminded me of a patient from my clinical practice. To help me conceptualize that fellow’s central problem, I came up with a private name for him: “The Man Who Eats With His Ass.”

Underneath his outward zeal for all things healthy and organic, this man was passionately intent on destruction. He would shovel the world – jobs, relationships, and ambitions – in through the back door, only to expel it all before it could be of pleasure or use. He couldn’t digest or metabolize important experiences. Not surprisingly, he felt persistently unfulfilled and unable to grow. Life for him was a big waste.

I think Wieder devised different and vastly more adaptive responses to the dearth of meaningful communication he experienced in an otherwise supportive and loving home. Perhaps most importantly, he learned to speak. The first major lesson he learned as a young businessman was that giving free voice to his business difficulties brought salvation, elegantly reversing his family’s paradigmatic silence.

In listening to Wieder describe milestones in the evolution of his business, a pattern emerged: “lucky,” “flukes,” “accidents,” “unforeseen disasters,” “one surprise after another.”

Remember the last-minute cancellations to our phone calls. I would say his early experiences of interruption, disappointment, and loss, coupled with the exhilaration of learning that he could magically convert negative to positive, are now embedded characteristics for him. I also believe that his success was fuelled by the childhood wish of bringing back his unknown brother.

And that helps explain how Wieder created a business that functions like a kidney, extracting nutrients and reprocessing waste for the good of the whole system.

Alexander Stein is a psychoanalyst and consultant in practice in New York City. He is also a training analyst and faculty member of The National Psychological Association for Psychoanalysis, and a principal in the Boswell Group.

Disclaimer: This column is designed for educational purposes only. Due to the individual nature of each situation, Dr. Stein cannot offer advice or suggestions beyond what is presented here. You should not rely on this information as a substitute for personal therapy, or construe it as the offering of a diagnosis or remedy.

Vision quest

(FORTUNE Small Business) – Peripheral vision is crucial to survival. It lets you see what’s next to you without losing sight of what’s in front. It’s important whether you’re hunting, gathering or running a business. Now imagine life with only peripheral vision. To look ahead, you must turn to the side. And what you see is dim and distorted anyway.

Dan Rhodes (not his real name) was about nine when he was diagnosed with juvenile macular degeneration (the center of the eye, the macula, thins, causing loss of central vision). He has been legally blind since the sixth grade. Now 39, Rhodes is founder, president, and super-spokesman of a successful and still growing East Coast retail company that provides equipment and services to the visually impaired.

Rhodes is one of six brothers and sisters, all of them visually impaired to some degree. Their parents, both normally sighted, worked to create as regular a home as possible – so much so, that Rhodes recalls having to remind his parents that he couldn’t see when they assigned household chores. He and his siblings felt entirely accepted at home, were never treated as disabled, and attended regular schools.

However, Rhodes was more closed-mouthed than his siblings. As he recalls, they often requested and received extra help. In the tumult of their needs, his quiet, steady surface mode was mistaken as all’s well.

The “normalcy” at home naturally collided with the demands and expectations of the outside world, where Rhodes could not escape his physical limitations. He felt massively pressured, frightened, and confused, and soon saw himself as utterly disabled, all the while hoping his condition would magically disappear. He withdrew from everything – he never raised his hand in class even if he knew the answer because he was terrified of being criticized or teased. He had no friends. By 8th grade, the stage was set for staggering psychological problems.

Through high school, Rhodes was deeply depressed and intermittently suicidal. He began drinking heavily to drown the pain. “I can’t believe this is my life,” he would think when he woke up in the morning, “Just take me out.” His ability to “see somewhat but not enough,” drove him further to the edge. Worse yet, he told me, not having been born totally blind, “I know what I’m missing.”

Between worlds

And he kept it all to himself. At home, there was nothing abnormal about him; he was one of many, and not the worst off. At school, his dread of withering critique was unrelenting; he imagined everyone had something negative to say about him. Nobody felt safe. To protect himself, Rhodes found ways to hide not only his feelings of worthlessness but his condition itself. He convincingly acted as if he were fine and sighted. He was neither.

The crippling social anxiety continued without let-up. He dropped out of college in his first year, returning to live at home. Eventually, Rhodes ventured out and found work, mostly brute labor such as building tennis courts and landscaping.

But all the while he was also quietly studying these businesses. It’s not uncommon for people who’ve had isolating illnesses, especially as children, to develop skills and interests uniquely linked to their condition (history is filled with mathematicians, philosophers and scientists who were sickly or bed-ridden as kids). Remember, Rhodes laid low out of fear, not inability. As a perennial outsider, he became a critical thinker and keen observer.

Then, pursuing a long-standing love of things that go fast (people are drawn for many reasons to what they cannot have or do), he befriended the owner of a local motorcycle dealership, who improbably brought him on as a salesman. This invitation, coupled with his mother’s endorsement of what seemed a loony idea (a blind man selling motorcycles!), solidified the realization that others saw him differently from how he fearfully expected. This triggered an internal shift: to finally admit his condition was permanent, and stop wishing he could will his sight back.

Business ascent

Rather than struggling to sell in handicapped silence, he found a voice for his eyes. He asked for help and special equipment. Within two years, at 25, Rhodes broke $1 million in sales, made vice-president, and was soon a partner.

His self-esteem bolstered, Rhodes could look past daily psychological survival, and consider living. He started dating, and fell for a woman he’d first known in early childhood. Her acceptance of him and their subsequent marriage brought a second important shift-an altered view of himself as normal and capable on his own terms.

These trajectories rarely ascend linearly. Despite having everything – money, love, respect, independence – Rhodes suffered another emotional crisis. He was trying to sell a motorcycle to a client who really couldn’t afford the purchase. The experience triggered a destructive series of thoughts: “People don’t need motorcycles” became “I’m doing something meaningless,” which led to the conclusion “I’m worthless.”

But this time he dealt with his regressive self-loathing in a far more positive way. Instead of succumbing to the paralysis of depression, he quit his job and took a year off to plot a new course.

Though their histories are not always publicized, the business world is heavily populated with people like Rhodes. Consider the late James L. Sorenson, a storied Salt Lake City businessman, born into the economic depression of the 1930’s, who suffered from severe dyslexia. From these early privations and struggles, Sorenson honed compensatory skills that he deployed innovatively, eventually amassing a fortune in excess of $4.5 billion.

Now firing on all cylinders and looking straight ahead, Rhodes enlisted his best asset: himself. Drawing from his own difficult experiences, he developed a line of products to help other visually impaired people. A smart business plan yielded a bank loan which, coupled with savings, launched his company, where most of his employees are also blind or visually impaired. Profits doubled in the first and second years, with continued growth from large-scale contracts, and partnerships with other providers to the low-vision population.

The boy who was once too petrified to raise his hand in class is now a poised presenter at conferences and tradeshows, happy to talk about how you can go fast even when you can’t see past the end of your nose.

Alexander Stein is a psychoanalyst and consultant in practice in New York City. He is also a training analyst and faculty member of The National Psychological Association for Psychoanalysis, and a principal in the Boswell Group.

Disclaimer: This column is designed for educational purposes only. Due to the individual nature of each situation, Dr. Stein cannot offer advice or suggestions beyond what is presented here. You should not rely on this information as a substitute for personal therapy, or construe it as the offering of a diagnosis or remedy.