Entrepreneurs Rising!
Wherever we look, whatever we read, a revolutionary movement seems to have captured the fantasies of corporatelandia: the battle for more entrepreneurialism is on!! Armies of consultants and swarms of starry-eyed agilistas are storming the bulwarks of bureaucracy and raiding the fiendish fortresses of decadent hierarchies and conservatism. Their demand is unanimous: we must transform our businesses, and ourselves, to become more entrepreneurial! Or with the words of Zhang Ruimin, CEO of Haier Group and celebrated chief ideologist of (a proudly Chinese!) “quantum capitalism”: “Management is not about managing people, but about helping people become entrepreneurs”!
Oorah!! Deus Vult! It was about time that someone rattled those rusty cages of unnecessary controls, administrative constraints and costly regulations! Down with old bureaucracies; freedom for free enterprise; sovereignty to savvy customers (… and, above all, princely profits for stock owners)! Who wants to be a (dull) manager anyway?!
That all sounds exciting, but wait… what exactly is “an entrepreneur”?
The Curious History of Entrepreneurialism
With all the hype about entrepreneurship it might come as a surprise that the role and reputation of “entrepreneurs” has been far from unequivocal during the last two centuries:
- In the 18th century, being an entrepreneur was rather lackluster — at least in any social sense that mattered. If entrepreneurs were at all invited to any of the good parties, they were at best perceived as “carriers of business risk”, i.e., (boring) people who “acquire resources at known prices to produce and sell goods at an uncertain future profit”. In other words, somewhere between loan sharks and speculators. Even Adam Smith described entrepreneurs primarily as financiers, without wider societal importance.
- A century later, the industrial revolution was in full swing and everything changed. Rampant investor-entrepreneurs pushed into the limelight and filled the headlines, whilst their managerial roles and societal relevance expanded rapidly: Soon Jean Baptiste Say praised entrepreneurs as the critical “link between science and labour”, and Alfred Marshall marked out their crucial role across all strategic business and investment decisions.
- Regrettably, at the same time the societal image of entrepreneurs rapidly deteriorated: many were decried as unscrupulous hunters for profits and condemned as selfish exploiters of society to make money. Edward Burke, often touted as the founder of conservatism, described the early English industrialists as follows: “the ledger is their bible, the stock exchange their church, and money their God”. Even Winston Churchill quipped, rather critically, that: “Some see private entrepreneurs as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.”
- Then came years of (capital-intensive) growth. With mass production (and distribution) came management science and, increasingly, the separation of professional management and ownership. Economies of scale were the name of the game, strategy became synonymous to barriers to entry, and predictability and control were the virtues of ever-larger modern organisations, both in private and public sector. German sociologist Max Weber argued convincingly that bureaucracy constitutes the most rational way to organise human activity and that hierarchies are indispensable to maintain order, maximize efficiency, and eliminate favoritism. By the late 19th century bureaucratic forms had begun their spread from government to other large-scale institutions.
- The post-war years offered a temporary opportunity to repair the tarnished reputation of entrepreneurs: disillusioned by politicians and soldiers, citizen — especially in Europe — looked up to a cohort of enterprising businessmen (sic!) who drove the reconstruction of both economy and society. Much in line with the (continental) tradition of “honourable merchants”, many illuminated entrepreneurs made it their personal mission to pull that wagon, as Churchill intimated, fully embracing greater social responsibility. (Note: for example, by endorsing taxes of up to 90% for top incomes in the US and by supporting the active role of governments in social welfare)
- Memorable in this context is the quote by John D. Rockefeller, founder of Standard Oil Company, who expresses the belief of many of his peers: “I believe that every right implies a responsibility; every opportunity, an obligation; every possession, a duty. I believe in the dignity of labor, whether with head or hand; that character-not wealth or power or position-is of supreme worth. I believe that the rendering of useful service is the common duty of mankind and that only in the purifying fire of sacrifice is the dross of selfishness consumed and the greatness of the human soul set free. I believe that love is the greatest thing in the world; that it alone can overcome hate; that right can and will triumph over might.” (Whether John lived up to his credo is, of course, another story)
The Modern Myth of Entrepreneurship
Thus, it turns out that the concerted promotion of entrepreneurs as the undisputable champions of a free market economy is surprisingly new. Joseph Schumpeter might well be its godfather: he passionately described entrepreneurs as creative and dynamic figures who “imagine and implement new combinations of resources to generate innovation and economic growth”. Yet it is only in the second half of the 20th century when crises and recessions bite, financial markets explode, and globalisation brings never known levels of competition and complexity that the campaign for more entrepreneurialism really takes off!
Sadly, in most textbooks today, technical definitions of entrepreneurship dominate and any ethical connotation has vanished. “An entrepreneur”, says Investopedia, “is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards.” In other words, entrepreneurs are those emblematic pioneers who creatively disrupt saturated or slow-moving markets to make a lot of money for themselves, and— allegedly — fuel economic growth for everybody else. Sounds familiar?
Whilst seemingly innocuous, such an “amoral” framing of entrepreneurship not only risks legitimising narcissism and personality cult, but also spins a fantasy tale of markets being ruled by the “natural law” of creative destruction — where (only) the fittest survive, and ruthless competition enables societal benefit. It might be no surprise, then, that in the soul-thirsty imagination of our ever more disillusioned corporate society, some entrepreneurs have advanced to an almost mythical status — as almighty avengers in a Darwinian battle for market share, technological innovation and power. Let there be no doubt: in the Churches of Capitalism, entrepreneurs are now the uncontested Saints!
Entrepreneurs of the World, Compete!
That’s all good, you might say, but should we now heed those battle cries, and radically transform our organisations to become more “entrepreneurial”? Making every employee an “entrepreneur”? Or not?
As always, it depends.
- Corporate Bureaucracy-busting: Firstly, juxtaposing entrepreneurs to managers, and platforms or ecosystems to bureaucracies, is ridiculously simplistic — in the same way we tried to separate “leadership” from “management”, or agility from resilience, without much success. How to structure an organisation is always contextual — and bureaucracy is not the same as (positional) hierarchy. It is also always interesting to revert to Elliott Jaques who eloquently argues that bureaucracies provide a valuable contribution to an open society. That said, the idea that companies must look out for ways to become more responsive to changing requirements, be that inside or outside the organisation, is undoubtedly compelling. By the same token, the suggestion that every employee should have at least a chance to become “their own CEO” is powerful. All of this points to a requirement to design and dynamically develop our organisations more purposefully and consciously, and it underscores the importance to better distribute organisational power — in order to BOTH enhance human flourishing and attain organisational agility. As Jon Ingham points out, this requires clarity over values and principles, and an open and participative process to continuously revise “how to make work work” — especially in those companies that still often stifle and constrain our ability to contribute.
- Individual Human Development: Secondly, should everyone aim at becoming an entrepreneur? Frankly, no. Having created a few startups in my life, there are many aspects of entrepreneurialism that do not easily fit the needs for (financial and psychological) safety or the preferred lifestyle of many. I know lots of people who simply would never want to become entrepreneurs. Hence, rather than promoting one specific role we should focus on collective and integral human development. As Stefano Zamagni points out: “it is the productive process that should be adapted to the human condition of people, not vice versa.” I reckon we should rather respect each person for who they are and cherish who they want to become, enabling an organisational environment where people can step into different roles, and where communities “lift each other up” for the good of all. Otherwise, we might quickly uncover the nasty face of entrepreneur-mania: that maybe it isn’t really about developmental freedom, but simply about further increasing the pressure on employees (or subcontractors) to accept more risk and responsibility at lower costs, to produce more profits for those few “individuals who enjoy most of the rewards”.
- Economic Ethics and Entrepreneurship: Finally, entrepreneurs have undoubtedly contributed massively to the progress and well-being of our society. And, whenever appropriate, we should praise them for their virtues and character — e.g., for their curiosity, courage and perseverance, or their social contribution. But I strongly believe there can be no separate “morality for markets” — our economy must serve society, and leaders of organisations must responsibly serve their people, communities and ecosystems. Hence, the often blatantly individualistic and profit-obsessed (“americanised”) image of entrepreneurship is neither the only, nor the best model. Every “good organisation” must balance autonomy with integration, and subsidiarity with solidarity — good organisations craft “entrepreneurial communities” where the production of “internal goods” (like friendship, development, justice, ecological sustainability) is as important as the production of “external goods” (like customer satisfaction or revenues). Therefore, “good entrepreneurship” is more than Fortune 500 CEOs sporting fancy sweaters, bubbly unicorns or flashy head offices.
“Servant Entrepreneurship”
Maybe, then, our conclusion is not that we need millions of new entrepreneurs at work — epitomising gig economies and self-employed uber drivers; but rather that we need more entrepreneurship to innovate the way we work, in order to create truly “good work”. Perhaps management is neither about managing people, nor simply about “helping people become entrepreneurs”, but about enabling both individuals and communities to flourish. Either way, reifying superstar entrepreneurs as the messianic saviors of humankind — as some management ‘prophets of sale’ seem keen to do, is certainly neither justified nor useful. We are not managers, leaders or entrepreneurs, because we rule. We are either of them, because we truly care.
Historical overview of the notion of “entrepreneur” based partly on: Christliche Unternehmer by Francesca Schinziger
