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 alleged chief ideologist of (Chinese-flavoured) agile capitalism: “Management is not about managing people, but about helping people become entrepreneurs”!
Hip Hip Hurrah! 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 customers (… and profits for the capitalist)! Who wants to be a (dull) manager anyway?!
That all sounds great, 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 invited to any big parties at all, they were at best perceived as those (boring) people who “acquire resources at known prices to produce and sell goods at an uncertain future profit”. In other words: “carriers of business risk” — somewhere between loan shark 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. Savvy entrepreneurs pushed into the headlines and limelight, and their societal roles and relevance expanded: Jean Baptiste Say praised entrepreneurs as the critical “link between science and labour”, and Alfred Marshall acknowledged 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.”
- Luckily, the post-war years helped to repair the tarnished reputation of entrepreneurs: disillusioned by politicians and soldiers, society looked up to a number of enterprising businessmen (sic!) who drove the reconstruction of both economy and society. Much in line with the (European) tradition of “honourable merchants”, many illuminated entrepreneurs made it their personal mission to pull that wagon, as Churchill intimated - fully embracing greater social responsibility (and supporting higher taxes as well as the government’s active role 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)
Therefore, it turns out that the invention of entrepreneurs as icons of modernity is surprisingly new. Joseph Schumpeter might well be its godfather: he describes entrepreneurs as creative and dynamic figures who ”imagine and implement new combinations of resources to generate innovation and economic growth”.
The Modern Myth of Entrepreneurialism
But the story does not quite finish here: with the invention of modern management methodologies, the explosion of global markets, and, alas, the introduction of business schools the portrait of entrepreneurship mutates once again, albeit slightly. In most textbooks today, technical definitions of entrepreneurship dominate and any ethical legacy has almost 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 pioneering disruptors of modern markets, who through their creativity fuel economic growth and above all make a lot of money for themselves. Sounds familiar? Whilst apparently amoral, it legitimises — not for the first time — behavioural narcissism, whilst introducing a touch of drama and magic to the dismal science of economics! It might be no surprise, then, that in the soul-thirsty imagination of our ever more disillusioned corporate society, entrepreneurs have advanced to an almost mythical status of almighty avengers — in a global Darwinian battle for market share, technological innovation and power. Let there be not doubt: in the Churches of Capitalism entrepreneurs are the new uncontested Saints!
Entrepreneurs of the World, Compete!
Exciting! So, should we heed those battle cries and radically transform our organisations to become more “entrepreneurial”? And make every employee an “entrepreneur”?
- 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. 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 certainly compelling. By the same token, the suggestion that every employee should have 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 security or the preferred lifestyle of many. I know many 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 people 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 at all about developmental freedom, but simply about further increasing the pressure on employees (or subcontractors) to accept more risk, responsibility and ultimately produce more profits for the “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 CEOs touting fancy sweaters, bubbly unicorns or flashy head offices.
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, for the purpose of “good work”. Perhaps management is not simply about “helping people become entrepreneurs”, but about enabling all individuals and communities to flourish. Either way, reifying individual entrepreneurs as the messianic saviors of humankind — as some management prophets of sale seem keen to do, is certainly neither justified nor useful.
Historical overview of the notion of “entrepreneur” based partly on: Christliche Unternehmer by Francesca Schinziger
Isn’t more autonomy good? Fair point Otti. However, would you say that shifting the system of management and governance in organizations to provide more autonomy to individuals in the workplace is an equally problematic aspiration? I would argue this it is inherently a good thing for humans and humanity, even if some organizational members prefer less autonomy for themselves. To be fair, the post talks about giving more autonomy to workers — which resulted in more of them acting like entrepreneurs. As long as they made this choice on their own, it is hard to find fault in that. The problem would be in imposing the risk profile preference of an entrepreneur on everyone.
- Yes, I certainly agree with most of that. I do believe, however, that the desire for autonomy as often understood — in the sense of “negative freedom” — is overrated. I believe differentiation and integration, and subsidiarity and solidarity should go hand in hand. And as Mary Parker Follett wisely pointed out, the true magic of organisations is their capacity to integrate, rather than fragment. I am pondering about a different theory of the firm that transcends the simplistic and I believe erroneous notion of the firm as a “nexus of contracts” — where boundaries are determined by transaction costs. Conversely, I reckon we need to look at the meaning-creating capacity of the firm — the ability to endow people with collective purpose and spark their creativity and imagination in service of the shared (and good) enterprise. More to be pondered…
From: “Sunday Morning Thoughts on LinkedIn” — I will report some of the interesting LinkedIn dialogues here, paraphrased and applying the Chatham House Rule — trying to protect some of the sentiments, thoughts, and above all our stimulating discussions from oblivion ;-)