Friday 4 July 2014

The Entrepreneurial Contract

As the antidote to the Patriarchal Contract (which I described here) Peter Block also outlines the Entrepreneurial Contract, and how that differs.

As I said in the previous post, his book (The Empowered Manager is a call to action for managers in all types of organisation - but particularly Bureaucratic ones where the Patriarchal Contract dominates. It is a courageous, rather than a safe, strategy that he advocates, for reasons which should be self-evident. 

As he points out, organisations start entrepreneurially - by definition!  Over time, with growth and a desire for stability, a degree of control is introduced, leading to an increasingly bureaucratic organisation.  Too frequently, that takes on a life of its own and becomes the prevalent culture of the organisation.

Here is my summary of his thinking on the Entrepreneurial Cycle.

The Entrepreneurial Cycle

1    The Entrepreneurial Contract

The essential difference in the entrepreneurial cycle is a fundamental shift of attitudes about people.  The Entrepreneurial Contract is based on the belief that the most trustworthy source of authority comes from the individual, rather than from the boss.  The primary purpose of the leadership is to enable people to give of their best in the service of a joint vision.  

In place of obedience, individuals take responsibility: within the agreed overall direction, strategy and guidelines, individuals are empowered to make the decisions that they believe to be in the best interests of the organisation.

In place of the denial of self-expression, individuals are encouraged to express themselves honestly and enable others to do the same: the resultant exchange of real ideas and information will generate excitement, enthusiasm, conflict, passion... and engage people in their work in a far more energised way.

In place of sacrifice for unnamed future rewards individuals make commitments to do what they believe in: this rests on the assumption that people want to contribute meaningfully to the organisation.  Instead of trying to cajole or bully them into work that is meaningless, an entrepreneurial culture is one in which people find meaning in their work - and then give of their best.

The belief that these principles are just points the way to a more positive and optimistic view of human nature.  It is true that some employees may not respond well to such a culture, but the fundamental assumptions are that most will, that it stultifies the whole organisation to write the rules for the unmotivated few, and that other ways need to be found to deal with poor performance than assume that all workers (and supervisors and managers) are fundamentally not to be trusted.

2    Enlightened Self Interest

If we are to transform our organisations, we need to step outside the myopic self-interest of pleasing bosses and playing it safe.  If we are to choose courage over caution, we need to be clear what is truly important to us.  Typically the entrepreneurial mindset finds value in:
  • Meaning
  • Contribution and service
  • Integrity
  • Positive impact on others’ lives
  • Mastery

The great thing about these is that they are all under our own direct control, and when pursued provide a profound satisfaction - as well as making a genuine and lasting contribution at every level: to individuals, teams, the organisation and society.

3    Authentic tactics

If we are committed to serving our vision of a better future, and to developing our own and others’ autonomy, then we do not need to indulge in the manipulative tactics designed to win approval.  instead we can be models of authenticity in the organisation.  In particular, we can:

  • Say no when we mean no
  • Share as much information as possible
  • Use language that describes reality
  • Avoid repositioning for the sake of acceptance.
All of these may require courage and risk-taking - and all will help both the individual who does them and the others with whom he or she interacts to become more autonomous.  Fundamentally it is treating people as though they are trustworthy adults, not irresponsible children.  Most will respond appropriately.

4    Autonomy
The entrepreneurial contract and a service-oriented definition of self-interest support each individual in developing more autonomy.  Autonomy both reduces our fear of those above us, and makes us take more responsibility for our own actions and contribution. It encourages us to use our minds at work, to communicate honestly and contribute to a more vibrant, exciting, stimulating and risky organisational culture.

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