How Entrepreneurial Organizations Thrive: The Power of Shared Responsibility and Innovation

Every organization serves a purpose in the market, but not all survive and thrive over time. Some organizations succeed due to the personality of their owner. However, when that personality loses its charm or control, the organization often loses its market credibility as well. These closures can be seen as part of the natural evolution—what is created must eventually end.

Yet, there are organizations that continuously create new purposes and adapt to support different personalities and their evolving expressions. These organizations function like a relay race, ensuring continuity and sustaining their ability to thrive. Any organization that can reinvent itself, align with the market, and continually grow and evolve can be termed an entrepreneurial organization.

Entrepreneur vs. Entrepreneurial Organization

The key difference between an entrepreneur and an entrepreneurial organization is that it’s not a one-person show. Typically, an entrepreneur invents a product, markets it, and builds a business structure to generate long-term revenue for all stakeholders. However, many such organizations do not survive beyond the entrepreneur’s lifetime. The entrepreneur’s vision becomes diluted, and the structure they built can no longer weather the dynamic market changes. Often, the organization’s employees lack the skills or expertise to run the business because the entrepreneur kept critical information close to the chest or was unwilling to adapt to ever-changing market scenarios.

In an entrepreneurial organization, every employee embodies an entrepreneurial spirit in their daily work. This culture is crucial for long-term success and adaptability.

Characteristics of an Entrepreneurial Organization

An entrepreneurial organization thrives on a combination of efficiency, empathy, and innovation. Today’s employees are not the same as those from 15 or 20 years ago. The newer generations are less willing to fit into hierarchical, bureaucratic structures. Instead, the focus is now on humanizing work—embracing humanocracy over bureaucracy. Organizations that follow humanocracy provide space for efficiency and empathy, fostering a work culture that combines these elements with entrepreneurial thinking.

To ensure the organization’s ability to reinvent itself, every employee must focus on revenue models that add value to the organization. Additionally, when individuals have the freedom to innovate at work, the organization can continually adapt and thrive.

The Role of Business Coaching

Business coaching plays a vital role in developing entrepreneurial organizations. The key is to focus on the “in-betweenness,” a concept highlighted by Mee-Yan Cheung-Judge in her book, A Practitioner’s Guide to Organizational Development. She points out that while there are many tools to assess and develop individual performance, what is often lacking is the ability to cultivate collective performance in the “in-between” spaces where collaboration occurs.

My mentor, Dr. Bernd Schmid, founder of ISB Germany, identifies five perspectives essential for developing an entrepreneurial organization:

• Shared Reality
• Shared Strategy
• Shared Performance
• Shared Responsibility
• Shared Leadership

Overcoming Bureaucracy

As organizations grow, they often add layers to their structure to maintain efficiency. However, this can create distance between employees at different levels, leading to bureaucracy and concentrated power structures. Creativity and innovation are then replaced by rigid processes and procedures.

As a business coach, I focus on freeing organizations from these self-sabotaging traps. By coaching within the “in-between” spaces, employees working together in the chain of responsibility can learn together, develop empathy, and complement each other’s talents. This approach breaks down silos and fosters a shared reality that can be addressed through shared strategies, performance, responsibility, and leadership. The result is a reduction in bureaucracy and a shift from hierarchical thinking to a more collective, entrepreneurial mindset.

Real-World Example: Bridging the Gap Between Corporate and Local Teams

In one business coaching scenario, participants from both corporate and city operations teams were brought together. The focus was on integrating global and local requirements. After establishing a shared understanding, the corporate team outlined their goals for the year and highlighted their dependence on the city team to achieve success. The city team then shared their goals and their reliance on corporate support. This mutual dependence fostered a sense of partnership, which helped the organization move away from a hierarchical structure and toward a more collaborative, flat structure.

When an organization operates with a flat structure, mutual exchange becomes viable, fostering innovation, strategic thinking, and managerial and executive decision-making at all levels. This entrepreneurial approach, supported by the organization, allows every employee to contribute to revenue growth.

The Future of Entrepreneurial Organizations

The focus of an entrepreneurial organization is collective innovation, strategy, and entrepreneurial thinking at all levels. When employees feel they can contribute additional revenue and are provided with a structure that allows for profit-sharing, they have the opportunity to act as entrepreneurs within the organization. As artificial intelligence takes over monotonous tasks, the future workforce will be even more capable of contributing in this way.

In conclusion, fostering an entrepreneurial spirit in every employee is key to creating an organization that can continuously reinvent itself and thrive in a dynamic market.

NOTE: The views expressed in this article are those of the author and not of Emeritus.