Theory E²: Working with Entrepreneurs in Closely-Held Enterprises — I. Close to the Heart
In this instance, the entrepreneurial challenge is one of finding coherence and continuity in the midst of the informality and flexibility—reminding one of the challenge that is associated with our second issue (tacit intentions). In a closely held enterprise, one finds coherence and continuity, not in the rules and regulations of the organization, but instead in the distinctive stories that each member of the enterprise can tell regarding the organization and her role in the organization. As psychologists working with leaders in closely held enterprises we are constantly in the business of eliciting and listening to stories—this is what holds the enterprise together and provides members of the enterprise with guidance regarding how to work with one another. Story telling is much more valuable in closely held enterprises than are attempts to artificially imposed rules and regulations. Some sociologists identify this approach as the discovery of “natural helping networks.” These networks often operate very effectively in closely held enterprises, and must be honored and supported, rather than being bypassed by some external version of how an “effective organization should run.”
5. Powerful Role of Leader
At the heart of the matter in closely held enterprises is the central, integrative force in this organization—namely, the entrepreneurial leader or cluster of leaders. Typically, the closely-held enterprise is highly dependent on this leader or cluster of leaders: “I don’t know what we’d do if she wasn’t here.” “He is the ‘life blood’ of this organization.”
Usually, there are high levels of loyalty to the leader or cluster of leaders. Furthermore, there typically are low levels of independence from the leader on the part of those who are working in the enterprise. This can be a further source of burnout on the part of both the leader and follower. The leader is ambivalent about the dependency of her staff. “I wish they would make up their own minds sometimes, rather than always coming to me for my advice.” Yet, this entrepreneur never quite lets her staff off of a very short leash and can be very critical if a mistaken action is taken without consulting her. There is often a demoralizing “I-told-you-so” response from the entrepreneur
We will have much more to say about entrepreneurial leadership in a later essay.