Searching for the Spirit of Enterprise

As the modern corporation has grown larger and larger, management science has created an endless stream of theories and techniques in an attempt to professionally manage the business enterprise. Consultants, academics, and corporate bureaucrats have assumed that any business can be professionally managed and that bigger is always better. Yet giant corporations the world over (including Japan) have been plagued by declining growth and productivity, while younger, smaller, more entrepreneurial companies have been the real source of economic growth. Farrell comes to the conclusion that the only solution is to dismantle the megacorporation and start anew.

According to Farrell, the new corporations will operate according to principles based upon the practices of successful entrepreneurs. They do not manage, consult, or teach—they make things and sell them, create jobs, and build businesses. Regardless of the industry, the basics are the same. Entrepreneurs have a customer/product vision that can be summarized as “my customer, my product, my self-respect.” They have a product they believe in, an obsessive desire to build a customer base, and take personal pride in the entire process—as does everyone who works for the company. Large organizations can retain these values by keeping business units small and simple; making sure all employees personally participate in the company’s successes and failures; and by leading with integrity, which means always making ethical decisions, and not asking employees to make sacrifices the managers will not make.

SEARCHING FOR THE SPIRIT OF ENTERPRISE is a passionate call for action—long on pronouncements on the current state of enterprise and inspiring success stories, short on concrete solutions (beyond the general principles, which are hammered home repeatedly). Perhaps that is as it should be, since the actual process needed to restore the spirit of enterprise would likely be different for every company. Despite overly snide comments about management theorists, Farrell’s main points are well taken and worth serious consideration.