Home Concepts Organizational Theory Theory E²: Working with Entrepreneurial Professionals in Closely-Held Enterprises

Theory E²: Working with Entrepreneurial Professionals in Closely-Held Enterprises

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Second, in many closely held enterprises (especially professional practices), the intentions are obvious—everyone is working on behalf of these intentions every moment of every working day. Most people working in a dentist office know what they are there for: dental health (and the reduction of anxiety associated with the patient’s coming to “see the dentist”). The intentions are similarly obvious to the staff of a law office, employees in a family-run grocery store, crew members on a fishing boat, or volunteers at a woman’s shelter. As one of our clients commented: “If you want to know what our business is, just look around you . . . Why do you even ask?”

There is a third reason for the intentions of a closely held enterprise being important, but rarely discussed. This third reason is inherent in the name: the power in the organization is held closely by a small number of people. There is not much room for other people to influence the intentions of the enterprise, so why even bother talking about these intentions? “Everyone around here knows who’s in charge and who calls the tune—so why even talk about what we value or where we are going in the future.”

What are the implications of a lack of formal intentions in closely held enterprises? First, there tends to be high levels of commitment in the organization—that’s why there is not much need for explicit intentions or for formal mechanisms of integration. Everyone pitches in and provides direct, tangible service to the organization; therefore, there is not much need for conversation about the intentions or for careful monitoring of the alignment of an employee’s work with the formal mission, vision, values or purposes of the organization.

On the other hand, there are low levels of clarity regarding the achievement of specific goals and objectives, and little clarity regarding how one’s own personal performance is measured with reference to a specific set of goals or objectives. Everyone is a bit on edge, waiting for an informed (but often biased) assessment by the entrepreneurial leaders regarding how “well” the enterprise is “performing.” One of my graduate students in the past owned a small business that processes coffee beans for distribution to high-end coffee shops. Every morning, when he walked into his office he could smell the beans being processed and immediately knew if the coffee is “good” or “bad.” He knew intuitively—but can you imagine how his employees felt while waiting for his daily assessment?

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