The bedrock of entrepreneurship is ownership. Yale law professor Henry Hansman argues that every business owner has two formal rights: âthe right to control the firm and the right to appropriate the firmâs residual earningsââin other words, the freedom to make decisions and a shot at the brass ring.
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People need freedom to act. Motivated, trained, and well-inculturated people donât need to be âcontrolled.â Adults donât need to be treated like children. People tend not to do their best work with someone looking over their shoulders.
Do people in your companyâall peopleâhave the authority (i.e., without approval from anyone) to make decisions that cost money? They ought to. Whoa! We bet that got your attention. Are we serious?
Yes. Weâre very serious. Of course, we donât mean that all people should have the authority to commit the company to million-dollar contracts, or that front-line clerks should be able to authorize the purchase of a new building. But people should have wide discretionary power to take responsibility to make sure something gets done fast, and done right.
It is the combination of autonomy and upside that fuels entrepreneurial fervor.
Personal pronouns take ownership. So whether we should use them or not depends on how much responsibility we want for whatever weâre talking about.
People desire and thrive on jobs that give them control over their own decisions. Since the 1980s, management literature has been filled with instructions for how to delegate more and âempower employees to empower themselves.â The thinking is exactly what weâve heard from Paolo. The more people are given control over their own projects, the more ownership they feel, and the more motivated they are to do their best work. Telling employees what to do is so old-fashioned, it leads to screams of âmicromanager!â âdictator!â and âautocrat!
So who does own Amazon or Apple? The answer is that no one does, any more than anyone âownsâ the Mississippi River, the Theory of Relativity, the Royal Economic Society or the air we breathe. A thing or â in Lord Millettâs erudite terminology â a res can exist without being owned by anyone. There are many different kinds of claims, contracts and obligations in modern economies, and only occasionally are these well described by the term âownershipâ. The differences between the modern corporation and my umbrella are so wide-ranging that it is hardly likely that my relationship with them could usefully be described in the same way.