Enlightened Entrepreneurship: The Next Step
I continue to promote and recommend the concept of enlightened entrepreneurship, but we do not have a common understanding of the term. Some define it as a very spiritual or humanistic approach to business and others confuse it with social entrepreneurship, where the purpose of the business is to meet the social needs of society more explicitly than the economic needs of the business owners.
My concept of Enlightened Entrepreneurship:
Business leadership that recognizes that doing better for the business also means doing better for people and the planet. Enlightened entrepreneurs manage their business to achieve its economic objectives while also recognizing and meeting its social responsibilities.
Consider the meaning of “enlightened” in the historical context of the Age of Enlightenment, also known as the Age of Reason, which dominated philosophical ideas in Europe from the early 17th Century. The principal goals of Enlightenment thinkers were liberty, progress, reason, tolerance, fraternity and ending the abuses of the church and state. The ideas of the Enlightenment played a major role in inspiring both the American and the French Revolutions for freedom and democracy, giving more power to the people.
Over the last two centuries, most Western societies have experienced increasing individual freedom and less dependence on central authorities with a corresponding expansion of capitalism and free enterprise. Early in this period (1776), Adam Smith published The Wealth of Nations and first described the principle of the invisible hand, guiding entrepreneurs to unintentionally contribute to the greater good of society.
In his words, describing the business owner:
He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it … directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." (Book 4, Chapter 2)
But the excesses of the industrial revolution, exploiting workers and concentrating wealth and power in the hands of only a privileged few, caused social reaction in worker revolts, the rise of trade unions and the growth of the opposing ideology of socialism.
In the 21st Century, we still observe irresponsible capitalist excesses driven by greed and selfishness that exploit workers, concentrate wealth, manipulate democracy and neglect the needs of society.
The opposing forces in society are still battling: some defending capitalism and free markets as delivering prosperity to millions of people and others blaming corporate CEOs, entrepreneurs and their political supporters for all the ills of the modern world.
We cannot keep our heads down and ignore these issues, while “taking care of business.”
Enlightened entrepreneurs know that they can no longer rely on the invisible hand to help them protect the public interest and meet their social obligations and responsibilities. The modern world is more complicated and modern society is more demanding. Entrepreneurs need to be more aware and more explicit in responding to the demands of the world around them.
The next step for Enlightened Entrepreneurship is for us to practice it, promote it and defend it.
Are you ready for the next step?