Entrepreneurship has a progression. You and a partner take your cutting-edge idea and launch a company, investing cash and sweat equity. You make some mistakes, you deal with the pressure. If your idea is a good one, if you make more right decisions than wrong ones, you have a good chance of success, or so you would think.

But you can’t foresee the future. Say your company grows from a few employees to 30, and then 50. The dynamics start shifting. You find that you need a new office, policies and procedures, a bigger strategy, and what seemed like a simple idea has become quite complex. Now you’re at 100 employees. When you look back, you hardly recognize your original idea.

What happened? Your company likely lost its initial entrepreneurial spirit as it grew, and your brilliant idea morphed into a bureaucracy. If I’ve learned one thing after starting 10 companies, it’s that you’ve got to keep that initial spirit going, and to do that, you must foster it among all employees.

Here’s how to turn employees into co-entrepreneurs:

GIVE YOUR EMPLOYEES OWNERSHIP

Entrepreneurs are driven more by ownership in what they created than by how much they are paid. Their true reward is based on the company’s success. If the business does well, they feel rewarded, and if it does poorly, money usually can’t lift their spirits.

Organizations should consider offering incentives as if employees are shareholders, either by issuing stock options, introducing a profit-sharing plan, or providing incentives on sales in certain cases. An organization is far more effective having owners in every position rather than only a few at the top.

PASS THE BATON TO INNOVATE FOR GROWTH

In a company’s early stages, the founders are the ones who identify opportunities and innovative solutions to drive growth. But all employees should be expected to do that, which means that everyone should be given the opportunity to develop a vision of the future and innovate within his scope of work.

CHARGE YOUR EMPLOYEES WITH ASSESSING RISK

Successful entrepreneurs are intrinsically good at exploring options, assessing risks, and making the best choice while managing the risk. This thought process requires a methodical approach, since entrepreneurs are constantly facing new decisions. Just as you expect your staff to innovate, expect them to identify risks within their area of responsibility and find a way to mitigate them.

ALLOW EMPLOYEES TO EXPERIMENT AND LEARN FROM FAILURE

Failure is part of innovation. It’s practically impossible to find a new and better way to work or to improve a product without failing from time to time. It happens when you experiment. The key to creating an entrepreneurial culture, or to develop co-entrepreneurs, is to welcome failure on a small scale. Allow team members to experiment with new ideas, as long as they are fully aware of the consequences of failed attempts (which you have defined for them) and the associated costs. Encouraging small-scale experiments will minimize the downside, produce some good ideas, and allow the company to scale the most successful ones.

NURTURE MERITOCRACY, NOT ENTITLEMENT

No company succeeds if any employees feel a sense of entitlement. Companies are constantly competing for customers and the ones who do it best win. It should be the same within an organization; employees who produce results should be rewarded.

INSIST ON RESPECT AND FAIRNESS

Ideally, team members work together but that’s not always the case. Not only do you need to foster an environment that encourages collaboration, you must mandate that employees treat each other with fundamental consideration and even-handedness. Otherwise, it breeds a culture of bureaucracy and internal politics, and employees lose motivation. You don’t want your team devoting energy to navigating obstacles around biases of others instead of focusing on their job.

GIVE AMPLE ROOM FOR PERSONAL GROWTH

Entrepreneurs don’t like limitations. Typically they want to make a positive impact on the world and achieve personal satisfaction. To them, the sky’s the limit. To get the best from every employee, remove obstacles so that they can reach their peak capacity. When people hit a ceiling, they lose their edge, and their productivity declines.