Cultivating a Culture of Entrepreneurship

Welcome to the third post in this series on social enterprise. In the first post I defined a social enterprise as an ongoing initiative offering services or products for sale that generate net revenue, while also yielding measurable social impact. In the second post I detailed four meta-skills that serve as force multipliers for flourishing, individually and organizationally.

In this third post I’ll provide a lens through which you can view innovation and entrepreneurship, along with ways to cultivate the conditions for success. I have a lot to cover so this post will be more to the point than my previous posts!

I recommend taking these 11 steps. The order is critical and full fidelity to each step is also important.

1. Acknowledge that this is a change initiative.
2. Establish your 'Big Reason.’
3. Establish your adventure team.
4. Pursue stakeholder alignment.
5. Establish desired results.
6. Decide how to decide.
7. Recruit serial innovators and entrepreneurs.
8. Generate ideas.
9. Screen ideas to shorten list.
10. Explore the DFV (Desirability > Feasibility > Viability) Loop.
    1. Conduct first-level scrutiny on shortlist of ideas.
    2. Decide on go/no-go decisions.
    3. Conduct second-level scrutiny on remainder.
    4. Decide on go/no-go decisions.
11. Launch and/or cycle to next idea.

The rest of this post will cover the first six of these steps.

1. Acknowledge that this is a change initiative.
   Starting a social enterprise—being more innovative and entrepreneurial in any capacity—requires a completely different mindset than business as usual. Established organizations, regardless of the sector, are organized around efficiency and execution so that acting otherwise runs counter to the organizational ethos. Acknowledging that this is a change initiative signals that this is not business as usual, and that the time horizon for results will be longer than is typical for new initiatives. Given this, it’s imperative that the head of the organization leads the effort and remains engaged throughout the entire process.

2. Establish your ‘Big Reason.’
   I always suggest starting with what I call the ‘Big Reason.’ Why are you considering social enterprise? Like any other important initiative, involving the leadership team early in the process is necessary. Good questions for leadership to consider include the following: Why are we considering a social enterprise? What do we expect a social enterprise to do for us? What do we need it to do for us for it to be considered worthwhile?

   Usually the driver for an organization is financial returns; however, many organizations desire a more 'entrepreneurial culture,' which, upon digging deeper, tends to mean a culture brimming with ideas and a ‘possibilities’ mentality. If this is the case for you, it is important to paint a picture of this. What does it look like? How will you know if the organization is more entrepreneurial? What indicators will be useful in marking progress? And so forth.

   Organize the best, most relevant questions and have individuals address them on their own. Then, reconvene the team and compare responses. Where are the responses different? What's driving the differences? These types of questions force a healthy dialogue that fosters alignment. This alignment will increase the likelihood that the entire effort will have staying power.

3. Establish your adventure team (yes, adventure team).
   This is unknown territory for most people; embrace it as something adventurous and fun. This team should be made up of six to ten individuals who will be engaged throughout the process. The team should be a representative cross-section of your organization. This includes board representation, senior leadership, management or supervisor level, and staff. Some organizations include volunteers, especially if volunteers are central to program or service delivery.

   Diversity is the key word: diversity of thought—individuals who are big thinkers, perhaps risk takers, mixed with individuals who are more conservative; diversity of backgrounds—cultural, experiential; diversity of skill sets—more creative mixed with more analytical; and diversity of opinion about the merits of entire effort—doubting Thomas's mixed with avid proponents. We’re all susceptible to hidden traps in our decision making. The more diverse the team across these areas the better! It ensures that whatever makes it through the process, and is actually launched, is vetted thoroughly and stands a much better chance of success on the terms you've defined.

4. Pursue stakeholder alignment.
   This involves communicating the ‘Big Reason,’ gauging attitudes and perceptions, and engaging in dialogue to get alignment. The likelihood of a venture being successful dramatically increases if everyone in the organization understands the rationale generally and specifically, and has some say-so (through adventure team representation) on whatever venture is launched.

5. Establish desired results.
   Desired results should include financial results, as well as desired mission or social results. Be as specific and clear as possible here. For example, ‘generate net revenues of $25,000 annually after three years’ is vastly better than ‘make $50,000 per year.’ There is clarity about the former. The latter is too ambiguous. Is the $50,000 total revenue? Is it even profitable revenue? How long will it take to generate this revenue? Will you do so annually?

6. Decide how to decide.
   Over the course of time your ideas list will grow, and this is a good thing. But which few ideas of the many have the best potential? It’s far easier to evaluate ideas if objective criteria have been established before cranking up the idea generation machine. If we evaluate without criteria, or try to establish criteria after peaking with ideas, our natural biases can skew our judgment.

So what does the right opportunity look like? I suggest settling upon a list of criteria—no more than eight, against which you and your team will judge ideas. These criteria will enable the team to winnow down the list to those that most closely match the established criteria. Without this screen it becomes an unwieldy, subjective scrum, with individuals advocating for certain ideas over others without any constraints to guide the conversation. For example, a set of criteria generally includes the following:

1. This idea enhances our vision, mission, and core values.
2. We have the requisite resources* to do this.
3. We have the excess capacity to do this.
4. This idea will make a meaningful contribution to our financial objectives.
5. This idea will make a meaningful contribution to our mission objectives.
6. We have the financial resources to get started with this idea.

*More on mapping your resources in the next post of this series.

Notice that it’s not until step 8 that we begin to generate ideas. The very human tendency is to jump right to the idea stage. Resisting this impulse, and following these steps as I’ve laid them out here, will significantly increase your odds of success.

In my next post I’ll pick up with step 7 on our list of 11, and I’ll tell you a secret about the organizations that have more success with social enterprise.

In the meantime, stay well and stay safe. My deepest hope continues to be that you and your team have discovered reservoirs of resilience and creative capacities that are aiding you as you navigate our current circumstances.