Have We Hit ‘Peak Entrepreneur?’

Unbridled ambition has become entangled with the definition of entrepreneurship. Anything less than “putting a dent in the universe” seems to be deemed “failure.” Even social entrepreneurs seem to be taking on more and more ambitious goals striving beyond the ‘progressive change’ that used to characterize the social sector.

While any university that isn’t yet home to an incubator is dreadfully behind and running to catch up, healthcare administrators seem to have fully internalized the jargon, too. Meanwhile, social enterprise and social innovation are still ascendant concepts in the global non-profit sector. And even the private sector is outdoing itself with ever more ambitious forms of entrepreneurship: “failure to be adequately exponential” may soon be grounds for dismissal with cause from most start-ups!

The usual next step when something gets this popular is a process of splintering and specialization. This is already happening; entrepreneurship is being reinvented (how meta!) to take distinct meanings in different contexts.

Will non-profits diverge from entrepreneurial approaches?

I’m interested in the evolving role of entrepreneurship in the social sector—approaches that are useful to address poverty, income inequality, racism, and overconsumption, given the urgency and scale of these and similar challenges. Is ‘entrepreneurship’ really the right approach?

We’re not quite at ‘peak entrepreneur,’ as it still seems to be capturing imaginations, funding, and cultures in all major institutions.

Social entrepreneurs are defined by their “opportunity sensing, out-of-the-box thinking, and determination” (from Martin and Osberg, 2007), in service of a lasting change from some unsatisfactory social equilibrium to a better one. This is still the broadly accepted definition; what is changing is the estimation of the value of the approach.

In the social sector, “sensing opportunities” may not be the most valuable personal quality of entrepreneurs. We have lots of ideas! The challenge is that many effective solutions that already exist are blocked by funding shortfalls, lack of enabling policies, absence of political will, or deficits in the social infrastructure necessary to sustain the solution. You don’t need to be an entrepreneur to see an obvious “unsatisfactory equilibrium” that could be improved to the benefit of vulnerable people. This is a central point in Daniela Papi-Thornton’s Tackling Heropreneurship approach.

You don’t need to be an entrepreneur to see a problem and devise a solution.

Likewise, thinking out of the box seems often to be conflated with boldness and audacity. This kind of unabashedly wild goal-setting came into vogue after Jim Collins and Jerry Porras published Built to Last, which became popular in the late 2000s. The BHAG—the “Big Hairy Audacious Goal”— has become a key part of organizational lexicon. (It’s echoed in Exponential Organizations’ ‘Massive Transformational Purpose,’ or MTP.)

According to Collins and Porras, “A true BHAG is clear and compelling, serves as a unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines.”

Over the same time period that BHAGs have become popular, the systems dynamics stream of social change has popularized the identification and discussion of ‘wicked problems.’ Wicked problems provide ample opportunities for social entrepreneurs to be extremely audacious in setting the scope of their ambitions—which are often labeled as BHAGs. It’s wonderful and laudable to have something like “ending poverty” as your BHAG.

It’s also useful, in a practical sense, because you can more or less endlessly justify your organization’s actions (entrepreneurial or not) as contributing towards that goal, but as it can never actually be achieved, you can’t ever be qualified as having failed! Whereas the definition of BHAG clearly points to something that is defined and evaluable, that’s not what we’re hearing and seeing from the front lines of non-profits, with their wicked problems.

Ferocious determination is necessary, but insufficient, for success.

I was part of Tamarack Institute’s recent evaluation master class on Evaluation for Social Innovation, and saw many heads nodding appreciatively at the observation that evaluators have borne the brunt of the enthusiasm for BHAGs. Evaluators are increasingly presented with plans for programs and projects that, in the name of addressing wicked problems, have BHAG-like goals built in to them, but these goals are so ill-defined that evaluators have to (effectively) re-write strategic plans for their clients, so that the plans can be evaluable, and this is not what many evaluators are trained to do (nor have their clients necessarily budgeted for a re-write of their strategic plan, at that point).

All of which brings us to the third central tenet of Martin and Osberg’s characterization of social entrepreneurship: Determination. Unfortunately, ferocity of conviction is necessary, but insufficient, to success. Yet it seems to be the one uniting trait of entrepreneurs of all stripes….

Will the Social Sector Follow the Zebras?

Non-profits may yet diverge from the culture of entrepreneurship that has been so popular of late. This divergence is already happening in the startup economy, as noted in Zebras Fix What Unicorns Break, which critiques traditional VC funds that chase “‘unicorn’ companies bent on ‘disruption’ rather than supporting businesses that repair, cultivate, and connect.”

Unicorns vs. Zebras is largely a critique of laissez-faire capitalism, where purpose has been eschewed in favour of ‘exponential growth.’ The unicorn companies set ambitious goals and pursue them with unwavering focus and determination, but they’re ultimately not held accountable for many of the unintended impacts they may have along the way. The grand vision and the business model get the dollars, and the rest of the long chain of consequences doesn’t need to be defined. ‘Externalized costs’ can be rationalized away with terms like ‘iterative, adaptive strategy.’

Zebras seem to be taking an evaluation-informed approach to strategy. Zebra organizations may not be extremely entrepreneurial in the way we understand the term now, or as it’s practised in the private sector; they may be slower and more deliberate. They may prioritize collaboration, movement-building, and listening over disruption and direct, zero-sum competition. Zebra organizations may prioritize building a shared body of evidence of what works, one program and project at a time, rather than leading their communications with the scale of their ambition, or the dynamism of their innovation.

The founders of the nascent Zebra movement say that “the business model is the message”—and I believe this carries over to effective approaches to strategy and planning in the non-profit sector. A useful approach should be grounded in a strong base of evidence that considers the effects on all stakeholders. This was always the blind spot, in Martin and Osberg’s definition of social entrepreneurship: it was clear that the social entrepreneur would create a lasting change to a system that was “more satisfactory,” but never proposed a clear method to resolve for whom that new equilibrium was better, or to whom the entrepreneur should be accountable.

Goal-setting should be evidence-based, and respect the effects on all stakeholders.

All those currently styling themselves as entrepreneurs in the social sector should ask themselves whether entrepreneurship provides the right tools for the job of addressing the social issues on which they’re focused. Or are we just using a different vocabulary while trying to rebuild the distinct capacity and character of the non-profit systems and social safety nets that we used to have?

Certainly, we should clearly focus our organizations’ roles, setting goals that are aspirational, actionable, and achievable. We’re likely not yet at ‘peak entrepreneurship,’ but we must be cautious not to get carried away by entrepreneur(wor)ship. Critical thoughtfulness about whether enterprise tools will solve for ‘wicked problems’ is essential.

 

Garth Yule is Managing Director of Junxion’s Vancouver office. He focuses on helping organizations to manage information to serve the public good.

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