4 Elements of Entrepreneurial Culture and How to Incorporate them into the Social Sector

We love unearthing provocative ideas and showing how they are relevant to the social sector like we did last week in our post on 3Q, the convergence of intelligence, emotional and spiritual quotients in organizations. This week, we want to focus on an equally intriguing idea — entrepreneurial culture — and how it can be adapted to build stronger, more responsive organizations in the social sector.

You often hear people say that nonprofits should be more like businesses. When they say this, we believe what they really mean is that nonprofits should be more entrepreneurial. But, what is entrepreneurial culture and how does this translate to the social sector? Peter Drucker described it well when he said, “An entrepreneur always searches for change, responds to it and exploits it as an opportunity.” With the shifts in the social sector, the most successful high-impact, high-performance organizations see change coming and adapt to it. One of the key drivers of these organizations is culture, which, when properly cultivated, can be the difference between a good and great organization.

In our research on organizational cultures, we found four elements of entrepreneurial culture — openness, adaptability, results and rewards, and being a learning organization — that can be translated directly to nonprofit environments. Below we expand on these four elements and provide you with questions to assess your organization’s entrepreneurial culture.

An Entrepreneurial Culture Assessment

Openness: A willingness to share information and lessons learned widely

• Do you share lessons learned from success as well as failure?
• Is it a norm for individuals to share constructive criticism to push thinking and minimize risk?
• Do employees at every level understand “the big picture”?

Adaptability: A commitment to monitoring your organization’s internal environment through measurement and your external environment through research and using the results to identify possibilities for change and improvement

• Are you monitoring customer (e.g., client, donors, volunteers) feedback — quantitative and qualitative — to detect shifts in needs and/or behaviors?
• Do you regularly seek feedback from external stakeholders about your performance and what more you could be doing to serve your mission?
• Do you question the status quo (a.k.a., “We have always done it this way.”) to ensure that it is still the best way?

Results and Rewards: A dedication to tracking outcomes and impact, but also rewarding the right behaviors, including organizational citizenship

• Do you push decisions downward to those on the front line and with the most information?
• Do you reward the right behavior more than you reprimand negative behavior?
• How does your organization handle failure? Do you learn from it and share lessons learned?

Learning Organization: A promise to employees to support a learning organization that will encourage them to grow and learn without fear

• Do all employees have goals for personal improvement that are regularly discussed and nurtured?
• When something goes wrong, does everyone pitch in without playing the blame game?
• Do you share best practices and newsworthy trends with everyone for feedback and possible implementation within the organization?

At your next team meeting, conduct this quick assessment to gather insights into your culture. Determine what’s working well and ask the group to add their ideas for improving your organization’s culture. Then, have your team vote on two or three short-term ideas and one long-term idea to implement. We would love to hear what you come up with!

Stay tuned for next week’s piece where we will dive deeper into SQ and how you can build this muscle within your own organization.