Articles

Governpreneurship: In Search of Public Sector Value Creators

By Robert D. Hisrich

Traditional entrepreneurs — the kind who risk everything to launch a venture in their parents’ garage — spend much of their time fighting against government. They relate to the Rabbi in “Fiddler on the Roof,” who quips: “May God bless and keep the Tsar … far away from us!”

They know that if government creates anything, it is usually bureaucracy. Rules, regulations, permit procedures and, of course, tax bills all come from City Hall.

Government culture is simply not built for entrepreneurship. Public servants face too much scrutiny from too many constituents to experiment with untested ideas. Short election cycles, combined with slow processes, create further barriers to innovation.

So I was not looking for entrepreneurship when I traveled to Saudi Arabia in January 2009 and met with government official Amr Al-Dabbagh. I was following up on a Thunderbird business development trip the previous year, and my visit with His Excellency was just a 15-minute stop between other appointments.

To my surprise, I soon realized my host was a genuine government entrepreneur who had left a family business to lead the Saudi Arabian General Investment Authority. Our conversation stretched from 15 minutes to nearly 2 hours, and I left with a new perspective on the potential of government to create or foster entrepreneurial activity.

I started exploring other examples of government entrepreneurship, and the project led to Governpreneurship: Establishing a Thriving Entrepreneurial Spirit in Government. The book, scheduled for release on Oct. 17, 2012, is co-authored by my Saudi friend and includes a section on the Saudi Arabian General Investment Authority.

While entrepreneurship has traditionally been viewed as a private sector phenomenon, I now understand it is a universal concept that can be applied not only in small, midsized and large companies, but also in government and social sector organizations.

Here are three examples of “governpreneurship” in action, including a Singapore case submitted by my former student, Katie Nehlsen ’11:

The Lion City

Although Singapore is theoretically a parliamentary republic with a free enterprise economy, the economic role of government is pervasive in the little city-state. Government has set wages and prices, allocated land and resources, regulated capital and controlled labor.

There are few issues in which the government is not involved in one way or another. Singapore is truly unique in its ability to run on democratic values with communistic efficiency.

As the first prime minister of the a newly independent nation, Lee Kuan Yew faced a great deal of uncertainty in 1965. He responded with governpreneurship.
Singapore had few natural resources and land only about the size of Manhattan, so Lee and his government focused on attracting foreign direct investment. To accomplish this, the government took an unconventional approach in bypassing neighboring countries as trading partners in favor of multinational companies from the West.

Lee invested heavily in infrastructure and repositioned Singapore as a “first-world oasis in a third-world region.” He took risks, experienced failure and persevered.

Today Singapore has become a trading powerhouse, growing from a seeker of foreign investment to an investor in lower-wage regions.

Wisdom of Crowds

New York City is collaborating with multiple sectors to create a modern governing structure that elevates performance, enhances discretion and employs analytics.

NYC Simplicity is the newest in a growing line of innovations New York City is undertaking to increase transparency in its governance. The initiative relies on handheld technology as it seeks to remove the regulatory barriers that inhibit government innovation and entrepreneurship by reorganizing government around the needs of residents and businesses.

Former New York City official Stephen Goldsmith says, “Sharing government information publicly and creating forums to capture public feedback is another important way to improve public service delivery.”

Other initiatives include New York’s BigApps competition, the NYC DataMine and a 311 service request map, which plots information from more than 19 million annual 311 calls on a street-level map.

The New York City model personifies Goldsmith’s belief in the “wisdom of crowds.” He explains, “In order to further disrupt the barriers to information sharing, New York City has launched two specific online platforms to take advantage of collaboration opportunities.”

Next in line is “Change by Us,” a public platform that will enable community-based organizations and residents to collaborate on projects designed to make neighborhoods more environmentally sustainable.

Goldsmith hopes the “free flow of information will break open the siloed decision-making that often prevents technically proficient bureaucrats from maximizing their effectiveness because they lack sufficient detail about individual and neighborhood problems.”

Nation, faith, patience

While still crown prince in Saudi Arabia, King Abdulla launched a series of economic reforms that led to the creation of the Saudi Arabian General Investment Authority in 2000. The overarching goal of the quasi-government agency was to transform the Kingdom into a hub for international business.

When the king appointed Amr Al-Dabbagh as chairman and governor of SAGIA in 2004, he provided three words of guidance: Nation, faith and patience. In other words, anything that contributes to the nation and doesn’t conflict with the Muslim faith should be pursued patiently until it is delivered.

The young governor had no previous government experience, so he drew upon his family business background. Within five years the Kingdom’s “ease of doing business” ranking from the World Bank/International Monetary Fund climbed from No. 67 to No. 11 in the world. Foreign direct investment also climbed dramatically.

Al-Dabbagh credits the rapid reform to 10 Golden Rules for Entrepreneurship in the Public Sector:

1. I aim, therefore I am. Link the purpose of existence with a lofty goal.

2. The greatest among you. Recruit great talent. Remember: “Under every great leader is an even greater one.”

3. Execution, execution, execution. Even the best strategies fail without proper execution.

4. Organic tastes better. Organizations that grow organically are more adaptable, more open, more consensual and more loosely controlled.

5. Collaboration cures. Make it clear to the other party how they will benefit from collaboration, and create a common language of collaboration.

6. Customer is king. Develop a service oriented value proposition.

7. The next big thing. Continually and systematically challenge the status quo.

8. Reaching out. Communicate what you are doing well to the internal organization and external world of partners, citizens and investors.

9. Honey, no money. Partner with the private sector, which means speaking the language of the private sector: the language of profit.

10. No risk, no gain. Risk should be allocated to the party best able to manage it.

Robert Hisrich, Ph.D., is the Garvin Professor of Global Entrepreneurship and Director of the Walker Center for Global Entrepreneurship at Thunderbird School of Global Management. He is also president of H&B Associates, a marketing and management consulting firm he founded.

GovernpreneurshipTitle: Governpreneurship: Establishing a Thriving Entrepreneurial Spirit in Government
Description: Challenging the traditional view that entrepreneurship is exclusively a private-sector concern, Governpreneurship presents a compelling argument for increased focus on entrepreneurship in public sector organizations. The only book to date to focus specifically on government entrepreneurship, this innovative volume offers expert advice on fostering and managing entrepreneurship in the public sector. Featuring forewords by former US President Bill Clinton and Dr. Mahathir Mohamad, as well as four case studies that demonstrate the effectiveness of government entrepreneurship in action, this fascinating book breaks new ground in a rapidly growing field.
Authors: Robert Hisrich, Ph.D., and Amr Al-Dabbagh
Publisher: Edward Elgar (Oct. 17, 2012)
Hardback: ISBN 978-1781951620, $99
Paperback: ISBN 978-1781952283, $31
Information: Edward Elgar Publishing

Bill ClintonFrom the Foreword: “After more than 20 years in public office and ten years traveling the world for my Foundation, I’ve concluded that the best outcomes occur when a strong, effective private sector works together with an innovative, entrepreneurial government to promote the economy. I know that as you read this book, you’ll gain invaluable insights about the type of government that will succeed in the 21st century. – William Jefferson Clinton, Former U.S. President