An entrepreneurial culture

“Continuous improvement,” one of our Five Basic Principles, has become so ingrained in our organization’s culture that our people implement countless relatively modest, incremental improvements throughout Goodwill each year. Cumulatively, those mostly small improvements make an enormously positive difference in the quality, effectiveness, and productivity of our work.

In addition, though, we have an entrepreneurial inclination that has been a huge factor in how we have grown and evolved over the years. I recently compiled a list of 95 significant initiatives we’ve undertaken during the last 37 years. Some were completely new business ventures or mission-related services, while others were major variations or extensions of something we were already doing. The financial investments associated with those initiatives have varied substantially, and in several instances the risks to our reputation have been greater than the financial risks.

I classified the success (or lack thereof) of those initiatives in baseball terms. Here are the results:

  • 10 home runs (six with bases loaded)
  • 73 singles, doubles, and a few triples
  • 12 strikeouts (one with bases loaded)

I don’t know if there’s any real significance to the fact that the number of home runs and strikeouts have been approximately the same, but it might be a reasonable indicator of our tolerance for risk. Of course, the fact that we’re not only still around, but are doing pretty well overall, is evidence that we haven’t bet the whole organization on any of those initiatives. And the overwhelming success of the “grand slam” home runs has far outweighed the cumulative effect of all of the strikeouts.

The primary key to our ability to take this approach has been and remains our board of directors. They’ve not only given us the freedom to try lots of different ways of growing the organization and increasing its impact, they’ve also given us the freedom to fail at some of what we try and learn and grow from the experiences. Of course, it helps that our batting average over the years has been pretty good.

In a piece titled “Fail often, fail well” in the April 14, 2011 issue of The Economist, Schumpeter wrote, “The best way to avoid short-term failure is to keep churning out the same old products, though in the long term this may spell your doom. Businesses cannot invent the future – their own future – without taking risks.”

The same column noted that “there is no point in failing fast if you fail to learn from your mistakes.” We’ve been fortunate in having had a lot of continuity among people in key positions – especially at the board and senior management levels. This has blessed us with a strong institutional memory, which helps prevent us from repeating our mistakes. Of course, because we have strong entrepreneurial instincts, we’ll make new mistakes. But that’s OK as long as we continue to ensure that the risks we take are prudent and that we continue to learn and grow from our experiences.

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3 thoughts on “An entrepreneurial culture

  1. Mr. McClelland,
    As a very new and enthusiastic Goodwill associate, I’m keenly interested in the “scorecard” of the 95 Most Significant initiatives you have compiled. Any chance to see the list? Thanks.
    Mike t.

    • Here’s my list of the “bases loaded” home runs and strikeout:

      Home runs

      Our first federal service contract under JWOD (now AbilityOne). Still going after 25 years, the success of this contract led to additional contracts that now employ over 200 people, 80% of whom have a significant barrier.

      The first suburban store where we bought land and built to our specs. Its immediate success prompted a retail growth strategy that has been enormously successful. The entire Retail Division now employs over 1600 people, 63% of whom have a significant barrier.

      The decision to advertise on television. The “offbeat” commercials were an immediate hit and have remained popular for 16 years. They have played an enormous role in broadening our customer and donor base and have helped change the image of the entire organization.

      The addition of e-books. Its success and the subsequent development of clickgoodwill.com has been enormously successful and created jobs for 77 persons, 64% with a significant barrier.

      The development of our first outlet store/distribution hub. Its success led to the development of two more similar operations and provided space to grow e-commerce, recycling, and other secondary market initiatives. The three centers employ over 200 people, 76% with a significant barrier.

      The Excel Center. This unique high school for older youth and adults has generated enormous interest among people who lack a high school diploma. Starting with 300 students in September 2010, the waiting list grew to over 2100 by the spring of 2011, and there is much interest in the school from across Indiana and from other states. Two more sites have been added in 2011 and total enrollment has increased to 750.

      Strikeout

      In the early 1990s we entered into a contract under JWOD (now AbilityOne) to manufacture nurses uniforms for the Defense Department. A combination of problems – some Goodwill’s fault, some the U.S. Government’s fault – led to financial losses of several hundred thousand dollars, the largest amount of any of our unsuccessful ventures. In addition, while we have learned some valuable lessons from most of our other unsuccessful initiatives and have seldom regretted trying any of them, the magnitude of the problems associated with the nurses uniform contract, coupled with the size of the financial losses, caused us to wish we had never even thought of it.

  2. Mr. McClelland,
    It is so “telling,” reading your reply, wherein lies your passion. You mention the very high percentage of jobs created for those with “significant barriers” in every section it could be applicable! I’ve only been in the Goodwill Family for 2 months, and I couldn’t be more proud to be part of an organization that “walks the walk.” I spread our mission and story every chance I get. Thank you. Mike t.

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