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.

Early childhood development – a key to reducing a lot of social problems

Throughout Goodwill’s history, we have worked primarily with older youth and adults. Yet, the more experience we have and the more we learn, the more I have become convinced that if we are to substantially reduce the incidence of poverty in the U.S., we must dramatically increase our investment in children from the womb to kindergarten.

There is a large body of evidence illustrating the positive return to society of investments in high quality early childhood development programs for children in low-income households. For example, Nurse-Family Partnership (www.nursefamilypartnership.org) is a nurse-led, evidence-based home visitation program that works with expectant mothers from pregnancy until the child is two years old. Three decades of randomized controlled trials have shown incredibly positive long term impact, including:

  • 67% reduction in behavioral and intellectual problems in children at age 6
  • 59% reduction in arrests of children at age 15
  • 72% fewer convictions of mothers when children are at age 15
  • The Rand Corporation found a net return to society of $5.70 per dollar invested in Nurse-Family Partnership

More evidence comes from extensive research done by Professor James Heckman (www.heckmanequation.org), a Nobel laureate economist at University of Chicago. His work has confirmed high returns to society from investments in high quality early childhood development programs for children living in poverty. Professor Heckman emphasizes that many of America’s major economic and social problems – crime, teenage pregnancy, high school dropout rates, adverse health conditions – could be reduced as a result of early nurturing, learning experiences, and physical health from birth to age five – the most economically efficient time to develop cognitive and social skills, both of which are essential for success.

It’s sometimes useful to remind ourselves that no child had any choice about the circumstances into which he or she was born. Some were luckier than others. For children born into situations that lack advantageous educational and developmental resources, we can pay up front to help prevent problems and develop human potential or we can continue to pay much more downstream for public assistance, remedial education, rehabilitation, incarceration, and in all the insidious ways we all pay when economic growth is stymied by a poorly educated, under-skilled workforce.

Some say we have no money to do this. I say we can’t afford not to. Because there’s not enough to pay for everything everyone would like to do, we need to begin shifting more support from programs with marginal return to programs with demonstrated high long term benefits. Doing so will upset some people, but will result in a wiser, more effective use of the dollars that are available. The potential long term benefits are enormous.

Evolving to Increase Impact

In the late 1980s, most of the people we worked with were adults with disabilities. We employed several hundred and helped others become employed with other firms. Then we were asked by a state agency if we could help “welfare” recipients find jobs. We found that we could, but only low paying jobs because hardly any of them had high school diplomas. Still, we continued to provide “welfare-to-work” services for 17 years. Meanwhile, we also continued to work with people with disabilities. We had simply expanded our scope to include more people than before.

In the early 1990s, unemployment in the Indianapolis area was very low, and employers were desperate for workers. We responded by aggressively trying to find anyone who was employable, but not working, and helping them find jobs. In addition to persons with disabilities and those on public assistance, we started assisting larger numbers of people coming out of the corrections system and newly-arrived immigrants with poor English language skills.

In the mid-1990s, we became involved in the operation of the one-stop employment service centers in Indianapolis, which were serving an average of 45,000 unemployed people each year. When we started examining demographics, we found that 50% of those individuals did not have high school diplomas.

About the same time we were becoming increasingly aware of the magnitude of the dropout problem in several of the city’s high schools, and we began to wonder if, as an organization, we had anything to offer young people who weren’t headed in a positive direction. We thought that if we could help them stay in school and graduate, they would be less likely to need Goodwill’s services once they became adults. Therefore, our organization’s long term impact would be greater.

We became involved in a number of small scale initiatives with local schools, found that we did have something to offer, and started exploring ways to maximize our impact. That led to a decision to start a charter high school that has now completed its seventh year of operation. The learning from that experience and the relationships that have developed led to our designing and launching a second school, the Excel Center, to provide a diploma option for older youth and adults who had dropped out. The demand for space in the Excel Center has been overwhelming, and we will begin replicating the school this fall.

These and all other major steps we’ve taken during the past twenty-five years have been to increase the organization’s long term impact. A few years ago we articulated the following as the ways Goodwill can add the greatest value in the communities in which we operate. Those are:

  • Help young people and adults who have struggled or failed in other educational settings complete high school and attain a post-secondary degree or other recognized credential.
  • Employ people whose work options are limited by disability, criminal history, low education level, or other significant barrier to employment.
  • Help unemployed people become employed.
  • Leverage Goodwill’s resources with those of others to help develop and implement practical, effective approaches to reduce major social problems.

Of those four, only one – providing employment for people with limited options – has been part of the organization since its founding in 1930. The others are a reflection of how we have evolved over time as we’ve learned more, our external environment has changed, and our internal resources have increased.

That process continues.