Failure is an option: the entrepreneurial governance framework

Date10 April 2017
Publication Date10 April 2017
AuthorJohn J. Carroll
SubjectStrategy,Entrepreneurship,Business climate/policy
Failure is an option:
the entrepreneurial
governance framework
John J. Carroll
Department of Public Administration, Nova Southeastern University,
Fort Lauderdale, Florida, USA
Purpose It has been more than 20 years since the Reinventing Governmentmovement swept through the
American public sector. Over time, the tenets of public entrepreneurship and new public management have
diverged due to liability and risk aversion. One of the core elements of entrepreneurship is risk taking, and
with it the likelihood of failure. The purpose of this paper is to reconcile these issues under a simple
framework of entrepreneurial governancethat works across the elements of knowledge, innovation,
opportunity, and implementation.
Design/methodology/approach This is primarily a set of problems (liability, risk aversion, critiques)
that negatively impacts the application of public entrepreneurship. To build a framework, the author made a
substantive review of the literature to get back to basicsand clarify the problems, as well as draw
fundamental concepts about entrepreneurship.
Findings The framework was developed by applying the more current notion of governancewith the
basic elements of entrepreneurship, acknowledging that in implementation we have to account for the
critiques by reinforcing responsible risk reduction and ethical decision making.
Research limitations/implications The intent was to create a framework based on fundamental aspects
of entrepreneurship. The limitations/implications are that additional research will have to develop more
concrete testing methods and then test the framework.
Practical implications The intent here was to create a practitioner friendlyprescriptive framework that
could be almost immediately applied.
Social implications A culture shift away from risk aversion (and corrupt practices) has to allow risk
taking and with it responsible risk reduction (and failure or success).
Originality/value The reliance on existing literature reduces some of the originality, except to
re-conceptualize public entrepreneurship in a way that accounts for its shortcomings. The value in shifting
culture and responsibly reducing risk is difficult to estimate.
Keywords Innovation, Governance, Decision making, Entrepreneurial action, Risk reduction,
Public entrepreneurship
Paper type Research paper
An idea untried will always fail. Many, if not most, ideas also fail when tried. Many succeed
too. At its core, entrepreneurshipis about developing ideas, assessing risk and reward,
implementing, and evaluating success or failure. Entrepreneurship, like so many other
concepts in the public sector, was drawn from the business world. The notion of public
entrepreneurshipblossomed with the Reinventing Government movement of the 1990s,
alongside new public management.More recently, a paradox has developed between the
continued calls for public entrepreneurship and its well-chronicled failures many of which
fall under new public management initiatives.
The author takes the position that the critiques must be acknowledged and addressed, and
that our discipline should step away from empty phrases and metaphors that simply sound
good to the public and media. The discipline can reconcile the critique as well as seek to have
public entrepreneurship and new public management co-exist. With ideas comes risk and with
risk, chances to succeed or fail (or both). We must seek to minimize the risk and the potential
impact of failure to the public, while accepting it is a possible outcome. This paper will discuss
Journal of Entrepreneurship and
Public Policy
Vol. 6 No. 1, 2017
pp. 108-126
© Emerald PublishingLimited
DOI 10.1108/JEPP-04-2016-0013
Received 8 April 2016
Revised 3 November 2016
Accepted 4 November 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
the critique of public entrepreneurship, propose a prescriptive theoretical framework of
entrepreneurial governance,visit the entrepreneurship literature, and suggest applications.
The framework takes into account the inherent conflicts of business solutions to public problems
and proposes solutions, with the intent of guidance for how public servants can proceed.
The critique of public entrepreneurship
What went wrong?
The new public managementparadigm was coming into its own in the early 1990s.
Hood (1991) tells us that, like many previous administrative philosophies, new public
management was presented as a framework of general applicability (universality), a public
management for all seasons’”(p. 8). The notion of public entrepreneurship would reappear
under this umbrella. Kuhnert (2001) noted the term public entrepreneurfirst appeared in
Elinor Ostroms (1965) dissertation. It was not until almost three decades later that public
entrepreneurship would cascade through the American public sector with Osborne and
Gaeblers (1992) Reinventing Government.
The Clinton/Gore administration took the lead in 1993 to incorporate Osborne and
Gaeblers work at the federal level with the National Performance Review. This became the
Government Results and Performance Act and evolved over the years to its present form.
Government agencies at every level scrambled to demonstrate (real or imagined) they were
being better stewards of public funds, providers of services, citizen oriented, and to rebuild
the trust between public servants and those they serve. This included heeding the call for
more entrepreneurial activity.
Language and corruption
Since the heralding of Reinventing Government,a darker side emerged too. The rush to
embrace this philosophy included wholesale adoption of the business language to
accompany the practices. Liability concerns and organizational culture appeared to have
move government policy to be more risk averse than risk taker. Hood (1991) argued that,
broadly, new public management assumes a culture of public service honesty as given
(p. 16). This was not entirely true. As someone who completed a public service career prior
to academia, the author livedthrough this era.
The pressure on public servants to adopt the new public management notions of
efficiency, effectiveness, and stressing results-oriented practices (Hood, 1991) seemed to run
counter to public entrepreneurship rather than complementing one another. The academic
critique linking entrepreneurial government and new public management practices to
corruption and failing to serve the public, as well as taking unnecessary risks, honestly has
merit. There are numerous cases of elected and appointed officials at every level of
government who created false successes and cut corners in order to meet increased demands
for perceptions of success. This is not to say corruption or incompetence is a new
phenomenon it has been around since the dawn of government.
In the literature, we find numerous and powerfully argued critiques on public
entrepreneurship, as well as many examples in the popular media. The adage that seems to
rear itself during every election season, we should run government like a businessmay be
relatable to voters responding to perceptions of government inefficiency, waste, and
corruption. Public administration academics and prac titioners recognize the stark
differences between the public and private sectors, yet the discipline continues to freely
borrow business terms and concepts. The whole notion of public entrepreneurship and its
attendant language is derived from the private sector.
If we were to begin with the Halachmi (2005) observation that protecting the public
is the (emphasis added) mandate that must be observed by all levels of government(p. 307),

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