Public entrepreneurship is much like its private sector counterpart; however, public entrepreneurs face additional challenges due to weaker competitive forces in the public as compared to private sector, with objectives that often are poorly defined and performance that is difficult to measure. Despite the impact on public good, how to enact changes successfully in public sector organizations to be more entrepreneurial is poorly understood. This article summarizes current research on public entrepreneurship and presents a detailed case study of a successful entrepreneurial change in a public sector organization. A five-step change process used to enhance entrepreneurial behaviors was implemented in a public sector organization and the qualitative and quantitative results demonstrated substantial performance improvements over 4 years (i.e., quantitative performance in some areas was more than 10 times greater). We explain key steps that produced successful outcomes and how to avoid common challenges in the implementation of ongoing entrepreneurial behaviors in public sector contexts.

What is public entrepreneurship?

The term public entrepreneurship can invoke images of actions taken by a government organization to promote a common good that transforms community life; simultaneously though, the term can also invoke images of a Sisyphean struggle for the ‘freedom to manage’ while trying to update stagnant public institutions that have lost relevance and accountability (Edwards, Jones, Lawton, & Llewellyn, 2002). Public entrepreneurship is much like its private sector counterpart, with defining characteristics of opportunity alertness, judgments about investments under uncertainty, and product, process, and/or market innovation (Klein, Mahoney, McGahan, & Pitelis, 2010). However, public entrepreneurs face additional challenges due to weaker competitive forces in the public sector–—as compared to the private sector–—with objectives that are often poorly defined and performance that is difficult to measure. Specifically, public organizations are often characterized by a focus on mission rather than profitability and a lack of clarity in organizational goals due to numerous competing demands, interdependencies, and interrelationships across multiple stakeholder groups. Indeed, Klein et al. (2010, p. 4) suggested that for outdated institutions, “innovation, both technological and organizational, is required but is difficult to accomplish because of conflict between short-run and long-term performance. Entrenchment is deepened by agency problems and by lack of clarity about the public interest.”