Tag Archives: Social enterprise

2013: A crossroads for social enterprise?

Image

I rather liked this tagcloud on social innovation from the European Summer School on Social Economy (which sounds like a jolly nice place). So I thought I’d copy it…

It’s about this time of year (or maybe I’m a little bit late this time round) when various members of the commentariat start to look ahead with unbridled optimism to what the year ahead might hold in store. Some make predictions – and if that’s your thing, check this really interesting list out – but as I’m only at best an occasional blogger, I’ll stick to a fervent hope and aspiration: that 2013 is a year of further, and significant, transformation for socially-orientated enterprise.

Why does this stuff matter? Well, 2012 wasn’t a great year for ethical conduct and public confidence in our most avaricious private companies, and a year of exceptional volatility throughout the financial markets has frayed investor nerves and encouraged flight to safe havens. Conversely, with the mutual sector’s poster child reporting a bumper Christmas, there is an ever-increasing store of alternative financial models thinking about values-driven pitches for consumer and investor support (and as I said in my first blog, I think we are living in a world where businesses have become increasingly social in order to succeed). And partly as a result of all this, the demand and need for businesses predicated on social as well as financial return (from traditional charities stepping in to offer services where markets fail, to tech startups launching community-enhancing apps drawing on new public data) has in no way diminished.

This year’s opportunities

This is not a zero-sum game – for private enterprise to deliver optimal economic and social outcomes would surely be impossible without a thriving for-profit economy and top-notch socially-orientated businesses working alongside each other to deliver optimal economic and social outcomes. But I think what is really interesting about this year is the way that these two traditionally distinct sectors might merge – driven by a gradual (but intensifying) shift from a dependence on philanthropy and grants to more innovative forms of investment into social businesses, and new approaches to business models across the ‘not just for profit’ sector. For example:-

  1. New financial products that generate social impact in a sustainable and repeatable way are actually being created, instead of just being talked about. Goldman Sachs’ participation in a $9.6m social impact bond to underwrite investment in Rikers’ Island prison’s anti-recidivism programme – with the potential for Goldmans to take financial upside and downside across the life of the bond – locks private investment to social outcomes in a promising way. Scarcely a month passes without reports of new SIBs being mooted across the world: let’s see how many ultimately deliver both the social and financial benefit they promise, and what happens to the service users and investors when they do.
  2. Public services across ‘Western’ economies face new and unprecedented challenges as spending continues to tighten, forcing public bodies to think creatively about how they’re commissioning (and de-commissioning) services, and with whom. Have a read of Laura Bunt and Charlie Ledbetter’s the Art of Exit pamphlet for a really intriguing analysis of this transformational process. One thing that struck me in this pamphlet was the importance the authors assigned to commissioners getting in place a well-planned political and communications effort to mobilise popular support prior to changing the delivery model of a public service. Contracting with businesses with a clearly articulated social purpose – where their success creates direct knock-on benefits to the service users – could be a really powerful force supporting public service commissioners to do this adapt their services in a way that supports sustained public engagement and support. Which would of course have the happy impact of creating countless new opportunities for social businesses.
  3. Business and investment practices are starting to permeate from ‘traditional’ marketplaces to the social enterprise space, and vice versa:
  • Social investment funds are taking an increasingly adaptive and flexible approach to their funding portfolios – look at the Omidyar Network’s ‘priming the pump’ series for an example of how funds are starting to look at a look at adapting individual investments to market impact, using marketplace and sectoral analysis to determine the model of investment preferred in individual deals. JP Morgan and the Global Impact Investing Network last week forecast a 12% growth in this ‘impact investment’ sector in 2013, ultimately leading to $9bn in investment through the year.
    • Ideas starting off life in socially-orientated business are increasingly ceasing to stay there. For example, NESTA’s 2013 list discusses the prospect of big business stealing and adapting  collaborative consumption  approaches modelled by social enterprises in their practices. My money’s on a bit more of this happening in 2013.

Image

Growing socially

So, things are definitely happening here. But where does this leave social business? The answer lies in your take on what’s needed to support growth in this industry – of individual social businesses and the sector as a whole – and what the positive and negative consequences of greater growth and scale could be.

On the one hand, there are strong views that the new models and investment that I’ve mentioned above bring risks as well as rewards. As Colin Crookes warns in this (generally excellent) blog published last week by the Guardian:-

“So in 2013 we will see the battle between scale (dressed up as impact) and social enterprise; large corporations with “social impact” departments backed by large investment funds against genuine social entrepreneurs using new legislation to promote social cohesion.” 

However, are those ‘genuine social entrepreneuers’ always the right people to carry businesses forward to maturity? Is it wrong for others (including ‘large corporations’) to get involved with social enterprise? As Crookes says, growing financial scale does pose challenges about how best to hold on to and embed social value. But the new conditions I’ve mentioned above also force difficult questions to be asked about how best to support social businesses to grow and expand successfully. And as mentioned in articles over Christmas, this is something London doesn’t always do very well, as we can get a bit too breathless about chasing the Next Big Thing and forget about the need to persevere at supporting sustained business growth over the longer-term. This conundrum- about how to support sustained growth without compromising social value- makes a lot of sense to me, as I’ve experienced it. For instance, this Harvard Business School article last week really chimed with my relatively brief experience as founder of one of the scrappy, 90%+ of low-profit social enterprises:-

“We can’t ask social enterprises to have a big impact if they can’t get the resources they need to grow bigger. In Britain, for example, fewer than 10% of the tens of thousands of social enterprises generate more than £1 million in revenue. Why is that?

One reason is that the scrappy, entrepreneurial approach that characterizes many of these organizations starts to break down as they pass that threshold. Normal business complexity sets in. Founding CEOs realize—or fail to realize—that their maniacal energy and personal devotion can only take their enterprises so far.”

Too true.

 

What now?

So, let’s be absolutely clear: I really, really want 2013 to be a transformational year for social enterprise. But, I think that for this to happen:-

1. We need to think really carefully about where the market failures lie where social businesses can add the greatest possible value, and be really demanding about the people and business models that will do this best, with investment responding accordingly (i.e. grants have their place, but so does investment and business generating significant return and revenue). In short, we’re going have to get really comfortable with the social and for-profit worlds coexisting in a much more integrated way…

2. … but we also need to recognise that in order for social businesses and the social enterprise to grow in a way that commands public and investor support (and holds on to the sector’s unique strengths), we will need to develop as much rigor and discipline about measuring and rewarding social impact as is applied to financial growth.

What do you think – am I overplaying the risks here, or do you agree? What are your hopes and fears for social businesses in 2013?

Advertisements

1 Comment

Filed under Uncategorized

The RSA- awakening the sleeping Fellowship giant

   An excellent example from the RSA Animate series


About 5 years ago a friend at the Civil Service invited me to join the RSA – an acronym which nowadays unfolds to the rather less pithy ‘The Royal Society for the promotion of arts, manufacturing and commerce’ – a membership organization with a glittering history dedicated to improving society through social policy and action, including:-

  • A formidable programme of talks and lectures, available online here, including the trailblazing RSA Animate series;
  • An Academy, putting theory into educational practice;
  • Fascinating hands-on research and social action projects;
  • A smashing central London space, currently undergoing a massive refit.

All of this is part-funded by its 27,000 Fellowship base, who in turn drive their own activity and networks in support of the Society’s aims. Although subject to a nomination and approval process, anyone can become a Fellow (and do get in touch if you’re interested).

Amazing, right?

Well, nearly.

In the five years since I joined, I’ve experienced the RSA treading a slightly confusing and hard-to-navigate path between its many identities; part-think tank, part social action hub, part membership organisation. The work it does is brilliant and the RSA’s officers are excellent, and I’ve enjoyed the talks (particularly the RSA Animate series), been to few meetings of the RSA social enterprise network, and spent plenty of time meeting Fellows and the central team at RSA House – but I feel that all of this great stuff does obscure the fact that a more effective relationship with and between Fellows would enable the Society to make an even bigger difference to the UK and the world.

It’s not just me saying this. When I was getting together the nominations to run for the Fellowship Council* I was disappointed to find that a number of friends had recently resigned their Fellowship- saying that as all of the things they valued the RSA for were offered for free to anyone and it wasn’t clear what else the organisation offered its Fellows, why would they pay the approx £100 annual subscription?

And they had a point.

While being part of the RSA Fellowship is not quite the same as buying a private product or service (i.e. Fellows’ subscriptions subsidise the Society’s general work, including making things like the RSA lectures available for free), my worry is that the message of the RSA is either not clearly defined or is not getting through, meaning that it’s not achieving its mission as magnificently as it might.

For me, the RSA is a great example of the huge opportunities, and the equally intimidating challenges, in getting people behind social organisations. I don’t want to be one of those people who extolls the virtue of private over public in all spheres, but as I’ve mentioned in previous posts, many private companies would kill to have as many ‘fans’ as the RSA has amassed and would be bolder in prompting them to act in support of their brand or product. Again, this is not to denigrate what the current team is doing, or to say that this is easy. It’s hard. But it’s such a great possibility.

And if you think that this is all a bit parochial, stop to think about how valuable a 27,000-strong user base would be to a social startup seeking to build a following behind its mission. There are, put simply, so many social startups doing great work for whom the RSA Fellowship could be a transformational friend.

So, here’s what I’d do to try and awaken this sleeping giant. I freely admit that these may already be on someone’s to-do list at RSA House – but from the point of view of a relatively active Fellow, if that is the case, the message hasn’t yet got through:-

  1. Use existing web platforms to personalise the RSA’s offer to Fellows, starting with new Fellows, and using data from other social networks better. Private companies draw on their user’s existing consumption habits (indeed, Facebook’s entire commercial strategy seems to be driven off opening up its users ‘likes’ to interested brands). We need to understand better what Fellows want from the RSA, and match them to the projects, discussions and initiatives that would deliver for them. This could also involve looking at greater integration of the online RSA Fellowship with existing platforms, including Facebook and social (like civiccrowd.org, about which I’ll be saying more soon).
  2. Give Fellows’ blogging a louder voice – In May, I wrote a short blog for RSA Comment (linked below). There was 3 weeks from submission to publication, and by the time it came out I felt pretty detatched from the article and wasn’t keen to share. RSA Comment has some terrific content, but wouldn’t it be great if we let go of some of the central control and gave Fellows had a more open platform to blog (around the Society’s mission and themes of course), with the most-read/ shared/ commented stories getting prominence on the RSA social meda feed and ultimately in the RSA Journal?
  3. Crowdfund the RSA’s Fellows-led Catalyst projects to make them go further and get more Fellows behind them –  I had a go at this with WeDidThis, with mixed success but a lot of learning, and would be keen to help this happen more and better in future. I’ve blogged about at greater length here.
  4. Increase opportunities for Fellows to drive Projects led by the central team – there’s a wealth of talent and experience in the Fellowship, which could be much more directly employed to drive forward RSA Projects. As a starter (and apologies if this is happening already but I haven’t yet seen it) why not invite Fellows to sit on the boards of each Project strand (subject to interview, and matching their skills and expertise with the project of course)?
  5. Set some public, accountable targets for Fellow engagement  – you know the ’50 people are talking about this’ that you see on every Facebook fan page? Well, it’d be great to have something just as open to drive the RSA’s engagement with and between the Fellowship – how many new Fellows do we want, and what are our targets for their involvement?

As you can see, I’m writing for both RSA Fellows and non-Fellows- I’d really welcome comments from both. If you’re a Fellow already, what do you reckon – does this make sense, or am I barking up a set of wrong trees? If you’re not, what do you think about the RSA – would you join?

* My candidate statement’s here – have a look, and if you’re already a Fellow, please vote for me!
To give you an example of the work funded by the Catalyst fund, here’s a project that was part-funded through my old site WeDidThis.org.uk and Catalyst. We need more of this!

5 Comments

Filed under Uncategorized

Of bridges and fences- aka Why I’m Blogging

Image

For a year and a half (until March this year), I had the pleasure of starting and running a website, raising funds for the arts. I’m going to blog a bit about my experience later- including why it worked, why we merged with a competitor, and what mistakes I’ll try not to make again- but suffice to say I met a bunch of people and organisations who I think are doing great things, and I want to use this blog to discuss what they and others can do to grasp what I believe is a pivotal moment.

Put simply, I think that we’re seeing a really exciting convergence of innovation and consumer demand at a time of great social need, creating new ways of giving people power to solve big problems. I’m fascinated by the opportunity that technology creates to bring increasingly connected global communities together, and am not sure that we’ve fully understood yet what can happen when we do so.

But why ‘bridges and fences’? Well, the title for this blog comes from a beguilingly simple phrase I spotted in ‘The World of Goods’, a book by Mary Douglas and Baron Isherwood setting out an intruiging defence of moral ‘consumerism’ (have a look at a free excerpt here– thanks to Google books):-

“Goods are neutral, their uses are social; they can be used as fences or bridges.”

Though writing in the distant past of 1979, Douglas and Isherwood make a point which I think resonates ever more loudly today. For those weaned on social media, we can see every day how the quality and quantity of social connections that a brand or campaign can generate is at the heart of its success, with brands seeking to build ever-more intimate ‘conversations’ with their fans, and advertisers desperately chasing the gold dust of peer-to-peer recommendations, retweets, and likes.  Products and services describe themselves in terms of the value they will add to their consumers’ lives- or the degree that they will meet their consumers’ aspirations  (have a look at this list of company slogans for a smattering of examples). And the openness and accessibility of the modern innovation process  – as I found out when I managed to start a web business off savings from a meagre few years in the public sector- means that the consumer has more power to innovate on their own behalf than ever before (and for more on this, check out Charlie Ledbetter’s excellent TED talk).

Socially orientated businesses have a killer head-start here – their very purpose is to inspire their consumers (and supporters) to be ‘better people’ and participate in realising a shared social goal, either by undertaking direct social action, or something more indirect like philanthropic giving. Social enterprises are by definition better aligned with their consumers’ aspirations- as both are principally concerned with achieving their social mission- in contrast to companies who exist to solely deliver value to their shareholders.

So where are these social game-changers, and if they are so well geared to making our lives better through connection to social good, why aren’t they everywhere already?

This is the point of this blog- to seek out those people, companies and movements that can be true bridges and bridge-builders, connecting concerned and hopeful user communities with inspirational leaders and movements who have the ideas to make a big difference. Got any suggestions? Comment below and I’ll have a look!

And later this week I’m going to start with the RSA, and a few thoughts about how they could energise its 27,000-strong membership base…. More soon!

6 Comments

Filed under Uncategorized