Mainstream believers

With another year coming to an end, it’s time to consider our new year’s resolutions and for much of the social enterprise/social entrepreneurship movement, the new year will herald a commitment to join the mainstream (whatever that means).

At this autumn’s Emerge Conference, Pamela Hartigan, director of the Skoll Centre for (er… ) Social Entrepreneurship led the charge to ditch ‘social entrepreneurship’ entirely. Pioneers Post reports Hartigan expounding the view that to use the terms such as ‘social enterprise’ and ‘social entrepreneurship’ is to: “continue to dichotomise the commercial and the social spheres” when really: “all commercial ventures have to be accountable for the social and environmental impacts they are having and all social ventures have to be financially sustainable in some way.

Readers who are not immediately clear as to why the latter statement tells us anything much one way or another about whether we shouldn’t or shouldn’t run social enterprises, or call ourselves social entrepreneurs, may find a (slightly) clearer take in Hartigan’s blog length explanation of her position – written for Oxfam last year.

Hartigan explains that: “I do believe that transformational systems change will never be achieved on a massive scale by non-profit organizations or even by well-meaning ‘hybrids’.  I very much believe that the way forward is through business.

It’s hardly an unarguable fact that a business, whether self-defining as non-profit/’social’ or not, is necessarily the most effective vehicle for social transformation in any given situation – particularly where the alternatives include some or all of campaigning, legislation and individual or collective behaviour change – but assuming we accept that the biggest social problems do need a business-led solution we’re still left with the question of what ‘the way forward’ might be.

Less profit on purpose 

The answer, apparently, is the concept of ‘reasonable profits’. As Hartigan outlines: “The key to sustainable capitalism is reasonable profits as opposed to maximizing profits.  In the current system, a segment of society is trying to maximize profits without concern for the impact on the well being of the society as a whole, while another segment of social organizations have to deal with the fall out.

It’s pretty abstract stuff and it’s anyone’s guess what the wider social impact of ‘reasonable profits’ (however defined) might be in any given industry. Should (not)social entrepreneurs doing their (not)social entrepreneurship within mainstream businesses turn their sword of reasonableness primarily on gross profit or net profit? Does transformation come through selling people stuff reasonably cheap or paying reasonable wages?

Whatever Hartigan’s vision for good business actually means, none of it gives an inkling of what Hartigan would actually like social entrepreneurs and/or people running social enterprises to do (even if they broadly agree with her analysis).

For example, one of my social enterprise roles is as publisher of a local community newspaper. I’m under no illusions about the fact that I have less power to deliver transformational social change in this role than if I were the boss of News Corporation. As soon as I get the News Corporation job, I’ll be happy to try to put a reasonable profits policy in place. But does Hartigan mean that, right now, I should stop running our social enterprise newspaper – making some positive impact in one area of east London – and concentrate full time on persuading Rupert Murdoch to give me the top job?

Unltd abstraction 

Fortunately, not everyone in the social entrepreneurship support industry has given up on the idea of social entrepreneurship entirely. Over at Unltd (The Foundation for Social Entrepreneurs), they’ve launched a new strategy: ‘Going Mainstream: how can social entrepreneurship break through?

Unfortunately, the publication is a ‘strategy’ only in a broad sense. The conceptualisation and analysis of the problem – the question of why social entrepreneurship is not mainstream already – is apparently restricted to the results of a recent survey of (433) social entrepreneurs that revealed strong support for some abstract statements:

  • 96% Social entrepreneurs have huge potential to do good
  • 94% Social entrepreneurs need to be taken seriously as businesses
  • 87% Social entrepreneurship needs to be better understood

The challenges preventing these abstract desires becoming reality are (according to the 389 social entrepreneurs who answered that part of the survey):

  • 71% Finding sustainable revenue streams
  • 71% Making a living from a social venture
  • 60% Getting access to the right kind of finance
  • 59% Finding routes in to sell to the public sector
  • 52% Getting access to the right talent and skills

It is interesting that most social entrepreneurs can’t sell stuff and (as a result) can’t make a living from what they’re doing. It’s also interesting that Unltd haven’t done any research to try and find out why (or, if they have, don’t mention it) – particularly as in recent years they apparently have had plenty of time and resources to promote the decidedly niche ‘profit-with-purpose‘ model.

The apparent absence of any analysis or understanding of how social entrepreneurs opinions and experiences relate to what’s actually happening in the markets they’re seeking to enter is a significant barrier to any attempts Unltd might make to come up with practical ideas for change.

The right platitudes 

On that basis, it’s no surprise that what follows is a cheap buffet of universal support organisation platitudes – Realising Potential; Connecting To Great Support; Maximising Impact –  offering no meaningful indication as to how Unltd post-2016 will be different to Unltd pre-2016.

The sad thing is that while the leaders of world and UK social entrepreneurship wallow in waffle, the questions about the role of social entrepreneurs – from those working as part of unregistered, volunteer-led groups in rural church halls to those with big jobs at big companies – remain largely unanswered.

In the UK, despite huge resources going into support organisations, we don’t know enough about what kind of support social entrepreneurs need:

  • to enter public service markets
  • to provide service fillings gaps left by public sector cuts
  • to create social enterprises to succeed in mainstream markets
  • to work within mainstream businesses to create transformational change

And, with a few honourable exceptions, we’re not very good at using what do know to inform what support organisations actually do. Time to stop waffling and get on with it.

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10 Comments

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10 responses to “Mainstream believers

  1. David, Pamela Hartigan isn’t really leading the charge. In fact, when Oxsef met in 2009 to discuss whether a new form of capitalism was possible, she was director of social entrepreneurship at Said Business School. Meanwhile as practioners, we were at the somewhat obscure Sumy State University.

    In the UK the call had been made in 2004, when we introduced the non dividend distrbuting model of business in a proposal to tackle poverty saying:

    “Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”

    In 2006 we learned from the Social Enterprise Coalition that our work was outside their current focus, though whether this mean international operation or reforming capitalism isn’t clear. What I do know is that what Skoll, Pioneers Post and many others are desperate not to attribute what has become one of the most approved articles on McKinsey’s MIX platform:

    http://www.managementexchange.com/story/re-imagining-capitalism-new-bottom-line

    Hartigan’s shift might be explained by her role in John Elkington’s Breakthrough Capitalism initiative which operates entirely from lecterns and conference halls.

    I can show you how the rhetortic at least is going mainstream as B Labs pondrer the same question about the responsibility to shareholders we began with and I introduced them to in 2009.

    https://www.linkedin.com/pulse/people-before-profit-jeff-mowatt

    So much for integrity in journalism.

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    • Beanbags admin

      Thanks, Jeff. Not suggesting there’s been a significant evolution of the overall message from Hartigan and colleagues – but I think ditching the term ‘social entrepreneurship’ is a relatively new development. At least new enough to be the most important soundbite in Hartigan’s speeches for past couple of years.

      Also, while you’re welcome to express your opinion on John Elkington’s Breakthrough Capitalism work, I don’t know much about it and don’t have an opinion but – according to the website – they are: “are also developing bespoke workshops and programs for individual organizations that want to explore ways of embedding breakthrough thinking and action in their business.”

      Lecterns may or may not be involved in the delivery of these workshops and I apologise profusely to Mr Elkington and colleagues if they are sometimes delivered in a roundtable format.

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  2. Tom Fox

    Thanks David for picking up the mainstreaming theme in your blog. You are right to point out the importance of understanding in more detail the practical barriers that social entrepreneurs face, and what we at UnLtd and others can do to tackle these. Often, the barriers and the solutions are issue- and market-specific. Our new strategy directs our work over the next few years towards understanding and breaking down those barriers and unlocking social entrepreneurs’ potential. We agree that it’s important to explore how social entrepreneurs’ opinions and experiences relate to the reality and workings of the markets in which they operate, and this will be an important part of implementing the strategy.

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  3. David
    You end your blog with ‘Get on with it’ – but your blog begs the question – Get on with what? And in making this strong statement, in what context are you making it – as a practitioner or consultant? I say this because you clearly now straddle both worlds which is difficult unless you are truly independent at all times – which I am not sure you are…?
    Being a fan of your past blogs and most of your views, I have found your recent viewpoints/ work a tad confusing often jumping from the practitioner to consultant. Within the jumping about, you strike me as a bit of a liberal when it comes to all things social enterprise/social entrepreneurship. You seem to advocate keeping the definition of social enterprise open, you seem to agree SEUK version of the events when it comes to the capacity of the social enterprise sector (which is wrong) and I know from our recent exchanges you support absolutely the use of finance as a tool useful for expanding the social enterprise sector, when all the evidence points in the opposite direction.
    So that said, here my confusion. Pamela Hartigan is expressing a viewpoint no more or less liberal than yours – using the vagueness of the social enterprise scene to suggest things are not good enough (she is right) and to suggest there is a need to widen the scope of who can be involved in everything ‘social’. I have spoken with Pamela and I am sure she wants to tackle social ills and whilst I don’t agree with all that she advocates, with no social enterprise definition this is what happens – we end up at a place where everything could be a ‘social-something’. You mention profit with purpose and we could add B Corps as more of the mood music that gets pushed into the social marketplace, because the door is open to the burden forced upon the sector by think-tank-type-things that step in as little more than fund sapping opportunists with self-appointed constituencies – which brings us onto UNLTD…
    Like Nesta, UNLTD have become one of those self-appointed ‘social-think-tanks’ playing/ pretending they are true commentators/agents regarding social change. Yet, they have no anchor in poverty and instead run around offering small grants, dream up competitions, dream up schemes like profit with purpose and claim their impact from weak survey work. And they do this because they have too much money and they can. Is it any wonder they are not that popular north of the English border – or anywhere north of Watford for that matter. You are right to criticise but as I have said earlier in what context are doing so?
    I would hope it’s as a practitioner because the consultant viewpoint matters much less (too many paymasters in that world). So as a practitioner as you say, “Get on with it” – deliver the change you think needs to happen and then write a blog to tell us all the difference you have made.
    You seem to have a good opportunity with the social finance work you are involved in and I for one hope you can make a difference in that world, offering opportunities for real social enterprises and stopping the current rot. If you do then that would be worth a blog or two.
    I look forward to reading them…

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    • Beanbags admin

      Hi Robbie,

      Thanks for this. There’s a crossover between Pamela Hartigan’s views and mine in the sense that we both reject the idea of ‘the social enterprise’ as the best model for delivering positive social change (in any given situation).

      My two problems with Pamela Hartigan’s line:
      (i) that it’s vacuous nonsense (see blog)
      (ii) that in the process of offering up her vacuous nonsense she’s telling a whole bunch of other people that what they do is outdated and worthless

      Although I don’t think you’re using ‘liberal’ as a compliment, I’d argue I’m considerably more liberal than Hartigan on definition.

      I don’t believe that everyone should run ‘a social enterprise’ (if they don’t want to) or that people who run social enterprises should look down on people who choose to set up a ‘for-profit’ business explicitly focused on doing good – or a conventional business selling products and services people want while operating in a socially responsible way.

      The kind of social economy I’d like to see would have many more organisations in all three categories – but with lots of groups of people doing good stuff in ways that don’t fit into any of those categories.

      Hartigan apparently believes that people who want to change the world shouldn’t start social enterprises or call themselves social entrepreneurs but try to make mainstream business more ‘reasonable’ instead.

      I think people who want to change the world should use the corporate structure (or lack of structure) that works best for them.

      I understand that this doesn’t really work as a soundbite.

      I’m less clear on my answer to the practitioner vs. consultant question.

      The best I can do is that I’m both. I’m currently a director of three social enterprises and I’m actively involved in running two arts organisations. This gives me some responsibility for running two shops (one currently in the process of opening), one newspaper and a small community centre.

      (Working with a range of other people) I’m keen to expand the media work – more newspaper, some podcasting – and (potentially) the shops.

      My primary source of income – as in, the main way I generate income for Social Spider – is through research into and writing about the social investment market (and other related topics).

      I hope both the practice and the writing/research are useful.

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  4. David’/Robbie, From the perspective of “do it then talk about it”, I recently compared the spectrum of social models, from Muhammad Yunus at one end to B Corporations on the other. There’s also Salesforce, L3C and our own profit-for-purpose.

    Whereas B Corporations make no commitment with regard to the direction of profit, all others are to some extent accepting that social benefit comes at a cost even if it’s just one percent of profit.

    In my article, I’ve included a debate between Yunus and Marc Lane who has had a lot to do with getting the L3C established.

    it’s my contention that all forms of business can “do good” in the broad understanding of that concept, but that when it comes to the more intractable problems, like poverty, corruption and terrorism, a shareholder mandate for the application of profit is essential.

    https://www.linkedin.com/pulse/what-do-you-mean-social-business-jeff-mowatt

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  5. Pingback: The calm before the storm: Have I Got Social Enterprise News For You | SSE

  6. MJ Ray

    “we don’t know enough about what kind of support social entrepreneurs need”

    Really? I feel like I’ve been surveyed within an inch of my life and still the only support organisation fulfilling any of our needs is one that we bought a share in and co-control – but that’s not sufficient as another we hold a share in continues to ignore us.

    I don’t know if my survey responses are atypical or ignored because I’ve not seen survey results reported to those surveyed.

    But then, we’re mainstream anyway. Our organisation was created without the sector’s support organisation’s direct help so it’s simple to continue without it, but it’s disappointing to see what’s effectively common funding peed up the wall. Are funders getting what they want?

    Liked by 1 person

  7. Funding aside, I see Marks and Sparks has launched a new network called Neighbourly, which promises to be what Your Square Mile could have been and it isn’t going to cost public money.

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