Tag Archives: salesforce

May Salesforce be with you

You’d have to have been living on the moon, or at least in a world without access leading social entrepreneurs’ Twitter feeds, to have missed this week’s successful conclusion to the heated discussion between cloud computing specialists, Salesforce and (a substantial chunk of) the social enterprise world.

For those of you who did manage to miss it, Salesforce have been using the term ‘social enterprise’ to describe their social media products and the companies who make use of them. While some in the social enterprise movement had raised concerns about this before, it was Salesforce’s recent decision to seek a wide-ranging UK trademark  that prompted UK social enterprise umbrella body, Social Enterprise UK (SEUK) to launch its campaign to protect the ‘social enterprise’ brand in response to growing demands from members.

Now, following a successful (ironically) social media based campaign based on around the Twitter hastag #notinourname, culminating in a lengthy phone conversation between Salesforce leaders and SEUK chief executive, Peter Holbrook, the technology company have backed down and will be both dropping their trademark applications and ending their use of the term ‘social enterprise’ to describe their products.

Social Enterprise Live quotes Salesforce CEO, Mark Benioff’s explanation for this about turn: “It was never our intention to create confusion in the social sector which we have supported since our founding. As a result of the feedback we received, Salesforce has decided to withdraw its efforts to trademark the term ‘social enterprise’. In addition, Salesforce will look to remove any references to ‘social enterprise’ in its marketing materials in the future.

I have to admit that despite being a strong supporter of the #notinourname campaign, I’m (pleasantly) surprised that it’s managed to deliver the desired result in such a short time. This is partly because, based on past experience, it seemed inconceivable that any debate focused on the meaning of the phrase ‘social enterprise’ could: (a) serve to bring the social enterprise movement together and (b) be resolved successfully.

Of course, Salesforce wasn’t making a contribution to the ongoing wrangle over what types of businesses are genuine ‘businesses that trade to tackle social problems, improve communities, people’s life chances, or the environment‘,  they were using the term to describe something else entirely –  with potentially serious (unintended) consequences.

Even so, this saga has revived the question of whether we need a definition of social enterprise – or ‘a social enterprise – in the UK. I used to be strongly against the idea but the Salesforce dispute is just one of several recent developments that have caused me to change my mind on the issue.

I remain skeptical about the idea that we need a definition of social enterprise to prevent the rise of ‘bogus social enterprises’. This term is most commonly used to mean people appropriating the term ‘social enterprise’ to give their business credibility when its primary focus is to generate profit for shareholders.

My problems with that argument are:

(a) there’s still not very many situations where claiming to be social enterprise will, in itself, offer you a competitive advantage.

and

(b) in situations where it might help, there’s ways to make the point without needing to actually call yourself a social enterprise anyway.

The fact that private sector back-to-work contractor, A4E, have now (rightly) been banned from suggesting they exist primarily for a social purpose suggests that the combination of regulation and public scrutiny should be enough to prevent companies describing themselves in a misleading (deliberately or otherwise) way for a long period of time.

The bigger danger – and the one that leads me to support an official definition – is inconsistent use of the term by public sector agencies when describing the organisations that they are supporting or awarding contracts to. A prime culprit in this is the recently departed Health Secretary, Andrew Lansley. As discussed previously, the Health and Social Care Act 2012, amongst its many and varied sins, says that:

“a body is a social enterprise if—

(a) a person might reasonably consider that it acts for the benefit of the community in England, and

(b) it satisfies such criteria as may be prescribed by regulations made by the Secretary of State.”

On that basis, local authorities are empowered to give the contracts to deliver the new Healthwatch service to ‘social enterprises’.

The Department for Business, Innovation and Skills (BIS) has a different definition stating that: “The term ‘Social Enterprise’ describes the purpose of a business, not its legal form. It is defined (by Government) as ‘a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners’“.

The clearly something going slightly wrong if the government’s definition of social enterprise is not even recognised by other bits of the government when drawing up legislation. But that’s because the BIS definition is not a legal definition, it’s what some ministers and civil servants have chosen to say, and some other ministers and civil servants are at liberty to ignore it entirely.

This matters now because of what’s at stake. Frankly, I couldn’t care less if, at various points in the past, woolly definition of social enterprise has led to private sector businesses receiving some free business planning training or a free Business Link mouse-mat. It’s more of an issue when there’s important services and serious cash involved.

There’s also the Public Services (Social Value) Act 2012, which will come in force next year. While being a social enterprise is no guarantee of providing additional social value, and not being a social enterprise is no guarantee of not providing additional social value, it seems likely that the fact that an organisation is a social enterprise may be a factor in commissioners’ considerations under the act.

The growth of the social investment market – however skeptical some of us might be about the way it’s currently developing – is another good reason for ‘a social enterprise’ to be defined for tax purposes.

I think the time has come for clear, inclusive legal definition that enables organisations to register as ‘a social enterprise’ and be regulated accordingly. Peter Holbrook and the team at SEUK have done a fantastic job leading the Salesforce campaign, getting agreement on a definition would be an even bigger challenge.

9 Comments

Filed under Uncategorized

Social enterprise movement battered by Salesforce winds

As if a double dip recession, record cuts in public spending and the contracting arrangements for the Work Programme weren’t enough for the social enterprise movement to contend with, the world’s attempts to prove the correctness of the late Gore Vidal’s claim that “no good deed goes unpunished” have now moved into the murky arena of intellectual property.

The problem is not that cloud computing specialists, Salesforce.com, have got anything specifically against businesses ‘with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners’, it’s just that they use ‘Social Enterprise’ for a different purpose, to define the exciting range of products they offer to help companies make effective use of social media.

This use has annoyed some social entrepreneurs for some time but the situation has escalated significantly in recent weeks following Salesforce.com’s application for a wide-ranging trademark for the words ‘social enterprise’. Civil Society reports that: “Intellectual property legal experts say an attempt by (the firm) to trademark ‘social enterprise’ is unlikely to be successful, but is possible.

Not surprisingly, Social Enterprise UK (SEUK) chief executive, Peter Holbrook, is on the robust constructive dialogue path, sending an open letter to the company while explaining that: “We’ve raised our concerns with Salesforce more than once and hope they’ll enter into a dialogue with us. With the launch of Big Society Capital, the world’s first wholesale social investment intermediary, and the passing of the Social Value Act, we’re on the cusp of social enterprise entering the mainstream vocabulary in the UK.

And adding that: “For Salesforce to jeopardise in anyway the social enterprise sector’s progress wouldn’t do much for their reputation.  We have taken legal advice and will take the necessary steps to protect the term social enterprise of behalf of all those in the sector.

SEUK are taking the right action in difficult circumstances but, while Holbrook is clearly correct to suggest that Salesforce.com’s actions are not helpful to ongoing attempts to establish social enterprise in the mainstream – as an approach that both other businesses and individual consumers are familiar with – these circumstances are partly a symptom of the failure of social enterprise to enter the public and corporate consciousness to a meaningful extent.

There is clearly no shortage of interaction between the social enterprise movement and large private sector companies. In the corporate world, anyone who’s anyone is now either running or involved in a social enterprise support and mentoring scheme. None of the schemes are bad but it’s not clear which, if any, of them take us far beyond the world of what used to be known as corporate social responsibility (CSR).

Now, the Salesforce situation raises big questions about the extent to which big decision-makers at big corporates really care about or even know about social enterprise.

That’s particularly true in the case of mobile phone company, O2 – allegedly one of the social enterprise movement’s most prominent corporate supporters. In 2010, the company announced its support for social enterprise stating: ‘This is the age of social enterprise, and 02 is welcoming it with open arms’ and then proceeded to launch both a website and  a package of services aimed specifically at social enterprises.

While some potential O2 customers within the movement may have found it difficult to identify specifically social enterprising approaches to phone use that were significantly different to those of other small businesses – and others may have preferred to buy their services from a social enterprise – it was definitely a nice idea.

Given O2’s apparent enthusiasm for our movement, readers familiar with Private Eye’s ‘Just Fancy That’ might be surprised to see the company making this contribution to Salesforce.com’s attempts to promote their alternative version of social enterprise. While Business Director, Ben Dowd and Head of Business IT, Steve Thurlow, are clearly being enthusiastic about something – and with my limited knowledge of their field, I’ve got no reason to doubt that they’re putting that across very well – it’s pretty clear that the ‘social enterprise’ they’re talking about is not our version.

This obviously doesn’t mean that O2 have actively ditched the social enterprise movement and are now opposed to it but it does suggest that their support was always a fairly peripheral element of their (extremely large) business – headed up by individuals employees with a genuine commitment to (our version of) social enterprise but without wider support within the company. In the same way that the head of Business IT would (quite reasonably) not be expected to have a detailed knowledge of all the charities O2 staff might be running the marathon for this year, neither would he be expected to know about the little-known alternative approaches to business that they might be attempting to give a helping hand to (while also hopefully flogging them some services).

In terms of the matter in hand, we have to hope that Salesforce don’t receive a trademark for a phrase that had widely used to define a movement of thousands of organisations, serving  millions of people, before they started using it but we should also take this as an opportunity to reconsider of relationship with the corporate giants that taking an interest our sector.

There is a big danger that – following cuts to public spending – many social enterprises, who previously had a ‘business plan’ based primarily on the idea that sooner or later the government would just give them lots of money to do really good stuff, will be tempted to replace the words ‘the government’ with ‘XZY Corp’s corporate supply chain’ and keep on following the same plan.

This may well be (a bit of) the best business model currently available if you’re a social enterprise support agency but it’s definitely not the best approach if you’re running a social enterprise media training organisation in Milton Keynes or a social enterprise bakery in Hull. Most social enterprises will succeed (or fail) by selling (or not selling) stuff to people who want to buy to stuff.

Most of us in the movement believe that there’s a value in the idea of social enterprise entering the mainstream so that more people actively look to buy from social enterprises, and also so that more dedicated and talented people choose to start social enterprises themselves. But mainstream knowledge of the term ‘social enterprise’ will not make unprofitable businesses profitable. In terms of existing social enterprises, if we’re not successful over the coming years it won’t be the fault of Salesforce (or corporate social enterprise support schemes). It will be because we weren’t able to sell enough stuff for less than it cost us to produce it.

6 Comments

Filed under Uncategorized