Tag Archives: SSE

January 6, 2011 · 6:56 pm

Loan dangers

My Guardian piece on the Big Society Bank seems to have generated a fair amount of (mostly supportive) reaction so it my typically difficult way I want to start by partially disagreeing with myself. The Guardian’s sharp, engaging headline and intro serves to slightly over-emphasise my scepticism about the Big Society Bank. I am sceptical about the level of hype around the Big Society Bank – in both its current and New Labour incarnations – but I don’t think it’s a bad thing. In fact, I think it’s likely to be a broadly good thing (and the ideas shortlisted by Nesta all sound potentially valuable).

My main concern is that the Bank is likely to be a vehicle to perpetuate the misguided thinking on social enterprise finance that I discuss in the rest of the Guardian article. My contention is not that people coming up with ideas to achieve social change through new financial models is a bad thing, it’s that it’s a relative side issue in the discussions about how to support socially enterprising people to deliver positive social change in the UK.

At the start-up stage or in the early stages people need to work out whether there’s a need for what they do and whether there’s a market for it. Overdrafts can be very useful but generally, while I can think of lots of specific exceptions where a loan might be the right vehicle to undertake that process, these exceptions cover a very small percentage of the overall number of new or early-stage socially enterprising ventures in the UK right now.

Over recent years, it hasn’t been unusual to attend events on social enterprise finance where there’s been presentations from two, three, sometimes four different flavours of social enterprise loan fund but little or no mention of (declining in many sectors but still relatively extensive) grant opportunities or, more importantly, ways of getting up and running without significant start-up finance.

I agree with Rod Schwarz’s view that, in the case of the kinds of social enterprises that potentially would benefit from significant investment, a lack of social enterprise investment propositions is a bigger problem than lack of cash. And I also very much agree with the approach of Schwartz’s company, Clearly So, in seeking to match social businesses with people who are willing and able to provide the kind of finance that’s relevant to their specific needs – whether that’s donations, equity investments or loans. Loans are potentially helpful but they’re a tool, taking a loan is not a socially beneficial activity in itself.

Part of the trouble is that elements within the social enterprise lobby see the use of loan finance of proof of virility. Social enterprises take loans and pay them back because they’re real businesses not wussy charities that take just grants and spend them on helping people. And don’t we have a significant growth in turnover this year.

Social enterprises (or enterprising charities) striving to be sustainable businesses – or get as close to they can to being sustainable through trading – is a good thing. The problem is that the bit of it that really matters is being able to provide some goods and services that people want to buy. Specialist providers do offer something to businesses that have got there, need finance to get to the next level and can’t get it from mainstream banks – but the number of social enterprises in that position is far too small to justify seminars, conferences or flagship government policies.

While I accept that part of the difficulty is that you’re more likely to get a decent turnout at (even an ultimately useless) event called ‘how to get some money for your social enterprise’ than you are at event called ‘practical tips based on my really difficult experiences starting a social enterprise with no money’, I still think social enterprises support agencies, business support agencies and other state-funded advice providers have a major case to answer.

With the exception of SSE and Unltd, these organisations have shown a worrying lack of focus on either helping people to do stuff or putting them in touch with people who might be able to. I doubt this is through choice. It’s likely that it suited New Labour to fund a never-ending roadshow of mostly irrelevant financial products and inter-lobby networking. A key challenge for the current government is to make the Big Society Bank doesn’t contribute to more of the same.

 

 

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October 18, 2010 · 12:11 pm

Down in Dartonia

I imagine problems with the Dartington estate broadband system prevented Nick Temple from continuing his insights into last week’s SSE residential. Either way, I’m happy to pick up the baton. I was at the residential as a member of this year’s SSE London block group. While the highlight of my week was undoubtedly joining fellow mental health social entrepreneur, Steve Light, in a karaoke interpretation of Sugarhill Gang’s Rapper’s Delight, my stay in Devon also provoked some thinking about how we do social enterprise.

The Social Enterprise City of the Future format created by the SSE team certainly generated plenty of discussion and – eventually – plenty of productive activity too. Although the situation was a necessarily artificial one, the problems of building groups and forming partnerships with others mirrored those faced by social entrepreneurs in the outside world.

One of the most interesting questions raised by this process was that of how we deal with the challenges that we (social entrepreneurs) encounter when we try to work with each other. There’s plenty of discussion in the social enterprise world about the potential difficulties of working with councils or more traditional charities but if you put together 20 or 30 passionate individuals with a strong motivation to achieve (often similar) social goals in (often very) different ways that poses problems in itself.

My instinctive approach – not especially suited to last week’s challenge – when working on a project involving a large group of people with different ideas about how things should be done is to sit and wait until all the shouting’s over and then try and work with anyone who’s left in the room to do something practical and useful. That’s a reflection of my personality rather than my professional opinion and – in my day job or my real life voluntary roles – I’ve found a little bit of well targeted shouting (or robust point-making) is often the necessary thing to do to break a logjam.

The big problem for my team in the Social Enterprise City of the Future lay in overcoming the challenge of deciding who was in charge and what needed to be done quickly enough for something to actually be done. This is one problem that social entrepreneurs don’t usually encounter when working with public sector agencies or funders on a fairly small scale. It’s usually clear that party (a) has some money and party (b) hopefully has the ability to do something with that money to achieve positive social change, if only they can persuade party (a) to give it to them – either in a chunk or based on some agreed results.

If, as many of us hope, one of the positive by-products of the current economic challenges we’re facing is that there’s more opportunities for groups of social entrepreneurs to get together and make things happen on a larger scale, that we’ll need to deal find ways for lots of people with the drive, passion and ideas to change the world to work together – despite their inevitable differences in experience and approach. That’s definitely a good thing but, last week’s experience (and other experiences in the past) suggest it won’t always be easy.

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July 7, 2010 · 8:00 pm

With a little trust

One of the most important characteristics of the social entrepreneur is what Linford Christie, in his energy-drink advertising prime, described as a ‘positive mental attitude’. Succeeding at social enterprise usually involves believing that a combination of some good ideas, a bit of luck and and loads of hard work can add up to a better world – and often involves continuing to believe this even when you haven’t been paid for three months and the only thing left in the freezer is an unidentifiable item of dubious nutritional value.

The positivity that provides a will to succeed against the odds is a wonderful thing. Unfortunately, amidst the current political and economic tumult, there’s a danger that some sections of the social enterprise movement could be seen to be celebrating the fact that there’s so many hard battles to be fought.

There’s a broad spectrum of social enterprise views on public sector cuts ranging all the way from the view that there shouldn’t be any cuts at all, to the apparent view that the more the government slashes spending, the bigger the opportunity for social enterprises to rock up and do everything much better for less money.

This paper from Charlotte Young and Nick Temple of the SSE is a thoughful contribution located around the mid point of this spectrum. The basic premise we need more collaborative, trust-based relationships and less of the expectation that professionals can and should magically solve all our problems in exchange for our taxes – with the citizen consumer asserting their rights to a high quality service which the (national) government provider is accountable for.

Given that the authors are challenging the bureacratisation of community regeneration – rather than suggesting that maverick volunteers should be able to have a go at doing open heart surgery – I’m broadly in agreement with their overall thinking but there’s one thread within the paper (and the post-election social enterprise and the public sector debate in general) that I’m less keen on:

“One reaction to a squeeze on public funding and central initiatives might be to wring ones hands and cry ‘What will happen to us? What are ‘they’ going to do about it?’ Another is to treat it as a possibly-once-in-a-lifetime opportunity to develop an even greater sphere of valuable trust-based activity which will be much harder for any future governments to control or subvert.”

There’s (at least) two problems with this line of thinking:

1. There’s a danger it enables governments to spin cuts in support to the most vulnerable people in society as being part of a clever plan to empower those people to become community activists. Closing the local public library may – in some areas, though probably not the less well off ones – provide a spur for local residents to get some bookshelves from freecycle and pool their own collections of paperbacks in the local community centre. I’m not in the camp that would see this as social progress.

2. For every social enterprise that gets to build the Big Society there’ll be at least one (maybe several) that gets burned on the bonfire of bureaucracy. The State of Social Enterprise Survey reveals that 39% of social enterprises (out of the cross-section surveyed) get more than 50% of their funding from the state and another 10% judge their state/non-state income balance at roughly 50/50. Whether or not government cuts of 25% or more provide many of these social entrepreneurs with once-in-a-lifetime opportunity will, in many cases, depend on whether or not they’ve had the opportunity to be unemployed before.

I’m not blithely sticking some pole in the ground and defending all current public spending, or all current government grants to and contracts with social enterprises. Nor am I denying the underlying good sense of looking for better ways for people – professionals and people who use services – to work together to do things as well as possible with less money. What I am questioning is the idea that swinging cuts in public spending mean that, for social enterprise,  ‘our time has come’. My strong suspicion is that when the big spending squeeze really begins to hit home, for many social enterpreneurs and social enterprises, the exact opposite will be the case.

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June 8, 2010 · 12:15 pm

On consultants and owning the change

I’m a massive supporter and satisfied beneficiary of effective support for social entrepreneurs and social enterprises provided by organisations such as SEL and SSE but I’m also amused by the apparent preponderance of social enterprises providing consultancy in how to do social enterprise.

In fact, if we temporarily ignore The Co-Operative Group, The John Lewis Partnership and assorted ethical banks, it would be interesting to know the comparative percentage of social enterprise income generated by social enterprises that tell other social enterprises how to do stuff, as opposed to social enterprises actually doing stuff. Interesting but maybe a bit frightening.

Frightening because while helping people to start and develop businesses (social enterprises or otherwise) is a potentially vital service (with fairly low barriers to entry), it’s also a service that it’s very difficult to deliver usefully.

This was well illustrated by last night’s episode of Mary Queen of Shops. Mary Portas is my favourite TV business guru by some distance – not least because she shuns Gordon Ramsey’s swearing and shouting for a glorious array of illustrative facial expressions.

Yesterday she was trying to help Angela, a lady who had been running a south London bakery for 36 years (a core message that she emphasised repetitively and with gusto) but needed to sell more bread and cakes. The essential problem, which Mary put across far more tactfully that I’m about to, is that Angela was providing a service for the era before supermarkets worked out how to sell bread.

Mary wanted Angela to start providing a specialist, more upmarket range of bread (especially) and cakes to give customers a reason to come to Angela’s shop rather than buying from the supermarket. Angela wanted to carry on selling the same stuff she’d always sold while miraculously increasing sales through giving the shop a lick of paint.

By the end of the show Angela had ordered the cameras out of her shop and, unlike in the more formulaic reality business shows, there was no redemptive success other than a tense final meeting where Angela and Mary agreed to part as friends on Angela’s condition that Mary left her alone and stopped trying to tell her how to run her business.

We never got to find out whether Mary had the right ideas about how to run an independent bakery in Wimbledon but the point is that it doesn’t matter. If you’re providing business consultancy to someone or some people who have a significant personal investment in their business then being right is, almost, the least of your challenges.

The job of consultants in this kind of situation is not to tell people what to do – someone who wants to be told what to do is unlikely to have chosen to be a social entrepreneur or small business person, and if they have the best advice may be for them to stop and get a job – but to help the client work out for themselves what needs to be done and how they can do it.

There does seem to have been an increase in the availability of business ‘coaches’ from various points on the motivational speaking spectrum but I’ve got a feeling that the ranks of business advisors in general could also benefit from an influx of people with a background in social work to complement the people with a background and certificates in business.

Mary Queen of Shops didn’t do anything wrong in the case of Angela and her bakery. The most sensible approach – other than the tactful persistence that Mary attempted – would have been to leave Angela alone for while until she decided (or otherwise) that things were going so badly that change was essential. That’s not really possible when you’re working to a tight deadline to film a TV show.

The underlying problem was that any questions about the contemporary market for bread in Wimbledon were completely squashed by the weight of 36 years of a lady’s life during which her identity, her sense of self and sense of a life fulfilled, were inextricably linked with her shop. If a business is about the people who run it and the business is going wrong, then pointing out what’s going wrong involves – to some extent – saying things that the people on receiving end will construe as ‘you’re shit’.

The social enterprise sector positively encourages the growth of businesses that are about the people who run them and their personal stories and motivations. That’s generally a good thing but it makes the job of consultants and business advisers even more difficult than it would usually be.

The consultants who succeed most often will be the ones who are best able to enable people to own positive changes to their business without telling them what to do. But more importantly, allied to that, the social entrepreneurs who succeed most often will be the ones who can put their stories and experiences at the heart of what they do without being crushed by the personal impact of accepting robust advice that says that those stories and experiences aren’t enough, in themselves, to make a successful business than delivers positive social impact for others.

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