Listening to the Social Entrepreneur

Listening to the Social Entrepreneur

Following on from the success of the Listening to the Social Entrepreneur event on the 9th October, I have written a brief overview of the day.

You can read the article on the Social Enterprise Magazine website.

We are currently working on a post-conference report and website – we’ll let you know when it’s ready.

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Posted by: bevmeldrum | October 6, 2008

Listening to … Tim Curtis

Procurement Versus Marketplace

Who are we listening to? This is a question asked in many marketing departments, entrepreneurship lectures and board rooms? Are we here to listen to our customers or to sell them something? The tension between having something sell, or a social justice issues we are passionate about and providing something our customers actually want is a fundamental tension in social business, and it runs to the core of whether we are procurement or market focussed. This is because we have to understand the nature of the two types of clients- the public sector and the wider (broadly private) marketplace. Who are they and what challenges do they present to our business model?

What does the public procurement market represent? The market watchers BIP say that total public spending in the period 2007-08 to 2010-11 will rise from £589 billion to £678 billion. So it represents a huge market, but it is not a single market. This is made up of, in the main, salaries and pension contributions. The rest is massive construction projects, private finance initiative expenditure and defence spending. The Mayor of London’s £3bn budget boils down to £450m of spending on small companies.

Public procurement is an intrinsically rules bound process. If anyone has read the EU Procurement rules, and they are to be reserved for significant sleepless nights, and the guidance on State Aid, they will rapidly realise that public procurement is primarily concerned with the governance of the procurement process- that the procurement should not distort or upset the smooth running of pure competition. Although attempts have been, and continue to be, made to include social clauses in contracting processes, effectively the public procurement market is designed to ensure that no one organisation gains a competitive edge from the procurement process itself. For a social enterprise, which is pursuing a social outcome as a primary objective of business, the procurer or commissioner can’t choose to select a social enterprise as a supplier.

The procurer can’t choose one supplier over another purely because of their status as a social enterprise. Large amounts of public procurement has shifted over the last few decades from ‘lowest cost’ decision making towards purchasing certain public policy outcomes. But, despite this progress away from the ‘cheap as possible’ approach, any organisation can deliver, or appear to deliver, a social outcome. This has been seen in the environmental field, when procurers starting thinking it would be a good idea to include a requirement for environmental management in their prequalification documents. I lost count of the number of ‘Environmental Policies’ I was required to write for companies that wanted to get on the pre-qual list, with no intention of doing any more to protect the environment than printing off a stock-phrase environmental policy. The same is potentially true in other social justice areas- day care services can be provided by any organisation, as long as they appear (in audits) to have achieved a narrow set of social outcomes, but they might well achieve these outcomes and yet exploit their staff with low wages and no pension, or skimp on another cost centre, or exploit food growers in the third world by not buying fairly traded products. In order to be efficient- i.e. provide the service whilst reducing the apparent cost to the public sec tor as well as providing a modest return on investment for shareholders still requires certain costs to be shed.

Shedding costs, however, is a false economy, because the costs (like the carbon emissions we fail to capture and use) don’t disappear- someone else has to pay for them- the costs are borne somewhere else.

Enough of the macro economics. What of the ‘marketplace’? How is this different? The marketplace is less rules bound and its measure of value is based on affordability. Anyone can buy anything, even somebody else’s life. And if I want something I work out how I can generate the cash to buy it- this is fundamentally different from public sector spending which is driven by fixed or reducing budgets. If a company or an individual wants to buy something that is very desirable, there is an opportunity to go and do something (sell more products, get a pay rise etc) in order to afford the product. The marketplace is intrinsically more relationship based- dare I say it- the private marketplace is a more ‘social’ place than the public space. We make more decisions about purchasing based on who we know and what we know about the vendor than we do about ensuring fair competition. The public procurement rules and processes narrow the scope for relationship building, because of the obsession with competition and not distorting the market.

The private market, on the other hand, accepts that the market already is distorted, and that competition is uneven, if not unfair. At the most basic level, differences in the information about a product because of language differences means that a local language product has a competitive edge over a ‘foreign’ product. In addition, purchasers are not unrelentingly rational. We make irrational decisions all the time, particularly over our taste in music or food.

So, to summarise- what is the difference between the public and private marketplaces?

PUBLIC                           PRIVATE

Rules-based                    Relationship Focused

Budget Controlled           Will earn money to afford a product

Efficiency oriented           Influenced by the desirability of a product

Predictable                      Unpredictable

So what does this means for social enterprises? Which market should we be listening to? Which market place is listening to us? Perhaps the question should be- what marketplace is best able to listen to us and why? Although one expects the public sector marketplace to be the one that is the most ethically informed and aligned with our own interests, in fact we must remember that the fact that there is a market at all is the result of the imposition of quasi-free market politics in the 1980’s. This means that the marketplace exists to implement government policy without distorting competition. It does not, therefore, exist to support social objectives that are not covered by (national or local) government policy objectives, nor is it able to listen more closely to one service provider over another.

The private market on the other hand can listen to whomever it wishes, it can contract (more or less) with whomever it wishes in what ever form it wishes. If a company wishes to be hugely inefficient and buy the most expensive product on the market, then it is free to do so. If that product happens to be intrinsically ethical and internalises lots of social costs, then that is a huge bonus. A private market can and does seek to distort the market. Traditionally this distortion is made in the interests of the company, but in some cases the distortion is made for a social justice purpose. The private sector is increasingly engaging with relationship contracting- where the costs of a product is less important than getting the product right and getting the relationship between vendor and purchaser correct.

Because the public sector market is rules-bound it is a predictable market. If you social enterprise relies on a predictable market, then the public sector is for you. If your social enterprise does not rely on predictability, then the private marketplace is for you, but you will need to prepare to weather the changing whims of the marketplace, and be prepared to keep innovating and out-competing the competition- including big corporates.

Posted by: bevmeldrum | October 2, 2008

Listening to … Doug Foster

As the other part in the ‘Doug and Mike show’ due to appear at the event next week I am in awe of Mike’s thinking on variant typologies of social enterprise, all of which I believe to have bearing on the debate here – and I think we come to similar sorts of questions, or sometimes complimentary questions at least, via different routes…

I’ve had an academic interest in social enterprise and social entrepreneurship for a number of years now, with my PhD attained in 2001 in part looking at how Church of England vicars functioned (or not) as social entrepreneurs.  Yet a decade or so before then I worked as a community care development worker when the Conservative government arguably tried belatedly to bring enterprise into the public sector, including the area of health and social care with which I was particularly concerned…

So what contribution do I propose to make in assisting with the ‘listening to the social entrepreneur’ agenda?  I guess my primary question in relation to this debate is ‘what’s in a word or the words?’  I’m not sure whether I’m clever enough or sufficiently versed in particular philosophical ways to make such claims, but it occurs to me that ‘deconstruction’ might describe part of what I’m trying to suggest here, by which I mean breaking down and interrogating the words we use.  Yet what I also see as a supporting element to this analysis is looking at words that may in one instance be used interchangeably, and yet in another be used in such a way only very awkwardly. On the other hand, some words are not used yet conceivably could be.  Why do we talk of ‘social enterprises’ rather than ‘social businesses’, and yet of ‘business goals’ rather than ‘enterprise goals’?  Why do we talk of ‘social enterprises’ and ‘social goals’, rather than ‘public enterprises’ and ‘public goals’?  Could we talk about ‘moral’ or ‘ethical’ enterprises and goals instead of social ones?  Why not talk of ‘green’ or ‘environmental’ enterprises and goals instead of ‘social’ ones, particularly if the aims are about recycling or cutting the carbon count?  Why is ‘business’ seen as particularly conflicting with ‘social’ goals and not ‘power’ and ‘status’?  In the end, however, this workshop is about listening to you, and these questions posed will only work if they can help expose insights relevant to that end, including whether this very debate we are having, that ‘we’ after all have framed, is the right one…

So…what do you think?

We have just released 20 more tickets for Social Entrepreneurs for the Listening to the Social Entrepreneur event after they all sold out earlier this week.

These will be the last tickets we can make available for the event on the 9th October 2008, taking place at the Britannia Village Hall in West Silvertown so make sure you don’t miss out by booking today.

Book your place here.

Posted by: bevmeldrum | September 27, 2008

Listening to … Mike Bull

The Social verses Business Debate: A different debate for different organisations

Doug Foster and I (Mike Bull) will be presenting at the workshop on the social verses business debate. The session might go in any number of ways and I’m sure that each conversation with the groups will be completely different. In a nutshell this sums up to debate – difference. At a time when the social enterprise movement is gathering speed across many sectors, in many parts of the world and in many different ways we somehow still strive to understand the phenomena from a single mindset – a single type, one definition, one way on ‘talking social enterprise’.
To bring difference back around to the debate, there are those social enterprises that this debate has no substance, and there are those that wrestle with the debate daily.

The differences in social enterprise are worth exploring:

Typology 1 – I imagine these to be the SEs that have a financial relationship with their end user – i.e. they sell the users buy – from my experience (on the surface of these types) there is little or no wrestle with the social verses business debate, yet looking deeper reveals that mission drift is an easy trap to fall into.

Typology 2 – I imagine these to be the SEs that are contracted to services for end users, so no direct payment from the user but a process by where the organisation is enabled to work with the end user via the financial contract with a third party – from my experience there appears to be tensions here around the goal differences between the enterprises and funders.

Typology X – I imagine these to be SEs that are using the social enterprise model as a framework to enable their core focus, the social, to function. They resist analogies to businesses per se – here I have seen the greatest disparity to blended value and people are very uncomfortable with the business concept.

Typology Y – I imagine these to be SEs who embrace the business model to be financially successful, rational and pragmatic that they ARE just like any other business, but do something different with their profits than the private sector – from my experience the tensions are explained away as manageable parts of the whole. A pragmatic response to a pragmatic, separated approach.

Typology A – New start SE businesses.

Typology B – transition SEs from charity and community organisations.

A and B types can vary dramatically in their ideological and philosophical constitution,

Typology i – the lone social entrepreneur as social enterprise.

Typology ii – co-op-preneurs as social enterprise.

Typology iii – social enterprise that wouldn’t really call themselves entrepreneurial at all.

i, ii and iii types also vary dramatically in their ideological and philosophical constitution.

Accepting these broadly different types, in theory, there a multitude of different types of social enterprise – of course practice is another thing – and I imagine there to be many shades of grey in-between, so many, many, more different types.

So what does this tell us? Maybe it tells us there are different types of social verses business debates? Maybe it tells us difference matters? Maybe it tells us goals matter? Maybe it tells us nothing? Maybe it is a starting point for debate and one which can be discussed as we lead up to the seminar? Let’s hope so! Look forward to London 9th October.

Announcing a change of venue …

Britannia Village Hall, 65 Evelyn Road, West Silvertown, London E16 1TU

Due to the University of East London not being able to provide enough space for us all we have decided to move the conference to a venue a few stops away on the DLR.

Britiannia Village Hall will be our hosts – a social enterprise in West Silvertown. It is 2 minutes walk from West Silvertown DLR station and there is plenty of parking for those that need to drive.

We’re really pleased with this new venue and it’s great to be able to hold this conference in a local social enterprise.

Look at a map here.

Posted by: bevmeldrum | September 19, 2008

Listening to … Kathe McKenna

Recently I listened to a hard question from two health care workers attending a gathering of people dedicated to operating soup kitchens for those experiencing homelessness and hunger: “Don’t you know that you are killing the poor?”

What these passionate fellow-travelers were pointing to was the clear evidence that over-eating and eating the wrong food was creating unhealthy bodies that were responsible for early deaths as well as compromised lives. Obesity, diabetes, high blood pressure – all caused in great measure by poor nutrition – are also crippling the health care delivery system by using up so many resources.

Forty years ago when we first began Haley House, the men who lined up for hours waiting to come in out of the elements (into an unheated storefront), gratefully received a cup of coffee, slice of day-old bread – and maybe, some government surplus butter. Today such fare would be rejected out-of-hand. Where are the donuts, pasta, sugar coated cereal – or eggs and ham and toast and jam? Who wants to be the one to say, “Here’s some yogurt and granola, or made-from-scratch oatmeal?

This is where one is reminded of the Buddhist slogan – in order to fly the bird needs two wings: compassion and wisdom. With compassion alone, loving care can miss the mark; with wisdom alone, loving care can take the form of cold rationality.

The mission of our non-profit is to transform peoples’ lives. A business enterprise by definition has the goal to make a profit. Its leader(s) may feel responsible enough to operate their business conscientiously with regard to the planet, their employees, and perhaps those who produce the raw goods. But that is ‘value added.’ It may even be a way of conducting business (socially responsible business) that attracts more customers and therefore generates more revenue.

The purpose of creating our social venture, the Haley House Bakery Café, was to transform lives. The vehicle we use is a business that also must produce a profit if it is to survive. This is the heart of capitalism. For all its downsides (and they are many) inherent in capitalism is an energy that can be either seductive or liberating. It all depends on your goal: to simply make more and more profit, or to give access to this energy to people without capital. A subtle and elusive challenge.

Posted by: bevmeldrum | September 17, 2008

The Great Blogging Competition

Today we are launching The Great Blogging Competition for anyone attending the Listening to the Social Entrepreneur event on the 9th October.

Just comment on a post here on the conference blog before the 9th October and your comment will be entered into the competition.

The prize is a silver 4gb iPod nano. Got one already … not to worry if you win the prize you can always give to someone else for Christmas – sorted!

The winning comment will be chosen by the organisers of the conference for being what they consider to be the most interesting and thought-provoking. The prize will be announced and awarded at the conference.

Posted by: bevmeldrum | September 15, 2008

Listening to … Rory Ridley-Duff

My name is Rory Ridley-Duff.  I will be presenting a section of the ‘Social Entrepreneurial Mindset’ theme of the seminar day and wanted to contribute to a debate about the respective roles of employee-owned organisations, co-operatives, charities and voluntary groups to the social enterprise movement.

There is considerable irony (for me personally) that the employee-ownership sector, despite active involvement in the formation of both Social Enterprise London and the Social Enterprise Coalition (SEC), has been marginalised in social enterprise policy. The recent
All Party Parliamentary Report on Employee Ownership” makes this clear in repeated pleas for political recognition “comparable” to the social enterprise sector (as if it has somehow left the movement).  I was surprised, therefore, that after the event the Chair of the Employee Ownership Association (EOA), Patrick Burns, felt that most members of their association did not feel part of the movement (despite the EOA itself being a member of the SEC).

Anyone who has participated in, or provided business support to, employee-owned / co-operative organisations cannot fail to experience and recognise the ‘social’ element of their enterprise orientation.  As Rob Paton and Roger Spear documented in the late 1980s (Reluctant Entrepreneurs, from the OU), the transition to worker ownership represents an enormous learning curve for trade unions, workers, managers, suppliers, customers (and in some cases receivers) as social relations are restructured to support workplace democracy and stronger links to the local community.

There are two constructive roles that such organisations can play.  In Spain, for example, the ‘for-profit’ co-operatives that produce industrial and consumer goods provide most of the financial capital for the secondary co-operatives offering education, housing and welfare benefits.  Secondly, viable models of workplace democracy are vital as learning grounds for inclusive management and decision-making processes.

At Mondragon, one of the most successful co-operatives in Spain – if not in the entire world – they run regular and accessible seminars (at low cost) for people wishing to learn about their approach.  If we are to apply ‘business’ practices to social enterprise, why not draw those practices from businesses that promote democracy?

My biggest concern is that marginalising the members of the EAO will leave social enterprises over dependant on state funds and philanthropy. Both these funders tend to impose top-down board-driven governance models rather than democratic self-management.  As Alibeth Sommers argued at the Social Entrepreneurship Research Conference in 2007, existing government policy toward social enterprise is about the expansion, not the contraction, of state influence.  As I further argued in Corporate Governance (2007), policy for the CIC was skewed in favour of the interests of charitable trusts and the government, not the promotion of democratic forms of ownership and control.

What are your thoughts on the way the social enterprise movement, charities and non-profit social enterprises, should develop links with profit-making employee-owned businesses and co-operatives?

Posted by: bevmeldrum | September 10, 2008

Listening to … Gladius Kulothungan

Gladius Kulothungan

Gladius Kulothungan

Two years ago in June I was attending the Social Enterprise Research Conference at the London South Bank University and during the morning break on day 1 (yes, these things run for more than one day!)

I ran into Zoe Portlock who was just finishing the B.A Social Enterprise course we run. I asked her how she found the proceedings and she took about a whole minute to answer, “ Hmm…….interesting!”.  Now I knew Zoe to be a very smart, intelligent and knowledgeable individual already leading a community project that trains disabled persons for employment in East London called The Tower Project and hearing her speaking in mono syllables about social enterprise research today got me thinking.

The next day I asked her what she found particularly interesting at the conference and what she said was a kind of a revelation to me. She said “ I don’t know how much of all they discuss here has a direct relevance for practitioners in the field”.

Peter Watherston, the founder of First Fruit, a social enterprise in East London, echoed the same sentiments when he once told me, “I avoid these academic discourses on social entrepreneurship because I am not able see the whole point of these exercises”.

For me, who is at a mid way point between practice and studying practice – I used to run social enterprises but research them now as well teach about them – these responses were indicative of a possible gulf between the world of the practitioner and the universe of the researchers in the social enterprise sector.

Being part of the Centre for Institutional Studies, at the University of East London, that tries to look at how institutions today try to address social problems, I thought of the idea of having the practitioner take centre stage and making their concerns and issues the focus of attention for academics, policy makers and network organisations was not only timely but important as well. This whole conference has developed from that simple idea when we were able to get together three other practitioners to shape the idea further.

The success or otherwise of the conference is in the hands of all of you I guess!

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