Based on a speech at Names Not Numbers, March 2011
Social enterprises are definitely the flavour of the month. And, on first glance, what’s not to like? The basic idea sounds great.
You take what’s best about business and then you apply it to a social or environmental purpose.
You reinvest a large chunk of profits back into the business.
You make decisions based on what will best serve the purpose rather than what will best serve shareholders’ pockets.
And you end up with results like 15 – Jamie Oliver’s venture which gives disadvantaged young people the experience of learning to work in the restaurant business while also creating some award winning restaurants.
Or the Divine Chocolate company – its primary mission is to improve the lives of cocoa farmers in west Africa and it is so successful it now has 25 products available in supermarkets, Oxfam and independent stores and delicatessens all over the country, and internationally too.
Or Greenworks which collects unwanted office furniture from businesses and redistributes it to schools, charities and community groups while also creating jobs for the long term unemployed.
These are all great organisations.
And giving businesses a social purpose is a great idea.
But the thing is, we don’t need a special vehicle called the social enterprise to do it.
Any and all businesses, in all sectors, can and should and do create social and environmental value.
Take Unilever. Hardly anyone’s idea of a ‘social enterprise’. Yet its mission is: “we aim to provide people the world over with products that are good for them and good for others.”
Like most businesses, it invests to generate long-term growth. And it is so clear that its shareholders interests shouldn’t trump those of other stakeholders that it has recently stopped issuing quarterly earning guidance to the stock market. As CEO Paul Polman said in an interview with that most business-like of publications the financial times:
“I do not work for the shareholder, to be honest; I work for the consumer, the customer. I discovered a long time ago that if I focus on doing the right thing for the long term to improve the lives of consumers and customers all over the world, the business results will come…"
And there are countless other examples from the very mainstream business world. Take Google, which exists “to organise the world's information and make it universally accessible and useful.”
In fact, one of the most notable developments in the corporate world in recent times has been the growing emphasis on social and environmental impacts and on how businesses can help solve some of the most pressing issues we face. Of course there’s more to be done, it’s not as though every business out there is trying to change the world for good. But the ‘social’ element of the regular enterprise is definitely rising up the agenda.
So it seems at best ironic, and at worst dangerous, to be championing the idea of social enterprises as the new solution. Why cordon off a small niche of the business world for social progress? Surely it’s for everyone.
In addition I struggle with what the social enterprise suggests about the ‘regular’ social or charitable organisation.
Just as it suggests that most enterprises aren’t social, it also suggests most social organisations aren’t enterprising. And once again I really don’t think that’s right or true.
There are countless examples of charities and other social organisations that are incredibly entrepreneurial in their approach. They’re professional, competitive, innovative, creative – in fact they often have a lot to teach the private sector.
Take the Clinton Foundation, for example. It’s a ‘regular’ charitable organisation. Yet the principles that it emphasizes across all initiatives include ‘measurable results’, ‘innovation and markets’, ‘efficiency and sustainability’ and ‘replication and scale’. Sounds pretty enterprising to me.
Or take a big, global, long established charity like the WWF. It would be hard to say it has not evolved in an enterprising way. It is now recognised by its panda logo alone all over the world. It has been very quick to respond to the way the world is changing around us - leveraging the likes of Facebook and twitter and getting through to the millennial generation far better than many a regular business. Its five year strategic plan lays out a clear set of objectives and details how it will act to fulfil them. It has been working to drive behaviour change since long before it became a buzzword.
Or Oxfam. Another big, global, charitable organisation. And one that’s the author of some of the edgiest communications of recent times, with a presence on most high streets, an effective brand stretch strategy (its bookshops are posing a threat to many more ‘business like’ affairs because they are so successful), and a punchy expansion plan.
I think you get the point I am trying to make. Social organisations are definitely enterprising. And so they should be. Their donors have every right to have their money well spent. And their donors are also likely to hold them to account. It’s a competitive space.
I think I would be hard pushed to find anyone who wouldn’t agree that charities should run their affairs in a business like way.
So it’s not just that the idea of a social enterprise suggests that most businesses aren’t social. It also suggests that most social organisations aren’t business like.
And I think this is not only wrong on both counts, but also sends the wrong message for our times.
We want businesses to have a sense of social purpose.
And we want social organisations to be professional and enterprising.
And we should applaud the extent to which both of these things have been happening in the past few years.
I think it’s a great development. And I for one would like to see it continue into the future. That would be real progress. And I don’t think the upstart of the social enterprise helps.
