Is there enough social in enterprise?
The Big Society is two years old later this month, and in her article in Social Enterprise LiveWire, Daniela Barone Soares makes the following, and I think extremely valid, points;
“the missing trick is the first step (in the process of social business enterprise) the relatively minuscule committed investment in the capacity of the most innovative and effective charities and social enterprises.”
This, she further argues, creates two possible scenarios:
“One scenario is that the social investment vehicles it will fund end up indistinguishable from ethical investors, providing capital to businesses that do no harm, but not much good either. Worse, social investment might distort the funding environment so that voluntary and social sector organisations are pulled away from their primary missions and towards activities that generate a return, but no social value. In this scenario, nobody benefits except private finance.”
As far as the Big Society is concerned, my personal jury is out. Daniela appears to echo some of my concerns.
I do have others though. Having completed numerous talks and delivered many business strategy presentations, to Start Up programme and self-funded budding entrepreneurs, I have been disturbed by the general level of basic business (commercial) acumen. I am also concerned that people, hugely ill-equipped in many instances, are being encouraged into private enterprise without full knowledge of the risks, time, and money involved in running your own business and, possibly even more importantly, the possibility of failure. Why is this relevant? Well because up to 50% of these individuals wanted to set up “social” enterprises, delivering services into the gaps in the Public Sector. I was always in admiration of their passion but regularly left these meetings with a sense of dread and foreboding for essentially well-intended and positive individuals.
It made me think at the time that most businesses fail. Many re-invent themselves and re-emerge stronger and wiser, that indominable enterprising spirit, but is this “start and fail” trend healthy for social enterprise? Should social enterprise have to complete other, more long term reviews and receive more commercial support because of the likely dependency of some recipient of these services upon the business providing the service? Should we test more, but give more (including but not restricted to funding) to social enterprise?
Would it be reasonable to formally incorporate responsibilities into the statutory requirements of corporate directors; to provide time and support to social enterprises?
Can we “make” the big bosses and experienced professionals that flourish in the commercial sector commit to social enterprise; in advisory or Non-Exec roles, as formal mentors and business consultants?
The emotions that still surround the various banking and corporate bonus scandals are not just running deep because of the sums of money being paid to senior executives in a society that is supposed to believe that “we are all in it together”, but also because of the blatent disregard for others – customers, the public and society as a whole. Their apparent devotion to personal wealth and obsession with greed has undoubtedly contributed to the worse UK depression for decades.
I am not a “rules and regulations” type. I would prefer that people be given boundaries and guidelines to work within and that they let their own sense of duty and responsibility guide them to acceptable “performance”. I also try to allow that as much authority and freedom to innovate accompany the responsibility. This I find is on the whole a healthier and more fulfilling approach to work but maybe one that allows for too much temptation. Can we really cope with huge decisions and social impact? Additionally, in these times of “who can I blame?” society is becoming increasingly litigious and appears to be less “public spirited”. I would much prefer that corporate directorate offered their time and experience; I am sure that some do. However, if we cannot encourage these better off, better experienced, better prepared individuals to support social enterprise, then maybe we have to legislate it. I am currently working with a chap called Paul Moore; the HSBC whistle-blower, in his new social venture, The New Wilberforce Alliance
One of it’s worthy goals is to banish the pursuit of greed and one way that he is attempting to do this is to propose legislation regarding the fiduciary responsibility of corporate directors. I would like to take this example further and introduce social responsibilities also.
I am not talking of ineffective “corporate social responsibility” documents. I have little time for those. I am talking about legally-backed, formal social responsibility of each and every senior executive to provide time and service to the social sector and to social enterprises in particular.
What would this achieve?
Well, quite simply it would ensure that there is extensive and experienced “commercial” support regularly and permanently available to social enterprises and that each and every executive has personal “social” responsibility above and beyond the general corporate social responsibility of their company as a whole.
It seems to me that far too many executives forget why they do their job or get caught in the profits trap. Why not encourage them to serve more people, to leave a lasting legacy and to develop sustainable social enterprise within their very own local communities?
As I said, just a thought!