Taking Established Social Enterprises to the Next Level

Perth Concert Hall

S2S – the second annual Social Enterprise Trade Fair was held in Perth again this year. Blessed by sunshine and the usual diverse mix of delegates – bankers, bureaucrats and social activists – the event was highly enjoyable – and well worth the long drive.

I only managed to take in one workshop, “Striding Out – Taking Established Social Enterprises to the Next Level”. This featured three speakers, all of whom had experience of doing just that, either through acquisition (buying a business) or organic growth (winning more business and employing more people on the back of the surpluses created). The speakers were Mike Sweatman from the Edinburgh Bicycle Co-operative, Pauline Hinchion from FEAT Enterprises and Laurie Russel from the Wise Group

In all three cases the next level meant getting bigger. Only one of the presenters gave time to the possibility of staying small – working a niche as a way of moving to the next level. As someone who was brought up on ‘Small is Beautiful: A Study of Economics as if People Mattered’ – by EF Schumacher I am definitely not convinced that bigger is always the best route to better! Especially when ‘better’ means more effective delivery of a social purpose.

All three speakers emphasised the importance of good management in making the ‘transition to the next level’ and how much should be learned from the ‘for profit’ sector in this respect.

I don’t recall any of the speakers talking about the challenges of working with the key competitive advantage of the sector, namely the passion with which people, employees, volunteers and (some) funders subscribe to the cause. As a social enterprise gets larger how do you keep the passion burning?

Passion is the ‘kryptonite’ of the social enterprise. Management and leadership that nurtures passion and develops excellent management in pursuit of a social cause is what makes the third sector such a powerful force. My fear is that we may learn the wrong lessons from the private sector – about efficiencies and productivity – rather than how to inspire and lead passionate people.

There is a danger that ‘good management’ will quash what is excellent about social enterprise.

What suggestions can you offer about good management practices that help to keep the passion of social enterprise alive either when recruiting, acquiring or just in day to day management good practice?

How can you be rigorous in pursuit of your mission without being ruthless in your day to day management?

11 Responses

  1. Recruitment, retention and letting the right people go to be successful elsewhere are indeed critical – and not just in the third sector.

    Managers who are comfortable giving feedback on what they see people doing and how that relates to the values and mission of the sector is also very important – and often done badly.

    Just love the Cakeorama idea! Although don’t let the H&S people find out!

  2. I would like to address your orginal question about how to keep the passion alive in a staff team. I believe that recruitment of the right staff is essential. Not anyone can work in this sector as there is such a diverse skills and value base needed. Time spent on recruitment, and nurturing staff once they are recruited, is essential. This can include training to develop extisting skills or gain new skills, trying to offer interesting opportunities to staff and staging fun events at team meetings or to fund raise. We are currently holding a ‘Cakeorama’ where each member of staff takes it in turn to bake and sell their home made cake at work and we score the cake (prize at the end) . Money raised is to help a member of staff to finance a trip to Africa to help in a womens project which prints fabric and use the skills in our workshop. This is both fun and functional., inspriring staff and having fun.
    These ‘soft’ things balance with the ‘hard’ parts of the work thus keeping us passionate and interested as well as feeling part of a functioning team.

    Patsy Telford
    Commercial Manager
    Aberdeen Social Enterprises

  3. Also from the small is beautiful background I find that it is often the only answer. For me S2S was by no means diverse enough, I work with BME social enterprises where there are significantly more barriers to development, and found the sector under-represented. Working with multply-marginalised communities of interest, including survivors of torture, trafficking, and trauma, needs can only be met on a small scale – which may or may not be local, but at least has to be small at a local level. Social enterprise is the ONLY route to economic inclusion for many very vulnerable people, the growth obsesssed private sector is not a valid role model for most of the people I work alongside.

    Alison Davis
    Social Enterprise Capacity Building Officer
    Council for Ethnic Minority Voluntary Organisations

  4. Thanks Bob. I agree very much with your comments about small not being better than big – per se. There are a range of factors that will influence the ‘right size’ for a social enterprise. It was just interesting to note that bigger is better seemed to be the default mode of thinking. Of course with scale come some economies. However I also think that many social enterprises are very tribal and scale makes maintaining the tribal links more difficult and requires careful management.

  5. Thanks too for your post Margaret. I can understand your pride! How many members does the ‘Chamber’ have? Does it mirror a traditional Chamber of Commerce?

  6. Many thanks for the post Sam. Your ‘Ethics Girls’ brand certainly made me smile. Thanks too for the book recommendation. I will add it to the wish list.
    There are certainly lots of good examples of collaboration in the private sector. However I still believe that this is a learned behaviour that does not come naturally to most in the private sector. I would like to think that in the Third Sector collaboration would be a more natural tendency and could provide a real advantage.
    I love your comment about ‘stop trying to be the smartest person in the room – no-one is smarter than everyone’. Perhaps if people posted some Third Sector problems requiring solutions to this page we might get some useful contributions. I am certainly happy to sponsor a small prize for the best posts!

  7. with regard to the 1st point of how do we deal with passion – i have found the book Creating Passion Brands really useful. Its not specifically written for social enterprise but does outlay how to get & keep passion in your business. One of its examples is how the Cooperative Bank turned their business around and moved into the ethical market. It also uses examples of Innocent and Camper shoes. It lays out a good process for analysing the whole business which includes how to involve the whole company to get “buy in” for the whole process.

    with regard to colaboration – the private sector is already doing this – in an article in the Guardian’s work section this weekend – a drug company Lilly ( a large drug company) has set up InnoCentive – an online community for scientific ideas. Lilly & venture capitalists have this up. Scientists post technical challenges to the site & then its open for the scientists around the world to ‘solve’ the problem – there is a deadline and a financial reward. This concept is already used in the opensource community – where people can post out technical problems and then others come up with the answers. The article was about innovation and how leadership deals with this problem. The author concludes – “stop trying to be the smartest person in the room – nobody is as smart as everybody.”

    Lily is obviously doing this to help drive its business forward and is rewarding financially. As far as i know the open source community often provide the solutions just for the sake of finding the solution without significant benefit. Maybe there is something in this way of seeking solutions that the third sector could take advantage of.

  8. I too was at the event in Perth my first visit. As Chair of Scottish Borders Social Enterprise Chamber the first of its kind in Scotland I was so proud to see just what our sector has achieved.
    In our area we decided to form a Chamber for Social Enterprises which could be the focal point, signpost and promote the diversity, size and capacity of our members. In our first year we have achieved a lot in partnership with the LSEP. We fit in with community planning in Borders and have instigated a procurement group with the local agencies to look at how we can build capacity, identify opportunity and the potential to collaborate to help our sector grow.
    I have to say that the extra benefit that social enterprises deliver makes it all worthwhile. We knew we had a job to do, Social Enterprises should operate in a businesslike manner but its real quality lies in getting the job done with not only added value but with the capacity to adapt and it can only be done by nurturing the brilliant entrepreneurs we have such as was on show in Perth. Our sector is growing and as more events such as S2S are held around the country our community benefit will and potential will shine.

  9. I don’t see how “small is beautiful” is any more relevant than “big is better”. Optimal organisational size is a function of its stage of development and in any case, in a social enterprise, size may be less relevant than generated income or quality of support for its employees and stakeholders. That competition can exist between social enterprise and private enterprise for the same market is less relevant than the fact that to gain market share both enterprises need to satisfy their respective customers. I agree that social enterprises can have an advantage from the shared values and hopefully shared strategies both within an enterprise and between enterprises, and across areas of common interest, but getting larger for an individual social enterprise is not necessarily a good strategic move per se. The social enterprise “model” (whatever that is!) has the inherent capacity to utilise a lot more of dear old Dr Maslows heirarchy for the enterprise than the basically monetary motivation in the private enterprise alternative. Perhaps we should devise a comparitive scale for the two?

  10. Nice comment Pauline – Many thanks for posting!
    I agree that small/local is not ‘the answer’. I just thought it was interesting that the option not to grow was not really developed in any of the case studies presented. And there are ways to grow that retain the best characteristics of small/local such as speed, agility, diversity and responsiveness.
    The community of interest concept I believe offers the sector great advantages. The private sector has historically struggled with the notion of collaboration – although it is getting better – slowly. A third sector that can develop effective communities of interest that work globally to spread best practice to organisation delivering services that are rooted in communities sounds to me like a winning business model. Is anyone out there seriously looking at developing what we know about communities of interest and communities of practice to strengthening the competitiveness of the third sector? One of events like S2S certainly play a part – but surely there could be more.
    One of the problems that the private sector has struggled with in learning to collaborate effectively has been the trap of letting the urgent (pursuit of short term profit by focusing on delivery and costs) drive out the important (building long term collaborative relationships that allows best practice to be developed and shared for the benefits of the sector). Is this a serious risk to the development of the third sector? If yes, then what can be done?
    Scaling up to reach a size where the social enterprise is taken seriously by the Local Authority and cannot be easily picked off by the private sector sounds like a compelling strategic driver for growth.
    But is ‘size’ really the best defence? What about value for money, built on the ability to unlock goodwill in the community and provide adaptable and efficient services tailored to meet local needs?

  11. Mike, whilst I understand where you are coming from, I do take a different perspective. I am not of the small/local is beautiful mindset. Those that are tend to define small/local in a geographical sense of the word and often set physical boundaries on the word ie at the level of the village or a specific area. For those of us who are ‘communities of interest’ those boundaries have no real resonance.

    Second, if we are serious about social enterprises challenging the dominant private enterprise model then we have to demonstrate that we can deliver across most sectors and at a size relevant to that sector. Otherwise we will get picked off either by the LA or by private businesses. I feel that social enterprises can be a dominant model and can reach a stage of wide spread acceptance as a good way of doing business. I don’t believe this can happen if we stay small and at the fringes of society.

    In the longer term once the social enterprise model is the norm, I think small will be sustainable as we no longer struggle to get ourselves understood at any level.

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