Are social enterprises ready to hit the mainstream?

Adele Blakebrough MBE, chief executive of the Social Business Trust, and one of the early pioneers of social enterprise in the UK, takes a look at the latest proposition by the Labour Party to put aside public sector contracts for social enterprises. A good thing most will agree, but have social enterprises got what it takes?

As Pioneers Post reported, “UK social enterprises will get exclusive opportunities to deliver public service contracts under proposals revealed by the Labour Party”. Even the most cynical have to welcome such a move but it may be a case of be careful what you wish for. You may have heard nay-sayers mumble about social enterprises’ readiness, business acumen, and ability to compete at such a level – all passion and no ‘proper’ business skills. I don’t want to join those ranks but let’s be honest there’s a question mark over whether many of us can compete at this level, which is why Social Business Trust and others in the field exist.

So let’s make sure social enterprises are ready for what might open up for them in 2015 – there’s nothing to lose. This could be the social enterprise sector’s time to shine. It’s such a good idea that hopefully whoever gets in politically will adopt the same policy. What’s sure is that May 2015 looms large. Should Labour win, the promise of public service contracts to social enterprises represents a huge opportunity for them to become more mainstream, better understood, and most importantly, to have greater impact. If Labour lose, this very promise has shed light on the potential for more social enterprises to become public service suppliers, and has caught the imagination of existing social enterprises so that they might work to improve how they run their business. It’s a welcome announcement whatever happens next.

Crucially, those that lead these businesses (and many forget that this is what they are and that they want to grow and flourish) need to show that they can compete on a level playing field with other providers.

Some have been very successfully doing so in recent years, such as The Challenge, which in 2011 put 3,000 16 year olds through their post-exam summer ‘challenge’. It’s part of the Government’s National Citizenship Service (NCS), where young people from different backgrounds have a short time away from home and take part in a team project that will help their community. They develop greater confidence, self-awareness and responsibility. 

The contract to be a provider of this service was hard won – and my goodness how things have evolved since it began two years ago. This summer, The Challenge will see 23,000 young people experience what it has to offer them, is working with the London Mayor’s office on the HeadStart initiative, and is about to launch an apprenticeship programme, Step Forward. The NCS contract comes up again this year. Having worked with The Challenge for the last two years, we know they have the skills and confidence to continue to grow and we really hope they win their new contract.

And as they and others compete against and beat the competition, the social enterprise way of doing business can spread – these outstanding companies will even by default demonstrate to the commercial sector the notion of social impact as a sound formula for success. Other examples of successful social enterprises include The Reader Organisation, providing valuable services to Mental Health trusts and prisons, London Early Years Foundation, servicing local authority contracts for high quality childcare, and Fashion Enter, bringing much needed skills back to Britain for the garment and fashion industry. All of these enterprises have a social mission at their very core, but are competing and beating commercial providers and proving that social enterprises can be part of the mainstream of UK business.

To make sure more contracts are won (aside from the small matter of a specific general election result) social enterprises have a responsibility to live up to the faith being placed in them by successive governments and in this instance the Labour party. What has often happened is that we have been protected and supported in positive ways but then to be honest we haven’t as a sector quite lived up to expectations. No-one says anything publicly but suddenly we find the 3 year ring fence isn’t offered again or even after 3 years we fail to deliver sufficiently.

It seems to me that we need to work hard to make sure this opportunity isn’t wasted. We know there’s sometimes a question mark over whether the passion behind the social enterprise is equaled by business acumen or experience. That doesn’t mean we can’t help the ones that need it to become better businesses, or indeed that there can’t be a trade-off where other skills are passed back in return. It would be great if the sector realized that this help is readily available and also that we have a unique opportunity by engaging with business to influence what they do.

Our partners find this is the case when volunteers from the likes of EY, British Gas, Bain & Company and so on, work with our member social enterprises, and take back valuable experience to their day jobs. It’s why more big businesses have to back social enterprise – engender any absent business skills required to complement passion and drive and ambition, help to create impact, and learn along the way and why we should embrace their support.

That has to be a good thing - come what may. 

4 ways to prepare for major contracts:      

1. Operational excellence is key. Delivering at scale is a very different proposition to delivering smaller contracts, and can require a whole different level of operational systems and processes. The shift from growth to delivery at scale is so often where social enterprises fall down just because it’s a difficult transition and the set of skills for one is very different to the other. Hire in experts who will live and breathe “operations” – they are out there and not only in corporate organisations – professionals from the police or armed services are (as you would hope) pretty good at this sort of thing!

2. Don’t be afraid to negotiate the contract – negotiation is expected in large public sector contracts, and the worst thing you can do is take on a contract that places unreasonable burdens on your organisation. Make sure the contract is long enough that any investment you have to make to service it is easily paid back – scaling up your organisation just to service a one-year contract could lead to horrible consequences in the future. Finding lawyers that are experienced in this field can add enormous value and also allow difficult negotiations to happen at arm’s length so that you can focus on maintaining good relationships with commissioners, while also getting the best deal.

3. Look for external validation of the quality of your organisation. Relevant ISO certifications, or accreditations such as Best Companies or Investors in People prove that you take your organisation seriously, and that your service is no different in quality to that of commercial organisations.

4. ‘Big-up’ your social credentials. Being a social enterprise can be a key factor in differentiating you from competition, and demonstrating solid social impact can be even more important. The Social Value Act places obligations on commissioners to consider the broader social value of providers, which can be an important additional selling point for any social enterprise bidders. 

Photo credit: Flickr