WANTED: Tough Cookies
Time spent accruing knowledge in the commercial world will stand social enterprises in good stead when it comes to competing with the big guns, says our sleeper agent.
There is simply not enough commercial business knowledge in the social enterprise sector. My view is based on experience working for a national charity for visually impaired people as well as a statistically irrelevant sampling of people at conferences. I know there are many people with commercial business experience, but there are still not enough of them.
At the same time, social enterprises are being encouraged to go after bigger contracts by influential voices. They include Minister for Civil Society Rob Wilson, who said at a conference organised by Social Finance in January: “We in government want to unlock more opportunities for charities and social enterprises to deliver public services.”
In March, Pioneers Post published an article online by Rodney Schwartz complaining about G4S, Serco and others always getting the contracts. However, one of the reasons this happens is that those companies can claim prior experience and knowledge of delivering the objectives the government wants, which the commissioner can rely on. Those might not be the right objectives, but they are what the customer wants.
There are huge public-service orientated contracts being delivered by anonymous multinational corporations and to compete with these organisations the social enterprise sector needs to have the skills and experience to know how to operate in those markets. The sector can learn a lot from the Co-operative Bank scandal – if you are incapable of delivering the advertised service (well managed banking facilities) then the fluffy stuff (the ethical ethos) becomes irrelevant; customers drop you.
We’ve got enough of the fluffy people; we need some more hard noses in the sector too
It may seem unfair to expect social enterprise to catch up with big business anytime soon. The latter sector has been at it an awful long time. But if you want to create impact big enough to change the world, scale is what you need. The modern economy is made up of big brands and multinationals. These are complex beasts with their own internal politics. For social enterprise, being nice isn’t going to win the day – you have to be good and nice.
In 2010 I realised that despite my significant accounting and tax knowledge I did not have the practical experience needed to run a renewable energy company finance department. I had no idea how to raise £2bn on the markets like Welsh Water did. So I turned my back on the dream of running an accounting & tax advice social firm staffed by physically impaired people and went into the world of the multinationals. I am still there; I am learning and growing like a caterpillar in a chrysalis. Another 10 years and I will be back in the battle on the social enterprise side.
What about social enterprise itself ? Is it learning, growing and developing fast enough to win this battle against entrenched profit-worshippers? Is a two day business planning course in a village hall really going to make any difference, or would we be better off learning on the frontline, working for businesses that are the big cogs of capitalism?
In the last issue of Pioneers Post Quarterly, Nigel Kershaw expressed concern about big business deciding the metrics on which social enterprises can be deemed to be effective. If we’re to perform as well as the corporates, social enterprises should not lose sight of the fact that they are businesses too. Maybe playing by their rules will one day teach us how to beat them at their own game. We’ve got enough of the fluffy people; we need some more hard noses in the sector too.
Photo credit: Psycho Delia