Medium 9781576754795

Mission, Inc.

Views: 1740
Ratings: (0)

Business has the power to change the world, but some businesses embrace that opportunity more aggressively than others do. Social enterprises put their change mission first – what they sell or what service they provide is a means to accomplishing a larger goal, rather than an end in itself.

Their front-and-center commitment to doing good makes social enterprises immensely attractive. But if you want to run one successfully, you have to manage a tricky balancing act. How can you be as efficient as any of your for-profit or nonprofit competitors while at the same time staying true to your social purpose?

In this groundbreaking guide, social entrepreneurs Kevin Lynch and Julius Walls draw on their own extensive experiences and those of twenty other social enterprise leaders to focus on the fundamental blocking and tackling tactics that make the difference between success and failure. Exploring the many paradoxes that can hamstring social enterprises, the authors explain how starting and running a social enterprise requires leaders to adopt an entirely different mindset and often a wholly different perspective on the day-to-day choices they’re forced to make. Likewise, Walls and Lynch help readers grapple with a different set of expectations from employees, investors, customers, and the community. For social enterprise practitioners, these expectations present an added layer of difficulty – but they can also offer unique advantages, which the authors explain how to leverage. Whether readers are looking for guidance on finding and hiring talent, marketing, finances, or scaling, this practical, accessible guide offers clear and compelling answers that light the way.

List price: $16.95

Your Price: $12.71

You Save: 25%

Remix
Remove
 

11 Chapters

Format Buy Remix

1: The ten paradoxes of social enterprise

ePub

Just like our colleagues, we love the enterprises we’re running. Hardly a day goes by that we don’t see a few glimmers of hope roll off the metaphorical production lines of our enterprises. At the end of the year, we proudly tabulate these incremental glimmers into a set of metrics and a report that documents the social change we’ve created.

But there’s a brutal truth we’re not as fond of discussing. It is simply this: we’re not doing enough.

By any measure, the problems we’re trying to address are getting bigger, not smaller. All the while, the aggregation of power continues within a market system that does not recognize the common good as its ultimate master.

We’ve approached this book as a practitioner’s guide because we want to improve the practice of social enterprise. We want to improve the business performance of social enterprises so that they grow, succeed, and most critically, go to scale. For only by attaining scale, by becoming large enough to change the current dynamics, can these enterprises serve their social purposes with the proper degree of impact.

 

2: Doing good versus doing well: BALANCING IMPACT AND PROFIT

ePub

Is yours a business idea that creates the common good? Or a social idea that gets carried out through a business model? Late at night, at social enterprise gatherings, the bars and lounges are filled with people debating this core paradox. As Shari Berenbach of Calvert Foundation says, “Mission-versus-margin is not an abstract trade-off.”1 (For the sake of this discussion, we use “margin” as shorthand for “earned operating income” simply because “mission versus margin” rolls off the tongue better than “mission versus earned operating income.”)

While the trade-off defines the decisions that need to be made, you must look at the question broadly. You don’t have to settle for an either-or option. In fact, the moment you do, you cease being a social enterprise. Without your mission, your commitment to the common good, your desire to cure an ill, you are not social. but it is equally true that without margin, you cannot define your organization as an enterprise.

You need both mission and margin to be a successful social enterprise. Naturally, these two concepts will create some tension. This tension—and there must be tension—will push on you, your decisions, your staff, your culture, and your customer relations. It will permeate every facet of your business. You had better give it as much thought as any other part of your business, be it your financing, marketing, or administration, or else leading a social enterprise will bring out the closet schizophrenic in you and your employees.

 

3: Form versus function: CHOOSING THE RIGHT STRUCTURE

ePub

Social enterprise leaders consistently report that finding the best legal structure for their ventures is among their very greatest challenges.

Indeed, it is almost impossible to discuss social enterprise without getting mucked up in the distinction between nonprofit and for-profit organizations. As you may have picked up from some of the definitions we quoted in the introduction to this book, some people in this field hold that the defining feature of a social enterprise is the income-generating commercial activity that supports the social mission of a nonprofit organization. This view is not without some underlying logic. After all, in a market system that awards divine rights to owners, how could a business that is owned by anyone other than the community as a whole put a social purpose at its absolute forefront?

That’s a very valid question, we think—one that sets the standard quite high for what constitutes a for-profit social enterprise. But in fact, some companies organized as for-profits are consistently and unquestioningly driven by their social mission ahead of (if not completely instead of) shareholder enrichment. In our view, these organizations are clearly social enterprises.

 

4: Planning versus practice: WORKING WITH DISCIPLINE

ePub

We are practitioners of social enterprise. We chose to write a book focused on the practice of social enterprise because it is in the trenches of doing that we spend most of our time and learn the most about what really makes our enterprises tick. Not surprisingly, it’s where most of the colleagues featured in this book live and breathe too. But none of us would be very good practitioners if we didn’t have a healthy understanding and respect for planning.

Two seemingly contradictory quotes frame the inherent tension you will face between planning and practice. From time management guru Alan Lakein: “Failing to plan is planning to fail.”1 And from Napoleon: “No plan of battle ever survives first contact with the enemy.”2

We believe these two views can peacefully coexist and form the basis for a healthy, sane enterprise.

Whether you prefer to call them strategic plans or business plans, you need to have good plans, for many different reasons:

No matter your approach to planning, business-plan writing is a specialized skill. Having the skills to operate a business does not necessarily qualify you to write a business plan. As the leader, your most important role is to articulate the vision, whether that’s drawn from a process you engage in with your team or board or merely from your inspiration. However you 55arrive at your vision, it must be well-articulated and omnipresent in your plans.

 

5: Debits versus credits: CREATING FINANCIAL HEALTH

ePub

You can commit two mortal sins as the leader of a social enterprise. The first is not admitting that you know too little. The other is thinking you know it all. Nowhere are these sins more deadly than in the area of finance.

No money, no mission—it is that simple. And it is why you can’t afford not to have a realistic understanding of money, of how it works in a social enterprise, and of your own financial literacy.

We want to arm you with practical knowledge. This chapter is not meant to turn you into a financial Wizard of Oz. It is grounded, instead, in a few key points you can use to guide your social enterprise. If you are already competent in the area of finance, we’d like to offer a few items to add to your toolbox. If finance is not currently part of your skill set, then do not let this be the last reading you do on the subject.

In this chapter, we will teach you some insider tips, provide some good financial advice, show you the gaping holes in your skill set and begin to fill them, and most importantly, inspire you to learn more.

 

6: Do-gooders versus good doers: HIRING THE BEST PEOPLE

ePub

As a social enterprise, your operation faces stiff competition from the entire world of non-social enterprises: from traditional businesses in your industry, from socially responsible yet shareholder-driven businesses, and from traditional nonprofits as well.

You may also face competition from other social enterprises. Nothing would be a better indicator of social enterprise health than a marketplace in which multiple social enterprises face off in the same business markets. (Both of the authors’ enterprises have at least one formidable social enterprise competitor, as is true for many others.)

But for now, most of your competition will be from NSEs. Once you absorb this premise, the lens through which you have to look at just about everything else is that of fierce competition. Of all the different ways you must compete, the one that matters by far the most is the battle for the people who are actually going to do your enterprise.

It’s a formidable battle. Traditional businesses—which are masters at externalizing real costs and don’t have the social costs of a common-good mission—can usually offer better wages and benefits, nicer facilities, and the appearance of more job security. Socially responsible businesses can offer all of these, along with a good feeling that the company is being a decent citizen. Traditional nonprofits can offer a sense of meaning, perhaps an appeal to nobility, an opportunity to work with kindred spirits, and in some unfortunate circumstances, even a lack of accountability that certain employees (probably not the ones you want to hire) crave.

 

7: Perception versus reality: MARKETING ON HIGHER GROUND

ePub

This may just be the happiest chapter in our book.

Many of the topics we’re trying to cover are tough and challenging ones, where the purpose of changing the world adds a layer of complexity and a degree of difficulty, and possibly even a measurable financial cost, to your business model. Granted, the mission usually bestows a corresponding opportunity as well.

But when you start to talk about marketing a social enterprise, you enter a realm of nearly pure opportunity to gain competitive advantage.

Please understand this right away, and understand it well: We are not talking about “cause marketing.”

Cause marketing is the practice of publicly aligning a company with a high-profile cause or a nonprofit organization with which the public sympathizes. Generally, the alignment 100is created through the donation of promotional dollars, tied to consumer purchase of the product, to the partner organization. For example, “With each purchase of a widget between now and Christmas, we’ll make a contribution to Children Without Widgets Worldwide.”

 

8: Value versus waste: LEANING THE ENTERPRISE

ePub

The world of business is the world of traditional businesses— in our parlance, the world of Non-Social Enterprises, or NSEs. Much as we’d like it to not be so, you and we recognize that social enterprises, at least at this point in the evolution of economic systems, represent but a rounding error in the sum of all the commerce that is done in the United States, much less globally.

But even when we accept for the moment that not every business is out to change the world for the common good, it’s still fair to ask, Why aren’t more NSEs at least modestly socially responsible? The simple answer is that most businesses think it costs too much.

Traditional businesses are right. The cost of the common good is real. As the traditional wisdom goes, doing the right thing squeezes your bottom line. Do you want to use environmentally safe, fairly traded, humanely produced raw materials? Your cost of goods sold will go up. Pay your employees 114a living wage, provide first-class benefits, work reasonable hours? There goes your labor budget. Produce in America, or closely monitor human-rights policies of offshore manufacturers? Too expensive; say good-bye to shelf space at Wal-Mart. Give money to the community and encourage employee volun-teerism? Less profit to reinvest in growth. Operate from green, built-to-last facilities? More up-front costs.

 

9: Metrics versus instinct: MEASURING SUCCESS

ePub

You can tell an awful lot about a business by what and how it measures. So to distinguish between a social enterprise and a non-social enterprise, you need look no further than the key reported metrics. In an NSE, the metrics are almost entirely financial. First among these is the measurement of market capitalization.

In a social enterprise, financial results are also reported, but these metrics are reported in relationship to the measurements of social impact that go to the core purpose of creating the common good.

To be clear, an NSE might also collect and report certain metrics around its social impact. Target Corporation, for example, has a huge strategy around community philanthropy. It measures every dollar it gives to every group at every location and proudly displays signs in every store meticulously describing how much money it has given away and to whom. All of this makes an impact in its communities. It has every right to trumpet that impact in its in-store marketing campaigns. But the fact that Target collects and reports that information does not make it a social enterprise.

 

10: Growth versus focus: EXPANDING SENSIBLY

ePub

For most economists and business leaders, a single word defines success: “growth.” At the very heart of the state religion that is our NSE-dominated economic system is a fundamental article of faith that states that gross national product (and its variants) must continuously increase.

In turn, the income statements and balance sheets of businesses must grow as well. Indeed, only through continuous growth can the relentless hunger of ownership be sated. As we proposed at the outset, the need for social enterprise—the very market opportunity, if you will—is borne in response to the fundamental social ills that are the unfortunate result of the single-minded focus on growth above all. If businesses were no longer driven, in their quest for continual growth, to offload true costs onto society as a whole, there would be fewer environmental problems for Seventh Generation to reverse, less generational poverty for Rubicon to redress, fewer human-rights abuses for Benetech’s software to track, and less pressure on the rainforest for Guayaki to preserve.

 

11: Sweat equity versus blood equity: CARING FOR YOURSELF

ePub

We know from parents, school, and a lifetime of societal messages that we need to contribute, sacrifice, and drive hard in order to achieve success. We have been taught all along that we will have to invest in our own success.

In the business world, when dollars are invested in the starting of a business, it’s called equity. Another type of equity is called sweat equity. Sweat equity accrues when someone puts in time and effort for no immediate compensation but is a contributor to the success of a business and will be rewarded for this sweat with a share in the success of the business when the equity is sold or pays dividends. Many times this equity goes unrewarded because many businesses fail. The investment of sweat equity is an understood risk for the possibility of a high return.

But what if your contribution to the enterprise goes beyond sweat equity? What if the effort goes beyond a reasonable investment of time? What if the exertion of effort is more than sweat? What if the toll of this unusually high contribution on your part starts to impact your health? What if this begins to negatively impact your relationship with your spouse and children?

 

Details

Print Book
E-Books
Chapters

Format name
ePub
Encrypted
No
Sku
B000000023294
Isbn
9781609944322
File size
762 KB
Printing
Allowed
Copying
Allowed
Read aloud
Allowed
Format name
ePub
Encrypted
No
Printing
Allowed
Copying
Allowed
Read aloud
Allowed
Sku
In metadata
Isbn
In metadata
File size
In metadata