Geof Cox's blog

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This is the full text of the blog piece on the most difficult social enterprise of all published in the Guardian Online earlier today...

The basic business proposition of social enterprise is pretty crazy: to go out into the market place and compete, but with one hand tied behind your back – by your higher cost base.  Most of the 'social value' we add has some kind of cost implication. It might be the higher environmental standards of green businesses, for example, or paying more to suppliers as in fair trade.  The trick, of course, is to find a business model that can realise the added social value in higher prices or cost savings elsewhere.  Green and fair trade businesses usually do charge a slight premium, sell into sympathetic markets, and fair trade usually shortens the supply chain too.  In fact there are many ingenious ways social enterprise realises the social value it creates (in my training sessions I delineate 5 basic strategies, but within these there are many more options).

The Senscot Bulletin

 

The Senscot Bulletin is easily the best source of information and discussion on social enterprise in the UK, but 2 of the links in the latest I think led readers in contradictory directions.

The first was to a recent Guardian article by Andrew Bibby on the Mondragon co-operative group.  I'm old enough to remember well the inspirational 1980 Horizon television documentary on Mondragon which led to much soul searching in the then just blossoming UK worker co-op movement, both because of the spectacular business and social success it portrayed, but also because unlike UK worker co-ops at the time Mondragon demanded equity investment from participants, paid dividends on profits, and was not completely asset locked (or 'common-ownership' in the preferred jargon of the time).

Structurally, Mondragon was and remains a sensible and pragmatic compromise:Mondragon

Social Investment – or the Emperor's New Clothes


From the point of view of the voluntary sector the hype surrounding social enterprise in recent years can look very like the emperor's new clothes – after all, charities through their trading subsidiaries, or directly through 'primary purpose' trading, have been earning income for social purposes for years.  Scottish social enterprise guru Laurence De Marco recently estimated that 90% of Scottisn social enterprise is still done by charities.

But if there's one area that can match social enterprise for hype, it is social investment.  Social investment is less passive than ethical or 'socially responsible' investment – which merely tries like Google to 'do no evil'.  Instead, social investment is about actively backing social outcomes.  The current flavour of the month is the social impact bond, which produces a financial return directly proportionate to social gains.  The casual observer might easily run away with the impression that such social investment is really happening – right here, right now.

It is in this context that the recent BCG / Young Foundation report, Lighting the Touchpaper, makes such sobering reading.  Because outside of community co-ops and local community share issues – which like the voluntary sector predate the hype - social investment doesn't really seem to be happening at all.

The Performance of Socially Responsible Investment


Two keen bargain hunters go out to get some good deals. Shopper A decides to only look in John Lewis.  Shopper B is less particular: he'll look in Lewis', of course – also anywhere else he might get some better deals.  When they get home their partners want to know how well they've done.  Of course they assume Shopper B must have done better – since he looked at the best deals in Lewis' and everywhere else, wheras Shopper A only looked in Lewis'.  Surely the result is a foregone conclusion...

Yet strangely enough when they look at the actual goods bought there doesn't seem to be a great deal of difference in the deals each has got – in fact if anything it is Shopper A who has done best.

How can this be?

A passing economist doesn't seem surprised: “It seems that restricting our shopping to John Lewis may not result in any statistically significant bargains.”

 

Reading research on the results of ethical investment is a bit like this.   Late last year for example Emma Sjöström published a review of recent academic studies, which concluded that of 21 published research papers...

Such a definitions mess that NOBODY can now clear it up?


A few years ago I was asked a question by a lady who had worked for years at a high level in social enterprise - actually for one of the employee ownership apex bodies - and who was also then researching her Masters in Ethical & Responsible Tourism. Quite an expert in social enterprise in fact. She wrote:

I'm going to the Social Enterprise Conference in Cardiff next week.  On their registration form they have Charities and Social Enterprises listed in different delegate fee categories.  I thought that Charities (or more specifically their trading arms) are SEs?  Am I easily confused?

Of course I was already aware that the social enterprise movement had got itself into the most awful definitions mess – but it was this question that really convinced me of the bigger tragedy we were creating.  We had actually succeeded in taking our wonderfully clear and simple and popular message - that you can do business to do good - and muddying it up so thoroughly that hardly anybody could understand it.

This week I find myself once again mulling over the tragedy that is our movement's failure to communicate what 'social enterprise' really means.

A Guardian Online piece this morning worries that 'social enterprise' can mean more than one thing'. 

There's a big Linked-In discussion going on, set up by the question -

Social Enterprise Mark... or Social Enterprise Brand?


There has been a sudden re-eruption of controversy around the idea of a Social Enterprise Mark, first as a result of Dr Rory Ridley-Duff's research into the problems of applying the SEC/RISE mark to democratic businesses, then what amounts to the launch of an entirely new Social Enterprise Brand by Richard Patey and others.

I've just joined Richard Patey's Social Enterprise Brand Linked-in Group principally because I am interested in the 'collaborative community' development methodology proposed by the new brand, which seems to promise something much more rooted in the real values of social enterprise - which should encompass an entirely new participative and community-owned brand-paradigm.

However, I find myself on the sidelines of most of the discussion here and elsewhere, saddened by the overwhelmingly obvious fact of the matter: that all this mark stuff is causing division - inward-looking, energy-sapping, destructive division.

Why social enterprise needs its own approach to intellectual property rights

Solomon Linda (left) with the Original Evening Birds, 1941Solomon Linda (left) with the Original Evening Birds, 1941


The young man on the left of this picture is Soloman Linda.   You may have heard of him sometime over the last few years, though in his own lifetime, in his own century, you certainly wouldn't have.

Sometime in the late 1920s Soloman Linda wrote a song called 'Mbube' (um-boo-bay – Zulu for 'The Lion').  Although a talented musician, Soloman Linda couldn't read or write.   He and his wife lived on maize porridge and slept on a dirt floor,   They had 8 children, 2 of whom died as babies, one from malnutrition.

In the 1930s Linda got a job as a cleaner for the Gallo Record Company, where in 1939 he first recorded the song Mbube – and where in 1952 he signed over the copyright for 10 shillings – that would be about £1 now. When Soloman Linda died in 1962, at 53, his family couldn't afford a gravestone.

Does the social enterprise movement lack leadership?


A new survey commissioned by UnLtd has found that if they had access to the right support about 1 in 3 people would like to be social entrepreneurs.

This is yet another confirmation of Dr Rebecca Harding's research on the numbers social entrepreneurs.  Her figures suggested some time ago that there are over 230,000 'hidden social enterprises' in the UK, and that over a third of all new entrepreneurs would like to be social entrepreneurs.

It is also another confirmation of the staggering scale of the opportunity we have - and this to me is the area where we really lack leadership (not, as Liam Black recently thought, in defending existing social enterprises).

Our focus on a few kinds of social enterprise - those that happen to fit an official definition, or can be used to forward a government agenda - is blinding us to a much bigger picture.

I've also previously mentioned in my blogs here and in the Guardian Online the Third Sector Research Centre papers on measuring the scale of UK social enterprise (September 2010) and on the construction of the 'social enterprise' concept (forthcoming).  These should have exploded once and for all the myth that there are only 62,000 social enterprises in the UK - yet I still hear this discredited figure trotted out by people who are supposed to be promoting social enterprise!

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