Scaling social entrepreneurship (or why many molehills make a mountain)

Posted on November 17, 2009 by sse

[This post was written for the UnLtdWorld Shout Out for Social Enterprise series]

There are
big problems in the UK and in the rest of the world: social and environmental
needs and challenges that are not currently being met adequately or, in some
cases, at all. So it seems obvious that to meet these big problems we need big
solutions and big scale organisations and projects that can change things for
the better.

And there are amazing examples of extraordinary social entrepreneurs establishing such
organisations: Muhammad Yunus (Grameen); Fazle Abed (BRAC); John Bird (Big
Issue); Michael Young (Open University / Which Magazine); Ann Cotton (CAMFED) and countless others. And you
can find countless more via the websites of Ashoka, Schwab, Skoll and others. We should
recognise, support and be inspired by their work.

But we
should also not necessarily use them as a template or blueprint, or fetishize
scale itself. Why? For a number of reasons.

1) Firstly, what is important is the scale
of impact and
change made, not the scale of individual organisation or scale of budget;
well-focused advocacy can change policies affecting the lives of millions; an
open-sourced solution can spread change more rapidly than a heavily controlled
one; a franchise operation can fit local and regional needs more closely, and
avoid reinventing the wheel. Social entrepreneurship should not be about
empire-building.

2) Secondly, scale
is not part of what makes a social entrepreneur (despite what is said here;
check the comments!); the vast majority of social entrepreneurs start
locally with a small-scale or niche
problem, and are content to create a solution that solves it in a sustainable
way. Just as in the commercial world, a few have the capacity, willingness and
ambition to replicate and scale and grow their organisation; but there’s
nothing wrong with those who don’t. Using scale as a part of what defines a
social entrepreneur is only serving to create an exclusive, elitist, MBA-heavy
cadre, not an inclusive, diverse and accessible movement.

3)Thirdly, small-scale
makes business and social sense. In the
commercial world, we might spend most of our time talking about entrepreneurs
like Richard Branson, Stelios, or Alan Sugar, but 97% of UK businesses employ
less than 20 people (and 95% employ less than 5 people), 64% of commercial
innovations come from small firms, and businesses with under 50 employees
contribute over half of UK turnover (FSB statistics).
Why should this be any different with social entrepreneurs, particularly when
their reason for starting (and motivation for continuing) is often a local /
personal one? And imagine those statistics translated into social, rather than
commercial, innovation and social impact instead of turnover.

4) Fourthly, the more who get involved, the better. Not only because “many social entrepreneurs x small impact = large-scale impact”
as surely as “few social entrepreneurs x big impact = large-scale impact” (as complex as my maths gets; see here for more); and not only because we need more innovations, not fewer. But also
because social entrepreneurs, whether they are in school, career-changing,
long-term unemployed, a refugee or a new graduate, gain skills, confidence and
networks through the process of
setting up a project or organisation. So it’s not just about what their
organisation does and delivers, but also about their development as future
employees, entrepreneurs, representatives and leaders.

5) Fifthly, replication and scaling
is tough, and
people often underestimate how tough it is (I know that SSE did). There is now
pressure on social entrepreneurs to scale up, often before they’ve truly proven
their original idea or concept really works; pressure that comes from funders,
prizes and, to an extent, media emphasis. And I’m not just talking about
investment readiness (do the numbers stack up, the cashflow, the working
capital?) but also, more broadly, about organisational readiness (do you have
enough capacity, expertise, the right skill set?) and even what might be termed
‘impact readiness’ (have you proven your model works, will you have most impact
taking this route?). It can also be tough, as Body Shop and others have found,
to scale values and ethical principles.

SSE is not ‘anti-scale’ at all. Of those listed above, Michael Young was our founder; Ann Cotton is an SSE Fellow; John Bird is an expert witness on our programme. And
SSE itself operates under a social franchise, replicating its programme across
the UK and the world (well, Australia for now but more soon, we hope).

It’s our belief that we need both: the big stars and case studies that can capture
imagination and bring attention and investment and recruits to this world; but
also countless smaller stars that help change lives in communities up and down
the country and who, cumulatively, have an enormous role in transforming things
for the better.

Transparency and (green) social entrepreneurship

Posted on October 15, 2009 by sse

So on Day 2 at the SSE residential, 140 social entrepreneurs packed into the Great Hall at Dartington to hear from Colin Crooks, social entrepreneur and founder of Green-Works, the furniture recycling social enterprise It takes quite an individual to hold that big an audience engaged and attentive for nigh on 2 hours, but Colin made it look effortless. And he demonstrated one of his key values, transparency, in virtually every sentence and every answer.

He split the witness session into four sections: Start-up, structure, people and new developments, drawing frequently and vividly and openly on his own experience. Below are my efforts at a transcript / bullet points of what he covered along the way, and the questions asked in each section. Hopefully it makes some sense, and you can take some nuggets of advice and wisdom.

START-UP
– Hates waste: of things, of products, and of people; used to just rail against it ineffectively before finding social enterprise
– Worked in plastics factory for 40p an hour
– Went to university age 24 + saw wasted talent there…society was wasting that talent
– I pick up things in the street and drive my children mad
– Glad to be in a place that gets environment + sustainability (Dartington)

– Started a paper-recycling business which went OK, but collapsed when the price of paper collapsed. Price collapsed by 35%; margin was 8%.
– Brutal experience, extremely unpleasant, and learned a huge amount.
– Paid off debts (£100,000), got married to an "extremely patient" woman.
– Elected to be a councillor in Lambeth (West Norwood); by accident… (18.9% swing); See things as a councillor (schools, hospitals, charities, residents association) that you would not normally see
– Lots of organisations that had “shocking furniture”; one meeting with 30 people…with no furniture
– Next day, went into major blue chip company that was throwing away 600 desks and chairs
– "Idea was obvious to me: so I rented a van… moved 600 desks over 4 months"; that was the beginning of Green Works: an intermediary role to solve market failure: I will take this furniture off you at a timetable that suits you, and I will provide / sell that furniture to organisations that need it (via a massive warehouse)

– But very hard: steep learning curve; have to take it all within 24 hours….
– £23,000 turnover after year 2…not getting paid; van + volunteers; was it going to take off?

– HSBC: invited in to HSBC’s major bank in old City of London; cabinets for sticks, gloves and hats
– Start talking about HSBC’s new building at Canary Wharf (Colin used to be a window cleaning manager)…filling the entire building with 7,000 people + closing down 17 smaller buildings in City of London; and new furniture for Canary Wharf
– Want us to take away 7,000 desks in 6 months; took me 3 seconds to take the risk and go for it
– £500,000 contract for a business turning over £23,000: the original business destroyer contract (if they pay a day late etc…); this is mad, this is too early….optimistic side won: gotta go for it
– Demanded sum up front + water-tight contract to allow him to get bank support + warehouse

– Peter Weatherstone (@First Fruit) signed and sealed a deal with him; to employ homeless people + get warehouse…on first meeting; his turnover was £75,000
– “That’s why I love being a social entrepreneur and in social enterprise; because we did it on trust, on wanting to achieve the same thing”
– Got pro-bono legal advice from Lovells: and ripped up the normal HSBC supply contract: November 7th 2002: signed the lease…+ first trucks rolled in
– 3,000 tonnes of furniture over the next 6 months; 52,000 items of furniture (including 1,000 hat stands) “The most amazing experience of my life: I’ve never enjoyed myself so much ever”

– Story shows you two things about starting up:
1) If you really believe in what you’re doing, and you believe you have the skills to do it…then do it; (but make sure that it is in line with your mission)

2) You cannot do it on your own; and there’s no reason why you should; huge diversity of skills and expertise needed to make it happen; the sum of the parts greater than the whole

Questions
– Is there competition now? Huge, intense competition; lots of people + orgs emerged; mostly delighted (because GreenWorks couldn’t cope with it all); some competition using dodgy tactics

– What are your personal key values…and how do you apply them? You can stamp your values through your organisation like a stick of rock as a social entrepreneur. For me, it is never divert to landfill; absolute integrity and transparency; + giving people a chance. Challenge to apply those, but we make them part of the interview, induction and review process in the organisation

– How challenging to forge relationships? You do create an energy around you; all you can talk about is the enterprise (breakfast, dinner, pub, friends, networks). Word of mouth got us HSBC. Relationships are the key things, but need to have an authenticity; you have to do a lot of networking, and kiss a lot of frogs…but find some princes on your wavelength who get it. Don’t try and force something that isn’t naturally happening. “If it doesn’t come naturally, you’re doing it wrong”

– How do you ensure furniture is re-usable? We collect everything, regardless of its state. And none of it goes to landfill

STRUCTURE

– I really believe in a not-for-profit model…company limited by guarantee: need directors + understand you are no longer the owner.
– First year: £2000; second year: £23,000; at first, friend + wife was enough. Needed more challenge as things went on (not just yes-men).
– Guy from Centrica: instantly professionalised us: get the numbers and know the numbers (disciplines + structures).
– 3 person board grew to 6. Bringing in particular sets of skills. People we knew or knew of.
– Recruited people who are do-ers. No "Lady Mucks and Lord Fauntleroys", but people who open their phone books and help us. And push and probe and challenge me. Advice that I couldn’t buy.
– Decent balance: I give up control of salary and (some of) strategy, but they were recruited to help me achieve my mission. And therefore I’ve found that hugely rewarding….
– Frankness is the key to making that board work; be honest when I don’t know the answers; you can be superman outwardly, but need to be open and trusting to the board. Then they will help you, not beat you up. If I tell them all the answers, how are they going to help?

Questions

– Is your structure succession-proof? Probably could do with tightening up. Biggest concern with integrity of business + some of those things I hold.

– Where do you recruit trustees/directors from? Advertise some vacancies on NCVO, SEC, SEL….and they are people who are looking for this kind of thing. It’s also about being networked, and networking your networks. [we are a charity and a company limited by guarantee; so the directors are also trustees]

PEOPLE

– I’ve made a lot of mistakes and got a lot of things wrong; and some right
– Sometimes you know instantly if you’ve got it right (Chris); just got on with it; applied himself intelligently…etc. for 4 days; then took him on when I dislocated my knee
– Best single recruitment I ever did: and it was backing enthusiasm and intelligence and attitude
– You have to be direct and clear with people (which some people find tricky)…you have to call the line, otherwise people cross it

– Recommends Good To Great (section on there: get the right people on the bus) by Jim Collins; get the right people on the bus and make sure they are in the right seat; and the bus journey may change…so the people may need to change (or change their seats). Need to know what skills you need, what part of the journey you are on, what skills you don’t have and what skills you need to get in…

– I’m out of my depth a lot of the time…and I don’t always know how to do it; I freely admit that.
– Brought in a load of more experienced people: didn’t get the dream, didn’t get the mission… didn’t get it in their belly, even if they did on their spreadsheets; and it nearly destroyed us. £200-300k spent on people taking us nowhere. Very much harder to get rid of them.
– Learning is: Do not recruit in a hurry…if you don’t think the person is right, go round again. Frustration of getting the wrong person in is infinitely worse than taking time getting the right person.
– Regular feedback from day 1. Direct, straight and true.
– If it’s not working out, the sooner the better in terms of getting rid of them / parting company

Questions

– When did you draw up an HR plan? When we got to around £1m. Intensely different business then and at £2m. But before that, keep the momentum going; do stuff. Instinctual.

– What was the problem with the ‘wise heads’? Was it about the money primarily for them? Yes. Not just about the money; it’s also about doing what’s right. They knew the price of everything and the value of nothing.

– How did you start to dismiss these people or agree to part? A frank conversation, normally. Pointing to history + some examples. Ask them "What do you think we should do?"

– Who are the key players in the business? Changes all the time. Depending on circumstances and what stage of the journey the organisation is at.

NEW BUSINESS / DEVELOPMENT

– You have to keep revitalising, keep developing, keep it new.
– Done some of the biggest ever contracts for recycling furniture in the UK. So looking also for some new things
– Went to Sierra Leone; met an MP starting a library there; offered her furniture; most amazing place I’ve ever been…most amazing people; so we are working to revitalise a whole community by providing them with furniture etc.
– Needed: nowhere to store books (mud floor, palm roof). So sent out a load of metal cabinets. Quadrupled them number of books in Sierra Leone; and all are stored in metal cabinets by age group.
– Also, back in the UK, have set up a fully computerised joinery workshop. Taken four years to get right. Because we are a warehousing business, not a manufacturing business. Finally turned into profit in the last 6 months.
– About the right people, the right partnerships and taking the opportunities
– Keep refining and revitalising the model…and to do all of that against the odds. And, to some extent, at times, against the opinions and advice of trustees + directors.
– Seeing the benefits of those two things has given me another level of energy for the future

[cue APPLAUSE]

Wednesday round-up: induction, investment, inspiration

Posted on October 7, 2009 by sse

So much going on, and so little time. No time to stand around like these people smiling and joking (see left). Here is my attempt at a round-up of recent major news and events int he social entrepreneurship world etc.I have picked out some highlights but you can read more of what we've been reading on the Twitter feed as well: @SchSocEnt

– SSE has recently started work in Lewisham, in Yorkshire (official launch article, and photo above; massive thanks to Campbell Robb from OTS & Saeeda Ahmed, Social Enterprise Ambassador + SSE Fellow), and the Ontario feasibility study is motoring along…and we've hosted the induction of our new Australian CEO Benny Callaghan over the last fortnight, which has made for a busy, if enjoyable schedule…

.- Event-wise, it's a smorgasbord of choice for social entrepreneurs and social enterprises. The Social Enterprise World Forum is currently going on in Melbourne, complete with SSE Australia staff and students. Follow #sewf09 on Twitter for live updates (through the night….) or to catch up.

– Then there's some more crackers coming up, including Good Deals: the National Social Investment Conference , the Guardian-organised Social Enterprise conference (more of a commissioning / public services theme) and, of course, Voice 10 coming up in Wales….and the ClearlySo Social Business conference as well.

– Hopefully they will all take a leaf out of this year's amazing Shine unconference (yes, SSE is a co-founder of the event, along with Ashoka UK, the Hub and UnLtd); for a sense of this year's event in May, check out this recent video by BeInspired:

– On with the rest; the Times reports that the third sector is increasingly the choice for graduates; Peter Jones goes younger, aiming at schools: Children need to be taught entrepreneur skills
(to which, we would say, they can't be taught…but they can be learned and nurtured and developed)

– From one Social Enterprise Ambassador to anotherl Craig Dearden-Phillips welcomes Peter Holbrook as the new CEO at Social Enterprise Coalition

– Interesting article from Stephen Bubb on the need for capacity-building in the sector (and making the case for it in the current climate)

– Great piece on SSE in the Guardian's housing supplement: A School for Social Entrepreneurs: we're the boss

– Further Guardian piece on the first 'embedded' social entrepreneur in the NHS; not convinced they are one as such (more a facilitator, development officer) but it's an interesting experiment….

– Inspired to read about the Sheila McKechnie Award-winners (for campaigning) and especially delighted that Lea Misan, current SSE student, was a winner; and that Sam Akpabio (SSE Fellow) was a finalist. Well done all.

– And finally, best recent headline was definitely Social Enterprise Skyscraper; congrats to all those at Coin Street for showing perseverance, vision, and many other entrepreneurial qualities to get this done.

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