The School for Social Entrepreneurs

Economic downturn: diamond in the rough? New opportunities for change

It has been a busy first two weeks for me here at SSE. The staff members here at the school are all very dynamic individuals, each with much to add to the conversation surrounding social entrepreneurs. One of the interesting conversations I’ve picked up on here, is one about the challenge of finding funding for small to mid-size non-profit organizations. With the recent credit crunch, there will inevitably be cut backs in government spending, and the endowments of various foundations and investment trusts have already begun to subside. Many people suggest that the private sector should pick up the slack, but corporation’s are experiencing their own economic hardships, and are not likely to increase their financial support to the sector anytime soon. Meanwhile the competition among various non-profits for the available funding is ever increasing. There is constant pressure to reinvent ideas so that they appear fresh and new. This proposes a demanding, however potentially extraordinarily stimulating environment for the avid social entrepreneur.

Nearly everyone is looking to make ends meet, and non-profits are no exception. In the past decade, the solution to lack of funding resources in the non-profit sector has seen a move towards being socially enterprising. Social enterprises aim to construct alternative methods for generating revenue to support mission-based programs. A regressing economy ushers in increasing social tension and disparities. Higher unemployment rates cause individuals to seek self-employment or reinvent their careers in order to regain control of remaining resources.

People tend to take fewer risks and become less creative when the commercial sector undergoes rampant downsizing and reorganizing. Creativity requires trial and error, and no one knows what happens to those who experiment with a new approach and then fail. It takes a real leap of faith to become a test case. The irony here is that this tendency to avoid risk comes just at a time when creativity is most needed in the workplace. However, fortunately, challenging and dodgy conditions are often the type of circumstances in which entrepreneurs thrive. When times are tough, people are more willing to find deals, strike partnerships, or work towards new negotiations.

It seems as though in the current climate, attitude is everything. An optimistic outlook will likely open more doors and sustain enterprises much longer than a negative narrative. Defining oneself as an entrepreneur can take time and involves gradual building of confidence. However once someone begins to see the positive outcomes of their actions or innovative solutions, they begin to feel more passionate about identifying themselves as a social entrepreneur. Perhaps the changing economic environment will create entrepreneurs out of some individuals who may have never considered dreaming up and testing out their own solutions to persistent problems. In his 2007 Nobel Peace Prize acceptance speech, Al Gore pointed out that in Chinese and Japanese, the word “crisis” is written with two symbols. The first symbol stands for “danger,” and the second stands for “opportunity.”  A new premium has been placed on vision and strategic planning instead of short-term financial risk taking. Ultimately this type of constructive thinking will benefit everyone, even as some will suffer now.

What the Iraq War can teach you about strategic planning

Just as optimism reigns in the US, I've been reading about arguably its darkest days of recent times in the Iraq War. Fiasco by Thomas Ricks (a US journalist on the Washington Post) details the build-up to the war, the invasion, the insurgency, and the reconstruction efforts in fascinating detail. It's not an easy read and has left me, by turns, angry, frustrated, depressed but also uplifted, inspired and amazed. So what relevance to this blog and the world of social entrepreneurs? Well, a couple of things really stood out to me:

1) The first is the emphasis the military in the US places on learning (from mistakes). That may sound a bit bizarre, given that Iraq is largely viewed as a Vietnam repeat and, at least to start with, a case study in how not to carry out a counterinsurgency. Time and again, though, senior military figures give realistic assessments of what is happening / going wrong, and highlight what needs to be done to change this: and much of this is done publicly in workshops / publications / speeches and so forth. This happens throughout the first five years of the war, and the military's ability to be honest with itself, to highlight errors (and successes) and incorporate those into its future operations has been crucial in improving (eventually) its performance there. This doesn't apply to all, of course; some of the most senior figures involved consistently made out that Iraq was in a better state than it was, and continue to delude (or contradict) themselves to this day.

2) The second was about strategic planning. Ricks argues that the failure in Iraq was primarily one of strategic planning (or the lack of therein). Firstly, there was a lack of realism (if only their goals had been SMART) and a lack of consistency: their grounds for going to war were based on a worst-case scenario (i.e. Iraq has loads of WMD, Saddam works with Al-Qaeda, the US is under threat) while their plans for the occupation / reconstruction were based on a best-case scenario (we'll be welcomed as liberators, and the country's in an alright state etc).

Secondly, there was a lack of clarity over the actual objective of the invasion: was it about finding WMDs, was it about removing Saddam, was it about regime change, was it about introducing democracy to Iraq, or to the wider Middle East? (some would add, of course, was it about oil?) and so on; and it shifted as the politics demanded it. This was hugely confusing and bewildering for the troops on the ground, because each of these goals requires different operational activity, different tactics and so on. If you are unclear about your mission, how can you decide how you are going to get there and achieve it? How can you make decisions between where you apply resources (and how many are needed)?

Thirdly, there was a lack of planning in and of itself. Phase IV (the reconstruction) didn't have an overall plan in place when people arrived in Baghdad to start, whereas Phase III (the invasion) had been planned and war-gamed to within an inch of its life. 

Fourthly, the US Army had not done its homework on insurgency and counterinsurgency as a whole (though individual commanders had knowledge of, say, Vietnam or Algeria, and applied it appropriately), nor on experiences of occupation. They only started to bring in this learning 2-3 years in, in a formalised way (via pre-Iraq training etc).

Finally, there was also confused leadership / ownership between the State Department (Rumsfeld et al) and the military in Washington, and between the Coalition Provisional Authority (CPA) and the Army in Iraq. From Ricks' account, this caused untold problems at every level of operations.

So, lessons from the Iraq disaster?

- do your research (it may not involve Vietnam or Algeria, but is necessary)
- a plan is important (entrepreneurs are prone to action, but a thought-through plan is crucial)
- get clear on your overall objective / vision and ensure it is clear to everyone else involved
- be realistic in your planning, rather than overly pessimistic or optimistic
- be clear about leadership and autonomy over particular areas (and who has the final say over what)
- be open to learning, honest about mistakes and constantly try to improve

Not a bad checklist for a social entrepreneur, or for the new US President to insist on the next time someone suggests a military invasion.....

Friday round-up: capitalism, CICs, Camfed and collars

Quick pre-weekend round-up.

- I covered the Enterprising Solutions Awards earlier in the week, but there was also some good coverage in the Times which is worth checking out

- Whilst we're on awards, huge well done to former SSE Director of Learning Matthew Thomson (pictured left), who is now CEO of London Community Recycling Network. They won the Innovation award in the Third Sector Excellence Awards; congrats to all the other winners and nominees as well, including SSE witnesses and friends Craig Dearden-Phillips, Afrikids, Toby Blume and..er...Duncan Bannatyne.

- Amongst countless "we need a new form of capitalism....now is the time for social enterprise" speeches and articles (to which I will no doubt contribute at some point....), this one by Charles Leadbeater struck me as one of the more interesting/thought-through:

"For most people the next year will not feel like a search for a brave new economic model: it will be more like hand-to-hand combat to keep hold of what you have......In all likelihood we will get a mix of subdued capitalism, social capitalism and ugly capitalism, even within the same cities."

- Social Firms UK do consistent, high quality work under CEO Sally Reynolds, and this is a thoughtful piece by her about why the model is important, particularly in the current climate

- Another kick for CICs; in this case from Apprentice winner Tim Campbell.....

- Jeff Trexler is never short of strong opinions; see what you make of this post: "The social enterprise movement has yet to grasp the extent to which it is as much a product of the bubble as subprime loans and credit-default swaps--it's not just a coincidence that do-gooders started talking business when business was good"

- Great article on Camfed in the Financial Times; Camfed was started by SSE Fellow Ann Cotton.

- Harvard Business School Global Business Summit Explores Future of Capitalism might be a title to send me running away, but there's some interesting stuff in here about what is needed to foster social entrepreneurship. Interesting to see business leaders still pushing venture capital and private equity models in this context as a route to solving social problems

- Lucy Bernholz, network queen of US philanthropy, has seen the future, and it looks like this

- I must mention Social Innovation Camp, to which SSE is a Community Partner: check out the site and send in your ideas.....deadline for submissions is coming soon!

- Lots of stuff being lined up for Global Entrepreneurship / Enterprise / Make Your Mark / Unleashing Ideas etc week (slightly confused branding, methinks...)......and SSE staff and representatives will be covering as much ground as possible: particularly on the 20th November which is Social Enterprise Day (coming just behind Christmas and birthday here, of course). Check out Unleashing Ideas for a sense of what's happening around the world.

- And finally, check out this story in the Huffington Post about how a book about "Green Collar" workers reached the bestseller lists. Just try not to wince when you read the bit about how revolutionaries are being replaced by "solutionaries", which must be officially the worst thing done to the English language this year....

Cheers!

Friday round-up: Bubb, Hub, Club, and... Forces for Good

As SSE prepares to head off to Devon for its annual residential (are you ready, Totnes?), and launches in Cornwall, the rest of the world continues to go absolutely haywire....

- And where else to turn at such times than to Stephen Bubb, who was already calling for the sector to be given £500m to help it through these troubled times, and that was before we learned that a load of charities have lost millions in their Icesave accounts (up to £120m according to the Guardian);

- And if you're wondering who has all that money stacked away, why not check out the Charity Commission's new website, with its groovy pie charts and punitive red and green borders (if you submit your accounts late). A vast improvement on before, and on Guidestar.

- It's fairly rare that this world makes it in to the mainstream press (apart from when it's losing buckets of cash apparently), so good to see a bit on the BBC website about social entrepreneurs including Colin Crooks who we are big fans of here at SSE, and the Hub making it into the Telegraph (seemingly by pretending to be a gentlemen's club!)

- This is an interesting Q&A on Stanford Social Innovation Review's site with David Gergen, who's a leading pundit / activist in this sector in the US. Worth a read, even if I found myself disagreeing as much as agreeing....

- Heard of Tribes, and how 'everyone's a leader?' You will soon....

- The Social Catalyst blog asks us, "People or Structures?" and answers "both" or "neither": values....

- SSE was at the Listening to the Social Entrepreneur Event yesterday: kudos to the organisers for choosing a community-based venue, and for assembling a decent mix of practitioners (not enough!), support agencies, and academics. There was a good mix of 'classic' SE debates, but also some more thought-provoking debate as well.

- Am reading Forces for Good at the moment, and it talks about how the organisations that have really big impact have a "network mind-set" that is not controlling, competitive but recognises that (if they don';t care who takes credit), working with and supporting other organisations and being open and distributive leads to greater overall positive social impact. It's something we're passionate about here, both through our 'flat' franchise approach and through initiatives like chairing the Social Entrepreneurship Policy Group. Full review to follow, but this certainly chimed with me and experiences with organisations that have an "organisational mindset".....

- ......seems to chime with Craig Dearden-Phillips as well; here he blogs about an example of exactly that network mindset: How to build an empire without taking slaves

- Finally, as it's been one of those weeks, here's some advice and tips for avoiding information overload! Hopefully we'll be updating the blog from Devon all next week.....

There's no triple in this Bottom Line

Listening to the first edition of the new series of the Bottom Line on podcast this morning, and my hackles rapidly got raised (not what you want on a Monday morning). I like the Bottom Line a lot: simple format (3/4 CEOs, Evan Davis asks them questions), and useful insight. This week, they had on both a hedge fund manager and the CEO of CafeDirect (Anne MacCaig), and, needless to say, much of the discussion was about the current financial crisis.

If you want a concrete example of why we're in the current mess we're in, I'd advise you to download the episode and listen to Hugh Hendry, the fund manager in question, who puts on a quite extraordinary display of immodesty, smugness and self-satisfaction. I can only assume they invited him on to wind everyone up, and provoke a response....in which case, they've succeeded here.

So, why am I so "Disgusted of Bethnal Green" about it? Well, firstly, he criticises the banks for leveraging and irresponsibility, before revealing that his hedge fund is, er, leveraged (to a degree he can't admit) and that they indulge in consistent, and some would say irresponsible, short-selling (which played a significant part in bringing those banks to their knees). Secondly, he calls himself the 'guard dog' of capitalism, before mixing metaphor midstream to describe himself as a 'sharp pencil' jabbing at the spine of businesses. Hedge fund managers as guard dogs? Warning and protecting? Er...ok. Looking at the current scene, one would suggest they haven't done a great job as a guard dog, and have ripped the spine out of several businesses, rather than jabbing at it.

Finally, and most unbelievably, he then attacks the business model of CafeDirect, which is, by all accounts, a sustainable, fair, transparent, honest, ethically-run organisation (Anne MacCaig gets a good plug for Triodos in there). There's no sense that this may be more sustainable (and profitable) because it invests in its producers and provides what its customers are looking for. Or that, gasp, greed is not good. How depressing to hear someone at the heart of a collapsing financial services system to have no sense of what real people are feeling, or any sense of how things ought to change. Quite how, in the midst of a crisis/crunch that has been largely caused by the financial services, this programme ends up with a hedge fund manager giving a fair trade coffee organisation a hard time over their business model, is utterly beyond me. (And Davis does little to turn this around; kudos to the man from Waitrose for doing so).

I'm not absolving the banks from blame, or saying that this is representative of all hedge fund managers, or pretending that CafeDirect is perfect in every way. But this broadcast should be a wake-up call to those saying that the current climate could be social enterprise's greatest opportunity / a chance for a fairer business system. On this evidence, there's a remarkably long way to go for that to even be on the horizon.

Is social enterprise the solution to the credit crisis?

No.

Ok, so I should expand on that a little. This was one topic of conversation that came up today at the unveiling of a big bit of research commissioned by OTS on what's needed to get social enterprise and entrepreneurship into the mainstream. The title of the presentation was "Social Enterprise at the Crossroads?" (no, not that Crossroads, although that wouldn't be a bad thing: a social enterprise on a soap), and it looked at different audiences, their awareness, how to reach them, who are most likely to become involved etc....

Nothing massively shocking for anyone from the sector or who works in this sphere, but was interesting to see it laid out by an independent agency in a strategic and thought-through way. My only major point of disagreement was that one of the target groups (disengaged / disenfranchised young people) were kind of discounted as a potential source of new social entrepreneurs....because they didn't have the requisite confidence (interestingly, confidence + conviction were highlighted as central to the whole thing) and skills. But of course they can gain that confidence and learn those skills. And what they do have is, often, a greater (and more personal) understanding of the problems....which the research also highlighted (those living in an area with social problems were by far the most likely to engage in setting something up...).

That aside, there was much of interest: talk of brand identity and a unifying mark, for example, seem set to dominate the autumn and winter. I'll take it all in, digest, and try and make sense of what was a long presentation. When split into groups (to answer questions like "what is the one thing social enterprise should do?" and "what is the one thing government should do?" etc), the banking crisis came up a few times. At the idealistic end was the thought that maybe there would be a reframing of capitalism to be more "sustainable" (in all senses: i.e. including social and environmental more) from here on in. At the more pragmatic end was the thought that there were a lot of fairly well-off Lehman Brothers traders looking to do something with their lives that might have a bit more purpose: how do we get the appeal out? Although we should remember that there are secretaries, cleaners, catering staff and lots of others at such organisations who haven't built up a war chest of cash over the intervening years....not everyone who worked there was on 6 figures.

It does feel like this time could be an opportunity for the movement as much as a challenge. Clearly, access to finance from banks, and squeezes on forms of funding (both public and private) will have an effect....but maybe there is a chance that some social entrepreneurship will prove enticing to those looking to increase their psychological wealth in line with their financial wealth, or that a slowdown will cause a bit of a stocktake (excuse share-related pun) about what is important, and about seeing friends + family, rather than getting pleasure from buying the next product or keeping up with the archetypal Jones's. We'll see.

SavvyChavvy

On a list of things I thought I'd never link to, a site with the name SavvyChavvy would probably feature. But it's not a micktaking site or a spoof online joke: it's a serious initiative to connect gypsy and traveller communities in the UK who are, by their very nature, often particularly isolated from each other. It allows young travellers in particular to connect to their peers, which is often as much about connecting East European Romany to their UK counterparts.

Does this section the community off in itself? Well, possibly, but providing them with a safe space to connect and communicate away from the excesses of Facebook groups and comments (there have already been 'spoof' profiles set up within the site, prompting new culturally-specific questions) seems like a sensible thing to do, especially when coupled with on-the-ground internet training. You can only join the community if you're part of the traveller community at SavvyChavvy.com (it's a social network built with Ning) but you can see some accompanying video clips here, and how the local South East TV news reported it.

Hopefully it might also go some way to reclaiming, or repositioning, the word 'chav', given that it is largely thought to come from the Romany word 'chavi' for a young person.

Congratulations to Jake Bowers and SSE Fellow Nathalie McDermott on a great initiative.

Saving the world one species at a time

I'm renowned at SSE as not being a great animal lover (due to being allergic to most of them), but an e-mail from a friend prompted me to look at a new website about species which are "evolutionarily distinct and globally endangered" (EDGE). It's called Edge Of Existence, and is a project of the Zoological Society of London, aiming to conserve these species by implementing the necessary research and conservation actions.

In a stroke of fundraising genius, you can choose to support in a variety of ways...but most will surely choose to support specific actions to help a particular species. My donation went to the uber-cute Slender Loris.

It's a fantastic site, albeit in the early stages, and an extraordinarily effective way of getting important research funded. Not only in the linking to specific animals, but also detailing exactly where this goes and why it is important. Obvious fundraising steps, but executed superbly, and with good and appropriate use of new technology to both invite questions and promote interaction and engagement.

[thanks to Fev for the link]

Military takes lessons from disruptive businesses

Great headline for an article in USA Today: "Can small businesses help win the war?". Apparently the US military have taken note of the success of businesses such as Craiglist, YouTube, and the like, and are studying how traditional businesses are responding. Why? Because Al-Qaeda is a disruptive organisation based on decentralised leadership. See the following:

"How large, traditional companies fare in this fight may prove invaluable in developing a strategy against al-Qaeda. That's why the military is going to school. A book making the rounds at the Pentagon is The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations. It was written for a business audience, but military strategists are saying, "This is the best thing I've read that applies to counterterrorism," says Lt. Col. Rudolph Atallah, a Defense Department director in international affairs.

The premise of The Starfish and the Spider is that centralized organizations are like spiders and can be destroyed with an attack to the head. Decentralized organizations transfer decision-making to leaders in the field. They are like starfish. No single blow will kill them, and parts that are destroyed will grow back."

The three-option solution to dealing with a decentralised opponent? Change the ideology that fuels them (aka hearts and minds), centralise them (governments easier to deal with than terrorists; Google takes YouTube), or decentralise yourself. I'm not quite sure how far you can take this analogy (a decentralised  military force is a pretty scary prospect), but shows the impact on our culture and ways of thinking that new organisations/ways of doing things are having. And I might be getting hold of that book too....In fact, while we're at it, here's Amazon's list of the top 10 business books from 2006 (for some reason, Amazon.co.uk only has a list of 6, of which only 2 overlap; go figure)

Afruca and child trafficking

Debbie Ariyo, the amazing social entrepreneur who founded and runs Afruca (Africans Unite Against Child Abuse), has sent us a link to their campaigning video on YouTube. We played the video at the recent Fellowship ceremony in London, at which Debbie's cohort of students completed their programme.

It's a powerful video that reminds us how the most vulnerable can be treated as a commodity; a message that carries particular weight at this time of year. Long may Afruca's very necessary work continue.