Some more thoughts on Social Business
Last week I blogged about why I think social business is the future. This week (and probably next week as well) I’d like to enlarge a little bit on the same theme.
In my last blog, I asked this:
How do you use ‘social business’ in context? Is it something you, or you business, becomes? Is it descriptive, or just an aspiration? Is it a new form of capitalism, or something more radical?
What’s really lagging is public perception: the idea that a charity can sell services or products (or both) to enable a social mission while still operating along business lines is seen as challenging. Meanwhile, the reality is that many social enterprises can still stay as registered charities.
So this is what I think the answers are, and where charities, not-for-profits and social enterprises can start, as well as being best practice (and in deciding on these 3 points I’ve drawn on over 20 years of business consultancy):
1. Choose technology that suits your organization. For example, that may mean adapting to allow more of your staff to work from home, or flexible hours to get the most out of your workforce, but also for them to feel valued and give the most back.
2. Create and encourage collaboration. Really value input. And create value with customers.
3. Conduct a concise audit and don’t think that having done it once, that it remains done. Revisit your audit. What is working for you, what is not working for you, why is that? Constantly evaluate, and just because you have a strategy you shouldn’t be afraid to revisit that too, and change if necessary.
Change can be difficult. It can often look and feel scary to people who have done the same thing, sometimes fairly successfully, over a long period. To an extent, that slight fear is what makes us human. Many staff, and that includes board members, are intimidated by the change from being grant funded to selling something in order to generate income. My answer to that is that social business is, at its core, about exploring other income streams to support activities that a charity already does. Yes, you have to get organisational ‘buy-in’, but isn’t that always the case?
A social business acts with a social objective. Costs need to be covered of course, but it operates as a company that supports itself by trading, pledging to reinvest at least 50% of profits before taxes. If there are dividends, they are shared among the shareholders.
Doesn’t this sound better than pandering entirely to shareholders? I grant that it isn’t a silver bullet but it represents a radical change, with many benefits. If you invest in a social business then you retain an ownership interest so that management are accountable, and, over time, your investment is returned.
In short, social business is measured in terms of impact, not investment return. This represents an opportunity for our sector to not only adapt, but to get ahead, and thrive. Next week I want to think a bit about the emerging market in this country and in Europe, and compare that with the success of social business in the U.S.