Bees and Trees: Social Innovators collaborating with large charities

I attended a fun and inspiring workshop this week. Hosted by Ruth Marvel and Owen Jarvis, both Clore Fellows. They are co-authoring a paper on how large organisations (mostly large charities) can help scale up social innovations. Given my passion for this topic I was delighted to be interviewed for the paper and then invited to the follow-up workshop.

One of the best things about the workshop was the diversity of people there and the range of organisations represented (in a sector where 95% of events share 95% the same attendees!). There were some familiar faces: Jenny North from Impetus PEF, Dan Sutch from Nominet Trust and several entrepreneurs I’ve met and worked with, including Zoe from Insane Logic. But also a great range of larger charities I dont normally meet but clearly share a passion for social innovation and scale: Mencap, NSPCC, Macmillan, Unicef etc. The session was expertly facilitated by Roland Harwood from 100% Open, who kept things pacey, fun and challenging.

The report will follow and I don’t want to steal any thunder in terms of its content but it examines pretty closely the barriers to big organisations working with entrepreneurial start ups.  Its subtitle is ‘Bees and Trees’ – as in Geoff Mulgan’s:

“Social change depends on alliances between what could be called the ‘bees’ and the ‘trees’: the bees are the small organisations, individuals and groups who have the new ideas, and are mobile, quick and able to cross-pollinate.

The ‘trees’ are the big organisations – governments, companies or big NGOs – which are poor at creativity but generally good at implementation, and which have the resilience, roots and scale to make things happen. Both need each other.”

This is closely aligned to the position I’ve been advocating in this blog for some time.  But whilst my thinking has been around large private sector companies benefitting from working with social innovators, the majority of Ruth and Owen’s focus is on large charities doing so.  Their rationale is that innovative new start-ups can help large charities find more effective and efficient means of achieving the social outcomes that they exist to achieve.   The large organisation’s existing networks, skills, resources, reach (and cash) can help the start-ups accelerate and de-risk the innovations and take them to market.

One very impressive example of this I had learnt of earlier in the year is Teach First, who are running an incubator/accelerator programme for social start-ups working in Education (initially only those run by Teach First alumni, but, I believe, with a view to widening this).  Teach First share their networks, skills and, not least, the credibility of their brand – and in return they get to aggregate the outcomes of all of these companies and use them in their overall outcomes targets they have set.  This is something approaching the ideas that Joe Ludlow researched around Impact Networks when he himself was a Clore Fellow.

This struck me as a strong parallel with the work UnLtd have been doing with Telefonica/Wayra.  In exactly the same way that Telefonica have the credibility, skills and networks in the tech space to accelerate tech start-ups, Teach First have them in the Education space to accelerate Education start-ups.  It adds phenomenal value to the start-ups – vastly more than any cash that could be provided.

This is, I think, the model that Ruth and Owen are trying to build on.  And it’s a model that can be replicated: NHS spin-outs incubating healthcare start-ups; housing associations investing in social enterprises that provide skills and employment to their tenants; care groups accelerating start-ups in the care sector…

The question is how… Many barriers – around culture, collaboration and communication – were flagged and discussed.  Key areas to work on included education around risk/innovation and the role of intermediaries in raising awareness of what’s out there and brokering relevant connections more proactively (something Big Venture Challenge are trialling this year with the work of Shaftesbury Partnership and our BVC Super-Connectors).

The workshop asked for practical suggestions on how to catalyse this work across the sector.  One idea mentioned by several people was around a formal programme, building on existing models like the Social Incubator Fund – but exclusively targeting themed impact networks: getting large organisations to handpick cohorts of start ups to collectively deliver a clearly defined outcome or outcomes over a period of time.

Funding could even work on a Outcomes based approach – akin to a mini Social Impact Bond model: relevant commissioners define the outcome(s); large organisations (private sector or charities) tender to win the work and commit to providing co-investment to the programme to fund running costs and investment, incubation, acceleration of start-ups. Once selected, the large organisation uses all their existing resources, reach and networks to accelerate the disparate innovations and aggregate the impact. They could buy in expert acceleration skills if need be.  As the outcomes targets are reached, the commissioner pays incremental sums – paid to the lead contractor to further their work and/or invest further in the start-ups.

Good on paper.  But making this succeed needs more than just good programme design, it needs a cultural change – something flagged again and again in the Bees and Trees session.   In short, large charities (including staff, trustees and funders) need to better understand innovation.  Part of this is about attitudes to risk and part of it is around understanding what innovating really means: trying new things, testing them, learning and moving quickly to act on the results.  Not just bandying around the latest fancy jargon.  Numerous parallels were made with how Silicon Valley operates: start-ups explicitly set out trying to disrupt existing business models from established players, because they know the big players are constantly seeking out new talent for acquisition.   If the start-ups business model sufficiently threatens theirs, the simplest thing to do is buy them.  This creates a thriving, functioning eco-system that drives innovation and incentivises new entrants.  What’s more important is that the big players are very aware of – and comfortable with – the risks involved in innovation, be that their own or that which they acquire.  Google and the like constantly embrace – and indeed celebrate – failure.  Something so wildly unlike anything that goes on in the charity sector!  If large organisations in the social sector do have a role to play in adopting and accelerating social innovation, they need more Google Logic. 

Wayra UnLtd – a Shared Value Incubator

18 months since I first posted on this blog, this week’s announcement of Wayra UnLtd is a huge practical example of what I’ve been banging on about.  I’m also delighted to say its something I’ve been personally involved in, alongside some great people at Telefonica.  It feels like the culmination of a long journey.  And the start of a new one….

So what is it? Wayra UnLtd will be an innovative and ground-breaking new partnership between UnLtd, the world’s largest supporter of Social Entrepreneurs, and Wayra, Telefonica’s global tech start-up incubator programme. In short, it will be an incubator for tech start-ups that have been set up to tackle social need. 

In practical terms, we will support 3 cohorts of 10 digitally-focused, start-up social ventures over two years in a purpose-built Wayra UnLtd Academy. Wayra UnLtd will provide seed-funding (a £40,000 convertible note); world class coaching and mentoring; incredible work-space; a global network of Academies and the amazing talent accommodated within them; fast-track access to influential decision makers in the public, private and third sectors and second round investors; and the potential to unlock the power of 300million Telefónica customers globally.  

In addition to Telefonica’s unique technology expertise and industry networks, UnLtd are bringing gest-in-class systems and processes for scouting, assessing, supporting, monitoring and showcasing the social impact of high potential social ventures.    

After 8 months incubation, we will help the ventures pitch for follow-on funding – from public funds and our existing networks of Business Angels and social investors.

I’m sure you agree… it sounds unbelievaly brilliant for the social ventures.

But why on earth are Telefonica doing this?

The cash contribution is coming from Telefonica’s global CSR team, because they buy into the huge amount of social good that the incubatees will be delivering.  It aligns with their global social responsibility objectives around health, education, the environment and social innovation.

But Telefonica are also doing this because its good business sense.  Each of the social ventures will be selected because they align with Telefonica’s overall business strategy.  They have a view that these are products and services they can integrate into their own value chain – delivering better value to their customers – both B2B and B2C.

Because the money going into the investees is investment rather than grants, this is also a sustainable intervention.  We hope that in some instances, the original £40,000 stake will translate into a £400,000 stake (or a £4million stake!) upon exit – all of which will be recycled into supporting further social enterprise activity in the UK and globally.  And unquestionably, Telefonica’s involvement will increase the probability of this growth happening – their help in making introductions to customers, to investors, to strategic advisors and partners adds real longterm value to these companies.  Telefonica have a hugely powerful brand and a set of networks in the tech sector that are second-to-none.  If the model works, then Telefonica’s CSR budget will become recycled again and again.  And all the while they will be exposed to exciting new innovations, R&D, supply chain partners and acquisition targets.

It is the absolute definition of Shared Value.

What’s more, this is a model that can replicated again and again and again: In technology, retail, FMCG, hospitality, construction, finance, travel… 

The message to corporates interested in creating shared value is simple: find a cohort of start-up social ventures that work in your industry and fit your broad strategic company goals and CSR focus.  Invite them into your offices for 6-8 months and share all of your knowledge and networks with them.  And reap the benefits…

In response to A4E and SEUK on the definitions debate

Earlier this month there was a fierce debate on the Guardian Social Enterprise Network prompted by A4E’s complaints that they’re no longer able to call themselves a ‘social purpose company’.  You can read the original article at ow.ly/dvwuH 

Here’s my response:

Firstly, I think sometimes we confuse social business with ethical business. Secondly, I think there’s too much focus on what a company ‘is’ (or claims to be) – and not enough on what it does.

Being an ethical company means doing business in the ‘right way’ – and being transparent about your business practices (supply chains, staff treatment, environmental responsibility, carbon emissions and – in the light of NewsCorp and Barclays amongst others – all staff operating in a legal and moral manner). It can be a cost but it is – and will only become more of – a competitive advantage. In this age of social media, unethical behaviour will unquestionably be found out and the cost of being ethical is less than the cost of the fall.

An ethical business can be any shape, any size, any constitution: an ethical start-up or an ethical multi-national. I have a hunch that as a company gets bigger – and shifts into public ownership – it’s harder to be ethical but not impossible. An ethical company may choose to gift a proportion of profits to a good cause but I would argue this is pretty low down the list of important best practice. 

Most importantly, there aren’t ‘ethical companies’ and ‘unethical companies’ – its a spectrum from very ethical to not at all ethical – with companies constantly moving up and down the spectrum.

Another spectrum is in social value creation. There are social purpose companies: companies who exist to do social good. I’d say these may also be any shape, any size, any constitution (and can be more or less ethical). Some may choose to gift (or in social enterprise terminology ‘reinvest’) profits to a good cause but I don’t feel this is an essential part of creating social value.

Equally, there are companies that are not ‘social purpose companies’ (ie delivering social value is not their sole or even principal purpose) but can still deliver huge social value. They might offer some products our services that create social value; they might have entire business units or departments that focus on creating shared value. That it’s not their sole focus doesn’t make the social value they create any less.

What’s important to me is that the social value captured by all of these grows: that new innovations help spread the impact further and deeper. There are just too many social problems out there for us to worry about what kind of organisation solves them. Nick is right to say most innovation comes from SMEs – the challenge is then to take that innovation and take it to scale where it can really impact on society. This might be through other larger organisations taking on the innovation (or acquiring the original company). Or it might be through the original company getting bigger

Therefore anything that restricts the ability of an organisation that creates social value to become sustainable and/or scale that value should be seen as a bad thing. I include in this anything that restricts a growing organisation’s ability to raise high-risk growth capital or to build healthy reserves.

Do I think private gain is ‘unsocial’? Absolutely not. Do I think it’s unethical? No. Do I think that remuneration for a CEO that is wildly out of line with the business performance (or their contribution to the business, in relation to other staff) is poor business practice? Yes. But that’s a matter for the board and the shareholders. Do I think government contracts that reward outputs over outcomes is poor commissioning? Yes, but that’s something for government to improve on.

I believe that personal reward that accurately reflects personal risk (from shareholders and entrepreneurs) is inherently a good thing. For most people (particularly those of us with children to feed and mortgages to pay), financial motivation drives performance and competition drives innovation. The profit motive attracts risk capital and risk-taking individuals that drive innovation.

If the goal is more, better, deeper, social value creation, the worst thing we can do is restrict the talent pool, focusing only on those that aren’t driven by personal financial reward.

So rather than endlessly debating definitions, fighting trademarks and enforcing organisations to overtly state what they ‘are’, why don’t we collectively design ways to (financially) incentivise anyone in the business of delivering social value to better demonstrate the genuine social value they create – and to make this a priority in commissioning. And, simultaneously, lets as a society work to ensure that all businesses of all shapes, sizes and business models are incentivised towards transparency and ethical business practices at all times.

Organisational Mentoring: Behavioural Change and Shared Value for SMEs

At UnLtd we work with some pretty amazing social entrepreneurs.  Our work in the Ventures team is to help them grow incredible social businesses to deliver impact at real scale.

The challenges for an ambitious entrepreneur on this journey are manifold: how to be an inspirational leader, how to recruit and retain wonderful people, how to plot a credible growth strategy, how to successfully market and sell your products, how to make accurate financial projections.  It’s not an easy path to take.

Some of the best support received by our Big Venture Challenge winners has come from successful commercial entrepreneurs who have already travelled the path and successfully scaled one or more businesses themselves.  Many have come via our partnership with the Supper Club who are promoting our work to their members (all founders of high-growth businesses turning over at least £1m, frequently much more), and helping create relevant matches by sector experience and expertise.  

Working with these individuals has helped our winners – all chosen for their ambition and potential to scale – because they can pass on valuable lessons from their own journeys, sharing their successes and failures and thereby (hopefully) reduce the risk of our social entrepreneurs making the same mistakes they did.  They also help our cohort think in a more commercial manner, get inside the mind of investors and plot short-cuts to rapid growth.  

But there’s a lot more that can be done.  These individual entrepreneurs are (in the most part) supporting our winners in their spare time, in an individual capacity and out of the goodness of their heart.  I’d like to see a scenario in which not only are our social entrepreneurs working with their commercial counterparts, but also in which different members of each of their respective teams are working together: Financial Director with Financial Director, HR Manager with HR Manager, Head of Sales with Head of Sales. This is ‘Organisational Mentoring’ provided by family-owned or entrepreneur-led, private companies that have successfully scaled.   

The challenges of scaling social ventures are not limited to helping the entrepreneur diagnose the challenges and opportunities – but in offering practical support and industry expertise to successfully implement the chosen strategies. For a social entrepreneur, this would involve your team having regular contact with a larger commercial business from a similar sector and sharing a range of resources: not just knowledge … this could be office space, contacts, template documents and suppliers.

So why should the mentoring company engage in this?  The numerous corporates that currently offer mentoring programmes with social entrepreneurs do so for three main reasons: to aid in staff development; to boost their CSR programmes; and to get exposure to an innovative new growth sector.   All three equally apply for medium-sized businesses too.

• Professional development of staff. Privately-owned SMEs have their own growth agendas.  They want to grow their teams and must therefore develop their managers.  One-on-one mentoring programmes have proven efficacy in developing the leadership, communication and interpersonal skills of the mentor.
• CSR Outcomes: Small private businesses traditionally don’t have CSR programmes – it is somehow reserved for large companies that can afford the ‘luxury’ of CSR departments.  But as CSR is increasingly being augmented by the notion of Shared Value – whereby the organisation actually creates commercial value out of the social value they create (and vice versa) – the opportunities for all companies, large and small open up.  Some forward thinking corporates are even considering dissolving their CSR departments and instead encouraging ‘Shared Value’ strategies in each department of their business.  For SMEs (with less ingrained thinking and no shareholders to convince), it is easier to build this culture early, than it is for corporates to dismantle it.
• Better innovation: Crucial to any SME’s growth strategy is building a culture of innovation. To my mind, the single most compelling feature of the social ventures we work with – above and beyond the social value they create – is their ability to approach a long-standing problem with an entirely novel perspective, challenging pre-conceptions and delivering a disruptive solution.   Indeed the mere process of bringing different worlds together creates innovation: research from Stanford Business School shows that diverse, horizontal social networks are three times more innovative than uniform vertical networks.

Over time, informal mentoring and co-innovation may lead to more formal partnering, co-production, joint-ventures… all of which opens new markets and new revenue streams to both organisations. The barriers that may prevent social ventures from working with major corporates – differences in culture and scale for instance – are greatly reduced when working with smaller privately-owned businesses.

 

Creating Shared Value: The Video – by FSG

via fsg.org

In good company: how can social enterprise work better with big business? (External post from Social Enterprise Live)

Today we are faced by a great need for effective, practical training and employment programmes for individuals facing significant barriers to employment, including homelessness, joblessness, re-entry after addiction rehabilitation, developmental disabilities, lack of marketable skills and prior incarceration.

Catalyst Kitchens, an initiative sprung from FareStart-Seattle ??? a culinary job training and placement programme for homeless and disadvantaged people ??? offers a proven social enterprise model that not only works to alleviate poverty through job training and placement for individuals committed to transforming their lives, but also distributes nutritious food to individuals and families in need. 

Catalyst Kitchens is a collaborative network of foodservice social enterprises that is on track to collectively train over 6,000 individuals annually, and provide over 10 million meals to people by 2016. Initially called Kitchens With Mission, it launched in early 2006 and focused on guiding and supporting organisations to develop a social enterprise response to joblessness and food insecurity. We made a very conscious effort to establish key corporate partnerships that would help to strengthen and sustain the programmes. 

The most successful and impactful of these partnerships was established with the Starbucks Corporation. Roughly half of all new training enterprises Catalyst Kitchens helped launch were able to take advantage of this sponsorship, or ???hybrid value chain???. Through Catalyst Kitchens, Starbucks provides over $120,000 worth of product and equipment discounts annually, but more significant is that the sponsorship has been fully operationalised by Starbucks, ensuring that benefits are deployed easily and efficiently through Starbucks??? usual business channels ??? thereby ensuring the scalability and sustainability of the sponsorship.  

Catalyst Kitchens continues to leverage the collective impact of its members in order to build relationships that are beneficial to the collaborative, including: Component Hardware Group, Wal-Mart, Rouxbe, Monster.com and Mercer Cutlery. Catalyst Kitchens??? ongoing success developing these corporate relationships can all be traced back to the development of its original sponsor, Starbucks. 

The keys to the Catalyst Kitchens/Starbucks partnership can be distilled down into five broad strokes:

1. Make sure it???s a two way deal. What have I done for you lately? In order to establish a strong, sustainable relationship, both sides must experience the benefits of partnership. The NGO being sponsored should take on the responsibility of making sure that their corporate sponsor experiences tangible benefits, and the NGO must also make sure that those benefits are understood and recognised by the corporate partner. For example, in each market that the Catalyst Kitchens/Starbucks sponsorship has been deployed, media coverage as well as comments and quotes from the community are passed along to Starbucks corporate. Examples of product and brand placement (annual reports, at community events, etc) are collected and presented to Starbucks ??? without them having to ask for them.

2. Don???t always have your hand out. A true partnership involves more than just money. Corporate partners can be scared off when they think they are only viewed as a source of funds. Sponsorships should be established based on the corporate partner???s products and/or services that can be leveraged for impact in the community. For example, Monster.com???s sponsorship of Catalyst Kitchens is delivered to members in the form of a free annual service (online job postings) that Catalyst Kitchens??? members experience as free but might otherwise cost them thousands of dollars. Monster.com is able to provide this benefit at very little cost to a leveraged network of organisations, and have an impact on our communities without direct funds being involved.

3. Do business THEIR way. Make it easy by using existing business/operational conduits. For example, Component Hardware Group???s (CHG’s) sponsorship of the Catalyst Kitchens network is managed through their regular day-to-day operations, with essential kitchen plumbing products ordered by member agencies and drop shipped by the sponsor CHG as they would to any other business customer. Similarly, Starbucks sponsorship is deployed through their Branded Solutions division. Once approved by Catalyst Kitchens, each member organisation is established as a customer account, and treated as any other customer would be ??? except for the fact that they get a discount of roughly 70% off products and equipment.

4. Ensure efficiency, standards, and accountability. These should be the cornerstones of your relationship management strategies. Your corporate partner wants to know and see proof that you are a well-run organisation that is managing and leveraging their assets well, and utilising them for maximum impact in the community.

5. Leverage collective impact to maximize a corporate partner???s impact. Large-scale social change requires cross-sector coordination, yet the social sector remains focused on the isolated intervention of individual organisations. Research by Fay Hanleybrown, John Kania, & Mark Kramer shows that successful collective impact initiatives have five conditions that together produce true alignment and lead to powerful results: 

??? A common agenda

??? Shared measurement systems

??? Mutually reinforcing activities

??? Continuous communication

??? Backbone support organisations.

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Social enterprise awards: big companies step in to provide support (External Post – Guardian Social Enterprise Network)

Rose Marley, co-founder of youth social enterprise Motiv, is very happy to be one of the 126 social enterprises through to the second round of the Deloitte Social Innovation Pioneers Programme.

Her venture, founded in 2005, gives rewards to school pupils to encourage attendance and has been very successful. But she is now at a crossroads and is hoping Deloitte will help Motiv move forward.

“There have been so many changes across the education sector over the past couple of years. We are looking for strategic input to enable us to gain greater financial stability and social impact long-term,” she says.

“The Deloitte scheme is exactly the kind of support we’d benefit from right now, and it seems like a genuine and fair exchange of value. Applying was straightforward.”

Big private financial companies such as Deloitte, Santander, Lloyds and Ernst & Young have all opened social enterprise development schemes in recent months. Both Santander and Deloitte say they’ve had around 300 applicants, and Santander will get more when the scheme goes nationwide in June.

Many in social enterprise are glad of a new source of support, a little funding and the potential to get known people in the private sector world.

But what impact will these new awards and programmes have?

Most provide mentoring, advice on business development, networking, and sometimes cash and in exchange they get good PR, access to new clients in a fast-growing sector and insights into how that sector does business.

Several support agencies such as Social Enterprise UK and UnLtd, which are running some of the sessions on the schemes, think social enterprises should take this chance to further their own message and see what can be gained.

“Not only does it help some social ventures directly, it raises the game overall, and brings social conscience into the commercial sector in a much more dynamic and compelling way than simply donating cash or time would do,” says Cliff Prior, chief executive of UnLtd, the foundation for social entrepreneurs.

Yet some social entrepreneurs aren’t satisfied with what’s on offer from these programmes.

“Are they getting social enterprises into their supply chain, in the way Wates is, for example? Or is it just mentoring to within an inch of your life?” says Sara McGinley, deputy chief executive of Social Firms UK.

“Our members want business. They could also do with some free services; what about a free CD on taxation, as a basic example? They need something simple that doesn’t involve them filling in countless application forms and going on more beauty parades where ‘young and sexy’ social businesses always get picked.”

Social entrepreneur Craig Dearden Phillips, who runs Stepping Out , agrees. He was asked by one company to apply for their awards, but refused. “People [who win the awards] seem to get bit of mentoring and a few set pieces. Some free services would be a lot more helpful,” he says.

A handful of social entrepreneurs also told us they’d been hotly pursued by some of the companies but had turned down their offer. Dave Dawes, of preponline, an e-learning social enterprise for nurses refused Goldman Sachs, and he says several of his peers also refused. But several hundred social entrepreneurs will be going on these schemes this year alone.

What might the effects be of these new awards programmes? Prior says UnLtd is encouraging privates to be really specific and to consider joint call-outs. “There is a risk that a large number of overlapping schemes could be confusing and result in too much time spent applying for quite similar awards to the neglect of running the social venture,” he warns.

One commentator on the popular Beanbags and Bullsh!t blog suggests that corporates might even support social enterprises to grow and then take them over and turn them into private businesses. His comments are part of a provocative discussion on this topic at the blog led by David Floyd, founder of Social Spider. Floyd suggests the awards could mean the types of social enterprises coming through in the next 10 years could be fundamentally different to their predecessors because they’ll be guided by input from corporates. Another possible consequence, he adds, could be “growing numbers of social enterprises that actually break even or better by selling goods or services.”

The awards and programmes

Santander Social Enterprise Development Awards

The prize money on offer ranges from ??15,000, ??30,000 or ??50,000, depending on turnover. Alongside the money, winners can access a package of support from mentoring, business advice, bespoke university training courses, paid interns and help to assess community impact. The pilot phase ends in March 2012 and the Awards will be launched nationally in June.

Robin Foale, managing director of Santander Business Banking: “The Awards have been created as part of Santander’s commitment to supporting small businesses in the UK. The social enterprises we spoke to when we were developing the awards gave us a clear message: there was a lack of support to help established businesses in their next stage of growth.  Through SEDA our aim is to help social enterprises looking to expand to realise their goals, and at the same time support local economic development and job creation.”

Deloitte Social Innovation Pioneers programme

Delopitte says that it will shortly announce  up to 50 social businesses that demonstrate strong growth potential to be part of its new annual programme. According to Deloitte, the winners will receive a bespoke package of support including access to a specially selected Deloitte support team to manage their growth plan;  the opportunity to participate in skills workshops and  networking opportunities, support in finding investment and a possible chance to become a supplier to Deloitte.

Bob Thust, Head of Corporate Responsibility at Deloitte, says “The response to Pioneers has been fantastic and we’re very excited about the calibre of the businesses that have applied.  We believe we can help the Pioneers realise their potential, thorough using our expertise and networks, and by developing joint partnerships that add real value to both organisations

Lloyds/School for Social Entrepreneurs

According to Lloyds, each year, over the next five years, 100 start-up and developing social entrepreneurs will be able to secure a place with the School for Social Entrepreneurs through the Lloyds Banking Group Social Entrepreneurs Programme. Lloyds says that, launching in April 2012, the programme will create an enduring legacy across the UK by building the confidence, skills and networks of 500 local people working to address a social need and regenerate their l
ocal communities. Lloyds believes that social enterprise is set to play an increasingly important role in the economy, and it says that social entrepreneurs will be given a place on SSE’s action-learning focused Start-Up or Scale-Up learning programmes and access to grants of between ??4,000 and ??25,000.

To find out more visit here or to register your interest email Alexa Kellow

Ernst & Young Accelerate scheme

Starting last month, up to 300 young business leaders and social entrepreneurs ??? recommended by UnLtd, Striding Out and others ??? will participate in 14 workshops in London over five months. Devised in consultation with entrepreneurs, the sessions will cover various aspects of developing a business, including social return on investment.

Iain Wilkie, partner at Ernst & Young says “Ernst & Young has a long standing relationship with entrepreneurs.  Accelerate is an opportunity for us to provide practical support to the future engines of the economy and for us to make the difference to them.  Through the workshops, we hope to help young business leaders and social entrepreneurs to grow and develop their businesses and employees by providing a quality of support and advice that they may not otherwise have had access to.” &nbsp.

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The Missing Middle

During a meeting last week with Social Enterprise UK, Clearly So and Social Enterprise London, a lightbulb moment ocurred.

We were discussing how the brutal honest truth is that its still a very tiny % of the UK’s social enterprises that have sufficient scale to work directly with the kinds of big corporates that are knocking on our doors, looking to make their supply chains more ‘social’.  Our slightly pessamistic conclusion was that if corporates really want to work with these organisations, they need to play the long-game and invest in them – both with cash and with knowledge – in the here and now, whilst acknowledging that they can’t actually work with them directly any time soon.  

The light-bulb moment was the realisation that there is, however, a short-term win too.  In the short-term, the corporates can make introductions between social enterprises and the corporate’s own suppliers – whether first, second, third, fourth tier…  These are much more appropriate customers for the majority of the UK’s social enterprises.  Customers can be found that work at the right local or regional scale and that offer contracts of appropriate size. 

In addition to these strategic introductions, the corporates can offer hands-on advice on how to grow a business in their industry – including significant clarity on what kinds of products/services are of value in the lower echelons of their supply chains – focusing the social enterprises product set around real-world demand.  They might offer cash too – as grants or investments – or they might fund intermediaries to source that investment for them and generally work on strengthening and scaling the social businesses.   

The corporates at the top of the supply chain should go further, incubating the social businesses, so they may benefit from direct exposure to and support and learning from their teams – principally in procurement but also finance, marketing, IT, strategy… Senior managers in the corporate could mentor senior managers in the social business.  Our learning from the Big Venture Challenge is this kind of industry-specific expertise is invaluable in scaling up.

If – after a few years – things have gone exceptionally well, the social enterprises will have raised investment, won small contracts within the supply chains, strengthened their management team and systems and scaled their delivery.  Then, possibly, they’ll be in a position to have direct conversations with the major corporate at the top.  But even if that doesn’t happen – the corporate who supported them has still benefited by having their own suppliers’ supply chains ‘social’-ised: something that is increasingly necessary but challenging to do.  Intermediaries in the space can offer further support by tracking the social impact delivered as a direct result of working within their overall supply chain and reporting that back to the corporates.

 

Small Fish and Blue Chips: Shining a light on how social entrepreneurs can deal with big business

Yesterday saw the Shine Unconference for Social Entrepreneurs.  I hosted a panel (Small Fish and Blue Chips) on how and why social entrepreneurs and corporates can work together.  Joining me were Richard Tyrie (founder of Jobs Go Public and The Good People), David Barrie (co-founder of The People’s Supermarket amongst many others), Bob Thust (Head of CR at Deloitte) and Nick Temple (Director of Business and Enterprise at Social Enterprise UK). 

They are a group of people from very different backgrounds and with varied experience but a shared viewpoint in this regard – that the gap between social businesses and big businesses can be closed.  Turns out they have different views on how it can be done, which led to some lively debate…

I’ve only just met Bob but from what I’ve seen so far, his views are pretty close to many I’ve expressed in previous posts here.  Deloitte seem to be taking a very bold position in the CR market and are doing some great things specifically with social entrepreneurs, not least the Pioneers Programme.  I loved that Bob said any good CSR team should act not as a means to an end in itself but as a conduit or gateway for social ventures to reach the rest of the business.  He went further, saying that CR professionals should be in the business of doing themselves out of a job.  Deloitte, of course, act as a gateway to many, many more companies.  As Bob said, the real prize isn’t getting in Deloitte’s supply chains, but getting in Deloitte’s clients’ supply chains.  This brokering role for CSR teams fascinates me.  We at UnLtd, increasingly see our role as being around connections: providing access to finance, support, networks and customers. But I’ve said for some time that , to really achieve this, we need people alongside us who have credibility and networks in the corporate world that we don’t have.

Richard Tyrie always impresses me when he stresses the importance of ‘weak tie theory’ in these discussions (in summary “weak social ties..are responsible for the majority of the embeddedness and structure of social networks in society as well as the transmission of information through these networks. Specifically, more novel information flows to individuals through weak rather than strong ties.”).  Richard’s view (one I share) is that ‘weak ties’ between individuals in the corporate and social sectors need to be in place before any meaningful organisational connections can thrive on a serious level.   This approach is, again, something I’m keen to build on with UnLtd Ventures – focusing on our role in building relationships on an individual level, on the basis that these will organically grow into something much stronger.

I was also pleased to hear Richard reinforce his view that we always need to talk about the financial value of social impact created – more than ever when talking to corporates.  In his words, “until I buy food for my kids with social capital” we need to talk money.  As I’ve argued before here, I believe the CSR world does itself a disservice by giving the impression that corporates are driven by anything other than profit.   Success, for me, will be when social businesses and big businesses can sit down and have ‘adult-to-adult’ conversations about how this relationship is going to make both of them more money.

David Barrie is a serial social entrepreneur and a brilliant, creative thinker and innovator.  His views on this subject seem to be that corporates can strengthen his work as an individual, provide immediate infrastructure, resources and key skills around his visions.   He wants full incubation or adoption even within a corporate environment.  I can certainly see the benefit of this, but care needs to be taken.  I think its important that social ventures build their own robust organisations without completely relying on ‘outsiders’ who may walk away at any time.  

David’s secret double life is as a highly successful TV producer.  He drew interesting parallels with the creative industries, where the major commissioners invest (in the widest sense of the word) in production companies in their supply chain.  This may be ‘grant’-like investments in infrastructure, access to their back-office resources, incubation, staff secondments (in both directions), guarantees of long-term contracts and ultimately equity investments / acquisitions.  A compelling vision for a future social innovation marketplace.

As for Nick… well it’s great to have him in the centre of the action at Social Enterprise UK.  He’s exactly the sort of pragmatic, unifying force needed right now to galvanise disparate parts of the sector who all-too-often focus on splitting hairs on technicalities.   Without a united front we’ve no chance of being taken seriously by the corporate world.  They will look on bemused at our bickering and get on with the job at hand without us….

The panel was a blink-and-you’ll-miss it 45 minutes.  But I hope the conversations we started can continue for some time to come…And even, who turns… turn into action!

 

Are Asian firms finding more supply chain value?

Recent story on the Guardian Sustainable Business site – the closest I’ve seen to tackling head on the issue of creating shared value through supply chains – really great to see!

Are Asian firms finding more supply chain value?

Their shared value approach shifts the business driver for sustainability toward mutual growth concepts

Until recently, the received wisdom was that European companies led the way in sustainability. Not anymore. Now some of the best examples of responsible supply chain development are to be found in Asian companies. Sustainability is no longer merely a box-ticking exercise required by large western companies; it is a shared-value practice whereby the Asian manufacturer has clear business incentives to be more sustainable.

Controls and risk management? Or sharing value with business partners? We saw these two different approaches in supply chain management while looking at the wider value chain in the course of our research for the 2011 Tomorrow’s Value Rating (TVR).

The last decade saw enormous effort put into command and control structures. This stemmed from the primary business driver for responsible supply chain development: risk mitigation and protecting the brand reputation. The results were control mechanisms like third party audit systems; contract language requiring adherence to regulations and international standards; supplier training on environment, safety, human rights; and draconian measures to drop suppliers if they violated terms.

By contrast the shared value approach that we have seen most commonly in Asian companies shifts the business driver for sustainability in the supply chain away from risk management toward mutual growth concepts. The result is that management mechanisms with suppliers are also shifting. Now we see leaders pushing on shared business models and revenue-sharing models, collaborative efforts to streamline production and logistics for cost savings, and providing strong incentives for good performance in sustainability.

The likes of Toyota, Hyundai Motor Company (HMC) and Samsung clearly demonstrate their attempt to find a sustainable solution in their supply chain management.

The concept of mutual growth is well discussed in HMC’sWin-Win supplier support programme. The interesting point is that HMC developed a support programme to increase suppliers’ economic stability through various financial programmes. For example, under the mutually beneficial cooperation strategy, its cash payment policy aims to guarantee payment to increase the financial stability of suppliers. Various loans including credit loans for operation funds, the Mutually-Beneficial Cooperation Fund and the Bridge Loan for Green Production Facilities are available to support suppliers. Also, through a joint purchasing programme, HMC aims to assist suppliers with cost cutting.

Another example of mutual trust can be found from Samsung. Samsung set up the Partner Collaboration Centre directly under the CEO, and their vice-president is the head of the centre. Seven key programmes for mutual growth are introduced including a Win-Win fund for partner companies, timely reflection of raw material price changes in parts purchasing prices and expanding support to indirect suppliers.

Critics might argue that these cases are mainly driven by local government pressure rather than sustainability enlightenment. They may also argue that specific, and measurable, benefits to suppliers are unclear and sometimes regarded as another way of keeping business benefits within a group of interlinked companies ??? so called “blue-washing”. The TVR clearly shows that there is plenty of room for improvement in many of these companies’ overall sustainability approaches. Nevertheless we see encouraging signs of a new approach to value chain management alongside the traditional controls/risk management approach ??? and believe this is one to watch.

MinGu Jun is divisional director, Two Tomorrows Asia. Full details of the 2011 Tomorrow’s Value Rating can be found here.

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via guardian.co.uk