debt, decommissioning, and death - the dark side of social entrepreneurship...

As a sector, social enterprise always seems to be talking about upbeat and positive stories - you never really hear about chief execs running off with pension funds, administrators foreclosing the business causing the loss of hundreds of jobs, or things like the government having to bail them out...

And I've an idea that that's because as a sector, there's a lot of political agenda being acted out, and that's led to a sense that we can't talk about failure or difficulty - because that would go against the narrative that the sector is trying to present to the wider world.

But that's surely a dangerous thing? If we're not open about the 'tough stuff" that goes on - the failures, the losses, the pain, then how can we hope to develop a generation of social entrepreneurs who are truly realistic about the marketplaces that they're leading their ventures into, and what may be asked of them personally if they're to be able to make a success of it all?

There are signs of hope though - the rise of "FuckUp nights", a model of support to help entrepreneurs recover from failure, that we've imported from our American cousins. And I was also greatly encouraged from recently being able to participate in part of a 12 month national programme of support for social entrepreneurs: all the ventures being supported through the programme meet together once a month and the first thing they do is share what they've been struggling with - not as a ploy to gain faux sympathies, but as a powerful model to build supportive relationships through showing vulnerability, and allowing opportunities for their peers to reciprocate by sharing in turn when they've faced similar and how they tried to deal with it.

And the struggles people share aren't what you might expect based on the messages and stories usually coming out of the sector - it's a hard shock to some to hear about:

• how fellow entrepreneurs have found themselves taking on debt that they now can't repay; 
• how despite the push for us all to pursue public sector contracts, those services we win and deliver are being increasingly decommissioned, leaving ventures with a business model that no longer works and no obvious way to continue the support they've been able to offer; 
• and the loneliness of being an entrepreneur when a close family member dies - working the grief and pain that's felt, while at the same time trying to also keep a fledgling venture running and support its staff and clients...

Social enterprise, like any other form of business, is tough. And we're surely only setting up future social entrepreneurs to fail if we don't encourage each other to be more open and honest about how tough it can really be sometimes?

How far is my social impact reporting really 'fit for purpose'...?

Most people may be aware that to my knowledge I’m the only freelance consultant globally to openly and annually publish a social impact report on myself. And while it attracts widespread interest and applause every time I do, I always struggle to make sense of how well the framework I’ve developed is ‘fit for purpose’ (there is no reporting standard for sole traders), and how far I should take pride in my ‘results’ (no other freelance consultants’ generate impact reports to hold mine against).

While I’ve started to make some firm plans for addressing the bench-marking of results question from next year, I took the opportunity to take the Social Value Self Assessment Tool to see how well I’ve actually thought through my framework, measures, and overall approach - https://socialvalueselfassessmenttool.org

Like all ‘multiple choice quizzes’ there’s some assumptions and bias in the questions which I recognise – it assumes that you’re incorporated with staff (I’m not), that you have ongoing contact with a core group of customers (I very rarely do), and that you have a small number of activities you offer support through (I have lots…). However, it’s a useful starting point and echoes some of what I already suspected: that I’m highly transparent, but struggle to engage stakeholders over the long-term and so have access to wider data sets to help identify how far my contributions contributed to the final generated impacts clients tell me about:

So – an overall ‘score’ of 56% may not seem great. But the tool allows you to benchmark your overall result against a number of others by sector, turnover, and type of activity.

Bench-marking my result against these others in this way suddenly shows that actually 56% means I’m still showing leading practice in how I’m going about reporting my social impacts:

• Similar aged businesses to mine = 30%
• Private businesses in general = 31%
• Other businesses with a similar turnover to me = 34%
• Other businesses offering enterprise support = 21%
• All UK based organisations = 33%

So – all in all, still room for improvement (which stops me getting complacent), but potentially ‘top of the class’?

48 hours in London

We’ve all had the same offer from people – “it’d be great to chat some more, let me know the next time you’re in town...” But how often do we actually follow up on those invitations? And how many contacts do we have on LinkedIn and Twitter were we only know the person by the thumbnail picture in their profile? (and would you recognise those people when they subsequently grow beards or shave their hair and don’t update those same pictures… you know who you are, Ian and John ;-) And yet we’d all agree that businesses succeed or fail on the quality of the relationships that they (we) have with others.

So this summer I tried an experiment (as is the prerogative of being self-employed). I arranged to be in London for 48 hours, and started to put out word to some of those contacts on LinkedIn and Twitter to see who might be around and interested in meeting up for a chat and drink.

And just about everyone I reached out to directly replied – some to say that they were sadly away on their hols “but next time you’re in town…”, others to say that their diaries were already overflowing with other commitments, and some to suggest times and places.

I did a running commentary of each of the meetups on twitter and Instagram as I worked through my ‘dancecard’, but now I’m sitting on the train back to Todmorden to resume ‘normal service’, I’m reflecting on the experience and a few things seem to have stuck with me:

- It was cheaper to do than I thought it might have been: advance train tickets, budget hotels (which included breakfast!), and travel cards for the underground all came to about just over £200. And in being able to meet up with 9 people in that time, that seems to be a good cost ratio.

- Asking people I was meeting for their suggestions meant that I got to discover parts of London that I never knew existed (who knew that there was a ‘museum of happiness’ in Tower Hamlets?). And I never thought I’d ever find myself having lunch in Canary Wharf alongside some of the country’s ‘big city bankers’…

- It can be very isolating being a freelancer, so the opportunity to ask peers about their experiences with certain types of client or work is a useful ‘sanity checker’. However, there are some conversations that are difficult to have by phone or email unless you’re sitting with the person over a pint...

- It is possible to engineer serendipity: through ‘chewing the cud’ in general, conversations started to spark ideas and options that would otherwise never have occurred to us separately, and they in turn start to lead to new things emerging in the world that benefit far more people than myself and person I was sharing cake with at the time

- There were some surprising moments where my reputation preceded me: people I was meeting with had invited others who had heard such tales about me that they wanted to have their picture taken with me to mark the occasion! (don’t worry – I still don’t knowingly allow a serious picture of me to be taken…) 

- Having a backup battery pack for my phone was crucial: maps and other apps for navigating myself, snapping pics, and such like can quickly suck your phone’s battery life

- But sadly there wasn’t enough cake by a long shot…

And now it’s back to catch up with emails, messages, post, and such like, I find myself asking the question “was it worth it?”.

I think it was, and judging to some of the tweets and comments to my Instagram posts by others during the 48 hours, others seemed to think so too. 

The chance to step back from the usual day to day distractions and chat with others without an agenda was also very liberating and allowed me to reflect on some of my own ideas and approaches in ways that I wouldn’t normally have had opportunity to.

So would I do it again? 

I’m already wondering which 48 hours next year might be a good time to come back so if you missed me this time, I’m open to suggestions…

Is ‘The Full Monty’ a promo movie for social enterprise?

I currently have the fortune to be supporting a group of South Korean social entrepreneurs who are studying for MBAs – as part of their international syllabus, they’re spending a week with Sheffield University (apparently Sheffield is one of the unofficial UK capitals of social enterprise – who knew?), and it’s there that I’m sitting on pitch panels and offering several days of mentoring support, along with other luminaries of sector support (including Laura Bennett, Morgan Killick, Andi Stamp, Dave Thornett, Jamie Veitch, and Nick Temple)

And while sitting in on one of the students’ sessions which offered them an initial orientation as to the history (and possible futures) of social enterprise in the UK, I got to reflecting on Sheffield's role in the wider landscape of social enterprise.

Sheffield is famous for many things, but perhaps most memorably, a movie called ‘The Full Monty’. It charted the fortunes of a group of unemployed steel workers who form a dance troupe and do strip routines… and I got to wondering if this made it a contender for being a movie that promotes the social enterprise model more generally?

Social enterprise is about people harnessing their available resources, skills, talent, (and sometimes baravdo and bluster – see some of Tim Smit’s ‘confessions’ in his books about his journey as a social entrepreneur…), in order to overcome challenges being faced by people (such as the poverty and deprivation caused by long-term unemployment).

And the ex-steel workers who formed their dance troupe were part of a community that faced economic decline and increasing deprivation caused by widespread long-term unemployment and a loss of employment opportunities.

Through their ‘market offer’ they not only created employment, but also attracted more investment into that city through customers coming in from outside the area, spending money to see their shows, and brought hope back to those who had seen only hopelessness before.

So – The Fully Monty: required viewing for anyone wanting to learn about social enterprise in the UK? (and what other movies might be similarly disguised propaganda for social enterprise..?)

The challenge of staying responsible when your enterprise has been hit by a ‘business disaster’

Despite what some people may protest, it’s actually quite easy to be a ‘responsible business’ – thinking about options for energy use, how to respond to the ongoing requests for sponsorship for local charities, and such like…

But what happens when things get tough – what happens when your business gets hit by an ‘official disaster’ such as the flooding that swept through a lot of the country over the Christmas of 2015? There isn’t the time, money, (or patience!) to do the ‘nice stuff’; the focus surely has to be on getting business premises rebuilt, stock replaced, bank managers pleaded with for extensions to loan repayments, and such like? And what if as the owner of the business you’ve been doubly hit because your home flooded too?

And yet, it’s such crises that can actually help us be even more ‘responsible’ as businesses in how we manage our recovery. And that’s because like thousands of others, I too was hit by the floods at the end of last year[1] – with my family and business having to move out while restoration works made repairs to our home and office, and I drew national interest in how I responded as a business.

Some of you may recall the huge expressions of support that the wider country made through donations to the flood recovery funds that were quickly set up – but along with the business recovery grants that local authorities started to offer businesses, none of these could be applied to if you were self-employed or home-based. The prospect for recovering the livelihoods for both I and many of my fellow freelancers and micro businesses seemed very bleak…

But what can an individual business do in the face of such need and economic devastation[2] (especially when they’re also trying to make their own home habitable again so they and their family can ‘go home’)? The answer is surprising a lot: the following list briefly outlines what I did, and it’s offered not as self-congratulation, but rather as encouragement and inspiration for others to realise the impact we can all make if we try and be ‘responsible’ as businesses at all times:

• I set up a facebook group[3] for people like me who weren’t eligible for any of the business support grants. It was meant as a peer support network and saw lots of tips and suggestions of advice being shared around temporary cheap or free workspaces, and such like. But excitingly it was also picked up on by the local authority and others who used its existence and membership to allow them to successfully argue a change the eligibility criteria for the business support grants.
• I contacted national enterprise support networks I’m part of to ask if they may know of anything we could apply to: one made an immediate cash offer which was used to enable a number of local enterprises to gain IT and office supplies[4] to enable them to continue working from temporary locations.
• And I shared updates on support like mad across twitter and facebook groups to make sure that fellow local businesses didn’t miss out on opportunities for further support as it was announced and identified.

The above may not seem like much, but it was a lot more than many other local businesses were able to do owing to the respective impact of the floods on their businesses and homes (and thanks to the joys of social media I was able to largely do it all at the end of each day after I’d delivered client contracts and dealt with my own immediate issues).

And I wasn’t the only one thinking like this – there was also the world’s first collective crowdfunding campaign[5], and others are re-staged the Christmas[6] we lost for the benefit of local retailers who’ve suffered loss of takings over what should have been one of their busiest periods.

Being responsible isn’t just about ‘buying the right things’ or treating your people right. It’s also about stepping up to do what you can for the wider local business community when we’re struck by something that affects us all[7]. But it doesn’t have to take a widespread ‘business disaster’ to motivate us to do this – we should surely be looking out for opportunities to help out our neighbouring businesses all the time anyway? 

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[1] http://thirdsectorexpert.blogspot.co.uk/2016/01/on-being-washed-out-by-floods-and.html

[2] http://ucvr.org.uk/category/flood-recovery/

[3] http://todmordenbusiness.net/new-facebook-group-hidden-home-based-self-employed-businesses-hit-floods/

[4] http://www.todmordennews.co.uk/news/local/practical-support-from-a-peer-solution-1-7773401

[5] http://www.todmordennews.co.uk/news/local/calderdale-rising-smashes-150k-target-1-7723289

[6] http://www.visitcalderdale.com/alternative-hebden-bridge-christmas-1704

[7] http://thirdsectorexpert.blogspot.co.uk/2016/02/just-because-you-didnt-get-wet-doesnt.html

spending money locally probably won’t save local economies…

'buy local' and the Totally Locally campaign is based on a very compelling and emotive idea – if we value our local shops, facilities (and therefore our local economy in which these things exist and operate), then we should support them by using them: “buy local”, and spend with local retailers rather than distant online stores such as amazon… after all, money makes the world go round, so the more we can keep locally, the more our local community can keep things going around for the benefit of us all?

But there’s a small wrinkle in this idea which means that ‘buy local’ may never really have the transformative effect on our local communities we dream of: scale.

The Totally Locally campaign is focussed on getting us as consumers to make choices about where we buy our stuff from. That’s the retail element of the economy. And collectively we spend about £378bn a year buying stuff in it. Sounds a lot, but the UK government spends about £754bn a year. There are also the various service and manufacturing and construction industries, agriculture, and so on – all of whom are also spending money that has implications for our local economy… implications like:

• if/how people are employed, and so able to have money to spend
• who owns the properties that shops rent, and we live in, (usually landlords aren’t locally based)
• the extent to which we have options about where we bank, sign up to phone contracts, access health care and other services…

So you see, I’m not convinced that getting more of us to buy locally as consumers will have the transformative effect we all dream of, as there’s lots of ways in which money gets spent that we can’t keep local, and the spending decisions being made by others that dwarf the impact we can create by choosing to do so…

HOWEVER… what if the idea of Totally Locally started to target businesses in the same way is does to us as consumers? What if as well as encouraging us as individuals to buy local, we started to encourage each other to buy local when it comes to purchasing decisions in our various places of work as well - using the local stationary store instead of placing an order with Viking; going to a local insurance broker on the high street instead of using a price comparison website for our employer liability insurances? We could lever so much more money into our local economies, making them even stronger and more resilient…

But how to create such encouragement and celebrate it? Well, Totally Locally already makes various awards of recognition, but what if it started an award to businesses who manage to source the most of their purchases from other local businesses? As a local enterprise, I’ve been tracking the extent to which I’m able to procure goods and services for my businesses from with the local economy (which I count as being a 10-mile radius around where I live in Todmorden) – over the last 10 years, this has been 29% of all my spending(which given I travel throughout the UK to deliver my services to clients seems pretty good). 

Anyone able to top that?

latest research suggests CICs are still trying to make their way in the wider world of social enterprise

So - as some of you know, I can be a bit of an anorak when it comes to sector governance, and statistics. Not just because my brain seems to enjoy doing it, but because I think that sometimes it's hard for us to get a proper understanding about what's really going on in our sector unless someone looks at published data afresh and offers an alternate view. (David Floyd and Nick Temple are both great at this, and also much more thorough too - I tend to look at headlines only here on my blog)

Anyway - every so often, someone publishes a survey about their part of the sector, and inevitably they never benchmark their charts against other peoples findings... This makes it hard to understand what might be really going on in the context of the 'bigger picture', and therefore how we can best support and celebrate each other.

So in spare half hours, I try and find a comparison against which to try and make sense of such published surveys.  Last time I did this was on the Big Potential programme from the Social Investment Business. Comparing their report of social ventures supported against the wider sector suggests that they've been very successful in engaging a 'new breed' of social enterprise.

But this time I'm interested in CICs, because the CIC Association has recently collated and published its 10 year survey of this form of social enterprise. Now, I want to be very open and honest here in that I've never been completely sold on the idea of this legal form for various reasons, but I've always been open as to why, and also supported some clients to gain this legal form (see other posts here tagged with 'CIC' for more).

The CIC Association survey contains lots of charts and headlines, and in trying to make sense of if these show this type of social enterprise to be in 'good health' or 'having some cause for concern' I've compared it to the wider Social Enterprise UK 'state of the sector' report.

But - a few words of caution before proceeding further:

1) the CIC survey was published in spring 2016, and the SEUK survey in autumn 2015 so there's bound to be a little 'drift' in the sector over that year

2) the CIC survey is concerned with CICs only; the SEUK report includes CICs as part of the wider response base, so there's also some variance and risk of some 'double counting'

However, for my own purposes and interests in trying to stimulate some wider discussion, I'm not too hung up on such technical variances as I think the 'broad brush' comparisons are what are interesting:

• CICs are more likely to be trading directly with the public (75%) than other forms of social enterprise (30%)
• CICs are more likely to fail in their applications for finance (43%) than other forms of social enterprise (20%)
• CICs are more reliant on grants - 25% have them as their main income compared to 11% of other forms of social enterprise
• CICs are likely to be smaller than other forms of social enterprise - most have turnovers under £10,000 compared to in excess of £50,000
• CICs are more likely to be structured to have share capital (private ownership) than other forms of social enterprise (34% vs 11%)

• Both CICs and other forms of social enterprise prefer grants as the preferred option for financing growth
• Both CICs and other forms of social enterprise are likely to be micro enterprises (less than 10 employees)
• Both CICs and other forms of social enterprise are growing year on year in similar ways (60% and 52% respectively)

So there's potentially some clear markers here that make CIC very different to their wider family of social enterprises (more public facing, more open to having private ownership), but also a lot of common ground too (size, growth, and preference for grants to support growth).

However, might there also be some contradictions emerging within this latest survey of CICs too? Potentially they could be seen as a weaker form compared to their 'cousins' in the wider sector, based on their being:

- more likely to be reliant on grants,

- seen as a riskier proposition by investors (based on the extent that they're able to access finance applied for),

- more likely to be marginal businesses (based on most having turnovers below what the average salary in the UK currently is..,)

- that 28% of CICs saying that this form has not had a positive effect on their business.

But its still relatively early days for CICs: while their 'honeymoon' period looks like it might be starting to wane, other forms of Social Enterprise have been around for a few hundred years longer, so investors and funders are probably still getting to grips with the CIC form.

And as I caveated earlier, the above are very much 'broad brush' findings that I've drawn out in a half hour over a cuppa.

However, my hope is that this will help to contribute to the wider discussion, debate, and further analysis. The aim of which should be to help us to better understand how to best support and encourage this (and other) form of social enterprise, so that they can realise their full potential. And in doing so, help bring about a slightly shinier, fluffier, and groovier world for all of us to enjoy.