How does social entrepreneurship work? and what is it exactly? In this book, a study of all the winners of Skoll Foundation awards has led to a formula for social entrepreneurship.
It starts with a nifty definition. There are many people trying to solve the world’s problems so which would you define as social entrepreneurs. The matrix Martin and Osberg use looks at those working with the problem (many NGOs and governments) and argues that while these groups work within the existing system they reinforce the status quo and can sometimes contribute to the inertia against change. They also look at those trying to change the system more indirectly and we all know advocacy groups that campaign tirelessly for a better system.
Social entrepreneurs achieve system change by working directly with the problem but in an innovative way. This definition appeals to me because it says that innovation on its own is not the key source of value, it’s the change in system resulting in a better status quo that really makes social entrepreneurship worthwhile.
The book is packed with examples and the authors cleverly use a different entrepreneur to showcase their framework. I am going to jot down the framework here but I thoroughly recommend a read of the book to be inspired by the unique approaches of others.
Creating a new and better equilibrium is no small feat. Governments and business can both create social transformations and social entrepreneurship sits somewhere between the two. It can focus on specific beneficiaries and a limited scope like a business does. Engagement with the program is frequently voluntary but the main purpose, like Government, is social benefit and this changes the sources of income for an initiative – frequently allowing it to service beneficiaries that are underserviced by business due to the lack of capacity to pay.
A social entrepreneur follows a four step path:
- Understanding the world. An outsider has unique insight into a world but cannot expect to change it without deep understanding. Three tensions follow: abhorrence vs appreciation, expertise vs apprenticeship and experimentation vs commitment.
- Envisioning a new future – understanding what is in order to see and describe what could be. This is the critical step that will determine if the initiative is transformational or simply ameliorates the problem. While focused on specific beneficiaries, the vision is systematic in understanding the role of others in the broader system and often engaging them as partners in the change. Compelling future state. But social entrepreneurs and their visions are remarkably adaptable when change and opportunity arises during the process.
- Building a model for change is where the understanding of everyone in the system becomes essential because they all need to pull in the same direction. Seven models to generate value were identified:
- adding customer value through transparency (think fair trade)
- adding government value through measurement
- adding value to an existing asset – eg repurposing or efficiency
- borrowing an enabling capital asset
- infrastructure / platform to reduce operating costs
- lowering operating costs through low cost labour
- cheaper products and services
- Scaling the solution. Social entrepreneurs dream big and as such scaling up and benefiting from scale are in their minds from day one. Outcomes rather than output, numbers and meaning are key to driving real changes for the better. A systemic/systems approach, an open source approach, documenting the model and refining it over time.
We hear a lot these days about the millennials driven by an urge to contribute to society and about enterprises rediscovering corporate social responsibility in terms of shared value. If a trend toward ‘for benefit’ businesses and new democracy is real then this book is a good starting point.
If you are interested in social entrepreneurship, give it a read.