Oh! Mr Porter, what shall I do?
There has been much talk since the election of the Coalition Government about the role of social enterprise and what a good thing social enterprise is in general. Some of this debate has centred on social enterprises working with the private sector to deliver services in such a way that delivers valued social as well as economic outcomes. This approach fits within the concept of ‘shared value’ currently being promoted by Michael Porter of the Havard Business School who argues that private companies can enhance their competitive advantage while at the same time advancing the societies they operate within. Many large companies have been toying with this kind of idea over the last few years, rebranding their CSR policies into new sustainability ones. The more innovative policies have already moved away from ‘old style’ approaches to CSR that tended to be paternalistic and ‘charitable’ in their ethos to programmes that deliberately seek to deliver ‘community benefit’ as part of their core business. A recent report by the United Nations even reckoned that some of the world’s largest companies are focussing less on short term shareholder value and more on the value provided to customers as well as to the environment and society at large. As social enterprises we all have to be enterprising in delivering our social purpose whilst at the same being hard headed about running our businesses. It’s not surprising therefore that an increasing number of social enterprises are finding themselves in conversations and relationships with much larger private companies about how they could work together to create opportunities for ‘shared value’ through new approaches to delivery. For the companies involved these kinds of conversations can be hard as they will often challenge the normal patterns of thinking and working.
Here at Renaisi we are engaged with a number of very large companies having these conversations. A purist may not label them all strictly ‘shared value’ approaches but each is clearly aimed at delivering greater community/social benefit through the development of a new or existing service, while at the same time enhancing the competitive advantage of the company involved. All of these conversations are on-going and could lead to a range of joint ventures and services – or not – such is the process of innovation! But even at this point it’s worth sharing what we have learned so far and what we would pass on to those who may be thinking of boarding the ‘shared value’ express. The next line in the song by Marie Lloyd: “I want to go to Birmingham and they’re taking me on to Crewe” is a timely reminder that without careful planning and hard work you could easily find yourself somewhere you didn’t want to be!
We’ve been lucky I think in that the people we are working with at the moment are all motivated with the very best of intentions. They understand that in delivering additional community benefit in the areas they are seeking to deliver services gives them a competitive advantage and a better product – in short they get it. They may not fully understand the complexity of achieving it but they share our view of trying. In our experience not all potential partners share these motivations and it’s worth testing these out before you leap.
Getting to the right person
However even if the company, or the person from the company, shares your vision about what could be done, actually getting it done is no easy feat. This is where, what I’ve seen elsewhere called, the ‘social intrapreneaur’ is important. It’s the individual relationship that is vital to moving things forward. It’s someone on the inside of these large organisations who will promote the idea and approach and has the authority to make things happen. The larger the organisation the more difficult job this person has particularly if it has to challenge long established views and prejudices. Even if the company has a written strategy that supports a ‘shared value’ approach it doesn’t meant that everyone else will have either heard of it or support it. You need to give this person all the support you can. They often will become the connecting personintroducing others into the conversation and making sure the initiative is supported as it makes its way through the corporate bureaucracy.
Having a clear vision
Whatever project you are embarking on you have to have a clear destination – at the outset anyway! If you have a new service idea that needs a private sector partner you have to make sure it can help them reach their destination a bit quicker and in a bit more style whilst getting you where you want to be. This means understanding their language, their pressures, their targets and business culture as best you can so you can make sure your project develops ‘with the grain’ and its benefits to the company’s objectives are clear. You’ll have to accept there will be a few twists and turns on the way and the final destination may look a little different to what you expected but as long as it delivers the outcomes you wanted that should be ok.
Size matters
You should always understand that this usually is a ‘David and Goliath’ relationship. More often than not the social enterprise, like Renaisi, is small while the private company involved is often global. This is not an equal partnership in many ways. The large private company will not understand or appreciate that your development resources are limited and you have no vast pool of management trainees or interns to support business development. You may sometimes find yourself introducing one part of a large private organisation to one of its other parts. Very large corporations, often themselves made up of numerous individual companies, have very little in the middle designed to join things up. Do not get frustrated by this. By acting as a ‘connector’ you are adding value and understanding.
But this imbalance does throw up challenges. Any enterprise has to innovate to prosper. Innovation requires investment in terms of time and money so for small enterprises this is an expensive but crucial activity. It’s important to lever in resources where possible to make sure you can do this – you cannot be in a position of relying on the private partner to make all the running in terms of development – nor should you want to. As ideas turn into action and action turns into concrete proposals the focus will turn to the form of commercial structure best suited to take the partnership forward. This is critical. Making sure that you are seen as an equal partner and risk and reward is shared proportionately is hard work. A small risk to a very large partner may be a huge risk to a small social enterprise. Making sure you have a sound and credible business plan, that is shared between partners goes without saying.
It’s a slog
Finally, you must be prepared for a lot of hard work most of which you will not get paid for – but that is the nature of entrepreneurship – the pursuit of opportunity without recourse to resources. I’m not sure what Marie Lloyd, the Hackney Music Hall singer famous for singing ‘Oh! Mister Porter’ would have made of the Havard Professor’s theories or he of her rather scandalous reputation. But the song does provide some timely advice for social enterprises involved in ‘shared value’ conversations with private companies. If you don’t want to end up in the wrong place – knowing your destination, making the right connections, having a copy of the timetable and getting to know your travelling companion well will mean you have a fruitful and enjoyable journey and greatly improve your chances of success.
By Rob Pearce, Director of Strategy