It has been a big week or two… not least all things to do with Osama Bin Laden, royal weddings, and more. We’re into May already and winter is long-gone; the events that define this year come and go. The future keeps rolling in like the tides and the seasons.
Here in Oslo many people have been reading about “social enterprises” in national newspapers, attending workshops and conferences about this brave new world, and I personally feel that bit closer to realising my dream here of starting up a social enterprise in Norway.
There is much talk about what a social enterprise is and should be, so for what its worth here is my view on it. It should be a business, in the sense that it operates with an accountability, professionalism, has defined markets and products or services. This is only a blend of the sort of behaviours you would expect from any successful business, or charity, give or take a few semantic differences. Some people seem to think that it has 2 bottom-lines, a financial one and a social one, but I think this misses the point.
I believe it should have just one social bottom-line, that is tied to its social goals. These social goals and innovative approaches to solving social problems should be the drive for business activities that allow or generate the social outcomes. A good 1, 3, and 5 year plan would include the social projects and goals for that time period, how they will be achieved and when, and what business activities will be involved to generate this. In this way the business activity is always tied to the social goals. It keeps the social enterprise true to its mission, and I think is a key difference between a normal business with lots of different activities, some of which are social, some not social. But the financial plan and revenue activities allow it to move towards financial sustainability.
The key to back this up in the long-term is to have a business entity that is different from a normal business entity, whereby the profits are to be reinvested into the mission of the social enterprise (as opposed to shareholders) and a separate tax is applied to social enterprise activities. In Norway, we need something different to “AS”, I think.
This achieves 2 things. Firstly, it provides a genuine separation between cashflow or revenue, and profit. In order to help social enterprises be focussed on their social goals (and how to sustainably deliver these), cashflow should be prioritised to deal with present social goals, whereas profit can be used to invest for social goals in years 2,3,4,5 etc. It allows the social enterprise to plan its revenue generating activities for this year’s goals, and target additional revenue as profit to reinvest for growing these future goals. It also allows a social enterprise to justify any applications for ongoing funding, in order to meet either current or future social goals. This just business common sense, I know, but for those either converting from a charity mindset or a traditional business mindset, it offers a way of making financial planning more manageable but always driven by social goals.
The second thing it achieves (as a separate business entity) is to create an identity, a culture, and a tribe. From my experience, when you are trying to do something different, it helps to feel you are part of a collection of like-minded souls with whom you share some beliefs. It is important from a psychological perspective, and it can help the business-side of the social enterprise in the sense that a customer knows that they are dealing with a social enterprise. Its kind of like the “Fairtrade factor” – as a customer you know you are buying from Fairtrade, and that matters to you.
To give an example briefly, my social goals are to help disadvantaged young people into meaningful work, and help our next generation to understand about the environment and sustainability for their futures. I will do this using outdoor survival skills, ecology and sessions “living in nature” as the learning tool. My medium-term business model is to use the same learning mechanisms to help normal businesses to put together effective project teams, to work together to deliver effective and on-time innovative projects. (I’ve been a project manager for enough years to have some methods for solving problems in projects, before they actually become problems for the projects). This business activity will allow me to offer the more directly social activities at a cost and value that is appropriate for both my customers, my business, and for me as an individual. To do more social good in this business year, and can decide to try to do more corporate work (ie the cashflow), or use the corporate work as the mechanism for future growth of social goals (ie the profit). But the principle remains the same – the 1-5 year plan for the social goals drives the revenue generating activities of the social enterprise.
And on the topic of my project, I have 3 products I want to deliver : sessions and follow-ups for “out of work” youngsters; sessions on sustainability and environment for school-aged groups; and corporate sessions on effective project teamwork. And the good news for me this week is that I have a provisional agreement for ideal facilities to use for much of these sessions. Some of it can be done locally in Oslo, but some of it I want to do away from Oslo, and have the perfect location thanks to Joint Services Training Centre / Destination Setesdal in Evje, 4 hours from Oslo. It is a very well run centre, run by Brian Desmond, an ex UK commando who has been involved in many great things, training British and Norwegian military in outdoor survival, working with young people, working with films about The Real Heroes of Telemark (please watch this documentary, especially if you are norwegian or british, it is humbling viewing). I hope Brian will be a great person to be able to work with.
So I believe I have the products, I have the facilities to deliver, I have a business model… I need to find my customers. From that perspective though, as a businessman, its not that different to being a “normal” businessman after all!
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