Social Enterprise: Balancing the Sinner and the Saint

Guest post from social enterprise expert Tim West. Part of The NextWomen Social Entrepreneurship Theme.

Do you have to be ruthless to be a good business person? And just what do we mean by ‘good business’ anyway?

When the Nobel Prizewinning economist Muhammad Yunus came to London from Bangladesh to address a group of 30 of the UK’s most promising social entrepreneurs, he made the powerful case that economics – or the traditional way that we view it across the world – is broken.

The problem, he told the group of ‘Deloitte Social Innovation Pioneers’, was that economics and the world of business had been built on an assumption that making profit was more important than making people happy. Just as problematic was the fact that, in the world of ‘charity’, the notion of ‘profit’ was considered a dirty word.

We exist in an economic system where doing good and doing business are apparently polar opposites.

Yet, if you were to explore the motivations of any rational human being, it is pretty obvious that very few of us, apart from the odd saint or psychotic dictator, make our decisions about life in this way. We are, points out Yunus, a natural mixture of the selfish and the selfless. That means that, in general, we all want to make some money, afford a nice house, take our loved ones on some fantastic holidays, and indulge in some high-level gastronomy or designer clothing. But we also want to act fairly, support our communities, help others who are less fortunate than ourselves and save our bit of the planet.

So the question is: if we are this natural blend of saint and sinner as human beings and in our personal lives, why should we be any different in the world of work – whether we work in business or charity?

The answer, of course, is that we shouldn’t. What’s more, when we challenge this paradigm of business versus charity, things can get pretty exciting. We find ourselves unbuttoning our business suits of profit maximisation and throwing off our stifling cloaks of charitable purity – and proudly slipping on the Jimmy Choo shoes of social innovation…

Before I get too carried away, let me explain the idea of ‘social innovation’, and other terms such as ‘social entrepreneurship’ and ‘social enterprise’. You don’t have to be a member of some kind of strange cult – being ‘socially enterprising’ is pretty simple: it’s about taking the best elements of business and entrepreneurship (great ideas, excellent management, inspiring leadership, tightly controlled finances, etc) and putting them to work for a social or environmental mission. Profit is a good word in this world – you’ve got to make it or you will go under, and if you sink then your mission is irrelevant. In fact, the more profit you make, the more money you have to recycle into your business, which means you are more capable of delivering your mission.

But social entrepreneurship is also quite special. You’ve got to be quite a special person to create and lead a successful social business. You must arguably be even sharper than the sharpest conventional business leaders. You must find the best staff to work for you, pay them market rates and inspire them to believe and deliver for the same powerful blend of business and social aims that you have come to believe in. You must decide where the balance between the profit and the social impact lies.

Lean too far one way and the business sinks; too much of the other and you lose your soul.

So, who are these special people? Muhammad Yunus himself is a pretty amazing example: the founder of Bangladesh’s Grameen Bank, he believed that instead of giving charitable donations to the poor, making small loans available at fair rates to some of the poorest communities – in particular, to poor rural women – was the most effective way of helping those communities take their first steps out of poverty. It began as a project in 1976, lending a small amount of money to a small group of Bangladeshi people in a village called Jobra, next to the University where Yunus was head of the rural economics programme. As of October 2011, Grameen Bank had 8.349 million borrowers, 97 percent of whom were women. With 2,565 branches, the bank provides services in 81,379 villages, covering more than 97 percent of the total villages in Bangladesh. 

As he stepped down from his position at the bank in 2011, after more than 30 years in charge, Yunus wrote a letter to members about how it all started:

Thirty-five years ago, I did not know that I would start a bank, and that I would lend to poor people, especially to poor rural women. Like many other teachers, I was busy teaching in the classroom, far from the realities on the ground. But Jobra village took my future into a completely different direction. I saw, first hand, how the loan sharks enslaved the villagers; I thought that if I were to lend money to the poor, then the villagers could be free from the grasp of the loan sharks. That is what I did. I never imagined that this would become my calling in life.

I learned a lot sitting and talking with the women of Jobra; I came to know about things which I had never imagined. I longed to do whatever I could to help them. With my students, I was able to help the women in a small way. Acting as the guarantor, I was able to arrange loans from the bank for the poor people of the village. Alongside the loans, I added a savings program. At that time, women in the village did not have the capacity to save. The savings program started with 25 paisa in savings per week. Today the total amount of savings by the borrowers stands at 6 billion Taka!”

Closer to home, there are some incredible examples of social entrepreneurs all around the UK. Take a look at one of those ‘Deloitte Social Innovation Pioneers’ I mentioned earlier, for example: Kresse Wesling has been passionate about waste for many years. When she went on an environmental auditing course back in 2005 she met members of the London Fire Brigade, who took her to see a stock of disused fire hoses. “There were coils and coils of it piled on the rooftop. It was beautiful,” she recalled in an interview for the Cartier Women’s Initiative Awards, in which she was a Laureate in 2011.

If you find it difficult to see how old rubber fire hose can be beautiful, then you should check out Kresse’s website: elvisandkresse.com. Kresse may be an eco-warrior but she is also a sharp-minded entrepreneur who saw a problem and at the same time saw a business idea. She has turned a load of discarded fire hoses destined for landfill into a suite of high-end fashion products – from beautiful bags to belts and cufflinks. Elvis & Kresse belts, bags and accessories are sold in the world’s most luxurious department store, Harrods, alongside famed luxury labels, and have apparently been spotted on Cameron Diaz in American Vogue. The brand runs in the same way as any business – except 50% of all profits are donated to charity. Not only have they built a successful business out of an environmental problem, but Kresse and her business partner have also decided to make that major shift in how business is done and what it means to them.

Yes, social entrepreneurs like Kresse have to be ruthless, especially in the world of high-end fashion and especially when you have to balance the business and social.

But get that balance right – and the ruthless business person can be just as ruthless about delivering the social mission, and be a greater business person and a more authentic human being because of it.

Tim West has been writing and consulting in the space where business and social mission meet for well over a decade. He leads mission-focused PR and marketing agency Matter&Co; he is founder of Good Deals, the UK’s foremost social investment conference; he created the RBS SE100 Index of high-growth, high-impact social businesses across the UK (se100.net); and most recently he launched Pioneers Post , an online newspaper and learning platform connecting social innovators across the globe.

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Ten places to find out more about social entrepreneurship:

  1. Pioneers Post – the leading online magazine and learning platform connecting social innovators across the globe, with its own TV channel, virtual business school, conferences, workshops, debates, etc.
  2. UnLtd  – the foundation for social entrepreneurs, with a wide range of support and investment programmes for social entrepreneurs at all levels, including the Big Venture Challenge .
  3. Social Enterprise UK – umbrella body for the UK social enterprise sector, with lots of resources, events, workshops etc.
  4. School for Social Entrepreneurs  – action learning for aspiring social entrepreneurs, including a major programme supported by Lloyds Bank.
  5. Ashoka  – biggest network of social innovators across the globe, with activity in most countries, including a brilliant programme with Ben&Jerry’s across several countries in Europe, called Join Our Core
  6. Deloitte Social Innovation Pioneers ongoing support programme for some of the UK’s brightest and best social businesses.
  7.  RBS Inspiring Enterprise– RBS Group support programme for young people, women and social entrepreneurs who want to start-up and grow brilliant business ideas.
  8. NESTA  – innovation charity with some big social innovation programmes.
  9. ClearlySo  – links social entrepreneurs to angel investors through the ‘Clearly Social Angels’ network.
  10. Big Society Capital– the world’s first wholesale social investment bank, based in London, with £600m to invest, and signposts to lots of excellent social investors, including Big Issue Invest ; the Social Investment Business; Social Finance ; Bridges Ventures, and many more.

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