The trust society: squaring the public service delivery circle?

There’s inevitably more time for reflection during the
summer months, as people go on leave and take time out to review where things
have got to, organisationally and personally. One thing that’s come up in many
conversations for me is the challenge ahead given the inevitable cuts in public
spending (regardless of which party is in government), but the continuing (or
increasing) need to deliver services that reduce inequality and address social
problems and needs. This is particularly interesting in the context of the
Conservatives, given their clear support for localism and grassroots-led
change by individual social entrepreneurs and their wish to reduce the size of
the state and its associated bureaucracy.

Currently, this wish to reduce the size of the state (or,
more simply, to reduce costs) has tended to lead to bigger contracts, bigger
providers and a return to a simpler, output-based model (this much money in,
these outputs out) that may be less nuanced than is currently the case through
necessity. This is as true of the current government as it might be of a future
Tory one (see the consortia being created around the Future Jobs Fund, for
example) and, if you put yourself in those shoes, is pretty understandable and

But, of course, the local, grassroots social
entrepreneur-led organisation may struggle in this context. Diversity, reach
and multiple outcomes will still figure, but will power and money go upward
into bigger contracts that are inaccessible? Or will there be enough devolution
and freedom at local, regional or sub-regional level to work with new
innovators and approaches that may change things for the better?

It’s an issue that we wrote about in Social Entrepreneurs
and Public Service Delivery
(pdf download), and one that is becoming more and more
critical as time goes on, and the current outlook for public spending becomes
bleaker. So is there a way of encouraging and fostering more grassroots social
entrepreneurial activity, with new sustainable and bespoke solutions, whilst
also increasing value for money? The answer is yes, but may require a shift
from a trust-based to a contract-based society, and that shift may take much
longer than the current climate will take to clear. But the broader point is
worth raising now.

A recent provocation paper by SSE Chair Charlotte Young discusses the differences between a trust-based and a contract-based society and, more pertinently in this context, the potential roles for the social entrepreneur as initiators, intermediaries and role models & people developers. For those trying to square the circles in the public service delivery space, it's essential reading.

– Read Can Social Entrepreneurs Make This  A Better Society? (pdf)  on the SSE website.

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Should third sector leaders be non-executive directors?

It's crazy time here at SSE….having recruited two new staff in three new regional SSEs, we're now mid-recruitment of three posts at SSE-UK here in East London. And we have been rewarded with our largest pile of CVs ever……

Whilst thinking about recruitment, I thought I'd draw attention to a different area of recruitment that has a broad relevance to the third sector. As many have pointed out, the failure of our financial institutions is also a failure of corporate governance which is, in turn, a failure of non-executive directors (NEDs). David Walker's recent report on corporate governance acknowledges this, and suggests doubling the number of days that NEDs contribute to a company per year.

This does seem an inadequate response, though. As The World of GingerbreadGirl points out:

"if you use the same people you will have the same answers, the same
approaches, and the same problems – whether or not you cut their pay,
double their pay, cut their days, or double them. If you always do what
you have always done, you will always get what you always got.

She suggests that every board should have to have one NED that has never been an NED before…in order to cut down on the cronyism, (old boy) networks and lack of variety that has affected the ability of non-execs to perform their role over the last few years. Matthew Cain follows on from this with some sensible questions that should form a basic check on whether a person can be an NED who will bring value to the corporate governance process. And points out that NEDs aren't a panacea to this problem, which is surely right.

But that doesn't mean it shouldn't be addressed.

So how does this relate to "our" world? Well, firstly because the same applies to charitable boards: as Eleanor at NPC points out in her post (with the does-what-it-says-on-the-tin title of Networks aren't the answer for boards: get some fresh blood for a change),

"Trustee boards in the charity sector in the UK face remarkably similar
problems. Most (around 80%) recruit new board members from their
networks. 'Word of mouth' is great for getting people who you know and
trust, but it means that you are looking in a very small pool of people"

This is surely true. We work hard with SSE students (and Fellows) to think hard about different types of governance structure, and about the make-up of their boards (if they have them). And that challenge of being aligned to the mission, but not too close to it; of being trusted, but not uncritical; of being a good mix of skills, but also a good team… etc

Secondly, and to return to GingerbreadGirls' original point about widening the pool of talent, surely there are people from the charity and social enterprise sectors who would add credibility, acuity, insight and experience to some corporate boards? This is something we've been looking at on the Social Enterprise Ambassadors programme and was called for at an event the other evening by leading charity lawyer Stephen Lloyd, who was reported as saying:

"that at least one non-executive director of all quoted
companies should have extensive experience of the social/voluntary
sector to add a new perspective to board discussions

Again, getting leading charity or social enterprise directors as non-exec directors is by no means a panacea, but it would surely bring a fresh pair of (credible) eyes to the table, combined with experience of running a significant organisation. And would also foster better understanding in both sectors about the differing demands and natures of each.

[Writing this post as part of Bloggers' Circle, an initiative to share posts cross-blog and get interesting posts more widely-read.]

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Economic downturn: diamond in the rough? New opportunities for change

It has been a busy first two weeks for me here at SSE. The staff members here at the school are all very dynamic individuals, each with much to add to the conversation surrounding social entrepreneurs. One of the interesting conversations I’ve picked up on here, is one about the challenge of finding funding for small to mid-size non-profit organizations. With the recent credit crunch, there will inevitably be cut backs in government spending, and the endowments of various foundations and investment trusts have already begun to subside. Many people suggest that the private sector should pick up the slack, but corporation’s are experiencing their own economic hardships, and are not likely to increase their financial support to the sector anytime soon. Meanwhile the competition among various non-profits for the available funding is ever increasing. There is constant pressure to reinvent ideas so that they appear fresh and new. This proposes a demanding, however potentially extraordinarily stimulating environment for the avid social entrepreneur.

Nearly everyone is looking to make ends meet, and non-profits are no exception. In the past decade, the solution to lack of funding resources in the non-profit sector has seen a move towards being socially enterprising. Social enterprises aim to construct alternative methods for generating revenue to support mission-based programs. A regressing economy ushers in increasing social tension and disparities. Higher unemployment rates cause individuals to seek self-employment or reinvent their careers in order to regain control of remaining resources.

People tend to take fewer risks and become less creative when the commercial sector undergoes rampant downsizing and reorganizing. Creativity requires trial and error, and no one knows what happens to those who experiment with a new approach and then fail. It takes a real leap of faith to become a test case. The irony here is that this tendency to avoid risk comes just at a time when creativity is most needed in the workplace. However, fortunately, challenging and dodgy conditions are often the type of circumstances in which entrepreneurs thrive. When times are tough, people are more willing to find deals, strike partnerships, or work towards new negotiations.

It seems as though in the current climate, attitude is everything. An optimistic outlook will likely open more doors and sustain enterprises much longer than a negative narrative. Defining oneself as an entrepreneur can take time and involves gradual building of confidence. However once someone begins to see the positive outcomes of their actions or innovative solutions, they begin to feel more passionate about identifying themselves as a social entrepreneur. Perhaps the changing economic environment will create entrepreneurs out of some individuals who may have never considered dreaming up and testing out their own solutions to persistent problems. In his 2007 Nobel Peace Prize acceptance speech, Al Gore pointed out that in Chinese and Japanese, the word “crisis” is written with two symbols. The first symbol stands for “danger,” and the second stands for “opportunity.”  A new premium has been placed on vision and strategic planning instead of short-term financial risk taking. Ultimately this type of constructive thinking will benefit everyone, even as some will suffer now.

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What the Iraq War can teach you about strategic planning

Just as optimism reigns in the US, I've been reading about arguably its darkest days of recent times in the Iraq War. Fiasco by Thomas Ricks (a US journalist on the Washington Post) details the build-up to the war, the invasion, the insurgency, and the reconstruction efforts in fascinating detail. It's not an easy read and has left me, by turns, angry, frustrated, depressed but also uplifted, inspired and amazed. So what relevance to this blog and the world of social entrepreneurs? Well, a couple of things really stood out to me:

1) The first is the emphasis the military in the US places on learning (from mistakes). That may sound a bit bizarre, given that Iraq is largely viewed as a Vietnam repeat and, at least to start with, a case study in how not to carry out a counterinsurgency. Time and again, though, senior military figures give realistic assessments of what is happening / going wrong, and highlight what needs to be done to change this: and much of this is done publicly in workshops / publications / speeches and so forth. This happens throughout the first five years of the war, and the military's ability to be honest with itself, to highlight errors (and successes) and incorporate those into its future operations has been crucial in improving (eventually) its performance there. This doesn't apply to all, of course; some of the most senior figures involved consistently made out that Iraq was in a better state than it was, and continue to delude (or contradict) themselves to this day.

2) The second was about strategic planning. Ricks argues that the failure in Iraq was primarily one of strategic planning (or the lack of therein). Firstly, there was a lack of realism (if only their goals had been SMART) and a lack of consistency: their grounds for going to war were based on a worst-case scenario (i.e. Iraq has loads of WMD, Saddam works with Al-Qaeda, the US is under threat) while their plans for the occupation / reconstruction were based on a best-case scenario (we'll be welcomed as liberators, and the country's in an alright state etc).

Secondly, there was a lack of clarity over the actual objective of the invasion: was it about finding WMDs, was it about removing Saddam, was it about regime change, was it about introducing democracy to Iraq, or to the wider Middle East? (some would add, of course, was it about oil?) and so on; and it shifted as the politics demanded it. This was hugely confusing and bewildering for the troops on the ground, because each of these goals requires different operational activity, different tactics and so on. If you are unclear about your mission, how can you decide how you are going to get there and achieve it? How can you make decisions between where you apply resources (and how many are needed)?

Thirdly, there was a lack of planning in and of itself. Phase IV (the reconstruction) didn't have an overall plan in place when people arrived in Baghdad to start, whereas Phase III (the invasion) had been planned and war-gamed to within an inch of its life. 

Fourthly, the US Army had not done its homework on insurgency and counterinsurgency as a whole (though individual commanders had knowledge of, say, Vietnam or Algeria, and applied it appropriately), nor on experiences of occupation. They only started to bring in this learning 2-3 years in, in a formalised way (via pre-Iraq training etc).

Finally, there was also confused leadership / ownership between the State Department (Rumsfeld et al) and the military in Washington, and between the Coalition Provisional Authority (CPA) and the Army in Iraq. From Ricks' account, this caused untold problems at every level of operations.

So, lessons from the Iraq disaster?

– do your research (it may not involve Vietnam or Algeria, but is necessary)
– a plan is important (entrepreneurs are prone to action, but a thought-through plan is crucial)
– get clear on your overall objective / vision and ensure it is clear to everyone else involved
– be realistic in your planning, rather than overly pessimistic or optimistic
– be clear about leadership and autonomy over particular areas (and who has the final say over what)
– be open to learning, honest about mistakes and constantly try to improve

Not a bad checklist for a social entrepreneur, or for the new US President to insist on the next time someone suggests a military invasion…..

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Friday round-up: capitalism, CICs, Camfed and collars

Matthew Thomson, CEO LCRN
Quick pre-weekend round-up.

– I covered the Enterprising Solutions Awards earlier in the week, but there was also some good coverage in the Times which is worth checking out

– Whilst we're on awards, huge well done to former SSE Director of Learning Matthew Thomson (pictured left), who is now CEO of London Community Recycling Network. They won the Innovation award in the Third Sector Excellence Awards; congrats to all the other winners and nominees as well, including SSE witnesses and friends Craig Dearden-Phillips, Afrikids, Toby Blume…Duncan Bannatyne.

– Amongst countless "we need a new form of capitalism….now is the time for social enterprise" speeches and articles (to which I will no doubt contribute at some point….), this one by Charles Leadbeater struck me as one of the more interesting/thought-through:

"For most people the next year will not feel like a search for a brave
new economic model: it will be more like hand-to-hand combat to keep
hold of what you have……In all likelihood we will get a mix of subdued capitalism, social capitalism and ugly capitalism, even within the same cities."

– Social Firms UK do consistent, high quality work under CEO Sally Reynolds, and this is a thoughtful piece by her about why the model is important, particularly in the current climate

– Another kick for CICs; in this case from Apprentice winner Tim Campbell…..

– Jeff Trexler is never short of strong opinions; see what you make of this post: "The social enterprise movement has yet to grasp the extent to which it is as much a
product of the bubble as subprime loans and credit-default swaps–it's
not just a coincidence that do-gooders started talking business when
business was good

Great article on Camfed in the Financial Times; Camfed was started by SSE Fellow Ann Cotton.

Harvard Business School Global Business Summit Explores Future of Capitalism might be a title to send me running away, but there's some interesting stuff in here about what is needed to foster social entrepreneurship. Interesting to see business leaders still pushing venture capital and private equity models in this context as a route to solving social problems

– Lucy Bernholz, network queen of US philanthropy, has seen the future, and it looks like this

– I must mention Social Innovation Camp, to which SSE is a Community Partner: check out the site and send in your ideas…..deadline for submissions is coming soon!

– Lots of stuff being lined up for Global Entrepreneurship / Enterprise / Make Your Mark / Unleashing Ideas etc week (slightly confused branding, methinks…)……and SSE staff and representatives will be covering as much ground as possible: particularly on the 20th November which is Social Enterprise Day (coming just behind Christmas and birthday here, of course). Check out Unleashing Ideas for a sense of what's happening around the world.

– And finally, check out this story in the Huffington Post about how a book about "Green Collar" workers reached the bestseller lists. Just try not to wince when you read the bit about how revolutionaries are being replaced by "solutionaries", which must be officially the worst thing done to the English language this year….


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