These (discredit / absorb) are two opinions of the private sector: social enterprise relationship I’ve read recently.

The first was from Cliff Prior, CEO of UnLtd, who was reported (in this Third Sector article) as making the point that "social enterprises are in danger of being discredited by private sector imitators" (aka profit-making businesses adopting a social enterprise model). Nigel Kershaw (of Big Issue Invest) rebutted this with "if you are transforming society, it doesn’t matter what you are".

The second was from Julia Meek on Catalyst’s Social Business Blog (Social Businesses: Victims of their own success?). In this post, she discusses the trend for mainstream businesses to adopt the approaches of social businesses, and then adopt them wholesale at a much bigger scale. Or, as Julia puts it:

"These supermarkets, electricity suppliers, market leaders and others
have been able to watch the market and let social businesses prove the
effectiveness of their various approaches. On observing a successful
one the companies have been able to leverage their infrastructure,
human capital, market positioning etc. to adopt it quickly themselves,
marketing ’social’ products and services to the same target audience
and at a lower price than can feasibly be offered by smaller, social
businesses."

This is partly a conversation about scale: can social businesses ever break the ‘ethical glass ceiling’, as Julia’s colleague puts it, and get the necessary investment to compete on more equal terms with the big boys? Does it mean that the best way for social businesses to make change is to pioneer/prove and hope for adaptation by the mainstream? (an approach often seen in the public sector and web 2.0 alike). She then posits 4 potential approaches, around quality, brand, partnerships and acquisitions. Well worth reading.

On the first, I partly agree with Cliff, in that just adopting a model / particular legal structure proves nothing, and this is a problem. This is as true for PCT’s hiving half of themselves off into a CIC (excuse acronym-itis) and then commissioning that ‘new’ half, as it is true for the private sector. Unless the primary mission of an organisation is a social one and the initiative is driven by a social entrepreneur / team of socially entrepreneurial leaders, then its motivation can always be called into question. But we see social entrepreneurs operating across all sectors, and that is where I agree with Nigel: ultimately, moving forward, there will be this increasing blurring of boundaries, and what will matter, as I’ve posted before, is:

– the quality of the work/activity/product
(reputation / measurement / evaluation / provenance etc)
– how well this is communicated
(brand / voice / connections to stakeholders etc)
– the transparency with which the organisation operates
(mission / finances / governance etc)

Regardless of the legal structure chosen, these will be key things for all organisations operating across this field; from enterprising charities through to socially-responsible companies.

It’s interesting to relate the second post to the ‘six practices of high-impact non-profits’ (which I mentioned here), in that one of those practices was to ‘serve and advocate’. If the pioneering role of social business in getting ethical / fair / green / social practices adopted by the mainstream is seen through this lens of advocacy, then maybe that helps place it in a slightly different context. Also, as I am bound to say in this context, the assumption is also there that social enterprises and the like want to scale up. As the Small Business Blog posted the other day, "69 percent of small business owners said that they prefer to have their business remain small.” If that is true in the private sector, surely the same can be said of the third sector / social enterprise movement as well? (If not more so, as ‘small and beautiful’ is a mantra to some).

And surely the movement should be proud to be influencing and changing the mainstream in the way that it has: how satisfying, however imperfectly done, to see big supermarkets pushing fairtrade coffee, to see Fiji water pushing its carbon neutrality, to see M&S put out its Plan A…none of which would have been achieved without hundreds of activists, campaigners and social entrepreneurs, and none of which we could have said even one, two, three years ago. Where we are strongest is in demonstrating, through quality practice and delivery, that things can be done differently….and that they are better done that way.