dispatches from the new world of work

Not Just for Profit?

I was fascinated to hear a recent BBC Radio 4 programme whose subject was social enterprise—a concept about which I did not know much! In essence, these are organisations that set out to make a profit, but then direct that profit at "good causes." Among them are a number of fairly high profile organisations in the U.K. (e.g., The Co-operative Group and Cafédirect).

The story that really caught my attention was about Greenwich Leisure Limited, an organisation that 14 years ago took over 7 struggling leisure centres that had previously been run by the London Borough of Greenwich local authority. They converted the organisation into a worker-led trust and have transformed it into an innovative, high performing organisation, that makes more profit, now costs the council only 20% of what it did 14 years ago, and has become a business model that has been copied by at least 110 Leisure businesses in the UK.

Mark Sesnan, the leader who took the brave step of leaving the relative security of a public sector job to embark on this challenge, speaks enthusiastically about the change in attitudes that he was able to stimulate in his workforce. By treating his people as partners, adults, and fellow contributors he has found that it has converted 80–90% of them into "happy, co-operative people." One indicator of their commitment is that sickness levels in the trust are consistently less than 2% per year, which is exemplary by any standards in the UK!

The various programme contributors contend that social enterprise will be the business model for the 21st century. As one of them says, it's the Robin Hood approach to business! Some might say this is "pollyanna" thinking, but I'm not so sure. I think (almost) all of us are looking for meaning in our work that goes beyond what we pick up in our paypackets at the end of the month. What can we all learn from businesses with a real conscience?

Madeleine McGrath posted this on 01/30/07.

Comments

Madeleineâ€™s question â€˜What can we all learn from businesses with a real conscience?

I am still idealistic enough to hope that one day the answer will be NOTHING. I am sure I am not alone in thinking it is tragic and worrying that (judging by the wording of Madeleineâ€™s question) we make the assumption that business today starts from a position of being WITHOUT a REAL conscience. I work with a Social Enterprise involved in healthcare based in Sheffield, England and I endorse this methodology fully. It is inspiring. The organisation I work with certainly has a REAL conscience.

Posted by Trevor Gay at January 30, 2007 2:51 PM

Muhammad Yunus, who won the Nobel Peace Prize for his work
in microfinance, is a believer in and promoter of social
enterprises. He wrote an article
Social Business Entrepreneurs Are the Solution
which is on the Grameen Bank web site.
http://tinyurl.com/3yr3vf

Posted by ShakespearesFool at January 30, 2007 11:51 PM

I feel that people coming the workplace today are demanding more in terms of values etc. from their employer. They want their work to ethical and to mean something. They want to make the world better.

I don't think that is anything new. I think this has been the case since intelligent throught began. What does feel different is the willingness of these people to vote with their feet and demand change

Posted by PaulH at January 31, 2007 3:02 AM

Madeleine;
Over the past few months 3 major US business periodicals (Harvard Business Review, Fast Company and BusinessWeek) had cover stories or significant coverage about corporate social responsibility and it close cousin, social enterprise. For those of us that work in or with nonprofit organizations, this is hopefully a sign of an actual business trend instead of the latest corporate fad. We believe this crossover of interests between business and nonprofits is healthy and essential for both. There is a long way to go but the signs are encouraging. I recently wrote a post with links to all of the articles on my blog. Thanks for the posting about it here.

Posted by Peter A. Mello at January 31, 2007 11:56 AM

The Starship Enterprise economy
Work to contribute
Contribute your passion for self actualization, fun and profit

Posted by Ken Edwards at February 2, 2007 12:15 AM

Madeleine,

This idea has been taking shape since the past year - and you can sense it on social networking sites. In fact, whole networks such as Zaadz.com are built around this idea.

I wrote a paper last year that puts things in a context and shows that ethics, passion, and business do not have to be out in separate boxes. The paper gave a visual context for business and society.

More: Why Do We Do Business?
http://www.inblogs.net/nextbyramla/2006/05/why-do-we-do-business.html

The paper received very interesting response - organizations from India, Russia, and other places wrote in with their examples. Many are using people-centered education models. I'm working on a second version. Interesting to see you bring up this topic.

Posted by Ramla A. at February 3, 2007 10:34 AM

One more thing. Even "social-social enterprise" is an idea that evolved within the last year... I have been quietly listening to conversations on the Internet and watching this trend.

The very-contemporary thought is that profit does not have to be divorced from doing good, and vice versa. I.e. if one wants to "do good," they don't have to choose a life of volunteer work/ low pay/ no pay.

The second wave suggested "social-social enterprise" which to some meant ethical businesses, to others it meant working for the have-nots, starting enterprises with a clear charity focus, etc.

The latest thought, which is developing in social networks and chat rooms (ask people under the age of 30 - I'm part of the age group) is to do regular business the right way. That's also my definition of "social enterprise" or whatever name it comes to be called by.

Personally my belief is simple: why should there be "good business" and "bad business?" Business should be good; period.

The problem is, the premise of our prevalent thinking is based on feudal and industrial ideas. Still. Formal and informal education does not think forward. Youth today, around the globe, have denied the capitalist model, and it should make news.

We simply need new premises. For instance, just because one has money doesn't mean they have the right to usurp resources others can't afford (typically, land). That old thinking has lead to violence and frustration around the world. This thinking must change, and it must be taken out of our textbooks. Price doesn't determine everything; humanity does too.

That's my project, and I invite the interested to peruse my blog which will be helpful. http://nextbyramla.blogspot.com

P.S. Recommended reading:
1. Fortune at the Bottom of the Pyramid,
By C.K. Prahalad and Stuart L. Hart
2. Me to We: Finding Meaning in a Material World (more volunteer-oriented, but has excellent research on the "new premises")
By the Kielburger brothers

P.P.S. Madeliene, the last words of your post ring very true. I wrote my paper after sensing this "search for meaning" present even at the top levels in many organizations. In fact, news about "executives falling" right on tpwireservice.com have been part of the inspiration.

Posted by Ramla A. at February 3, 2007 10:58 AM

The "social enterprises" represented on the BBC program went to some lengths to set themselves apart from "not-for-profits" as we talk about them in the US. They also separated themselves from regular shareholder enterprises not by their purity or way of doing business, but by their purpose.

In typical shareholder capitalism a company exists to operate at a profit and to return that profit to shareholders. Most of the enterprises on the show described themselves as operating at a profit but using that profit for something else than enriching shareholders. This is not better or worse, it is merely different.

Most of this is not new. If you doubt that, do some reading about the Rochdale Principles which date from the mid-19th century.

What is new, to my mind, are enterprises like Grameen Bank, which have two interesting characteristics. First, their stated purpose is to improve the community while making a profit. And second, the technique of managing financial risk by consciously using community dynamics.

Posted by Wally Bock at February 3, 2007 5:46 PM

This comment came from Ramla A. by email, and I am posting it here for the benefit of all:

In response to Madeleine McGrath's blog post about social enterprise, here is a useful resource with plenty of info: The Skoll Foundation http://www.skollfoundation.org

"Social" should be the mega-trend of the moment. The definition is up in the air, but a consensus seems to be emerging on the humanitarian, do-good, feel-good, and responsible nature of the enterprise called "social." To me, it simply means that doing good + following one's passion doesn't have to be exclusive from making a profit. The old-fashioned thinking was, of course, "Son, in business, you gotta do this [wicked thing]."

Another term is "Conscious capitalism." More info: http://www.trendhunter.com/trends/conscious-capitalism-dirty-business-no-more/

Posted by cathy mosca at February 16, 2007 10:47 AM