Somewhere, maybe around the corner from your office or near your home, there is a small group of genuine change makers hard at work. They are combining a breakthrough vision with their knowledge, experience, creativity and energy into an innovative solution designed to address a complex social or environmental problem, which has sadly been neglected by society. It’s highly likely they need you, but probably they are not able to pay for your contribution – in financial terms.
You could describe this type of innovator as a social entrepreneur. Their solutions usually become Social Enterprises, often providing a fertile ground for innovative collaboration.
Maria Ana Botelho Neves
Would you (or your team) give it a go?
To develop a compelling vision, you need the courage to try, fail, learn and try again – and possess the ability to make things happen. Most likely, the concept could be unthinkable, utopian or unrealistic, but the primary aim is not about making money.
Unlike conventional entrepreneurs, a social entrepreneur’s primary focus is to put an end to social (or environmental) problems and not to simply make money. These issues range from ending poverty, preventing social exclusion, building houses for refugees or eradicating food waste. The goal is achievable by starting an enterprise (not a campaign), and their successes measured by the value created for society.
This approach to entrepreneurship is a hybrid space emerging in-between sectors – combining formal and informal structures such as charities, companies limited by guarantee, community interest companies, cooperatives and partnerships. These Social Enterprises, set up for the benefit of society, aim to provide non-financial outcomes to bring about improvement and social value – often managed by people who are not motivated by money.
Since the social mission is very compelling, it makes working and partnering with social entrepreneurs a unique human experience, in particular for cross-sector collaboration. The social entrepreneur is usually capable of turning intangible resources such as an idea, knowledge, experience, relationships, reputation, passion, commitment or trust into tangible results. It’s also dependent on external resources, which for a traditional enterprise would cost the going rate, such as office space, vehicles, equipment, design, databases, volunteers and marketing but despite the shortage of money, the job has to be done! There is a refreshing ‘can-do culture’ and deeply human secret ingredients…
The social entrepreneur’s secret ingredient starts with networks and creativity, and an essential capability to operate without resources, often applying ‘bootstrapping principles’, such as never purchase what can be rented, never rent what can be exchanged, never exchange what can be borrowed and never borrow what can be given. They have the ability to build strong relationships with volunteers, co-workers, co-creators, donors, customers, partners, competitors, end users, and of course social investors.
Without trust, we depend on hugely expensive support for human interaction, which is standard practice in large organisations.
Running an Enterprise on trust
Unlike commercial and public sectors, social entrepreneur’s rarely run an enterprise on a contractual basis. Instead, these are trust-based, unspoken and unwritten terms supported by trust and integrity. It might seem strange and unprofessional through the eyes of traditional business thinkers, however as Professor Onora O’Neill claimed: “Trust is a high order human attribute which tends to reduce transaction costs to a minimum”.
In my experience, the rewards of partnerships built on trust lead to healthy relationships, shared responsibilities and emotional rewards, becoming far more efficient at the organisational level. As I learned from Charlotte Young, the Chair of School of Social Entrepreneurs – trust allows a speedy and reliable response, which is unusual in today’s commercial organisations because of its unspoken but emotional nature.
Charlotte’s insight comes from working closely with hundreds of social entrepreneurs every year, where it’s common to see trust in action and a highly efficient way to manage resources that are scarce. As Charlotte said: “Without trust, we depend on hugely expensive support for human interaction, which is standard practice in large organisations. Such arrangements build a culture that is the opposite of trust, fuelling impersonal relationships, supported by targets, audits, systems of incentives, financial rewards and penalties.” She explained that these processes compartmentalise people, limit their willingness, underplay their versatility and capability and tend to result in meeting minimum standards rather than maximising contributions.
As an example, I estimated the value of trust-based relationships at Plan Zheroes, a food waste charity and the project I co-founded and managed. In just one year, this trust-based relationship produced a value worth more than 23 times the amount paid for essential resources – the overall value of the resources totalling more than £500,000. Of course, this is just one dimension of the value of trust. There are other aspects to delve into which I will review in my next blog but be aware – trust doesn’t come out of a bottle, especially in a society that has shifted a culture of trust into a contract-based culture. Trust is built over time by interaction, legitimacy, demonstrating capabilities and by continuing social benefit. It is very fragile and easier to destroy than create.