It was ten years ago today

Well, it was ten years ago yesterday in fact, but even I tend not to blog on a Sunday, although I do tweet.

22nd November 1999 was the day that the fair trade shop where I cut my socially entrepreneurial teeth opened in its shiny new high-street premises.

We'd previously been hidden in the basement of a Christian bookshop - the kind of location that you'll find many a fair trade shop to this day.  We - with some justification - felt we were at the vanguard of the fair trade movement - taking it from the margins to the mainstream (I can well imagine that my press release used that very phrase).

It was all very exciting.  We had a party in the shop on the opening night for customers, members (500 local people had invested in the co-op) and suppliers, with gallons of organic wine supplied by Leeds-based Vinceremos.  I can honestly say that that night was one of the proudest nights of my life.  To get that far we had achieved so much, and it was incredible to see so many people there to celebrate it with us.  It was a bit like getting married, but with the tills running.

Five years later it was all over.  This was what greeted me the day after we closed in 2004:

The signage from the shop, (which cost a small fortune) hacked down and thrown to the floor by the organic retailer that we'd invited in to take over our lease. (I'm not suggesting they shouldn't have done that - it was just a brutal image for 10am on a Sunday morning).  

It's a story I've told in parts before - but we basically couldn't make it pay - and eventually we went into administration.  From £250k a year sales of fair trade goods to nothing.  

We all have stories, events in our lives which shape us.  Trade for Change is one of my stories.  I learnt so much during my seven years there - as a volunteer, shop worker, board member, treasurer, and ultimately one of the people who sat at the table with the creditors to work out a deal to save the business.

It's why I am how I am.  I'm a great enthusiast for finding entrepreneurial ways to change society.  But I can't stand some of the nonesense that surrounds the social enterprise movement - the hype, the spin, the cosy consensus that appears to exist amongst many with influence in the sector.

It's why my to do-list for the blog this week involves reading the Coalition's new research about the state of the social enterprise sector, and finding out more about the failure of Secure, a social enterprise which was set up to deliver prison health services and which has now gone bust.  I don't deliberately seek to find fault, to be cynical, or to point the finger.  But if we are to really change society, we need to celebrate successes, but also learn from things when they go wrong, and challenge some of the exuberance.  

Comments

[Geof Cox]

I've often wondered Rob why I so often share your perspectives on social enterprise - but perhaps it's this: I too spent 8 years at the sharp end of running a retail/wholesale social business that went through some hard times, and eventually went out of business - a few years after I left so unlike you I don't know exactly why - but I DO know that the missing piece of the pre-perestroika-pravda 'only the good news' picture that the social enterprise coalition and others purvey is that social enterprise is DAMNED HARD!
Our fundamental business proposition is that we're going to compete in the market place with a higher cost base (added social value) than everyone else. Are we NUTS? Surprisingly not - because we do in fact make it work, and make a difference to many lives - as you did for many years, and continue to do in your present work.

[Nick Temple]

You know I agree with you Rob, and I agree that we need to learn from things when they go wrong: it's what our whole programme is based on (learning by doing). Not that that means we always do it brilliantly ourselves.

I'd only say that it does seem that the Coalition can be a bit damned if they do and damned if they don't. People (including me) say "it's all rhetoric, no reality", so they commission a survey + research, publish the findings, and people say "it's not comprehensive enough" or "you're highlighting the good stuff only". Both of those might have some truth, but it's got to be a step in the right direction surely (evidence-based)?

It is bloody hard, and I'm constantly amazed by the people we work with who do it and make it work. Let's challenge each other, learn and critique, but, as you say, not fall to finger-pointing and (only the bad news) sniping.

[Dave Dawes]

I agree that it is really important that failure is recognised, learned from and even (in a perverse way) celebrated. People often forget that 50% of start-up social enterprises fail in the first 4 years and yet there seems to be a reluctance to acknowledge this fact and learn from it. As someone who has had a social enterprise fail, I know exactly how Rob felt but I learned far more lessons from that failure than the preceeding success.

I wonder if there is a UK-centric viewpoint where there is shame and stigma associated with enterprises failing whereas in the States, this is seen as a badge of honour for entrepreneurs. I have certainly found venture capitalists to be more impressed by entrepreneurs who have had a venture collapse than those that haven't.

I remember when we were creating Social Enterprise ambassadors, my application was turned down because "I had been part of a failed social enterprise" and I find it ironic that one of the people that was part of that decision was involved in Secure :)

[Adrian Ashton]

When speaking at undergradute entrepreneurs clubs and societies, I often take a friend with me - an inflatable 'Scream' by Edvard Munch which quietly sits behind me until I reveal his symbolism at the end of the rabble-rousing speeches about how great social enterprise is by the local great and good (and you can always tell who hasn't set up and tried to manage a true social enterprise 'cos they don't have any scars or warning stories...), anways - Munch's Scream typifies that creating and managing a social enterprise can be extremely demanding and hard work and in all likelihood will affect your health at some point (just as Munch had a breakdown while painting his masterpiece), BUT... the legacty of our toil will hopefully be something that adds to the world in ways that inspires countless future generations.

[patrick Butler]

Rob, I read with interest your comments in relation to Secure Healthcare, whose demise was reported in Society Guardian last week. There was surprise in some quarters that we had run the story the day before Social Enterprise Day (and a Guardian Social Enterprise conference in Birmingham). The delicate implication, it seemed, was that somehow we were letting the side down. My response was the same as yours: of course we must celebrate success (and yes we do that in the media from time to time) but it is crucial that we take SE seriously: that means being prepared to cut through the hype and spin, of which there is arguably too much, and strive to report robustly and honestly about the real, practical challenges facing businesses in the sector. Yes, that can mean bad news. But most people I spoke to at the conference about this had a pretty and level-headed perspective on this. As Allison Ogden-Newton says on her blog (apropos our conversation on Secure): "Fair enough I think, when Woollies went down no one said that it marked the end of high street retailing."

[Martin Murphy]

I think this is the kind of discussion that should probably take centre stage in all of the current dialogue around Social Enterprise. I'd like to track down some examples for you but have other work to do (yes it's gone 9pm and still working!)

I love the spirit and energy around Social Enterprise but Geoff's point is absolutely right, it can be amazingly hard work and is not for the faint hearted.

I recently visited Seattle in the US for a break and visited the CEO OF a successful social enterprise whose model is being replicated across the US. His face when he talked about others wishing to start SE's is still imprinted on my mind. It reflected Geoff's comment "Are we nuts" and it was pained to say the least!

I believe the ground will probably and unfortunately be littered with failed social entrepreneurs and failed social enterprises and perhaps I'm one of them.

Saying that I love my work. I love the fact that through my hard work I might, just might, make a lasting contribution to making the world a better place and making it a better place in an area that I am personally passionate about, social inclusion, fairer societies and a fairer system of wealth distribution.

I used to be the kind of person who took whatever I could from society and contributed nothing because I viewed the way it all works as unfair. When I was 38, 11 years ago, I changed my life and more importantly my attitude. I decided it was time to opt in and contribute rather than take away, and I've been contributing for the last 9 years through my work in the homelessness sector. alot of that time has been voluntary.

I'm ambitious though. I want to make a big difference and I want to make a big difference to lots of people. Social enterprise gives me a vehicle to make a difference in a way in which I am not reliant on the charity of others. I contribute my own cash to it and if Network 2012 doesn't work for me I'll get up, dust myself down and start again. It is a fantastic vehicle for making the world a better place and I expect I'll be contributing in one way or another for the rest of my life. I'm happy with that and I'm just grateful I have found some purpose in life. Being cash rich cannot replace this sense of purpose!

There will be massive challenges but bring them on!!!

[MIke Chitty]

The rush to enterprise, social or not, will inevitably lead to higher business failure rates. We need to have a much more honest dialogue about the risks of enterprise. In most cases we should be begging people not to start - unless they have to - http://bit.ly/oShfZ

Enterprise is a double edged sword - it cuts both ways.

[Liam Black]

Mike, could not agree more. When we ran the Cat's Pyjamas sessions in Liverpool for would be social enterprise creators, Jeremy and I would do all we could to deter people.Why on earth would anyone bring their charitable cause into the merciless arena of a competitive market when there will always be someone to give free money to good causes?

[Craig Dearden-Phillips]

Hi Rob, Another great post that's got us all talking. Keep doing it man. I knew the Secure case quite well and while it was undoubtedly painful for Peter to be held up publicly the way he was, it does kind of come with the territory. We take the good publicity when it comes, we also have to cope with the bad. Secure went down, I believe, for two principal reasons. One was the crazy world of public sector health commissioning which makes it extremely difficult for non NHS providers to grow. The second, from the limited amount I know that it wasn't easy for Peter to get the right people in the right holes in good enough time. Pete is an entrepreneur and a business at £4mk needs solid, MBA carrying types to put in the plumbing. Finding and affording these people just when you need them most isn't easy - I know this having run my own organisation close to the wire a few times before I found them!

[Liam Black]

Secure's experience should cause a pause for thought amongst the SE spin industry and its claims that SE is a special remedy for public service delivery. There is little evidence that this is the case and the capital and staffing issues which Craig mentions bedevil all SE's. I ran public sector contracts when I led FRC in the 90's and early 2000's and it was bloody hard even with a highly supportive commissioner and plenty of cash in the bank and the right people running the business. In the much more complex and politicised NHS any start up is going to really struggle. The work that Nesta - where I am trustee - is doing with the Young Foundation on SE's in the NHS also shows how difficult it is and there is no rush of people wanting to pick up the social enterprise option.I dont blame them. Added to the financial and people challenges they would also have to deal with the wholly unreasonable expectations of the supposed miracles they can achieve through SE. Cuts, changing political masters, and increasing demand will only make this terrain even more challenging for those wedded to the not for profit social enterprise business model.

[Rob Greenland]

Just a quick note to say thanks for all the comments. Patrick's point about getting the vibes that he was letting the side down a bit by reporting the Secure story the day before Soc Ent day is key here. I don't point to where things haven't worked in a sneering Daily Mail way. I'm interested in talking about them because I think that by learning from where things go wrong we'll have a much better chance of changing society.

There was a quote in Patrick's piece (linked to in my post above) from someone in the NHS who suggested that all 200 of the social enterprises who they had invested in were doing well. A 100% success rate. Unbelievable! I'm involved in a project which has invested in social enterprises in social care, and I would imagine that our "success" rate is probably somewhere nearer 50%. That, as anyone who knows anything about business will tell you, is pretty typical. There will be people who make political capital out of the 50% figure, but I'd much rather be honest and learn what we can from the ones that haven't worked out as planned. That way I think we'll invest better in the future, and we'll support people better in the future. And we'll have better social businesses.

[Liam Black]

Im at airport so have time to meddle here! This letting the side down business needs to be knocked on the head. Honest discussion is critical and must be given an airing. It is a shame that it falls to bloggers like Rob to lead this and not the SE intermediaries and official propagandists of SE. I fear this is because they have taken the taxpayers shilling and therefore cannot voice the truth of the "social enterprise" sector which is that it is a messy, contradictory,by turns inspiring, by turns infuriating spectrum of organisations, some of whom are true business pioneers, most are not very innovative at all, many struggle to make payroll and few have the capacity to get to the scale of impact that is required in markets like the NHS. Just like private sector sme's! I have always contended that social entrepreneurs must be our own fiercest critics and never believe the hype because reality will out like it has with Secure.Keep it up Greenland and Butler! Anyway off to Dhaka now to have a look at the Grammeen/Danone joint venture, where two very different organisations have teamed up to create something neither could have done alone.

[Rob Greenland]

Thanks Liam. I think you're right, it is a shame that it falls to a blogger like me to be the one who stimulates this kind of debate. (Although it's a benefit to me of course, as my recent number 1 in the blogparade testifies:

http://bit.ly/77yp5g

Maybe a new person at the helm at SEC will move things on.

It does get tougher to be critical the closer you get to Government (not that I know!) but we have to remain critical as well as enthusiastic.

The stuff in the SEC research (which I haven't read in detail yet) about optimism is interesting. Soc ents are more optimistic than SME's apparently. Is that necessarily a wholly good thing? Maybe some of that optimism is because our "time has come". Just like our time had come with the fairtrade shop - but being flavour of the month doesn't pay the bills on its own.

[Nick Temple]

It's true about the optimism, Rob: we find that in our surveys as well. I asked about 400 SSE and UnLtd soc ents about how the current economic climate had affected them, and it had strengthened their resolve and they were MORE optimistic. I don't know whether that's about feeling that traditional economy has failed (therefore our time has come) or whether it's the passionate / purposeful streak that marks them out...or maybe I'm just a lot more cyncial and jaded.

I couldn't agree more with Liam about critique as well: constructive criticism and learning from mistakes is the only way we get better. There's an interesting post on it here which, although largely about US / philanthropy, is relevant: http://bit.ly/7aPfZ0

Like you Rob, I often get the best responses to the most challenging, honest posts, as does Rod Schwartz. Personally, I think social entrepreneurs build legitimacy, trust and credibility through authenticity and transparency and proving the quality/impact of what they do. And that transparency is at least partly about honesty about what's gone well and not gone well. The same is surely true for the movement as a whole.

[David Floyd]

Well, the claimed 100% success rate for NHS social enterprise investments might be partly down to the fact that the policy is fairly new and spin-off SEs get an uncontested contract to begin with.

In defence of 'the lobby' it is part of their job to push the idea of social enterprise but, in the long term, it isn't in anyone's interest to by hyperbolic about what's likely to be delivered in practice.