The Social Business

I'm now blogging over at www.thesocialbusiness.co.uk

After 3 years of blogging here I've finally outgrown Typepad and have moved the blog over to a new site - http://www.thesocialbusiness.co.uk/blog/

This blog - and all the previous posts - will stay here for the foreseeable future - but from now on I'll be writing on the new site.

The idea behind the move is to bring my blog, information about what I do, and my free resources - all onto one site.  Up to now they've been in three different places - which doesn't make a great deal of sense.

If you subscribe to the blog in a Reader, you should be able to subscribe to the new site - it's a Wordpress-based site.  

I don't want to lose you as a reader - so if you do have any trouble accessing the new site (or commenting, or whatever) please get in touch.  

Outsourcing and the pursuit of shared goals

There was a good article in the Guardian yesterday about how public sector spending cuts mean boom times for outsourcing companies such as Serco.  

The much-accepted logic is that outsourcing saves money.  Yet the Audit Commission has suggested that councils may be overstating the savings that come from outsourcing.  More importantly, from my point of view, is this:

[The Audit Commission] said that it had found evidence of councils having difficulty with managing the complexity of contracts and assessing performance.  "Some councils have relied unduly on the spirit of partnership, believing that contractors would pursue shared goals without incentives to do so," it added.  

We've all seen examples (not just in the public sector) of business relationships where the language of partnership has been spoken, but the reality has been far less collaborative. You could also suggest that the belief  that contractors would pursue shared goals - without explicit agreement on how that would be done - is pretty naive.  And, ultimately, poor use of public money.

I think there are opportunities to do things better here - and there's a clear role for social enterprises.  I'm working on a local authority project at the moment where, when we drew up the tender documents, we agreed clear social objectives that we wanted to see achieved.  Then, with the people who have won the contract, we have agreed how achievement of those objectives will be monitored.  Progress on achievement will form the basis of the contract-management meetings.  

The alternative would have been a dry, outputs-based process which loses any sense of the real change that you wanted to achieve through tendering out the service in the first place.  Instead, by making it clear that we want to achieve certain things, then working together to agree exactly how that will be done, we should have a better chance of achieving what we want to achieve (and of course, manage the relationship with the contractor).

I'm not making big promises about how much we'll achieve, because social impact reporting can be hard work, and it's the first time we've done this.  This is why I go to Social Impact Camp - to try to work with other people on this issue.    But for me the clever thing here is that we've integrated social impact reporting into a process that was happening anyway - the contract management process.  So it's more work, but it's added on to (and could eventually replace) something that was happening anyway.  

Is that an incentive to pursue shared goals?  I think you could say it is.  It's certainly making it explicit that we want to see certain things achieved - and it should also give clear direction to the people delivering the contract.  In itself it won't  make the contract a success, but it at least gives us a framework for judging success - and for trying to improve things in the future.  

The power of networks

Busy day today. On the train home from London now.  It started with us not knowing if our house sale was going ahead as planned.   We also didn't know if we had somewhere to live next week.  It ended with an exchange of contracts on our house and our offer accepted on a house.  We've also had a few offers of places to live for the 8 weeks we'll be between houses.

I chatted with a friend about it all this morning.  It's been really stressful - many of you will have been through similar house-moving difficulties.  But we talked about the faith we both have in our own ability to work things out, and that with help of our friends, family and contacts, we trust things will be OK.  That, amidst all the stress, kept me going.

What I don't have such faith in is the world I inhabit.  What do I mean by that sweeping statement?  It's not that I'm a post-Thatcherite individualist.  It's more that I don't have confidence that the State will always see me right.  Or that the businesses that I buy from have really got my interests at heart.  Or that the people who manage the economy will manage it in a way that will ensure future prosperity. Or that our politicians will make the right long-term choices to tackle global poverty.  Or that my fellow UK citizens will see beyond the short-term and begin to live more sustainable lives.   I understand these are big generalisations, but that's how it feels.

I suppose the point that I'm making is that it is through networks that we will create change.  Whether that's small things in our own lives (finding somewhere to live) or big things as a society (stopping runaway climate change), we will make progress with other people.  It's obvious really, but sometimes forgotten.

I was at the second Social Impact Camp this evening.  That's another network where I thing good things can happen.  We are a group of people who want to get better at planning for, achieving, measuring and proving the social good that comes from the work that we do.  Each of us on our own could try to work this out, but would probably struggle, because it can be hard work.  But as a group I think we'll make good progress.

Are Tory co-op plans "clearly a social good"?

I've been enjoying witnessing the Co-operative Labour movement making it abundantly clear that they are the real co-operators over the last couple of days, since the Tory announcement of their plans to encourage co-operatives and social enterprises to deliver public services.

I sent my previous piece on this via Twitter to Phillip Blond, the architect of the Tory plans.  Here's his reply:

Thanks - will read and study.  But surely just a negative reaction is wrong and a misaligned reflex.  This is a social good. 

This is a social good.  Blond clearly doesn't lack confidence. 

First things first, I haven't really read any of his work in any detail, or read the detail of the Tory co-op plans.  I will do as soon as I've moved house and unpacked the boxes in ten days time.  But I've kept an eye on what he's been saying in the newspapers and elsewhere.

Secondly, I think it is a fairly negative piece so I take his point.  And that's a fault of mine - I try hard to write positive stories, and to be constructive, but I know that I can dwell on the negative sometimes.  But show me a writer who doesn't.  It's easy writing.  And there are downsides to be told in a social enterprise sector which sometimes only tells the good stories.  And I enjoy having a go at George Osborne. 

Yet I'm interested in Blond and his Red Tory ideas.   I'm also intrigued by his background.  Like me, he grew up in 1980s Liverpool and he says the impact of Thatcherism on the city has been a big influence on his life and work.  I'd say the same.   I can see how to this day Thatcher's policies - and the Militant response - did a lot of damage to my home city, and that legacy is still with us.

But I can't help but question the claim:  this is a social good.  Says who?  Who's to say that opening up the market for public services to social enterprises won't create a massive amount of damage to a fragile, skint society?  Or that the real impact of opening up to social enterprises will be to create a market in which the private sector will eventually dominate, thus (potentially) further alienating local communities?  Or that the undoubted social good that will come from the many great social enterprises that will deliver services will be counterbalanced by the regular bailouts of the ones that fail?

Let me finish on a positive.  I, like many other people, see the damage that poor public services do to individuals and communities.  I also believe that we need socially enterprising approaches to changing society - and some of those will come in the form of social enterprises.  So, I'm going to try hard to be constructive, as well as critical, in the debate about mutuality and public services.  I hope the people who seem to only see the upside of these proposals - who see them as a clear social good, might also peer over at the slightly less green grass on my side of the fence. 

Accountability and Impact

Two big words, which can often lose their power through over-use.  But being accountable for what your social business does is important.  Planning to have positive social impacts - then keeping an eye on them - then telling people about them - is vital too.

I'm hoping that once the Social Enterprise Mark settles into its stride that it will make a positive contribution to all of this.  I'm intrigued to find out more about their criteria around impact.  On their site it says:

Can you provide externally verified evidence that you are achieving your social or environmental aims?

In practice, social enterprises tend to do this by producing a social audit.  I've written before about how I think that we need fresh approaches to accounting for our impacts.  It's the second Social Impact Camp tomorrow (please come along if you're interested in all of this) - and I'm going to talk about the ideas I've had, and the work I've done, around trying to find ways to plan and record impacts that aren't as onerous as some social audit systems.  

At Voice a couple of weeks ago I asked a question in the plenary about whether the Panel felt that current social accounting systems were fit for purpose for the majority of small to medium sized social enterprises.  There were some interesting responses - with the consensus being that the current approaches have significant limitations.  Third Sector magazine have reported the discussion here.  

What will be the approach of the Social Enterprise Mark Company to this issue?  Will there be a working towards clause which allows businesses which are in the process of producing social accounts to get the Mark?  Or will it be a straight no to any social enterprise without externally verified evidence?  I'd be worried about my targets if the latter were the case.

Hopefully they can help to stimulate discussion and fresh approaches to this.  Much of the noise around the Mark so far has its roots, in my opinion, in the gut feeling that a lot of us have that profit distribution issues are of far less importance than the stuff around effectively planning for, and proving, your impacts.  It may help to move debate on if they start talking more about this in the months ahead.   

Osborne, Co-ops, Free Schools and Privatisation

George Osborne was on the Today programme this morning talking about Tory plans to open up the delivery of public services to social enterprises  - in particular, it seems, to co-operatives.  I assume Steve Hilton has decided that we're not awake enough to understand what a social enterprise is at 7.10am (he's probably not wrong), so he instructed him to just keep saying the word co-operative as often as he could in three minutes.  It is a lovely word after all.

I have written a lot about how public services need to improve.  I am also an enthusiast for socially enterprising approaches to delivering services.  But I'm suspicious of political enthusiasm for social enterprise.  In this case I'm picking on the Tories, because I find them (and Osborne in particular) unconvincing, but I'm pretty sceptical about Labour's motives in this field too.  

There's something of the four legs good, two legs bad dogma about politicians embracing social enterprise. They are so desperate (as they should be) to work out ways to make the UK a better place to live that they can end up believing that transferring services to social enterprises will magically make things better. They can definitely make a big difference if the social enterprise is good at what it does.  But they are not inherently better at doing things than other organisations or businesses.

I also have a question about the likely capacity for social enterprises to deliver services.  I know all the stats about how the sector is expanding, but I'm also aware that not everyone is cut out to be an active member of an employee-owned business, of the kind Osborne is proposing.  I'd be a rich man if I had a pound for every public sector employee who's told me that they're hatching plans to set up in business, to break free from the dead hand of bureacracy.  I'd have about £3 if I had a pound for every one that's done it.  Osborne said this morning that services will only be transferred to co-operatives if that's what staff want.  I think that, sadly perhaps, is a big if.  

So, if I'm right, and the public sector won't be transformed by hordes of public sector workers all desperate to set up co-operatives, how will we find different ways to deliver services?  Enter the private sector - particularly if the Tories get into power.  I suggest that politicians will keep talking about the opportunities for social enterprises, pointing us to that lovely social enterprise which collects bulky waste in Liverpool, whilst plenty of the opportunities will actually be gobbled up by the private sector, who will soon speak the language of social responsibility with more fluency than your average social entrepreneur.  

I do think that will happen more quickly if the Tories get in.  Read for example this account of a recent Politics Show about Michael Gove's Free School plans.  They interviewed Tory MP Tim Yeo, who made it clear that he thought that the Free School plans were flawed - not because schools should not be independent, but because the organisations that will run them won't be allowed to make a profit.  One rogue Tory does not a party make, but I very much doubt that Yeo is alone.  

Gove wouldn't dare allow idea of private-sector-run Free Schools to get in front of voters.  But two years into a Tory government, with restless right-wing backbenchers giving Cameron grief, you can well imagine that things might change.  Co-operatives'  real value to Osborne and his colleagues may be to clear the way for further privatisation of public services.  

Gordon - this is how to use YouTube to connect with voters

It's election time at Leeds University Union - one of the biggest social businesses in Leeds.

I think student unions are fascinating organisations.  Every year a group of seven or eight fresh-faced young people with various agendas and little experience of what those of us in work may call the real world take responsibility for  a multi-million pound, multi-stakeholder business.  And then twelve months later they all move on.  

The best student unions work hard to involve their members - and take democracy and accountability very seriously.  Take - for example - LUU's pioneering stance on phasing out bottled water sales in their shops.  

Let's hope our country's politicians find ways to connect with us once the election campaign begins.  I doubt they'll do anything quite as effective as this.

Putting your money where your mouth is

Here's an interview I did earlier this morning with Helen Seymour, from Headingley Development Trust.  

(Apologies for me muttering away in the background from time to time - I keep forgetting not to do that)

The Trust takes a socially enterprising approach to making Headingley a better place in which to live.  They recently supported a community buy-out of a local healthfood shop, and they are in the process of converting a former primary school into the Headingley Enterprise and Arts Centre.

I came across them through their relationship with Swillington Organic Farm.  Around 30 Trust members have committed to buy chicken and pork from the farm over a 6 month period - and have paid up front.  This gives Jo, the farmer, confidence - and cash - to rear the animals, in the knowledge that she has a market for them.

I really like this kind of business relationship.  I think we need more of this kind of thing.  Running a small business - particularly one with a lot of up-front costs and a perishable product - is an inheritently risky business.  It's good to find ways to share that risk a bit.  

If you'd like to know more you can get in touch with the Trust.

I think I'm washing my hair that day

I saw this billboard ad today on my way to a meeting:

 

I've got a bit of a thing about the overuse of the word "Event".  It usually means that the last thing the event in question will resemble is any kind of event.  It tends to be a word that is used when you're really not sure what the point of your event is.  So you call it an event.

I can be guilty of having a go at Local Authorities without real justification at times, but I have to say the inner taxpayer is feeling a bit annoyed that some of the cash earmarked for my part of Leeds has gone on such an unremarkable piece of marketing, if you can call it marketing.  Are local people really going to think "Hey, we're free on Saturday, let's go to that Voluntary Organisations Market Place Event."

I hope it's an eventful event.   I'm busy that day in any event, so I'll probably never find out.  

*Other vehicles to create social change are available

I've just put Frank to bed - far past his normal bedtime.  He came with me this evening to a talk by business author and social entrepreneur Robert Ashton.  I like Robert - he's a human-scale entrepreneur on a talk-circuit dominated by supposedly super-human entrepreneurs who most of us find it hard to relate to.  He talks a lot of sense.

He also had a picture of Frank in his presentation, much to his delight.  I'd seen Robert at Voice10, and I'd told him that I was bringing him along - and his photo turned up by the power of Facebook, to illustrate a point about what the world may look like in 2100.

Robert was talking about social enterprise as tomorrow's enterprise.  Someone asked a question at the end, which I've summarised here:

"When we tell people that we run a social enterprise, they don't understand.  They just say, "Why don't you just run your own business?"  We say it's because we care, but that doesn't seem like a good enough answer.  What's a snappy way to tell people why we run a social enterprise?"

I'm sure it's a question that many people ask - why don't you just set up your own business?  I think it's a valid one, and it's one that I ask people when they come to me, asking me to help them to set up a social enterprise.  It isn't for everyone.  It also isn't the only business model for creating social change.  

I imagine there are value judgments in the statement "it's because we care".  The assumption is that people who don't set up social enterprises don't care - they're just fat cats out to make a fast buck at the expense of everyone else.  Those people exist - but there are also plenty of people who run businesses which aren't structured as social enterprises (as we tend to define them in the UK) and who are doing good.  And I think there are plenty of others who are coming round to the idea that they could do more good in their business, but aren't wholly sure where to start.

This is one of the things that concerns me about the Social Enterprise Mark.  The world's in a right mess.  And the social enterprise movement seems to be setting itself up as THE vehicle to get us out of this mess.  The Mark will, in their words, represent businesses working for social and environmental aims.  

Except it doesn't.  It represents businesses working for social and environmental aims which spend at least half of their profits on socially beneficial purposes.  So there's a value judgment there about profit, which rules a lot of us out.  

I think in many cases profit-distribution and ownership are red herrings.  Often they make sod-all difference to how much change is created, and, at times, can get in the way.  At other times they magnify the change created by the business. So, for example, I will soon set up a business as a social enterprise - because I think that particular business will achieve more good structured that way.  But social enterprises aren't (as I think the questioner above is suggesting) inherently good - or necessarily better at doing good than other businesses.  

I'd be right behind a Social Business Mark which was awarded to businesses which have clear social aims, and which provide externally verified evidence of their impacts.  I'd even be happy if the businesses which had certain "social enterprise" structures got a further tick in the box.  But given that my interest is in social change, and is not ideologically driven by a dislike of profit distribution, I am finding it hard to get enthusiastic about the Social Enterprise Mark.