The Social Business

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. 

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.  

Grow it - and they might not come

It's always interesting to confront people with their worst nightmare early on a Saturday morning.  

I ran a marketing workshop on Saturday on behalf of the Soil Association, for a group of Community Supported Agriculture (CSA) projects.  I'm a big fan of the CSA approach - the main idea being that local people share some of the risk with the grower by paying up front, in return for a regular share of the harvest over that year.  I was a member of a CSA at Swillington Farm - and they've also recently set up a CSA arrangement (to rear a pig) with Salvo's -  a local Italian restaurant which you may recently have seen on Gordon Ramsey's F Word.  There are plenty more businesses which have adopted the model - including a Community Supported Bakery which I wrote about here.

The marketing workshop was themed around the title - Grow it - and they might not come.  This in turn was inspired by the Kevin Costner film Field of Dreams - in which rookie farmer Ray Kinsella hears a voice which tells him to build a baseball pitch in his field.  The voice tells him "If you build it, he will come" - and sure enough the ghost of Shoeless Joe Jackson and seven other Chicago White Sox players turn up to play on his field.

As you can imagine people thought Ray was nuts.  People who want to set up CSAs sometimes meet with a similar response.  Getting people to pay up front to buy veg from you - when all that currently exists is a sketch of your planting plan and a seed catalogue - can be a challenge.  That's where an effective marketing plan can help.

A do-able marketing plan for your CSA

View more presentations from robg.

I talk about marketing as building relationships with customers.  This concept sits well with CSAs.  You need to build relationships if people are to trust that you will grow food for them.  I take people through my step-by-step plan - which requires you to think carefully about your business - and in particular your customers - but doesn't require you to have any formal marketing background.  

During the workshop we split into groups and each group creates a plan - using an innovation which, even if I say so myself, I'm very proud of - upcycled wallpaper - used in place of flipchart paper.  £2 spent in Oxfam has to be better than £10 spent in Staples, surely?

 

Aside from the eco-benefits (which won me early greenie points with my organic audience), I'm a big believer in thinking sideways along a page, rather than down a page.  There is something about a portrait flipchart which makes you anxious - you get to the bottom of a page and you start losing the will to live - because the stuff at the bottom feels weighed down by what's gone before (and you're now kneeling on the floor, writing like a four year old).  You're also wondering whether to squeeze a few more words on - or start a new page.   Whereas, with a roll of Upcycled Wallpaper  Flipchart ^TM you can keep on writing - and keep referring back, drawing lines where there are connections, etc etc.

The risk I take with this workshop is that I spend very little time talking about the things that some people expect me to talk about.  Some people want clear guidance - a top ten of the best ways to market your business - that kind of thing.  I don't believe in that stuff.  As my Iced Tea slide suggests, what works in one place doesn't necessarily work in another.  That's why I talk people through what they need to think about - so that they can then make their best judgement about what it's best to do.  That way, you also start thinking about ways to market your business which don't cost a great deal of money.

My four year old son was a bit confused on Saturday morning, given that I was going to work.  He asked me what I was doing.  I told him I was running a workshop.  

"Is it like Santa's workshop?"  he asked.   

"Son", I said, "Today I will give people a gift greater than any that Santa could give.  A do-able marketing plan."  He looked at me a bit confused, and carried on eating his breakfast.    

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.  

What matters more - impact or structure

I'm on a bit of a roll writing about social impact at the moment - here's a post I've written for the UnltdWorld blog as part of their Shout Out for Social Enterprise series - questioning whether a focus on certain business structures (four legged company limited by guarantee good, two legged private business bad) takes us away from what we should be concentrating on - does this business make a difference?  

State of Interdependence

Lots going around my head this morning but not much time to write.  Given that there's lots going round my head this may not be the most coherent post, but here goes.

I'd like to point you to a couple of interesting blog posts from the RSA.  In the first, from Matthew Taylor, he describes himself as "an enthusiastic collectivist but a reluctant statist."  It's a neat phrase, which I think also gives a good idea of my position too.  

One of the myths of affluence (or at least one that I've swallowed) is that greater wealth can lead to greater independence.  You basically don't have to worry too much about things as long as you've got a good bit of cash to buy your way through life. You can buy your independence - and, it's assumed - your happiness and wellbeing.  

In thinking more about climate change over the last few months, it's struck me that if we are going to build an economy and society which have any chance of survival, we need to better recognise our interdependence. That's true on a global scale - but also on a local scale.  We won't be able to change things on our own. Hence my interest in the collective - but my scepticism about the role of the state.  

Following on from this I found this post from the RSA Connected Communities blog interesting.  The post looks at community responses to climate change, and includes this quote from an RSA Fellow:

The future is certainly looking ominous. But I have experiences that when you join together with others to do something about it, something extraordinary starts to happen. You might start with something that seems small or insignificant in the face of the huge scale changes that are needed, with “ordinary” people, not experts, and no idea how to begin. But in the process, such groups can come up with really robust ideas and initatiatives that start things moving and create a momentum that gradually infects the wider community.” 

It made me think again about the Borrowed Planet group I'm part of, and also about Progress School, where I'm going this afternoon.  Should my aim in life be to become independent?  Or happily interdependent with others?  And does the State have a role in helping me and others to be happily interdependent?

The People Versus

I was back in Liverpool at the weekend to watch the Cup Final with the Blue half of my family.  Sadly the Chelsea Blue triumphed over the Everton Blue.  There were a few sore heads on Sunday morning.

Everton - the so-called People's Club - versus Chelsea - the club bankrolled by a Russian billionaire.  The game came a few days after Man United - owned by billionaire Americans - played Barcelona - a club owned by its fans.  

Barcelona's triumph made some wonder whether this was the start of a new world order - both in football and the wider economy.  Here's a letter from saturday's Guardian from Sheffield Hallam University academic Dr Rory Ridley-Duff:

Much as I am saddened by the sporting loss of Manchester United to Barcelona, I am heartened by another victory for co-operative ownership and social enterprise over private sector capitalism.  Will historians record this as a turning point in our economic history?  Will Francis Fukuyama be forced to revise his thesis on the "end of history"?  Barcelona's supporter-owned football club stands as an inspiration to co-operative entrepreneurs and social enterprises around the world. 

I'd like to believe as much as Rory does in the victory for co-operative values,  but sadly, as is usually case, I think the reality is a bit more complicated.   

Barcelona is owned by its members, and there's a strong democratic structure which elects the club's President.  Their link-up with Unicef is admirable - given that they could make a fortune out of shirt sponsorship.

But Barcelona aren't quite as virtuous as they might seem on the surface.  As David Conn points out here Barcelona (and Real Madrid) dominate in Spain partly because each club sells its TV rights exclusively.  So Barcelona make an absolute fortune, whilst the likes of Getafe will make hardly anything at all.  The Premier League is far from perfect (it was set up partly to stop sharing money with the lower leagues) but at least collective selling of rights means that the TV money is shared a bit more equally between the 20 clubs.  Co-operative values seemed to get forgotten when Barcelona decided how to negotiate TV rights.

Barcelona's choice not to have a shirt sponsor is also, of course, a great piece of marketing.  It allows them to develop the mythology of a club unsullied by corporate greed - whilst it exploits the Barcelona brand with 26 corporate sponsors who pump millions into the club - but who don't get their name on the shirt.   

My point is that I'm as pleased as anyone that Barcelona won on Wednesday, partly because I buy into the mystique of the club and its history as a symbol of Catalan pride - and I do like the fact that they have a different type of ownership.  Yet whilst Barcelona certainly show a better way to run a football club, it's far from perfect.  If we're looking for inspiration, we should perhaps take what we can from Barcelona, but continue to search for better ways to run football clubs.  

The Wordle Economic Forum

I've found a new toy to play with on the internet - Wordle.  It takes text and generates a word cloud.  

The wikinomics blog pointed me to the opening speech at Davos yesterday - so I thought I'd try Wordle out - here it is:

You can read the whole speech here - it's not long.  I can't say I hope for much from Davos, but it's interesting to see some of the words and phrases which were prominent in a short introductory speech - honesty, transparency, holistic, ethical value base, moral reformation, co-operation.  

Evan Davis has also commented on the humility that he's witnessed at Davos - and how many present have had the intellectual confidence knocked out of them.  Good, I say.  Their intellectual assumptions - informed largely by the MBA brigade - are no longer wanted round here.   

It's good to share, isn't it?

Times are tough, and all the talk is of tax cuts to help us all make ends meet.  But is there an argument to say that now's the time to increase the amount we all pay into the pot?

When money's tight, it makes sense to share.  A few years ago I was part of an informal car pool with a group of friends.  For some of the people in the pool, it was their only realistic chance of regular access to a car.  For the rest of us, it saved us money and helped us to do our bit for the environment.

And over the years I've seen my fair share of tool sharing schemes on housing estates.  Instead of everyone owning a lawn mower, tools are bought and then loaned out when people need them.

You could see public services as one big tool-sharing scheme.  Instead of each trying to do everything alone, we pool some of our money, and services are delivered to us all as and when we need them.  Theoretically, society becomes a bit more fair along the way, as people are able to access the tools based on need.

Perhaps tool-sharing schemes give us a good pointer to how public services go wrong.  They seem like a great idea.  But they're usually tool-re-distributing, (benefactor gives tools to the needy)  as opposed to tool-pooling (sharing what we've already got) - so there tends to be a lack of ownership of the service.  You can't always get the tools when you want them (it's sunny on Sunday - no-one's in the office - and even if they were - everyone wants the lawnmower).  And then, someone abuses the service - knackers the strimmer - and the Committee close ranks and only hire the tools out to people who can fork out a £20 deposit.  Word gets round, someone shouts at the Chair of the Committee in a public meeting, the service gets suspended and the tools gather dust in the corner.  

If I was asked to put money into a tool-hire scheme, I'd think long and hard about it.  I'd also be wary about paying more tax to fund public services.  Why?  Because I'm not convinced that the money would be well spent.  That's a real shame.  I read about Sweden and their high taxes at the weekend.  The picture that was painted was of a society where people are happy to pay high taxes because they see the benefits.

We went to Stockholm when Francis was 9 months old.  I've never been to such a healthy-feeling place.  We saw the place through the eyes of parents of a young child, but surely how a society treats its children is a good indicator of the health of the nation. We noticed free travel on the bus if you've got a child in a pram (take note Leeds Transport Planners), lifts and level access at every metro station, and loads of people out and about with their young children - thanks in part to generous maternity and paternity leave.  

I'm interested to know why it's so different in Sweden.  Are their services better run - or do they just have more money to spend?  Have they entered the much-heralded post-bureaucratic age?  If you have ideas, please let me know.  

For sale - large property, enormous garden, generous seating area

If you ran a bank, and had loaned a load of money to a football club, who then couldn't pay it back, what would you do?  

Obviously if you re-possess a house, you can usually find someone else who's in the market for buying a house.  But selling on a stadium - that would challenge the most florally-linguistic estate agent.  

I'm worried about Liverpool.  We've got our best chance of winning the league for years, and it seems that the biggest danger  is that the club might go bust before the all-important title run-in.  

Keith Harris (no, sadly not that Keith Harris) said earlier this week that he's worried about Everton and Liverpool, because, as he puts it, "The demographics of Liverpool as a city are not hugely compelling."  

Liverpool's problem is that Gillett and Hicks, Liverpool's owners, took out a £350 million loan when they bought the club, and that loan is due up in January.  Most of the risk lies with club - even though Gillett and Hicks would stand to benefit most if the club became profitable.    The two banks - RBS and Wachovia (Wachovia - who are they? Exactly) - aren't flush with cash and could well ask for the money back in January.  There doesn't seem to be much spare cash floating round the economy to lend to a business as other-worldly as a Premiership football club - so where's that money going to come from?

There's a fan-led initiative called ShareLiverpoolFC which would like fans to own the club - a bit like they do with Barcelona.  When it was first launched I was enthusiastic but my head told me that they had no chance.  Now I think things are very different.  The days of cheap credit are gone, and with a bit of luck, so will Gillett and Hicks before long.  But the days of small-scale investors - clubbing together to buy football clubs - have arrived.  Supporters Trusts now own a number of football clubs in this country.  

The demographics of Liverpool as a city may not be compelling to Harris, but the case for fan-ownership is more compelling than ever.