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.  

Social realism

I ran my final workshop today as part of a Charity Bank in the North programme of support.

The workshop helps third sector organisations to consider ways in which they can generate income, and, to use the much-used phrase, work towards sustainability.

Opportunity Knocks

View more presentations from robg.

Picking up on the comments on the last post,  it's clear that social enterprise isn't for everyone.  The issue is that it is often seen as a way out of a sticky situation.  As our experience at the fairtrade shop illustrates, trading can (of course) get you into a stickier situation than you were in the in the first place.  So whilst it's the right thing for some to explore, it's not the magic bullet that it's sometimes seen to be.  It's always worth considering why you are being encouraged to set up a social enterprise.  It might be a genuine desire to encourage enterprising solutions to intractable problems.  Or it could just be a way to pass the buck and not fund an activity which should be funded. 

The main message in my workshop is that you've got to take responsibility for the situation you're in.  To start with we do an exercise which looks at the context people find themselves in.  What's happening in their organisation?  Their sector? For the people they serve?  And in wider society?  This is really useful and brings out some common issues - a push towards partnership working, increased unemployment, an imminent change of government, funders who don't fund what we think needs doing, people who won't pay for services, etc etc.

These are all important issues - but my next question is:  Given all that, what are you going to do about it?  It's comforting to point to external factors which stop you from being the kind of organisation you'd like to be.  But I'd argue that the organisations that will be sustainable - in other words those which will keep delivering benefits - will be the ones that understand the context they're in - and take decisive action.

That's why we follow that exercise with one where we look at an organisation's current activities - to consider each activity in turn in terms of its social impact, and its contribution or otherwise to the financial health of the organisation.  The idea here is that you should start by looking at what you're already doing - and seeing if you can improve that - rather than start with a search for the killer idea.  

Only then do we consider new ideas - with a quick assessment of each based on how risky/difficult they appear to be. In broad terms we assume that a new service, sold to a new customer group, carries more risk than sticking to your knitting and serving the people you know.  That doesn't mean that you don't develop new ideas - but you should go into any new enterprise ventures with a clear sense of the risk involved.  Once you've done this work, you may well come up with two or three ideas which feel more do-able - and they may be the ones that you consider further - with a feasibility study, a plan or a bit of test-trading. 

I've enjoyed delivering the workshops over the last few months.  Like in the rest of my work I've tried to bring a sense of realism to the issue of sustainability.  If you're in a funding crisis, and you've never set up a social enterprise before, is now really the best time to do it?  You might feel like you have no choice - but if you are considering setting something up, at least go into it with your eyes wide open.  

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?  

Not everything in black and white makes sense

It seems that not everyone shares our enthusiasm for social enterprise.  First there was NAVCA's boss twittering away about his doubts about the good ship #socent, and now Social Enterprise Magazine assistant editor Chrisanthi Giotis has told us about how she struggles to explain what she does to her friends.

I sympathise with Chrisanthi, as I find it tough to explain what I do half the time. I also share her enthusiasm for keeping it simple. However I'm not so sure about whether her decision to start talking social enterprise being about "really creative people who base all their business decisions on generosity, not greed" is really going to help that much.

It's a nice image, and one which her friends will probably quite like.  But is that really what it's all about?  I class myself as a social entrepreneur and if I were to write down what my values are, I'd probably include "be generous" amongst them.  That's why, for example, I freely share all my business planning resources.  But do I make such black and white decisions, where I choose generosity over greed?  

I'm sure Chrisanthi was partly writing on the UnLtdWorld blog to be provocative, but there's a broader point here about why many people either don't understand what social enterprise is all about, or are sceptical or even hostile towards it.  I think it's partly because we over-complicate it - and yes, I'm going to revert to type and blame bureaucrats and politicians for that.  In this country we've ended up being fixated on structures - so such and such an organisation is a social enterprise because they're constituted like this, whilst another isn't because they've got a different type of structure. 

Social enterprise, in my opinion, has been hijacked by people who want to find a cuddly middle ground between a sclerotic State and a rapacious private sector - both of which of course are caricatures as comical as the ever-generous social entrepreneur.  That's why I'm interested in social business - businesses that exist primarily to achieve social impact.  Some of them distribute profits, others don't. But they nail their colours to the social impact mast. When you keep it simple like that I think people can relate to it, and also challenge any business which they don't think is having the impact that they say it has.  But of course, that won't suit the UK social enterprise support industry.

A story to finish:  I heard today of an entrepreneur (I'll keep it vague to protect them) who has a great product which delivers tangible social benefits.  Primary customer is the public sector, but he wasn't getting anywhere with them.  He was advised to become a CIC.  He's now got more work than he can cope with, because his public sector buyers feel comfortable buying from a social enterprise.  What's changed?  Nothing much - other than the legal structure he works within.  I don't understand that - so I don't see why anyone else will either.  

What does the SE100 Index tell us about social enterprise?

I did something new this week - I followed a conference on Twitter.  

Thanks to @SchSocEnt and @SEMagreporter I kept an eye on what was going on at Good Deals 2009 - the national social investment conference.  

I learnt, amongst other things, that plenty of people are keen to see some lighter touch social reporting, and that Liam Black had a dance on stage with Jeremy Nicholls.

I also learnt about some new research from SE100, which gave rise to headlines that social enterprises grow faster than the UK's other top companies.  

I had to look into that in more detail.  According to Social Enterprise Magazine's website, the top 40 social enterprises in the SE100 list enjoyed annual turnover growth of 78%.  This, in itself, seems impressive, but the icing on the cake is that it's almost double the turnover growth of UK-based companies listed in a similar index last month (that figure was 38.9%).

Whilst I'm not particularly good at maths, I am very interested in how statistics are used.  I had a bit of a closer look at the Index with which the SE100 index has compared itself.  

Business XL Magazine's Rising Stars list looks at the top 50 UK companies, in terms of turnover and profit growth.  These 50 businesses have a combined turnover of £1.3 billion, and combined profits of £147 million.  This averages out at around £20 million average turnover, and average profits of around £3 million.

Compare this with the SE100 list.  The top 100 (I can't find who they are) apparently have a combined turnover of £390 million - an average of just under £4 million.  In other words, on average, they're one fifth of the size of the average business in the other list.  We're not told how much profit they made.

My main point is that I don't think there is much value in comparing businesses which are very different in size.  What does it tell me if a group of 40 businesses which turn over an average of £4 million are growing at a faster rate than a group of 40 other businesses which average £20 million in turnover?  I'd say it tells me very little, regardless of whether they are social businesses.

I'm also a bit suspicious of the numbers chosen.  Why choose the top 40 for comparison - when one list looks at 100 businesses and the other at 50?  If they'd gone head to head, 50:50, you have to suspect that the figures wouldn't be such headline-grabbers.

Note:  Update 2 November:  Following the comment from Tim below, I think the suspicion in my previous paragraph is unfounded.  I hadn't realised that the Business XL list only gives financial information for 40 businesses - not all 50 in the list.  I've updated the blog as a result - see previous paragraph.  

I also question why we feel the need to prove that social enterprises are growing faster than for-profit businesses.  Who are we trying to impress?  Or is it just another example of the myth-making which is prevalent in some of the overheated parts of the social enterprise sector?  I'm currently running a sweepstake on when that stat is first used by a politician.  My bet is Tuesday morning.

And my final reason for looking into this more is that I don't hear enough voices at the heart of the social enterprise movement challenging stuff like this.  These stats were casually re-tweeted around the #socent community - in a similar way to how Umbrellagate seemed to be dismissed as an irrational attack on the sector by someone who just doesn't get it.   

I hope my commitment to writing about social business, week in, week out, demonstrates my enthusiasm for finding entrepreneurial ways to change society.  I congratulate any social business which is growing in terms of turnover, profit and impact. However, I question whether the selective (see note in italics above) use of statistics, which in my opinion prove very little, are helpful as we try to create bigger and better social businesses.  

By the way, I haven't been in touch with the SE100 people to discuss this - I'll send this post to them and will happily correct any factual errors - and obviously they can tell their story by leaving a comment below. 

The third sector - guilty of believing its own hype?

Here's a letter I wrote to this month's New Start Magazine, in response to comments from third sector umbrella body leaders on partnerships between third sector and private sector organisations.  You can see the original article here.  

Download NewStartArticle

Reading the debate about whether third sector organisations should partner with private businesses in last month's New Start, you'd be forgiven for having the impression that all private businesses are run by villains and all third sector organisations by saints.

It's natural that umbrella body leaders generalise - they need to given that they represent a wide range of people.  But I think some of the generalisations that your contributors offered point us to some of the difficulties in achieving more cross-sector partnerships.  

The tensions, it is assumed, stem from a private sector value system which is at odds with a third-sector ethos.  That can definitely be an issue - but I'd suggest that the third sector’s over-inflated ego often gets in the way as well.

Peter Lewis's assertion that the third sector is "the sector that always puts people first" is amusing, as is his suggestion that we should focus on what we can "teach" the private sector about public service delivery.  Similarly Allison Ogden-Newton’s belief that the third sector is “the future of service delivery in the UK” seems, to me, a bit over-the-top. 

This kind of over-confidence in the uniqueness of the sector (just read ACEVO Chief Exec Stephen Bubb’s blog if you need any convincing) can, I believe, get in the way of effective partnerships.  Who wants to partner with organisations that seem so full of their own importance, and so dismissive of a different way of doing business?

As Allison Ogden-Newton suggests, it is the social impact that you have that matters most.  That’s why I think that structure and ownership will become of decreasing importance over the next few years – just at the time that we’re expecting the third sector’s role in public service delivery to grow. 

Cash-strapped Councils, on the look-out for safe bets, will choose the organisations which look like they will deliver, rather than the ones that talk a good game.  And don’t assume that your snappy social mission will save the day.  It’s a safe bet that private sector firms will find their way around the clunky social clauses in contracts.  They might, in some cases, actually deliver better impacts than their third sector competitors, who take their delivery of social benefits for granted.  In other words, they might not need us after all.  

I am by no means an apologist for the private sector.  But I’m similarly unconvinced by a lot of third-sector rhetoric.  I think that before you enter into a partnership, you need a good sense of who you really are, not who you think you are.  

What am I going to do about it?

Liam Black, from Wavelength, made an interesting comment on Tuesday's post about local food.  I'd suggested that the woman in the photo was probably thinking that I was some kind of freak.  Liam replied:

"Face it she's right - you are some kind of freak!!  But in a good way.  You give a shit about important stuff and you say interesting things.  That puts you in a very small group indeed Mr Greenland.  Why are you demotivated and what are you going to do about that??"

I've been wondering how to promote myself for a while.  Liam's solved the problem.  "Hello, my name's Rob Greenland, and I'm a freak who gives a shit about important stuff."  That'd get Theo and Duncan's attention.  

I'm more interested in his question though.  "Why are you demotivated and what are you going to do about that?"  In the original post I'd said that I'd been out on my bike, partly to stimulate my brain a bit as I wasn't getting the stimulus from the work I was doing.

If you read this blog regularly you'll hopefully appreciate that I aim to be pretty honest about things.  There's clearly a risk in me basically questioning whether I'm doing the right thing, given that I earn a living out of the things that I do.   But I believe that in being honest good discussions open up - like the one that Liam's started here.

I wrote this in my first blog post of 2009:

...If social business is really something that I want to make a living out of long-term, I have to do things that I think create change....  If this reads as much as a memo to self as a blog post, that's because it is.  If you see me chasing money and not creating much change this year, buy all means point me to this blog post.  

I don't think I've chased the money, and I've done a fair bit of thinking about what I want to do longer term. I'm still not completely sure what that is - but I'm pretty clear that I don't want to just continue doing what I've done for the past four years.  

I've mainly focused on third sector social enterprise stuff - helping third sector organisations to become more enterprising. I think - hope - that I've done some useful work.  Yet I've been part of, and become increasingly sceptical of, a social enterprise support industry that at times has felt like the enterprise arm of the UK Government.    Don't get me wrong, I'm keen on finding different organisations to deliver public services, and I also like to see organisations find ways to sustain what they do.  But I came into this to do more than that.

I won't be jumping into the sea, Reggie Perrin style, with my old social enterprise clothes in a heap on the beach.  But I'm keen to explore different ways to create social change - not just in the third sector.  I'm not sure what that will be yet, but I think you need to free up space in your life if you want to explore different things.  If I continue to work 100% on what I do now (and it seems that there's still plenty of work out there for me) then I'll never get round to doing something different.

Does any of this matter to anyone other than me?  I think it does.  I don't think I'm alone in being increasingly sceptical about a lot of what goes on in this country under the banner of social enterprise.  I'll let Liam speak for himself, but I think his move - into a private company (heaven forbid), working with, yes you guessed it, private companies (alongside social enterprises), is an interesting one.  He seems to believe that that's where he can help to create most change.  

So Liam, thanks for the question, it was a good one!

Public services and mutual self help

Mike Chitty pointed me to a really good piece in yesterday's Guardian by Charles Leadbetter.

In the piece he argues the following:

"The fiscal crisis has fully exposed the current model of public service reform - invest, modernise, set targets, review performance, eliminate failure - as having run out of steam.  Public services may be more efficient, but all too often they are not joined up, leaving the people on the receiving end bewildered by what one elderly woman, who was being visited by four occupational therapists, described to me as a blizzard of services."

I found myself nodding away at various other things he said - and my heart probably raced a bit faster at this bit:

"The key will be to redesign services to enable more mutual self-help, so that people can create and sustain their own solutions."

Easy words of course, but I think he's spot on.  We've got to start thinking more like this, particularly now that we're entering a decade of savage public spending cuts. 

I was in a meeting yesterday, discussing a project I'm involved in where we've helped to set up a number of gardening services for older people.  The project has had a fair amount of success, but one steering group member pointed out that there are still thousands of people in the city who can't access gardening services.

Part of me wanted to scream (we haven't managed to secure world peace in the lifespan of the project either, but I don't think that means we've failed).  But there was an important point there too.  We, well meaning people, with public funds, have tried to intervene in the marketplace to support people in need.  In reality we've only touched a small percentage of people - largely because we don't have the resources (money) to help more people. 

The steering group member suggested we should have done more to encourage other ways to get gardening done - for example schemes where a neighbour helps out an older person with cutting their hedge, in return for access to their garden to grow veg (see Landshare for more ideas).

We did do a bit of that, but not much came of it.  But she does have a point.  Communities helping themselves is perhaps the only sustainable solution to the problems we face as a society.  Maybe there's a lesson there for us. 

Stop and rest a-while

I saw a reader of my blog briefly yesterday who commented on what she considered to be my "rant" about Francis's £9 library fine.  It was said with tongue slightly in cheek, but the point was made all the same.

I try hard not to rant, but I try harder to be honest.  And, to be honest, there's a lot that makes me want to rant.  But I believe that most of the time a more considered, thoughtful approach is appropriate, as it tends to get my message across and open up conversations which can move things on.  Which I suppose is the point of the blog.

Many bloggers will tell you of the risks they take in being open on their blog.  I'm no different, and as I've said once or twice before, I'm aware that where I have a good number of loyal readers, I know there are other people who think I'm a bit of an opinionated pain in the arse.  I also have to accept that some of those people are people in positions of power in my field of work - so there are implications for me there.

For the record I don't think my post about the library fine was a rant.  I was using a real, raw experience to convey a frustration that I feel about the culture that is behind a lot of public services.  Nonetheless, I think I need to be careful not to fall into comfy tribalism, where all public sector workers are self-serving lazybones, all private sector entrepreneurs are self-serving moneygrabbers, whilst all social entrepreneurs are to be greeted as the saviours of the world.  

I sent out a newsletter yesterday, and linked to a few recent posts.  It was interesting to read two month's worth of posts.   Where there weren't rants, there were certainly some weary, sceptical posts about the worlds of regeneration and social change.  And whilst I think I need to tone down some of that scepticism at times (it's easy to write that way - and I need to make sure I'm saying something new), I also stand by just about everything that I've written.

The more I do what I do, the more impatient I become.  My world vision is like this - we are in a right state as a society and as an economy.  We've pretty much buggered up the environment too.  But, amidst all that, I have great hope that human beings can change, and, if we get our act together, we can, in lots of small and big ways, create a world that's worth living in.  That's why I believe in this thing we call social entrepreneurship.  We need more people with a can-do attitude to changing things for the better.

That vision of the world explains why I am often sceptical, sometimes cynical - and maybe sometimes rant.  There's too much mediocrity in the world of regeneration.  Too many people working in initiatives which don't make a difference,  and where people don't learn when things go wrong.  Instead, evaluations are commissioned where some "lessons are learnt" but where most useful stuff is swept under the carpet.

It's not that I think I've got it right.  Far from it.  But I reflect on what I get wrong, and work hard to get things right.  The blog is one important part of that process.  

I'm off on holiday now for two weeks.  Off to the south of France, excitingly and vaguely sustainably by train.  I can't wait.  A chance to forget about work - but also think about it in a different kind of way.  That cliche about getting your best ideas on the beach says so much about the value of being a slow burner in the thought department, as an Enterprise Czar may not say.  

If there are any burglars reading this, some friends are house-sitting, so don't get any ideas.  (You can take the boy out of Liverpool, but you can't take Liverpool out of the boy.)

And of course, if you'd like to continue this discussion in my absence, please do.  And if I get a signal on the campsite, I might well join you.  On the other hand, I might just open another beer.