As social enterprise continues to grow at pace, we've seen the rhetoric shift from volume to one around scale. Whilst the concept of 'unicorns' (billion dollar valuation businesses), growth hacking and scaling is common speak in the technology field we are seeing more and more discussion on the concept of scale emerge in the world of social enteprise too.
A business that aims to help society is clearly a better prospect morally, but what about when it comes to strictly business? When asked to choose between two businesses, are Venture Capitalists really going to pick the one with a social story over an extra pip of profitability? Whilst we are seeing encouraging signs of growth within the Social Impact Investment world, if this fails to become mainstream practice then how will social enterprise ever be big enough to change the world?
This was the topic posed to myself and a panel of fellow entrepreneurs including Sonal Shah (Executive Director of the Beeck Center for Social Impact and Innovation at Georgetown University and former White House Advisor on Social Innovation), Lily Cole (Founder of Impossible.com) and Thomas Davies (Chief Investment Officer of Seedrs) at a debate held at the Natural History Museum, hosted by Chivas Regal's The Venture.
Three of the key topics discussed on the night were:
1.Achieving scale as a social entrepreneur
Scale is a certainly a buzzword at the moment, but in the context of social enterprise, the meaning is murky. Do we mean scale in terms of profit or social impact? Personally, I believe the aim for every business - let alone every social enterprise - should be to achieve both. Doing business whilst also doing good is possible in every industry, and more entrepreneurs need to realise that. When it comes to social enterprise though, it's often more difficult to scale a business model that is hyper-local in terms of the problem it solves. Plus, a lot of social entrepreneurs don't have that 'empire-building' mentality that is possessed by many of their counterparts. The focus on scale in social enterprise can be a red-herring; if your primary goal is social impact and your model is good enough, the idea will achieve scale even if your business doesn't. As they say "imitation is the sincerest form of flattery" and in the social enterprise arena if your model can be replicated and adapted to suit a social problem elsewhere in the world that in itself is a form of success.
2.The role of big business
Corporates need to be a lot bolder than they are being right now. Big businesses have a huge part to play in doing business the 'right' way - even if they aren't doing it themselves. It's a model that occupies a grey area between charity and 'hard business' (sometimes remaining in the confines of "CSR"), and as a result many find it difficult to know how to embrace it.
In recent years, we've seen an increasing number of companies wanting to get involved in the social enterprise arena, which is fantastic, and is starting to create additional support networks and opportunities for partnership. There are already a few multinationals who have begun to get behind social entrepreneurship and social innovation; Chivas Regal, Barclays, Pearson and Unilever have all started well-respected social initiatives, but we need more, and not just in terms of sponsorships. Change needs to come from the inside too. Big businesses need to look at their hiring policies, their procurement policies, and think more deeply about their impact, and how they can help accelerate this industry area, whether that be directly or indirectly.
3.Attracting the right people
One major thing social enterprise has going for it is the ability to attract top talent. A recent study by Chivas found that 87% of new recruits look for a greater sense of purpose from their employer. Add that to Daniel Pink's study in his book "Drive" whereby he points to "Mastery, Autonomy and Purpose" as the three main drivers of intrinsic motivation for the millennial generation, and you find yourself with a generation of job-seekers looking for meaning in their profession.
Whilst salary is definitely a lower priority than normal when working for a social enterprise, a job at a cause-driven business is no longer less attractive. With social enterprises starting to attract the most talented people from diverse range of industries and backgrounds, this provides a significant opportunity to leverage their insightsto accelerate and scale impact in whatever way the social enterprise deems most appropriate.
The debate was thought provoking and lively and highlighted the power of multi-stakeholder partnerships. With ever growing social issues which need tackling, we need more corporates, social enterprises and governments to work together to change the world for the better.