Friday, June 30, 2006

The Skoll Forum (2006), part 2

In previous postings I've stated that delegates to the 2006 Skoll World Forum on Social Entrepreneurship seemed to undervalue entrepreneurs and entrepreneurship, but I've not provided readers with much in the way of specifics. So, here's a concrete example.

Scaling Capacities: Supports for Growing Impact: lessons in building organizational capacity to support scaling among social entrepreneurships a study prepared by LaFrance Associates, LLC with support from the Skoll Foundation. Click on the LaFrance link to get your own copy of the paper LaFrance presented at Oxford.

In a blurb describing the presentation LaFrance writes:

The purpose of scaling is to increase impact. By identifying capacities that support scaling, our research seeks to support efforts to bring innovative models closer to the scale of the problem they aim to address.

The LaFrance paper had a pretty cover (click the link and see for yourself), and the program note sounded intriguing. I am a sucker for good graphics, so I decided to attend the session. Once there, I found it was yet another session for SOCIAL entrepreneurs.

According to LaFrance, his organisation prepared 28 case studies of 'social entrepreneurships that have scaled to a national or international level.' 'Social entrepreneurships' are defined by LaFrance (following Alvord, Brown and Letts) as 'organizations that "create innovative solutions to immediate social problems and mobilize ideas, capacities, resources, and social arrangements required for sustainable social transformation."'

In other words, almost every organisation working to create social good can be thought of as a 'social entrepreneurship,' as long as entrepreneurship is reduced to entrepreneurship. The LaFrance definition omits the 'creative destruction' that the economist Joseph Schumpter identified as entrepreneurial, and also seems to downplay the relentless pursuit of 'opportunity without regard to resources currently controlled,' that Harvard's Howard Stevenson finds so central to entrepreneurship. The LaFrance definition makes a space for the timid feeders in the lagoon of social enterprise. It de-emphasises the audacious, disruptive and risk embracing character of entrepreneurial activity, and as a consequence, it is potentially misleading.

The LaFrance research on 'lessons in building organizational capacity to support scaling among social entrepreneurships' focused on '28 social entrepreneurships.'

These LaFrance 28 designated 'social entrepreneurships' are:

African Medical Research Foundation
Alcoholics Anonymous
BAIF Research Development Foundation
Childline India
City Year
Community Voice Mail
College Summit
Delancey Street Foundation
Doctors Without Borders
Environmental Defense
Grameen Bank
Heifer International
Human Rights Watch
International Rehabilitation Council for Torture Victims
The Nature Conservancy
Share Our Strength
Teach for America
TransFair USA
Transparency International
WaterKeeper Alliance
The Wellness Community

There is no doubt the organisations listed above are engaged in the provision of social and humanitarian good on a large scale, but it is less clear why more than a few of the above organisations are considered by LaFrance to be entrepreneurial. Of course, LaFrance's definition of social entrepreneurship is so broad that almost any well run charity or NGO might claim to be a "social entrepreneurship". However, such an all encompassing list of organisations will do little to help us understand much about entrepreneurship as applied to social and humanitarian problems.

While I applaud the work of organisations like Alcoholics Anonymous (AA) and Environmental Defense (EDF), are such mature organisations really entrepreneurial? Henry Ford was a successful entrepreneur, but does that fact license a perpetual reference to the Ford Motor Company as an entrepreneurial venture? There may be much to learn from AA, EDF and Ford Motor on how to (or how not) manage a large organisation, but there is little that seems specifically relevant to entrepreneurial studies. It might have proven more useful to social entrepreneurs if LaFrance Associates had turned its attention to how Ford and his team (or the AA and EDF founder) turned their concept into an international business.

It is also significant that no commercial social entrepreneurships made it onto the LaFrance list. Firms like Olivio, Newman's Own (Shameless exploitation in pursuit of the common good), and Nourish the Children would all qualify as organisations focused on the creation of social good, and all have successfully scaled up.

In the end, LaFrance Associates found what can be found in thousands of business books that have nothing to do with entreprenuership, or social entrepreneurship. Here follows the banal conclusion reached by LaFrance Associates:

The critical scaling capacities that our research revealed include: (1) Mission - defining and adhering to core mission; (2) Structure - balancing control and flexibility in the organisational structure; (3) Model - codifying what works in the core model; (4) Culture - cultivating and perpetuating organisational culture; (5) Data - collecting and using data; (6) Money - connecting fundraising to mission; and (7) Leadership and Governance - making the right decisions for scaling.

As with LaFrance, so it is with many (if not a majority) Skoll delegates: most do not appreciate the potential of genuine entrepreneurship to create social good. Point #6 in the above illustrates this point. In Scaling Capacities LaFrance, in reference to #6, writes:

While fundraising is a perennial need for many nonprofit organisations, it becomes even more pressing during scaling when operations may be expanding. [May be expanding? Isn't that the result of scaling?] The social entrepreneurships we studied increased their resource base by viewing fundraising not solely as an activity to generate income but also as a natural outgrowth of connecting and engaging supporters. This can happen in any number of ways, such as partnering with other organisations, mobilizing new supporters to the cause, and communicating the organisation's message to new audiences. [So the social entrepreneuship doesn't try to generate income, but rather it seeks grants and donations? This doesn't sound entrepreneurial to me.] Such measures increase revenue to offset or subsidize the costs of scaling, and stabilize the organisation's finance by diversifying its funding streams. [How is this a diversification? The organisation moves from donor based income to donor based income?]

As an example of this supposedly effective social entrepreneurship practice, LaFrance refers to Human Rights Watch (HRW):

As Human Rights Watch (HRW) scaled it faced the challenge of expanding its fundraising network beyond the New York area where it was founded. As an advocacy organisation. HRW wondered how it could best connect individuals who supported human rights in the abstract to the concrete work it was doing to protect human rights around the globe. [And this generates income how? by fundraising, not entrepreneurship.] They met this challenge by developing Human Rights Watch "Councils" in cities around the world. Each Council is composed of activists and influential people who support HRW's mission. These local councils not only help HRW expand its fundraising network, but also engage in mission-related work such as advocacy and public education.

LaFrance and many Skoll Forum delegates seem to have confused effective fundraising with building an income producing entrepreneurial venture that creates a social good. This leads to social entrepreneurship becoming nothing more than a buzz word for fundraisers to use when soliciting donations. It does not lead to the production of social and humanitarian good through entrepreneurial methods and means. In the final analysis, the LaFrance approach is too conservative. It merely props up the status quo, and that's not good enough.

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Thursday, June 08, 2006

THE 2006 SKOLL WORLD FORUM ON SOCIAL entrepreneurship, part 1.5

In Part 1 of this review of the 2006 Skoll World Forum On Social Entrepreneurship I bemoaned the sometimes open hostility displayed by a number of delegates towards entrepreneurs and entrepreneurship. Rowena Young (Director, Skoll Centre for Social Entrepreneurship) seems to suggest that the root of this scorn is ideological. I think she's right.

More than a few of the delegates I met were self-described political activists, and it's my guess that a substantial majority of these activists identified with Forum moderator Stan Thekaekara's openly stated left-wing sympathies. Do not infer that I am critical of Thekaekara or his politics. His comments were offered, I believe, in a spirit of honest and full disclosure rather than political advocacy. Nonetheless, such leanings may explain why some Skoll Forum delegates have had difficulty accepting Young's social entrepreneurship formula: 'Seeking profits and doing good are compatible'. In fairness, I've noticed that those on both the hard left and the hard right stumble over Young's formula, but, of course, for different reasons.

My own plea would be that next years delegates check their ideology, activism and prejudice (left or right) at the door, and focus instead on learning how we can best yoke the power of entrepreneurship to social and humanitarian ends. This will not happen so long as evidence is sifted through ideology. The words of Jeffrey Pfeffer (Thomas D. Dee II Professor of Organizational Psychology at the Stanford Graduate School of Business) and Robert I. Sutton (Professor of Management Science and Engineering at Stanford's School of Engineering) in the Spring 2006 Stanford Social Innovation Review ring true:

Learning is difficult when people are driven by ideology rather than evidence.

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