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:

ACCION
African Medical Research Foundation
Alcoholics Anonymous
Ashoka
BAIF Research Development Foundation
BRAC
Childline India
City Year
Community Voice Mail
College Summit
Delancey Street Foundation
Doctors Without Borders
DonorsChoose
Environmental Defense
GlobalGiving
Grameen Bank
Heifer International
Human Rights Watch
International Rehabilitation Council for Torture Victims
The Nature Conservancy
PRODECOOP
Share Our Strength
Teach for America
TransFair USA
Transparency International
YouthBuild
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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8 Comments:

Anonymous Chris Jordan said...

Thanks Tom

this is indeed a somehwat worrying 'hijack' it seems.

If repeated often enough this kind of thing can successfully change the perceived meaning (by the public) of a newly-coined term or word.

We must be aware and steadfastly drive home the real point in explaining our mission.

By that I mean the entrepreneurship part of the term.

Thanks for another great insight into the Skoll world.

Chris Jordan

7:34 pm  
Anonymous SSE said...

I think you're both right and wrong here. I do think social entrepreneurship has lost its focus on risk / opportunism / entrepreneurship as a mindset and a type of approach. I agreed with Matthew Bishop in his words (see my post here) on levels of risk (and failure), and have written at length about the respective definitions, and how they have lost focus on the entrepreneurship side of things.

But, I also don't agree with those whose primary definition of entrepreneurship is income/wealth generation (which seems to be the case a little here). We've known social entrepreneurs who've been unpaid, and marshalled resources of all types (human + in-kind) in order to achieve social ends. Using innovation and opportunism to tackle a problem in a new way, and taking the risk and responsibility upon themselves for the new business.

See Gregory Dees on this; I think he has it spot on.

12:03 pm  
Blogger Tom said...

Thanks for taking the time to comment.

With regard to your second point, I did not intend to suggest that entrepreneurship be defined strictly in the terms you mention, (although I am not personally opposed to income and wealth creation).

I would, however, like to see more discussion focused on the work of commercial "social enterpreneurs" such as Paul Newman (Newman's Own), and Lee Iacocca (Olivio and Nourish the Children initiatives).

Such a suggestion might seem to favour the income definition you reference, but I see it more as an attempt to counter balance a perhaps unconscious mindset and filtering process (as illustrated by the LaFrance study) that leaves some forms of social entrepreneurship unexamined.

At this stage, we should be investigating both non-profit AND for profit social entrepreneurship.

1:56 pm  
Blogger Stephen said...

Very insightful. I learnt a great deal from attending a presentation given many months ago by David Green, from Project Impact, at the Said Business School. A quote worth remembering: "Profit is a means not an end." Surely this is the most accurate definition of social enterprise: it recognises the need for profit-making (the enterprise bit) with the qualification that the overall purpose is a good beyond financial definition (the social bit).

As an aside, my experience of making it to this presentation was entreprenerial. I pretended to be an MBA student to get in. This makes me query whether there can be such a thing as a Skoll Conference on social enterprise that fully appreciates the enterprise aspect. The more a conference is highly-organised, with a list of delegates from well-established organisations, the less likely it will have an entrepreneurial dynamic. A conference is run by an institution, which by definition is an exclusive body - and by nature, entrepreneurs are usually the excluded.

7:54 pm  
Anonymous SSE said...

Cheers Tom. I think we agree largely here. As I said, I would have liked more pursuit of entrepreneurship as a concept: the risks, responsibilities, innovations, action and so on...as the man from the Economist said, if it's entrepreneurship, then there would be more failures....

We're far from anti-wealth generation as well: our students set up all sorts of organisations along the spectrum from unconstituted community group through to for-profit business, and everything in between.

I believe you are right that we should focus on all of them, and broaden the view. The proportions of social and finance will always vary depending on the type of person/initiative/goals...but we should welcome anything that's delivering quality sustainable outcomes that are making things better...surely?

3:55 pm  
Anonymous SSE said...

...and Stephen: yes, absolutely.

Increasingly in the UK, all conferences/trade fairs in the social enterprise world tend to be packed with second tier support organisations (such as ourselves!), government bodies, local and regional agencies etc....with no practitioners/social entrepreneurs...

As you say, entrepreneurs are traditionally the ones pushing at the boundaries, challenging institutions (which is why we recruit on the basis of traits and characteristics, not paper qualifications) not becoming part of them.

But that opens up a whole other discussion: can you go on a theoretical/academic course to become an entrepreneur (of any sort)?

3:59 pm  
Blogger Stephen said...

Thanks for answering! Schools/colleges/universities have tried and are trying to increase enterpreneurship education. At Oxford, we have the Oxford Entreprenuers Society, which is fairly independent of the uni, and has been the starting point for lots of new business networks. I'm very interested in this issue, and recently posted on it at http://wearfair.blogspot.com/

I think enterprise is fundamentally about risk taking, and agree that the social sector needs other forms of organisation to stabilise the failure rates. Yet at the same time, I had the impression that many organisations attending the conference had taken a risk by adopting traditional organisational models which are heavily dependent on outside funding - although instances of philanthropy such as Warren Buffet's may make this point redundant.

But if funding does start to dry up, the organisations which have models based upon profit-making will be the most likely to survive - but then again, is longevity that important? Do we overestimate the importance of stability and long-term survival in our business models anyway?

9:28 am  
Blogger Tom said...

Stephen and SSE,

Thanks for your very thoughtful comments.

Stephen with regard to your remark about W. Buffet, I don't think his philanthropy will eliminate the funding risk you describe anymore than the did the philanthropy of Carnegie and Ford in an earlier era. And That, I believe, is for the good. (Single source funding may stifle initiative. Last night I happened to see a BBC programme that highlighted this danger.)

Tom

3:46 pm  

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