Do Social Entrepreneurship and System Change follow the same principles?

This is the latest blog update from the Skoll Centre’s main research initiative, the Systems Change Observatory.

Many organisations, platforms and coalitions have reported examples of systems change in action. These include the Finance Innovation Lab, Future of fish and EYElliance. However, these organisations do not fit into the model of for-profit social entrepreneurship. Their approach is cross-disciplinary, with a focus on collaborative action and building coalitions of actors from each system they intend to change.

“While implementing a solution inordinately changes systems, the approach to the programme design and its guiding principles are a key differentiator.”

– Systems thinking educator working with a Foundation, USA

In our last post, we discussed the distinctions and overlaps between shifting systems and scaling a solution. This includes focusing on root cause analysis and shifting a system permanently in the long-term. From these discussions another thread emerged – differences in the principles which underline social entrepreneurship and systems change. Although the terms can overlap, there are a few distinctions to note. These include:

Scaling impact vs. problem solving

As a social entrepreneur, there is a tension between growing an organisation’s impact and working to solve a problem.  Our contributors noted a difference in working at the system level and at the enterprise level. One of our contributors emphasised that as a ‘systems entrepreneur’, they spun out of a social venture to not just grow one organisation’s impact but solve the population-level problem.  When engaging in systems change, work must be focused on analysing and mapping the system with the intention to create systemic change.

“Should you grow impact or solve a problem in its entirety or both? [We are] bridging the gap between social entrepreneurship and systems change.”

– Social entrepreneur running a multi-sector coalition, USA

Role in the Ecosystem

Social entrepreneurship fulfills a different role in the ecosystem as well. The focus is typically on a specific venture or organization, while systems entrepreneurship is more likely to focus on making connections between different elements of a system to address the target problem.

“…you sit in a different place in the ecosystem. One of the benefits of that is we have very different conversation with institutions like WHO, USAID, Game changing conversations”

– Social entrepreneur working in the technology sector, India

Conflict of Interest

Our contributors noted that there is a tension between creating returns for investors and taking systemic approaches that require collaborative action. This implies that a lot of systemic interventions fall outside the scope of for-profit social enterprises that are in-turn responsible to their shareholders. Spending time away from the business also has a disconnect with funders and investors.

“In the marketplace you are trying to win, building the ecosystem is a tension as a for-profit company.”

– Social entrepreneur working in the technology sector, Zambia

Capacity

Another driver of systems change is capacity. An organisation has to be structured to achieve systems change and cannot achieve this if it decides to create systems change partway through fragmented approaches and interventions due to the factors listed above.

Commonalities

Our contributors also shared some common principles between system change and social entrepreneurship. These include:

  • Experimentation: While vision and mission setting are extremely important to know what change an organisation wants to achieve, the process is also constantly evolving as approaches and market segments are tested and flexed. As you engage in both activities, you often encounter roadblocks that you did not expect, and you create new ways to navigate around them.
  • Building on your Expertise: While trying to shift the system in multiple ways, entrepreneurs identify approaches that are well outside of their capacity. Instead, they develop a theory of change and target the problem indirectly with an approach that fits their expertise.
  • Complexity: The complexity of the system at play can be different for different businesses and target problems. Some cases require policy change and collaboration with the public sector, while some are more focused on changing how information is shared in the system. For each of these cases, you have to create the right tools fit for the purpose.

As we can see, there are several distinctions and overlaps in the principles defining social entrepreneurship and systems change. For-profit social entrepreneurship traditionally focuses on an organisation and its impact, while a venture that intends to create systems change follows a more collaborative approach to change and holds a different power dynamic with actors in the system.


Author(s): Nikhil Dugal is a systems change consultant with the Skoll Centre for Social Entrepreneurship. He is a Skoll Scholar, having completed his MBA at Saïd Business School in 2018.

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