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The rise and challenges of social entrepreneurship

Skoll Centre Early Career Research Fellow Tanja Collavo hosted a workshop at Marmalade 2017 on the strengths and weaknesses of the social entrepreneurship sector in England… and where next.  

The State of Social Entrepreneurship in England – Strengths, Issues, and Solutions.

What is the state of social entrepreneurship in England? In the course of my DPhil research at Saïd Business School I interviewed key people at social entrepreneurship organisations, revealing a snapshot of strengths, weaknesses, worries and ambitions for the future development of the sector. At this workshop I presented some of my findings and asked participants to give their thoughts and elaborate actionable proposals around the issues most important to them.

The debate was lively! The overall agreement was that the sector is growing, vibrant, diverse, exciting, and constantly changing thanks to the very low barriers to entry. Its core strengths are its ability to break silos across sectors and organisations, and its democratic nature, encouraging bottom-up solutions to social problems and the retention of the wealth produced at the local level. Additionally, the perception is that the quality of products and services delivered by social enterprises is constantly improving and that this is a great business card to increase their market penetration both in the business-to-business and business-to-consumer markets. In this sense, many workshop participants welcomed the shift of the sector towards business and believe that more and more social enterprises should aim to become business-savvy and competitive.

But participants also agreed that there are still many key issues holding back the growth and success of the social entrepreneurship sector:

  1. No one talks about failures

There is very little learning inside the sector because media, intermediaries, social entrepreneurs and enterprises talk a lot about successes but hardly ever about failures.

  1. The passion paradox

Most ventures start because of founder’s personal experience with or passion for the problem they are trying to tackle. This has obvious positives but also can lead to a “do something now” mindset promoting easy solutions and immediate action more than the elaboration of long-term strategies. Further consequences can be the lack of professional sectoral knowledge and lower inclination towards collaboration due to high levels of personal ownership and commitment, also associated with stress and burnout.

  1. Difficulty accessing supply chains

A third issue present in the sector is the low presence of social entrepreneurial organisations in supply chains, both in the business and in the public sectors. In fact, in most cases, social ventures are too small to bid for contracts and too young to have a proven track record that would facilitate their winning supply or service contracts.

  1. Too dependent on government and poor finance

Participants described the sector as still too reliant on government and as lacking appropriate financial support matching its funding requirements and specificities. Financial support was described as particularly scarce at regional and local level, with core sector and financial intermediaries being based in London and mostly focusing on organisations and areas geographically close to them.

  1. Lack of collaboration amongst support organisations

Finally, the group agreed on one of the main findings of my research projects: the lack of collaboration among sector intermediaries. This leads to a duplication of efforts and to a degree of confusion among social entrepreneurs and enterprises about where to look for support and how to reconcile the different messages they hear from the different intermediaries they are affiliated with.

Out of this list of issues, the workshop participants picked two areas that they thought were especially relevant in order for the sector to keep on thriving: the access of social enterprises supply chains in private and public sectors, and the low collaboration among sector intermediaries.

Social entrepreneurship in supply chains

The group tackling the issue “access to supply chains” found several core causes for this issue. Some causes can be attributed to failings of social enterprises themselves:

  • a lack of transparency and metrics that would lower the perceived risk of social ventures;
  • a low understanding of tender processes;
  • and the inability of social enterprises to scale and integrate or collaborate in order to bid for big projects and commissions.

Other challenges are created by the surrounding ecosystem:

  • procurement practices and contracts that do not favour the involvement of social enterprises and small organisations in supply chains of corporations and public bodies;
  • the existing regulatory environment;
  • and the still low recognition of the value and specifies of social enterprises outside of the sector.

Proposed solutions to improve the situation relied on the involvement of social entrepreneurs and enterprises and/or in that of sector intermediaries. Social entrepreneurs and enterprises should, with the help of intermediaries, lobby both the government for changes in legislation regarding tendering processes, and private companies to convince them about the possibility to collaborate with social enterprises to enhance the sustainability and credibility/effectiveness of their CSR practices. Furthermore, on their own, social entrepreneurs and enterprises should collaborate to win contracts and present stronger evidence about their performance and competitiveness, which would reduce the perceived risk for procuring organisations. Finally, sector intermediaries and research bodies should: analyse where the Social Value Act has worked; prove the benefits of values-based supply chains; and ensure social ventures involvement in supplier network platforms like Ariba.

Increasing collaboration amongst intermediaries

The second group of participants decided instead to work on the problem of low collaboration among social entrepreneurship sector intermediaries. The origins of this situation can be found in the presence in the sector of multiple umbrella bodies and intermediaries that publicly state that they are cooperating and collaborating with one another but in reality are very territorial and not interested in what other intermediaries do because “they occupy a separate niche in the sector”. In addition, many intermediaries have very specific views and beliefs about the definition of social entrepreneurship, about what the sector should look like, or about its role in society. This makes it difficult for them to really collaborate beyond sporadic cooperation for specific projects and events.

In this case, the proposed solution was to start from existing successful platforms involving several intermediaries (such as the Social Economy Alliance) and create a “network of networks”. This would have shared ownership and governance, would avoid exclusive definitions, and would initiate collaborations among different organisations around specific projects, such as “improving the access to supply chains for organisations in the social economy”. Cooperation on specific projects could be a starting point to create trust and a mutual understanding. At the same time, this “network of networks” should map out all the different intermediaries present in the sector and develop an online list differentiating organisations according to their core competences and easily accessible for organisations interested in obtaining support from the ecosystem. The creation of such a database would simplify the research process for individuals and organisations in need of help and would create the opportunity for intermediaries to understand where their respective strengths are and, thus, for sharing best practices and outsourcing to each other non-core activities.

What’s next?

The meeting finished with some networking and the hope that these solutions could lead to some concrete initiatives in the sector as well as to other opportunities to meet and discuss also the other issues present in the sector and ways to solve them in a collaborative way. Is anyone there up for the challenge? From my side, the door is open to anyone willing to know more or to jointly organise something along these lines to help the social entrepreneurship sector as well as other parts of the social economy grow and thrive even more.

Want to learn more about the interconnected networks within social entrepreneurship and social enterprise? Come along to Tanja’s talk ‘Networks in social entrepreneurship – how to support the sector while mobilising it‘ on Wednesday 17 May, at the Saïd Business School, Oxford.

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Finding Common Ground Between the Financing Fault Lines

Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

 Skoll Scholar and Oxford MBA Candidate 2016-17, Ashley Thomas, draws on this year’s Skoll World Forum theme in relation to social impact business models.

There is a fault line between models of international development financing. On one side, there is the traditional donor and philanthropic capital that utilises grant money to support projects. On the other side is the social enterprise space that seeks to create sustainable impact through revenue generation.  There has been a lot of excitement in utilising grant funding for social enterprises to build and tweak their business model, but to date there has been little appetite for true hybrid models of ongoing subsidies for social enterprises.

This is a conversation that I had in numerous sessions and coffees throughout Skoll World Forum. It was also one of the key themes from the session hosted by Mercy Corps and USAID on sharing the learnings from their investments in the Innovation Investment Alliance. There is a common ground emerging; these conversations are hinting at the start of innovative new business models that allow for hybrid grant and revenue streams.

The Problem:

Social enterprises are addressing market failures. They bring products or services to underserved markets, often at low margins, and often at high costs. However, market failures exist for a reason; many companies are realising that even at scale, high volume low margin products are not able to generate the revenues that are necessary to be sustainable. However, social enterprises often sell themselves on this vision- that with initial capital to pilot and build systems, they will be financially sustainable at scale.

The Solution:

Philanthropic capital- which does not require financial returns, can help bridge this fault line, and maximise the potential impact of social enterprises. This does not mean we should revert to the large scale unsustainable development models of the 1990’s, but use philanthropic capital as way of targeting the market failure and allowing social enterprises to maintain their focus on their mission and outcomes. This hybrid model is being utilised in the FundiFix hand pump repair service designed by Dr. Rob Hope out of the University of Oxford. The model uses monthly user subscription payments to pool capital to finance prompt hand pump repairs. However, the willingness to pay only accounts for 2/3 of the cost of the service, and the remaining cost is subsidised through grant funding. This is also used in much larger social enterprises.  Ella Gudwin from Vision Spring spoke about how their model has shifted from seeking to maintain cost recovery- and retailing glasses at increasingly higher prices, to minimising the “philanthropy per pair” and serving their target customer.  They were able to do this under a scaling innovation grant from USAID and Mercy Corps, demonstrating that donors are also recognising the need for the pivot into these hybrid models.

It is increasingly clear that there is not one single model for social enterprise, and a single-minded focus on achieving commercial sustainability may limit the impact. Innovative hybrid models that use the social enterprise ethos of cost effectiveness in combination with smart grant funding that can subsidise the product can address the market failures preventing social enterprises achieving impact at scale. There is immense opportunity to achieve scale and impact through creating this common ground.

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Aha! Moments: When I Changed Course

 Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

University of Oxford DPhil student, Luiz Guidi, gives his perspective on the  Skoll World Forum session “Aha! Moments: When I changed course”.

What is the secret to having a good idea? How do those moments of inspiration happen?

For Albert Einstein, the answer lied in thinking in completely different terms as, according to him, “no problem can be solved from the same consciousness that created it.” Searching for inspiration, some people have used psychedelic drugs to let their minds enter new dimensions including, allegedly, a certain Steve Jobs. At the Skoll World Forum yesterday, we decided to time travel using, not drugs (as far as I know), but through personal histories.

Josh Babarinde (Cracked It) take us back to his “aha!” moment.

Josh Babarinde (Cracked It) take us back to his “aha!” moment.

In an inspiring session, six speakers took us back in time and along their journeys of discovery and realisation, through those moments when something clicked in their brains and—aha!— they came up with a solution to the problem they were faced with.

Kennedy Odede (Founder & CEO, Shining Hope for Communities) told us his deeply moving story of struggle and forgiveness in Kibera, and how overcoming the suffering of a friend’s death and a football made him realise how he had to empower himself to help shape the lives of those in his community. Josh Babarinde (Founder and CEO, Cracked It) gave us an insight into how working directly with young offenders in London made him realise the potential for turning their existing social entrepreneurial skills in crime into something positive and desirable for them using technology. Ruth M’Kala (Alum, Global Health Corps) shared her tale of inspiration by the philosophy of justice and human rights, and how that enabled her to unlock her inner motivation to work towards promoting health as a human right.

Building on this, Chuck Slaughter (Founder, Living Goods) told us about how serendipitous encounters and conversations can lead you down to unexpected paths and to discoveries, and about the importance of testing these ideas quickly and cheaply—like when he became an “Avon lady”. Randomness and surprise were also a theme in Julia Ormond’s (Founder & President, Asset Campaign) story, as she realised that things are often very different than you think. For Julia, we must always ask ourselves: what is our own personal contribution to those faulty lines out there? Christine Su (CEO and Co-Founder at PastureMap) told us her history with cheese and how it put her in conflict, physically through causing her hives but also emotionally and ethically with realising how much of our food is still produced.

The connecting theme about all the ‘aha-ness’? It has nothing to do with training your brain or brainstorming playing in climbing walls. Instead, it is by simply being on the front line, experiencing things personally, feeling it for yourself. Through that, not only you can really deeply understand the problem, but you let serendipity play its role. By working directly with the people or the problems at stake, living it in the flesh, our speakers ended up stumbling upon an idea. As Chuck Slaughter put it, “we have a lot less control over our own path than we think.”

But, whilst this session was especially dedicated to it, ‘aha’ moments were everywhere in the Skoll World Forum. Moments of vision and insight have been shared by many throughout the week. And, hopefully, it provided a platform for many other moments of enlightenment, be it fuelled by inspiring stories, exchanges over coffee during the day, or random late night encounters over a beer—which, I suspect, many of us here today now regret drinking.

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Building Bridges: Partnerships in Responsible Supply Chains

Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

Macarena Hernandez, Skoll Scholar and Oxford MBA Candidate 2016-17 at the Saïd Business School, gives her perspective on the Skoll World Forum session “Building Bridges: Partnerships in Responsible Supply Chains”.

The task to build bridges to trigger the development of responsible supply chains is not only a task for “bridges builders”, it is a common task. We need to forge common bridges together.

The session kicked off with a “pop-quiz” leading by the session’s moderator, Daniel Viederman, Managing Director at Humanity United. “How many cocoa farmers are around the world?” After guesses and approximations, the right answer was 5 million.

Could you imagine the investment that is needed to audit all of these cocoa farmers have the responsible practices? How many more products a single food industry company have? As Viederman mention, we are not talking about a lineal supply chain, we are talking about a supply web.

The complexity of this supply web has meant that no one takes the responsibility to ensure fair labour conditions within the web. The private sector thought that labour issues needed to be solved by the public sector. Governments have been establishing regulations that encourage big industry players to start solving these issues.

Despite this complexity, companies such as Target and Mars Inc. are taking responsibility and action. In 2015, Target started a partnership with GoodWeave in support of their mission to end child labour in the rug industry. Mars Inc. is partnering with Verité to design simple solution for their suppliers to meet their responsible sourcing standards.

Building Bridges - Partnerships in Responsible Supply Chains panel

Building Bridges – Partnerships in Responsible Supply Chains panel

These leading efforts are transforming the unfair labour practices across industries. However, these partnerships and projects are not easily scalable for the various products across different industries. As Marika McCauley Sine, Mars’ Human Rights Director, said, ‘the situation is complex; we need to make it easy. We need to be specific and clear. Make it as simple as possible.’

For me, this simple and scalable solution is called: trust. If enterprises trust in other stakeholders, especially suppliers and suppliers of suppliers, there would be no need for huge investments to develop detailed audits or localised projects throughout the supply chain.

Although, building trust is not easy. How can we trust in others? Transparency, openness, collaboration, accountability, and information flow is needed. Who is creating trust through stakeholders? Talking and listening during the forum, two potential solutions came into my mind. After the panel, I had the opportunity to talk with Charmian Love, Co-Chair and Co-founder of B Lab UK. I realised that the B-Corporation Certification is identifying responsible players around the world. Listening to the session “Data-Driven Models for Change”, I discovered that Provenance is developing digital tools to trace products’ journeys.

Both trust’s mechanisms, mentioned above, include characteristics such as collaboration, data sharing, and transparency. This openness creates and distributes value along all stakeholders. Which make me reflect: Are the main industry players and competitors ready to collaborate between them? Are the innovators ready to share best practices? Are businesses ready to share value, despite the fact that these actions will reduce barriers to entry, increase the number of competitors, and increase consumer power?

I hope they are! In the long term, collaboration will be the key for value creation. My favourite value at Prospera, the Mexican social enterprise where I was working before coming to Oxford, states: “El que comparte, prospera. Siempre.” Translated to English: “The one who shares, thrives. Always.”

Follow Macarena: @macarenahdeo

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Designing Sustainable, Inclusive Cities of the Future

Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

Oxford MBA Candidate 2016-17 at the Saïd Business School, Devin Rebello, gives her perspective on the  Skoll World Forum session “Designing Sustainable, Inclusive Cities of the Future”.

The story of a broken city began as a fault line of inequity and exclusion ripped apart the urban centre of Medellin, Colombia. Faced with rapid urbanisation and population growth, the city was sent into extreme economic upheaval spurred by lack of jobs, failing infrastructure, and inadequate city services.  The most disenfranchised and vulnerable populations fled into the mountains where they were soon preyed upon by drug cartels and caught in cycle of violence and extreme poverty that made Medellin the most dangerous city in the world.  As Liz Agbor-Tabi, Associate Director of 100 Resilient Cities, tells it, Medellin was a city with a master plan. Local leaders had gone through the exercise and set a vision. Unfortunately, they had planned for the city they had, not for the city they would need. This story, though extreme, is all too familiar to those working to design sustainable, inclusive cities of the future.

As I sat in the room and listened to the tragic impact of failing systems and the hope for a better way forward, I was struck by the conflict between formal and informal communities and the role of government in creating their own problems. The outstanding, passionate panellists drove a resounding point home:  there are social structures, laws, and physical spaces within growing cities that inherently expel people to the fringes. The more a city treats the marginalised like a problem, the larger the problem becomes. A city cannot ignore the pain and suffering of those existing in informal spaces, such as slums, nor can it take a wrecking ball to these informal communities and expect them to go away. The marginalised will not disappear by being ignored or physically threatened; instead, like in the example of Medellin, they will find ways to try to survive that can be devastating to formal structures.

The big question is, how do you change this? How can cities get out ahead and build something that will grow with a surging population? The overall sentiment in the room was that we need to break through silos and take a systems approach to building more inclusive cities. This starts by bring those living in informal spaces to the table and including them in the planning process. It starts when we demand governments change arbitrary laws that lock the marginalised into poverty by disallowing them from being entrepreneurial. It starts when we recognise that natural disasters disproportionately devastate the marginalised and fight to change systems that currently make them ineligible for aide. It starts when we design cities that focus on creating easy access to education, health care, and transportation for everyone. And it continues when we constantly remember that design is not neutral – it can help or it can hurt.

What is most inspiring is that this can be done. Looking back to Medellin as our example, it is an amazing story of a phoenix rising. Liz Agbor-Tabi told us that from the ashes of violence and extreme poverty, the city was able to turn things around by bringing marginalised citizens into the planning process along with NGOs, businesses, and civil society. Medellin built infrastructure to physically connect those living in the mountains to the main city allowing easy and safe passage between locations, which led to more employment and more spending that would boost the overall economy. They also put a deliberate emphasis on creating community spaces to rebuild the connectivity and trust between and among citizen. Medellin is now a rising hub of social entrepreneurship that has an intentional focus on poverty alleviation and inclusion.

This last thought is an interesting one – with the government taking the first steps to build an inclusive foundation to alleviate violence and poverty, local businesses are emerging that are determined to take care of the community. But does it really have to get that bad for businesses to take responsibility for the communities in which they work? Do we really have to rely exclusively on NGOs and social entrepreneurs to be the ones to take action to prevent another city from falling?

I think back to the opening plenary of the Forum when Hamdi Ulukaya, Founder and CEO of Chobani spoke about employing refugees within his factories well before the current refugee crisis hit. In the process of employing those in need of a job, he built critical foundations that enabled his employees to become thriving citizens. Hamdi learned that transportation was a challenge, so he provided buses. He learned that language was a barrier, so he provided translators. He learned that factory skills were lacking, so he provided training. And in doing all of this, he removed large numbers of refugees from the fringes and helped them integrate into the formal economy. This, in turn, supports the job markets and overall health of the cities in which his factories operate. We applaud Hamdi for his work because it is truly remarkable. But we cannot simply view Hamdi as a caring heart amongst stone-cold corporates. His actions made economic sense to his business and, even with the additional expenses of transportation, training, translators, and paying his staff twice as much as what his competitors were paying, he is still making a profit. Chobani is the example that we need to point to and demand that all businesses responsibly participate in the health and safety of their communities. This is critical to the design of sustainable, inclusive cities of the future. We cannot speak about an inclusive planning process for the future of our cities and give big businesses a pass from sitting at the table side by side with those most in need of employment.

Follow Devin: @DRebell0

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Civil Discourse in the Social Media Age

Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

Daniel Stokey, MBA Candidate 2016-17 at the Saïd Business School, gives his perspective on the  Skoll World Forum session “Civil Discourse in the Social Media Age”.

Panel moderator Manoush Zomorodi, Host and Managing Editor of WNYC Radio, began the session by asking the audience, roughly 100 people in Nelson Mandela Lecture Theatre, how many get their news from social media. I turn to see the vast majority of hands shoot up, well over 62%, the 2016 statistic about Americans used in the blurb introducing this session. Below are my takeaways from the lively discussion that followed, introducing the challenges we face in an increasingly polarized world where social media dominates the spread of information.

The Power of Social Media

Eli Pariser, Co-founder of Upworthy, put the issue in perspective, asserting that Facebook, as the world’s largest forum for media distribution, is in fact the biggest media company in our planet’s history. However, Facebook does not claim to be a media company, and is completely opaque to research. This is a problem, as the power and influence that Facebook wields has a profound impact on our society. Eli goes on to explain that Facebook is a system that optimizes for engagement, through algorithms that seek to maximize time spent. However, Facebook’s agnostic approach to how users spend time almost exclusively shows content that confirms what they already believe.

The other challenge with social media is the potential for spread of misinformation. Phil Howard, Professor of Sociology, Information, and International Affairs at the Oxford Internet Institute, shares results from their recent study showing that 50% of websites shared by users in Michigan prior to the US election was “junk news,” a 1-1 ratio of professional journalism to unverified sources. He also shared findings that Bots (automated internet traffic and social media accounts) played a significant role in the US election, making Trump seem more popular than in reality early on, and driving the proliferation of negative content about candidate Hillary Clinton in the weeks leading up to the election.

The Responsibility of Citizens

Matthew Segal, Founder and Editor in Chief at ATTN:, believes that trying to resist social media, like resisting automation, is futile. In addition, he argued strongly throughout the session that the responsibility to stop the spread of fake news ultimately lies with citizens. The burden is on all of us to investigate the credibility of our news sources, and not necessarily on a single entity like Facebook to stop the spread of fake news. Ultimately, he asserted that an undue amount of blame has been placed on Facebook for the Trump victory, and not enough on a genuine change in electorate views. While credible news sources need to adapt their product to social media platforms and do their best to inform the public, much of the burden lies with us to do our own fact checking.

Right vs. Left

A third unavoidable issue that arose during this session was the dichotomy of right vs. left. Eli Pariser shared results from a study conducted through web-browser plugins, which measured how often Americans visit fact checking sites versus sites deemed to be “fake news.” Findings showed that Americans on the right of the political spectrum spent more time consuming fake news. Those on the left are least exposed to fake news, and most likely to visit fact checking sites. This gap in news consumption practices poses a real challenge. However, there is an underlying assumption here that we, all of the people in this session know the facts, and that those on the left of the political spectrum have the truth on their side. The danger here is in minimizing or ridiculing those with differing political views. One disturbing trend in America today was raised by an audience question from Anne-Marie Slaughter, President and CEO of New America. More and more, she argues, we tend to demonize people on the other side of the political spectrum. Not only are they different or wrong, they are evil.

Half of the Conversation

As we sit in perhaps the most concentrated echo chamber on earth, at the University of Oxford among CEOs, celebrities, and academics, it feels somewhat disingenuous to discuss ways to “fix” this problem. A quick glance this morning at the front pages of ATTN: and Upworthy reveals exactly what I would expect – negative stories about Ivanka Trump, positive stories about Michelle Obama, the plight of refugees, and articles on gay rights and interracial harmony. Let me be clear, I am the target market for both media outlets, and agree with literally all of these sentiments. However, it doesn’t strike me as an objective panel discussing this issue. The “civil discourse” that played out on stage took place among three panelists and a moderator that clearly all lean heavily to the left of the political spectrum. Yet as we have learned in the past year, a large percentage of the US and UK population are not onboard with this narrative. What would a laid-off auto worker in a closed GM plant in Morraine, Ohio have to say on this topic?

Near the end of the session, Eli Pariser shared his belief that one of the most powerful ways to break down implicit bias is to spend time in another person’s world, and to genuinely try to understand their perspective. This is the best way to build empathy, yet unfortunately it is so often missing from our lives. This is true not just in the context of social media, but in our education systems, workplaces, and conferences.