EDITOR’S COMMENT
Welcome to AFG Venture Dispatches, your insight into current issues and items of interest for Emerging, Technology and Growth Companies across Australia and Asia. This Edition focuses on Social Entrepreneurs, Social Enterprise, Social Capital and Social Ventures, a growing sector of organisations, that is combining innovation and resourcefulness to pursue system change and address market and government failures. The entity structure, for profit or not for profit, is only a strategic matter for the social entrepreneur in their quest for positive social impact in a sustainable and realisable way. Articles, comments or letters are most welcome and can be sent to editor@afgventuregroup.com. The next edition will be in March 2010 and will focus on Trading in Global Markets. Contributions welcome.
Social Entrepreneurs, Social Enterprise, Social Capital and Social Ventures – this month’s theme
“What business entrepreneurs are to the economy, social entrepreneurs are to social change. They are the driven, creative individuals who question the status quo, exploit new opportunities, refuse to give up, and remake the world for the better.”
– David Bornstein
Social entrepreneurship has been with us since the beginning of time and arose out of community initiatives. It then evolved into guilds, orders and systems that developed supportive structures to meet community needs. An example is Florence Nightingale who professionalised nursing. Today, the social and community sectors are growing and innovating to address traditional areas such as social justice, health and poverty but also to attend to issues such as the environment and sustainability.
Defining the sector and social entrepreneurship is difficult with the variety of exponents and methods. Entrepreneurs don’t adhere to norms or existing patterns unless they work. Re-imagining, pushing boundaries, changing attitudes and beliefs, is the entrepreneurial style. What social entrepreneurs do share is working at the market fringe, using market principles, focusing on how to improve society and in doing so, drawing on as much of our communities talents and potential. And social entrepreneurs do not just run not for profits, an increasing number are setting up businesses that address community needs on a for profit basis, so they can fund growth and be self sustaining.
World wide, the social sector is maturing to make the most of what resources it has at its disposal. The number of social enterprises are expanding, with innovation and competition increasing and in response, management is becoming more sophisticated. Education, through action learning and peer support, measurement for increased accountability and review, collaboration within and with other sectors, are all now part of this sector. Philanthropists, individual donors, foundations and governments have seen the value of investing to expand the capability of the social sector.
This Edition presents views from the coal face of social change. Our writers are participants in the growing maturity of the sector. Within the commentary, Contributors pose a series of pertinent questions and learned insights that reflect the current approaches to bringing about sustainable positive social change.
Entrepreneurship, whether financial or social, are key components in developing and deploying innovations. Investing in social innovation will be as important for our societies as research and development in other industries and services.
AFG Venture Group wishes our readers all the best for the Festive Season and a prosperous New Year.
“Entrepreneurs have a mind-set that sees the possibilities rather than the problems created by change.”
– J. Gregory Dees
Steve Lawrence has worked for over 35 years as part of Australia’s social change sector. Even with many proud achievements, it seems today, many problems give pause for reflection as attempted solutions have often perversely, made the situation worse, even more complex, becoming ‘wicked’ or seemingly intractable issues.
Responses are a critical task for every citizen, not just those in government or civil society. Steve shares his insights and experiences on what works when seeking to solve or reduce the most ‘wicked’ problems. Providing some principles for practice, it appears deep thought and widespread consultation, about the system that fosters the problem, is required to make an enduring positive impact.
Steve also confirms how much leadership matters. There is a need for facilitative or ‘servant leader’ approaches to drive effective social entrepreneurship and the necessary innovation. Key skills are the ability to create the right conversations and obtain engagement from others.
Women & Social Enterprise – Carol Schwartz, Chair, Our Community
Carol Schwartz has been involved in Australian business at all levels and is concerned big business isn’t taking full advantage of the talents available to it, by maintaining a gender gap. In Australia, women still hold only 8.7% of board positions in the top 200 companies, and an even smaller proportion of executive positions in the core business areas.
Any change has been slow, in comparison to some other countries, although women can make up 50% of the representation on government boards and committees and in not for profit/community organisations. This may be attributed to a perception that woman are soft, caring and feminine and are therefore better suited to not for profit activities. But, today women are the equal of men in terms of education, experience and skill and research indicates the gender gap hinders the economy by between 11% to 20%.
When discussing life motivations, women are more likely to include words like satisfaction and balance – between career and family. Social entrepreneurship has allowed for the possibility for women to make a step sideways, displaying the same drive and rigour as in business, in a more flexible, reasonable and person-centred way. Social enterprises should be setting the example for the commercial sector by being more family-friendly and structuring themselves to be compatible with the lives of women. Governments should also be supportive of changes so our society is able to draw on all its available talent and potential.
Kevin Robbie comments on how social enterprise is moving into the mainstream. There is a growing understanding of this business model and how it can contribute to sustainable development. Kevin outlines a new approach that is increasing the sectors capability.
There are three things to know about social enterprises, which are;
- Like any business it requires hard graft to make happen,
- They need capital and investors, and
- There are two types: those that can prove their impact and those that cant!
Kevin discusses this achilles heel of social enterprise – measurement and provides examples of how this challenge is being tackled. Social Ventures Australia (SVA) is refining a tool, first developed in the US, called Social Return on Investment (SROI) to prove the social value of an enterprises efforts. SVA is working to embed this reporting system into the DNA of all social endeavours, the first steps in the journey of tracking social performance, so investors can make smarter, more informed decisions.
Martin Stewart-Weeks welcomes us to the world of social innovation. Enterprises like Big Issue to the Grameen Bank are confronting profound and seemingly intractable disadvantage by breaking the mould of what is possible.
These inventions, to overcome complex social problems, start with the premise of sustainability and develop value chains that link people, communities, money and institutional capacity. Australia needs to devote attention to developing these innovations as in the past with science and industry.
And the sector needs to become more collaborative, open and inclusive and more responsive to ideas, experience and insights of citizens and consumers. Increased investment is required that puts social innovation at the heart of the Australian national innovation system because in the past we have been a bit hit and miss. In the future we are going to have to get better…much better.
Benny Callaghan discusses the work of the new innovative School for Social Entrepreneurs (SSE) recently established in Australia. Licensed from the UK school, its approach is based on the belief that social change is ‘people powered’. The school seeks individuals who see untapped markets as people and communities in need and who are not focused purely on profit but instead by a social mission.
SSE has a non-academic approach believing that social entrepreneurs learn better by doing. Within the year long program a core element is ‘action learning’ where students apply their learning directly to the project that they are involved with. Often the students have personal experiences of the issues they are dealing with and at times need personal as well as project support. During the total of 34 contact days they cover business planning, legal structures, managing money, peer review and problem solving, mentoring, site visits and a 3 day residential.
Australia may soon have these schools licensed in Melbourne, Brisbane and Adelaide as well as Sydney. Philanthropists and governments are realising the value of professionally training those who are seeking to build successful and sustainable community projects. Some stories from the front line are shared from this engaged philanthropic approach that is challenging and shaping conversations around new ways of driving effective social change.
Rebecca Scott created STREAT, a Melbourne based social enterprise, providing an employment pathway for homeless and disadvantaged youth. Already their vision is for the model to be replicated into other cities. For without scale the concept will remain a cottage industry, missing the opportunity for operating lessons to be spread for the benefit of the many in need.
Rebecca echoes research that points out that single enterprises in single locations ‘represent a substantial loss to society overall. Time, funds, and imagination are poured into new programs that at best re-invent the wheel while the potential of programs that have already proved their effectiveness remains sadly underdeveloped’.
STREAT is attempting to change that by looking into franchise-like models to replicate into other areas using the former homeless, now skilled youth, as owners. Small is beautiful, but big is better.
Belinda Drew introduces us to Foresters, a community development finance institution. Foresters focus on asset building strategies for the social sector in Australia, engaging in leasing or mortgaging real estate to these organisations.
The social impact of their work includes security of tenure, a stronger balance sheet increasing sustainability and changes in organisational culture for social sector organisations. In the United Kingdom and the United States it is widely recognised that these strategies can increase the social impact of these organisations.
Foresters has established a subsidiary company called Social Investment Australia that over the next six months will release a range of investment product into the Australian market place. Investors will now be able to make social investments alongside their philanthropy, earning an income whilst delivering social impact.
Leveraging Human Capital – Andrew Olivier, The Working Journey
Andrew Olivier’s fascination in how our personal potential evolves probably resulted from his days as a young archaeologist. Interest was enhanced due to an experience with wasted potential. Since then it has been a journey into the world of Cognitive Power (CP), our ability to deal with complexity, to synthesise issues and to identify them with clarity, and to consider ramifications and their consequences.
Andrew shares some stories of that journey which has involved the models and concepts of Elliot Jacques. Relatively few have the capability to become leaders of organisations. What is it about the exceptional people who do and what lies at the root of it?
According to Elliot Jacques people mature cognitively at different rates with a strong biological link that can grow at a predicable rate over time along eight Growth Modes. And it has evolved over millions of years. A persons CP, or potential, governs and frames their Work Journey as we mature to get our head around and make sense of ambiguity, uncertainty and the unknown. But we need experience to actualise our potential.
Already agencies around the world are beginning to explore developing the personal potential of those disadvantaged, that they seek to assist. Supported with development plans and trainee placements related to their current CP, it provides the best opportunity for anyone to be able to realise their potential and to make a difference in their and other’s lives.
“The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.” – Winston Churchill
“My greatest challenge has been to change the mindset of people. Mindsets play strange tricks on us. We see things the way our minds have instructed our eyes to see.” – Muhammad Yunus, Founder of the Grameen Bank
“Great spirits have always encountered violent opposition from mediocre minds.” – Albert Einstein
If you have any comments or would like to submit an article, please email the editor@afgventuregroup.com – your comments and feedback are always welcome. We seek articles for the next issue that will focus on ‘Trading in Global Markets’. The due date for contributions will be mid February 2010.
If you were forwarded this newsletter and would like to receive your own copy, wish to change your e-mail address or no longer wish to receive further copies of AFG Venture Dispatches, please contact editor@afgventuregroup.com.
A Final Word
“Social entrepreneurs have existed throughout history. St Francis of Assisi, the founder of the Franciscan order, would qualify as a social entrepreneur – having built multiple organisations that advanced pattern changes in his “field”. Similarly, Florence Nightingale created the first professional school for nurses and established standards for hygiene and hospital care that have shaped norms worldwide. What is different today is that social entrepreneurship is developing into a mainstream vocation, not only in the United States, Canada, and Europe, but increasingly in Asia, Africa, and Latin America. In fact, the rise of social entrepreneurship represents the leading edge of a remarkable development that has occurred across the world over the past three decades: the emergence of millions of new citizen organisations.’” – David Bornstein
Copyright 2009, AFG Venture Group. All rights reserved. All material contained in this newsletter is the Intellectual Property of AFG Venture Group and cannot be reproduced, copied, published, quoted or disseminated without the prior permission of AFG Venture Group.
