We want to legitimise social enterprise as an effective business model and a vehicle for social change.
A social enterprise (SE) is a business that that conducts commercial activities to alleviate social problems. They are a relatively new phenomenon, but currently operate in all industry sectors, across the world. Through competitive markets, these organisations are exposed to pressure that makes financial performance, sustainability and growth, crucial. In addition, they bear the responsibility of realising social change, through their impact goals. SE have to be better, and deliver on more fronts than their competitors do. The challenges faced by SEs are as varied as the business models they employ. Our online tools are a way to uncover the threats and the opportunities facing SE’s in all stages of development.
Despite their differences, all businesses face resource constraints. SE’s dual responsibility to social and commercial ‘success’, creates tensions and challenges that don’t have a textbook solution. The typical commercial tools and indicators that guide businesses through decision making on resource allocation, don’t effectively work within SE (traditional business tools only maximise financial bottom line).
In order for SE to realise their commercial strategy and social mission, it is vital that they effectively manage the tensions when setting goals and allocating resources. Both financial and social goals are important and necessary, but setting strategic priorities and executing them through everyday operations is the grey area in which social enterprise operates.
Throughout the life-cycle of a SE, their success in balancing the tensions will determine their legitimacy as an organisation that can deliver on its promises to its stakeholders and beneficiaries. IR2O offers free resources to empower your organisation to navigate the challenges you face.
How can we help?
The majority of SEs are in the initial stages of development and just like businesses, many don’t make it to the maturation stage. In order to grow sustainably and stabilise, SEs have to manage the expectations of their stakeholders. This is particularly challenging when you have a long list of stakeholders (major/minor investors, partner organisations, staff, volunteers, community groups and beneficiaries), who expect the business to deliver on a range of outcomes.
The learning curve is steep, and even the most thorough plans cannot prepare an organisation for set-backs and adjustment along the way. As growth and learning takes place in the initial stages, the business needs to be continually refined.
Refine the Mission:
When an SE is established, the goal is to create a vehicle for incredible social change. Although being world changing is a worthy aspiration, unattainable social impact goals become a source of frustration and distraction. Aspirations need to be kept separate from goals. Short term and long-term goals are the road to achieving aspirations.
Refining the mission is about keeping it realistic alongside staying flexible as the business grows and things fall into place. Achieving social impact is only possible if routine and effective impact measurement is embedded into the structure and operations of any SE. For more information, and some thought-provoking questions, check out the articles on the left.
Refine the Business Model:
New SEs are driven by passion and energy to do good, but as obvious as it seems, the business needs to be financially sustainable in the long run in order for it to be transformative. There are countless ways to achieve this, but just as with the mission, approaching it with a realistic and flexible attitude is vital to effectively applying all you learn along the way.
Our RM tools are structured modules that as the questions you need to break down all aspects of your business. They are a learning tool, that helps you set realistic goals. When you know what you do well, and what you need to do better, you can decide how to best allocate limited resources to attain your financial and social impact goals.
2. Becoming best practice
Once the business is engaged with its social mission and reached some financial stability, it needs to achieve operational excellence in order to grow and become viable in the long term. Becoming best practice is about engaging with the best industry standards, as well as formalising the processes that make your business uniquely yours. As enterprises grow, and engage with more clients, employees and communities, it is important that the key activities and goals are clear and accessible. They become an anchor point for everyone in the business, and the point of reference when the business is growing and maturing.
3. Investment readiness
Once a maturation stage is reached, a business needs to take certain steps to become ready for investment. Communicating with investors, and getting the right amount and type of funding is a challenge that requires a lot of preparation and clarity. It requires a business to build a coherent plan and a competent team to take the business forward. An RM assessment is necessary for investors to gauge the suitability of any proposal, but it can also be a tool to uncover unnecessary exposure to risk and prioritise actions that can remedy it. In this way, making businesses a more attractive venture with lower risk.
The risk management resources designed by the founder of IR2O, Ann Devine, are designed to help social enterprise evolve from their initial stages to maturing and enduring businesses. Below are links to a list of tools that break down a business into risk and opportunity categories. The presentations ask the questions to help business get to know where they stand and what they can do to best maximise their social impact. Click on the links below: