development of ‘social enterprise’ (or as i like to call it, ‘enterprise’)

26 Jun

I’m pretty interested in thoughts that others might have about this, and just talking through it. If you want to chat sometime, hit me up.

As Ben Packard, the Starbucks VP of Global Responsibility said recently: “Social entrepreneurship is nothing more than the future of business. The purpose of business must be to provide shared value. This is the new norm. Consumers will punish brands perceived to be out of step with their world view.” 

Is it trendy to have a purpose? (I mean, if Starbucks is doing it…) Or have we evolved to where we are? (Or both?) Some call themselves unreasonable, but it’s clear that a purpose & values-driven business certainly offers one possible path to success in today’s world.

(If you were lured in by the title of this post, here is a history lesson in the development of the field, and cool infographic overview.)

To be clear, this type of values-driven business does not replace the nonprofit sector. In the spectrum of social impact, I understand the function of the nonprofit designation falling under some combination of the following 3 categories (though there are other ways to slice it, this is how I understand it):

  1. One crucial role of nonprofits is to provide a space for experimenting with potential solutions to economically inefficient services or obsolete procedures; this creates room for the innovation that is necessary for continued growth in the private sector. Often, successful experiments can become for profit or hybrid business models.
  2. A space for replacing inefficient or lacking government services. Think about all the nonprofits around education in America.
  3. Working to address, and hopefully correct, a specific issue or injustice. Aka “working yourself out of a job”. Not mutually exclusive to either of the other two, but an important designation nonetheless.

From what I can tell, I believe the following to be true: my generation, if interested in making positive social change, in functions beyond the previous 3, is trending away from nonprofits and towards for profits for a couple of reasons:

  • It has become clear that a nonprofit designation does not indicate altruism and transparency (think of the Red Cross scandal post Katrina)
  • We got entry level jobs at nonprofits and recognized the vast inefficiency of that operating model
  • For profits are more sustainable operating models, and can therefore have a bigger impact
  • The affiliated context of greed & corporate bullshit, strengthened by the financial industry, has peaked, and we’re taking back business as a source of growth and innovation (think entrepreneurship). To me, this begs the next question: It is time ot think differently about capital? As a productive/creative not financial/transferable value? (And about banking as relationship-driven?)
  • Business is the most powerful & effective mechanism for making change in a community.
  • Finally, the least straightforward, but still relevant, observation: I think that my generation sees more fluidity in the world, and more easily rejects binary conditions (such as work or life; profit or values; gay or straight; marriage or kids; religious or not – many fall somewhere in the middle). This includes the history lessons that come along with seeing unhappy, overworked (& often divorced) parents (I don’t mean you! Hi Mom & Dad!)

But the question at hand is really about values/mission/purpose-driven for profits: Does this characteristic offer a competitive advantage? If so, then we’re really on to something. And the Starbucks man seems to think so.

To paraphrase my former boss, and current mayoral candidate of Portland, OR, Jefferson Smith: us socially-oriented feel a responsibility for those problems that affect everyone but are the delegated responsibility of no one, and thats why we do what we do. (The current condition of the educational system? The detriment affects us all.) So, in addition to the in group trending away from nonprofit models & to for-profit models, are we becoming larger? Are we also trending towards giving a shit (through our work)?

Is this what evolution looks like?

Further Reading on Millennials and why/how we’re more ‘community-oriented’:

One huge difference is this ethic of teamwork and community… People often ask the question: How does technology shape a generation? That’s an interesting question, but it’s usually the wrong question. The much more interesting and fruitful question is: How does a generation shape technology? Much more interesting question because if you look at that you see, who invented the personal computers and why?

Well, it was Bill Gates and Steve Jobs in the late ’70s, early ’80s. Why? Because they wanted to get away from those huge mainframe IBMs that had been designed by their GI generation parents. The idea was that all the information went to the top of an organizational pyramid, someone crunched the data and then all the orders went down — right? — throughout the organization. Boomers said, no, we each want an individual think station on our own desk separate from anyone else, so we can be personally creative. And that was the whole, 1984-won’t-be-like-1984 ads in the 1980s and Apple and everything taking off. Gen X took this theme of individualizing and individuating the technology further with the internet, particularly with the web commerce and everything they did.

But here’s the real trend-breaker. Millennials when they were growing up they came home and the first thing they wanted to do on the computer was, well, they wanted to e-mail their friend. And then they wanted to go on the chat room, and then it was IM, and then it was Facebook and MySpace, and now it’s these cell phones that have a little Marauder’s Map; you can track every single one of your buddies all day, 24/7.

But the point is, they’re moving technology back to the community. And in fact, they’re revitalizing and galvanizing political campaigns and community action through technology. This was not designed or anticipated by older people. This was driven by young people. And you see this in hugely higher rates of community service and volunteering. I mean, let’s face it, for Gen X, volunteering was a punishment. You know, you did something wrong at college, you do community service. (Laughter) But the Millennials — it’s more of a norm. And so that is huge.

Pew Research Center, 2010:

Want more on this? Check out The Millennial Impact

Addendum: All this being said, I take issue with the terminology of ‘social entrepreneurship’. More on that later, to be sure.

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Posted by on June 26, 2012 in Uncategorized


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