Shared value is not for the tight fisted

how to measure...As readers will know, a social enterprise is “a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.” (DTI, 2002).

In the last 25 years, as I’ve moved through my career, I have worked for global companies, volunteered regularly for charity, operated a franchise, founded, run & then sold my family business and started a social enterprise (where, believe me, I got more bouquets and brickbats than for all the rest combined).  Here is an extract from a blog I wrote in September 2010…

I am not always a fan of the big smoke but yesterday, London was great.  Actually, I think London was probably the same as it always was but the day itself was great.

On the train back, with the aforementioned HR Director and a perfectly decent meal, we did some more long journey debrief chatting.  On the back of a napkin, (I think I had lost the traditional fag packet), we did a drawing…

We, as a social enterprise, turn over close to £1M, employ 35 staff and transition 80 trainees a year into employment.  They turn over £15.4B (yep, that’s B for billion), employ 140,000 people and create around 20,000 new jobs each year.  So, if they were to take 10% of their new starters from our academy and if they could get 6 other major retailers to do they same, who then has the greatest impact?  Who is social, who is enterprise?

Is social enterprise about numbers, impact or intention? 

So, here is the question I am still wrestling with.  Is it only charities and social enterprises which can claim the monopoly on positive impact?   Do they have the right to claim the high ground purely because they do the “good” thing without making a profit?  My answer to that is an emphatic no, but then I’m deluged with arguments that only a charity or a social enterprise with no profit for shareholders can have true positive social impact.  I’m struggling with that, to be honest.  It seems to me that the organisations that set out to offer a public service or create social impact are denigrated for making a profit only when the service they offer is crap.  Would G4S or A4E have come under the same scrutiny for their profits if they really had reduced reoffending or got millions of long term unemployed people back to work?  Is there really anything wrong with financially rewarding entrepreneurs for their positive impact on society?  For me, though, the very worst case scenario is when a charity and a commercial enterprise are compared to each other (most often by the charity, to be fair) with a compare and contract dialogue that states outright that charity (even a small, not very effective one) is better than the (impactful, successful, far greater reaching) business…just because one is a charity and the other is intent on making profit.

I was reminded of this debate while watching this TED talk.

Porter’s argument is incomplete and there is much to criticise about those big greedy corporate monsters but the debate is not as black and white as some people, particularly those in the charity world who have a ‘market-share’ to protect, would have you believe.

You see, we all operate in a complex network of social and environmental relationships.  We drive the car, go to work, buy lunch, pick up the phone, write an email, buy some shoes… every interaction we have has both a social and an environmental impact.  If this is true of individuals it is also true of organisations.  Most of us want that impact to be a positive one.  I am not sure now, in fact I never have been, if charities and not for profits have the monopoly on positive social impact.  In fact I would dare to suggest that some of them take more out of society than they give back, and some businesses give more back than they take out.

Last week in the Guardian, David Floyd explored this same question and it left me feeling – it’s a complicated world isn’t it?  But one where I think wisdom dictates we look at true impact rather than the label of the ‘type’ of organisation (charity, business etc.) before we make our judgement…

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About Sarah Dunwell

Sarah Dunwell is executive director of Arena Partners and has twenty years experience in the corporate and business sector. After a number of senior roles in customer service and retail management, Sarah led her own successful catering business and is experienced in business turn around and SME growth. Sarah has a particular interest in the role of robust business planning and development in the not-for-profit sector. Her passion lies in seeing social businesses grow successfully and sustainably through creating mature businesses that deliver strong social agendas.
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