Growing a social enterprise- working from profit and good culture

 

This blog outlines something of our understanding on how social enterprise grow (proliferation rather than scaling) and how you build growth potential from day one (focus on profit and culture above all else).

Grace Network currently runs 5 social enterprises and has helped launch a number of others in the past 5 years. We have spent a lot of that time working out how to grow and develop social businesses from prototype to fullsize in the shortest timeframe possible. The aim is that we want to get the social impacts that are needed go as far and as deep as possible as quickly as we are able. When we stop and connect with the people in our community we get a sharp focus to our attention, helping us to be bold and move quickly to answer the cry for solutions to the challenges our neighbours often have to face on their own.

However, we don’t like to talk about scale as this implies replication through compounded growth of a single concept, as if it were a bank paying interest. We work to nurture proliferation instead. This corresponds to a sense that social and community value cannot be reproduced by copying a single model 100 times but instead that social change moves and increases in a nonlinear organic manner. Transmitted from person to person and community to community. We have learnt that growing a person focused social enterprise, regardless of the actual business activities, is not really something that can be scaled directly. It can only grow as other people join in and offer their gifts to increase the size of the operation.

However, just because something is organic it doesn’t mean that we don’t want to see it grow quickly. We don’t want to artificially scale things to try and move them forward but we do want to see the best elements transmit and proliferate across the community. How then can we try and help things grow and proliferate quicker?

Having tried and failed a few times and also seen some of our businesses thrive we are starting to find some ideas of how to see social impact grow and develop:

  • First and foremost, we start by creating an offering that has the largest possible margin with the greatest level of turnover that is reasonably possible. This focus on generating cash and developing the means of production gives the business a strong root base from which to grow.

  • Second, we see the need to pay attention to developing the right team culture at the very start as the second core task. Get this culture wrong and the operation doesn’t grow in a healthy way. This means that the initial team act and operate from day 1 in the manner they intend the enterprise to operate long into the future. If you get this culture wrong the operation doesn’t grow.

These two elements give us a picture of growing strong roots as quickly as possible and then planting them into a soil which is rich in the cultural nutrients needed to sustain growth. From this all social impact can proliferate. The strong roots, representing a strong and stable(!) business model that can make money from day 1, and the right soil, representing a culture that is healthy and conducive to real growth, are the key. Any social output (fruit if you will) can only follow after this. Too often funders, donors and board members want deep, significant social change from day one and try and add the social business afterwards. Instead we see the need to build a business with a social heart and then allow the social fruit to grow and proliferate in a natural and healthy way. Focusing on the root and the soil never seem as urgent as the more visible and attractive fruit but without good soil or roots, the plant won’t be around for long.