Saturday, February 9, 2008

Make Trouble in 2008

`Entrepreneurship is the last refuge of the trouble-making individual.'
Natalie Clifford Barney

Are you a Trouble-Maker? I always have been – ask my Mum! Not in a nasty way, you understand. But always challenging, wanting to do things my own way..

I started my own journey as a social entrepreneur 15 years ago when I worked in care homes for disabled people.

I noticed how much good money was being spent on a really bad system. I saw abuse and suffering. I also noticed how well people did once they had found their voice and made their own choices.

So I quit my job and set up Speaking Up. It was that simple. A year or two without money and sleep. The best and worse of times. Thankfully it came off and Speaking Up now works with thousands of people each year.

But I am still angry. Angry at the way public sector bodies stuffed full of cash simply can’t deliver decent services to disabled people.

Angry at process-obsession I encounter in agencies that have forgotten what it means to make a difference.

That is why I am a social entrepreneur. I believe in a very different world. One in which citizens not bureaucrats put the world to rights. One in which social entrepreneurs are centre-stage not on the edges.

And this is no pipe-dream. History has produced an amazing number of social entrepreneurs who have helped shape our world. Cecily Saunders. Joseph Rowntree. Muhammed Yunus.

And there exciting new names coming through. Like Reed Paget, Schwab Social Entrepreneur of the Year 2007 and a fellow Social Enterprise Ambassador.

Reed used to make documentaries about environmental degradation. Then he decided to actually do something about it and founded Belu (

Belu sells mineral water in bio-degradable corn bottles and gives its profits to water projects.

You can now buy Belu at Waitrose and satisfy your thirst knowing that, through your purchase, someone else can do the same.

Reed is amazing but he isn’t some kind of superhuman or trust-fund millionaire. He’s just an ordinary bloke who was angry and did something about it. A Trouble-Maker if ever there was one!

If you’re still searching for a New Year resolution try this one. `Make Trouble in 2008!’

If you want to hear more about Reed and the 34 other Social Enterprise Ambassadors go to

Are you a 21st century manager?

`Why is it that whenever I ask for a pair of hands, a brain comes attached?’'
Henry Ford, US automaker, 1908.

As a man of his time, Henry Ford had one view of employees – as simple machines to do his bidding. Enquiring minds and human emotions just got in the way.

A hundred years on we know that only when the mind and spirit are fully engaged can we deliver our very best work.

We also know that democracy and freedom, as principles for life and prosperity, work far better than dictatorship and control.

Yet how many of today’s enterprises walk this talk? Not many, I venture.

Let me put to you a question : “How `turned on’ are people in your business?”

One way to test this is to compare their achievements at work to what they accomplish out of hours?. Do your people give freely their very best?

Or do they only come truly alive on the weekend?

If it’s the latter, you are not alone! Only a few leading firms have cracked it, and mine is not yet one of them.

Indeed, I can recently recall an employee who barely had a pulse at work but represented her country in sport as well as being a successful creative writer.

So why do we persist in our failure to get the best of people at work?

According to Gary Hamel, writer of `The Future of Management’ (Harvard University Press 2007), we fail because we are trapped in the Henry Ford model of management which, put very simply, sees a commanding `brain’ of managers controlling an unthinking `body’ of automatons who follow orders.

It is our failure, Hamel argues, to move to a more democratic, power-sharing management model that is strangling the potential of our organisations.

He highlights the achievements of companies such as Google, WL Gore, Whole Foods Market and Semco, all of whom have turned traditional management models on their head.

In these companies, the cold steel of directives and bureaucratic control has been replaced by an humanistic model of management built around the goal of harnessing employees full commitment.

Within them, you see employee democracy and decentralisation taken to levels which sound, on the face of it, quite frightening.

Managers are selected and appraised by their own staff. People choose their own hours and pay and write their own job descriptions. Employees at Google, for example, have a right to refuse to do something they are asked to do if they feel that their time needs to be spent doing something different.

It sounds like a recipe for disaster. Yet these companies are among the most consistently successful in the world.

Hamel’s compelling book came in my Christmas stocking and I found myself reading it under the tree (until my children stopped me!). If you read no other business book this year, make it this the one.

So, is your organisation a dictatorship or a democracy?

Until very recently, mine was what you’d call a benign dictatorship. I am quite a nice guy but, in common with most social entrepreneurs, I like my power. I also rate highly my ability to make good decisions. Dictatorship worked OK for a while.

As we grew from an acorn organisation to a sapling, we didn’t seem to suffer for having one person calling all the shots.

But, as we tried to grow further, I was in for a sharp awakening.

Not long after, I learned that a number of our key people didn’t feel fulfilled working for Speaking Up. By contrast, they felt ignored, unrecognised and devalued.

Decisions happened above their heads. They had no involvement in where their own services were going. Things had to change or they would be on their way.

This forced me to ring a few changes. The most important by far was to give much of my own power away.

But this wasn’t some fluffy win-win. Power is finite. To enfranchise others I had to disenfranchise myself.

What did this mean in practice? On a very simple level, it meant I had to stop making all the big calls.

My job as CEO is now to build the capacity of others to make good decisions.

It has also meant renouncing my monopoly on ideas and strategy. I no longer have sole say on what we invest in.

This all feel feels exciting… and not a little uncomfortable. In fact, I can’t say I am totally enjoying it. It leaves me feeling nervous and slightly redundant.

But when I am feeling wobbly, I remind myself that this is the way the most innovative and consistently successful companies in the world are now working To allow Speaking Up to join them, I need to step back.

Different? Yes. Counter-intuitive? Very. But this is 21st century management based on 100 years of learning about people and society.

We now know bureaucracy stops good new things happening and that people only perform when given the freedom to do so. Therefore, like Henry Ford over a century ago, we must manage in step with our times.

And to be fair to the great man, he would have expected nothing less.

Its about the business - stupid

As a social business, you probably have at least two types of customer: people who buy your stuff and the people your business exists to help.

Chances are that you will also have a third type of customer – funders - to pay for the `helping’ side of what you do.

The competing demands of these customers can pull you in different directions like a medieval torture rack piling on the pressure until you submit – or snap!

But that’s social business: The people who buy your stuff, quite rightly, expect an A1 service.

Those whom you support also present a legitimate demand on your time and energy.

And your funders will want to be sure that you are delivering any `paid-for’ social outcomes.

This `triple whammy ‘is both the defining feature and potential Achilles heel of any social enterprise. How social entrepreneurs deal with this is the key to their eventual success.

So how do you do it? Two things stand out. One is keeping the business in balance.

Too many social enterprises I have encountered do `social’ at the expense of `business’. The result is a crap product.

Take `community cafes’ – a real social enterprise chestnut and, for me anyway, almost always a crap customer experience.

Last week, overcome by the need for a caramel macchiato, I passed by Café Nero and instead went round the corner to a brand new community café.

I wished I hadn’t bothered.

There was a ten minute wait while a hulking skinhead called `Hutchy’ (name changed), who had `KILL’ tattooed on each hand, struggled to make the coffee. There was no caramel for my drink and plastic seating which hurt my arse.

Never again.

Not that the place will probably exist for much longer - I was the only person in there.

This was a cafe dedicated to helping ex cons and drug addicts - which is great and I wish them well. If only they had thought a little more about the business…

The other aspect managing the Triple Whammy is being brutally honest.

With funders this means being up-front about what can be achieved in a start-up. Funders’ expectations are often utterly overwhelming.

They to want to see Hutchy off benefits, literate, numerate, housed, sober, straight, out of trouble and married with kids at the end of year one. All for about five grand, probably.

This is bollocks. The truth is that the sums involved often don’t even cover the costs to the business of taking on a person like Hutchy.

My guess is that Hutchy’s skills as a barista reflected the tiny amount of funding allocated to him by some Home Office formula, not any realistic appraisal of his needs.

Yet instead of saying all this, we smile nicely and engage in a dance of deceit in which we’ll say we’ll turn around people’s lives - and worry about the consequences later.

But this is a dangerous game, Accepting bum-deals like these can inflict mortal damage on fledgling social enterprises like this one.

For not only does the business end up absorbing extra costs while it is still running early operating losses.

On top of this, it is forced, for its funding, to employ too many people like Hutchy too early in the life of the business. When that community cafe closes down ( I give it a year), the salaried and suited quangocrats who funded it will, in my view, be partly to blame.

Managing the Triple Whammy also means having honest discussions with beneficiaries about is required of them, particularly in the early days of a business.

This would mean asking Hutchy to grow his hair a bit and to get his tattoos lasered before putting him front-of-house.

While this is not the type of conversation I personally would fancy having with him, it would, I am sure, have a positive effect on the café’s bottom line.

The big message here is that the business has to come first. If you’re a start-up, repeat this till it is etched into your brain!

In your early days, you should do whatever is necessary to survive, even if you achieve very little socially. Social enterprise is better played as a long game. Profit and life-changing stories don’t happen in year one.

That’s for later, when the business is properly established.

Sadly that drab community cafe will never cut it in the high street. How much better to have created a wonderful café that started with out no employees like Hutchy but was, in two or three years time, making money and using that money to offer first class opportunities to several guys in Hutchy’s position?

But isn’t this taking the `social’ out of social enterprise? No! Because, by waiting till the business can safely absorb people like Hutchy, you are creating the opportunity for him, and others like him, to benefit in perpetuity.

Happy customers, lives changed and if you’re really good, no need whatsoever for funders.

Now, that’s real social enterprise!

Hard Questions about Social Enterprise

Unlike Gordon Brown, our honeymoon goes on and on.

While old Misery-Guts is wondering where it all went wrong, we in social enterprise are still basking like seals on the sands of good fortune.

However, the continuing glow means that no-one, publicly anyway, is asking any really tough questions of us. So we’re not thinking of any answers!

But think we must. Because the backlash will come.

In the USA, it has already started. The Wall Street Journal reported last month that few US social enterprises run without massive subsidy. The message was uncompromising:.

Better to leave commerce to people who understand it and for social firms to revert to just helping people. None of these messy `double bottom-lines’. Let corporate America create the wealth, you lot spend it.

Similar points already being made sotto voce in the UK business community:

`Aren’t the business of making money and that of helping people are very different in terms of the skills and focus required’.

`Might it not be simply more efficient for society to organise these tasks separately rather than in blended organizations like yours?’

When asked, I find myself defending social enterprise from anecdote and experience. But surely we need more convincing answers to these questions.

If we are to be the new face of capitalism in the 21st century, then don’t we now need the irrefutable evidence to show that out model is superior?

The WSJ article begs three further questions. The first is about our approach to business.

Is social concern a strong enough driver to make businesses really work?

Social firms, let’s remember, are normally inspired not by profit or a passion for a particular industry but by social goals. But can such businesses be just as effective at meeting customers needs as those businesses in which managers’ sole concern is to do just that?

While Anita Roddick showed that a business can be exactly that, my experience suggests this mixing social and commercial goals can be a hit and miss affair, especially if you don’t love the business enough.

One company I created several years ago went bump because of an unhappy mismatch between commercial and social passion. Our hearts weren’t really in the business, only the cause it served.

We were a business only in name.

The reality is that we were a charity - a good one but a bad business. But we ended up as neither because we went bust, failing to achieve both our commercial and social goals.

Had they been watching, the people from the Wall Street Journal would have been laughing into their lattes and saying `Told you so!’.

This isn’t to say social business cannot work. Of course it can. But only if social business means real business. And only if we focus on our businesses as serious ends in their own right, not just incidental to our social purposes.

The second question is about entrepreneurs. How can we create a madly dynamic sector when our entrepreneurs cannot shape the deployment of capital?

In the commercial world, top entrepreneurs build a business, sell it (or borrow against it), start a new one - and so on. This ongoing process makes private entrepreneurs into economic trend-setters .

Think of Branson, Philip Green and so on.

However, social entrepreneurs – people who create social wealth – cannot yet operate the same way. They can’t raise money for their own use because they can’t sell the businesses they create.

Like me, they often end up as employees who are never quite flush enough to go off and start a major new venture from scratch.

We therefore end up as one-hit wonders in a sector that desperately needs people who can produce a string of number ones.

The third question is also about investment. How can we actually scale social businesses without being able to offer attractive returns to investors?

The CIC structure is, I think, a problem if serious levels of risky investment are required.

By messing the relationship between risk and return, the CIC restricts the market for capital to the few good souls who don’t mind a current-account return on capital employed, however high the risk.

This simply won’t produce the quantity of funds needed, say, to buy a major company and turn it into a social business. Or to create a national chain of out of an idea that’s just won the Enterprising Solutions Award.

Overall, I believe that the answer to the inevitable backlash will be to prove that blended models and double bottom lines are a sensible thing.

On top of this, we need investment vehicles that offer returns that reflect risk.

And we need new ways to ensure social entrepreneurs can shape the use of capital.

If none of this happens then we are a big step along the road to proving the Wall Street Journal right - that we’re simply playing at business and should stick to helping people.

Trying to become an Ambassador

Last week I attended my first proper job interview for a very long time.

Along with four other nervous people, I turned up to exceedingly funky offices of innovation company `!What If? to see if I was wanted as a Social Enterprise Ambassador.

At 9am an impeccably positive young man bounced up, checked who we were and led us past a life-sized plastic cow decked out as Superman and into a natty loft space to meet the panel, a kindly group of well turned-out people from the World of Social Enterprise.

One hundred and twenty nervous minutes later, I signed out of the What If building (with a fake-fur twisty pen), and stepped out into the mid-morning sunshine.

What happened in between was a pretty intense, highly courteous grilling about what we would actually do if appointed as an Ambassador. In addition, I sensed, to immediately shaving off our beards, if we had them.

The challenge, for the Ambassadors was threefold as I saw it. Firstly, we need more `normal people’ to become social entrepreneurs.

At the moment, social enterprise is a fringe activity, a bit like Bridge or taxidermy. However, if it is going to make a dent on the economy and society of the 21st century we actually need it to be the next Facebook. Everybody needs to be at it, particularly bright young things.

But they need to be persuaded that social enterprise, rather than the City or Law, is a great place to start a career.. Sure, bright older things are needed too (of course!!) but it’s the youngsters we really need to go after. That’s task number one.

Secondly, we need to achieve buy-in from the UKs under-performing and over-resourced public sector. For the most part, the public sector is still off-limits to social enterprise organisations.

In late 2007, life for those poor sods working directly in `partnership’ with the state, especially at local level, is pretty bloody. Believe me on this - I am removing buckshot every night over a large bucket of wine.

Getting a contract in the first place is still hard because their unions don’t like us, their managers have no power and their commissioners don’t yet understand what we offer.

Keeping contracts is hell because we are expensive and complicated compared to in-house workforces or normal companies.

Although Gordon Brown knows that he has hit a worrying ceiling of achievement in public services, those operating the delivery arms of the state are, sadly, a long way behind him.

So, yes, we are political too, albeit with small p. My guess is that GB sees our sector as reviving those parts of our society which our failing public sector will never reach, however much cash you throw at it.

We’re also more palatable to voters than American corporations when it comes to running health and social care.

Finally, he also knows we are excellent at involving communities in service delivery, something (credit to him) he really likes.

But GB also knows there is a massive culture change required before any of this can happen. Hence the Ambassadors. Fostering such a change in culture is a rock-hard task, but a worthwhile one, I feel.

The third challenge is make social enterprise intelligible to the masses. Relatively few people beyond the readership of this magazine even know what the term `social enterprise’ means.

It is plagued by a lack of a fixed image, unlike, say Fair Trade or Organic food. Like the clay character Morph, we take many forms - from the swanky Soho mineral water business giving profits to Africa to the grant-aided community café in Scunthorpe run by former drug users.

Therefore, it is hard for the public to fix on what we really mean when we talk about social enterprise.

While we’re never going to get round that completely, the challenge for the Ambassadors will be to `boost the brand’ in the public mind by telling some great stories social enterprise in action. After a while, people will `get it’. We hope.

Whoever gets picked to do be an Ambassador will need to be damn good. Although there’s a fair wind for social enterprise at the moment, it won’t blow us far beyond port.

From then it will be about how the Ambassadors – and the wider sector beneath - perform. So if I do get chosen from the 200 applicants, I will be suitably scared.

Not only will I have to go and be impressive twelve times a year, I will also need to find somebody to mind shop while I am away. And leave two small babies at home with their Mum while I swan around the UK.

Indeed if it is to be `Yes’, it I may be having to get my own Superman suit….

Social Entrepreneurship - Is this for you?

Are you thinking of setting up a social enterprise?

If so my first question would be: `Is this for you?’ Or do you just like the idea?

It is important to be brutally honest because success in social enterprise doesn’t come easily. It means not only giving up a job, assuming you have one, but also a lifestyle – that of the employee and regular person.

The sacrifices and risks, particularly to your reputation, are high. You will live with uncertainty and total responsibility for the success of your venture.

So look hard into the mirror and ask yourself if this is what you want. What you really want!

This isn’t just an opinion. A recent study for the School for Social Entrepreneurs (reviewed elsewhere in this edition) shows that social entrepreneurs are a rare breed.

What makes them special isn’t just their ability to dream up new responses to old problems but, far more importantly, their ability to shape up a practical response.

Where most people never get beyond their lattes and laptops, social entrepreneurs are people who decide to take action.

Massive action.

This powerful trigger-to-action for social entrepreneurs is referred to in the study as an `Excalibur moment’.

My own such moment came when as a 24 year-old I reacted to the lives (or rather lack of a life!) experienced by many learning-disabled people with whom I was working. I realised that if I didn’t do something, no-one else would. So I founded Speaking Up.

What happened during the following three years was probably the hardest period of my life so far. Hardest because I had to learn everything as I went along. Hardest because I made some horrendous mistakes.

Hardest because I worked like a horse for three years and survived on Pot Noodles and Red Bull!

But it was also the best period too. Best because the fairground-ride of building something from scratch. Best because of the sense of freedom and creativity. Best because I knew Speaking Up wouldn’t be happening if we weren’t doing it.

Notice here that the `Bests’ outnumber the `Hardests’ . But each `Best’ and `Hardest’ was an extreme.

Life as a social entrepreneur feels much more animated than when you’re just doing a job. The best bits will probably surpass anything you’ll ever experience at work.

Equally, the worst parts are truly dreadful. I remember, many times, opening envelopes thinking ‘If this isn’t good news, we are finished’.

Jobs lost, years of my life down the drain. People saying ‘Told you so!’.

So, passion and commitment are vital. But the second big message of the SSE study is that that these alone are not enough to succeed in social enterprise. Its also about having the right skills.

We all know people who have passion in bucket-loads only to crash and burn because they don’t have what it takes.

So what does it take? Three of the core attributes of successful social entrepreneurs identified by the research are fantastic networking skills, an exceptional aptitude for learning and a realistic assessment of their own abilities.

My own view is that the research is spot-on.

You’ve got to be able to build coalitions of support around you. These networks sustain you and amplify your influence.

You have to be hungry to learn whatever you can from every person you meet.

And, perhaps most vital of all, you’ve got to be humble enough know what you are hopeless at doing yourself. Only then you can build a balanced team around yourself and develop something sustainable.

Still feeling up for it? If so, it is important that you act.

Now, more than ever, the support is there for you to do it.

Just contact the School for Social Entrepreneurs or Unltd, both fantastic organisations for people starting out.

Then prepare for the time of your life.

Let's learn from Tesco!

Just now there a lot of talk about the so-called “Tesco-isation” of the third sector.

This is seeing a handful of big-brand charities pulling away leaving the rest in a spiral of falling income.

The facts bear this out. According to the UK Voluntary Sector Almanac published in June by NCVO, the top 300 or so charities account for about 43% of income and rising.

Meanwhile those with a turnover of less than £1m (about 97% of all charities) reported a fall in income. The voluntary and community sector is, in effect, in recession.

So what of Tesco-isation? Well, on one level, yes, it’s all very worrying.

From a personal view, it was galling to see a local community organisation recently lose a big contract to Sure Start.

I have also been deeply exasperated by the failure of the larger charities in my own sector to partner with innovative smaller enterprises like my own.

And who cannot be irritated by Government spin about “empowered communities” when we’re seeing the slow-starvation of grass-roots neighbourhood organisations?

But while clearly Something Has To Be Done, it is not enough to just throw rocks.

We need to look at ourselves too and ask some hard questions.

One is whether there are now simply too many charities? The last decade of Lottery-fuelled prosperity has seen an explosion in the number of charities, from about 100,000 in the mid 1990s to 168,000 today.

The 2007 Almanac shows that most organisations are now creaking as Lottery money dries up and public finances tighten.

This begs the question of whether it is now time for some kind of consolidation of the third sector. 120,000 robust organisations may achieve a lot more than 170,000 living hand-to-mouth.

This leads onto a second question: is small is actually beautiful? In this country, small organisations are garlanded as more innovative, closer to communities and better-run than the big brand names.

But how true is this? Where’s the evidence?

My organisation was small once, and, yes, we were innovative, but we couldn’t do much with our ideas because we were too small.

Yes, we were connected to clients but only because we worked with only 25 people.

And, frankly, NO we weren’t well run at all. In the early years, I had to do everything from strategic planning to opening the post. 80 hour weeks were quite normal.

Being so stretched meant that delivery was often sloppy, our finances were all over the place and our office looked like a squat. Getting bigger enabled us to professionalize. Only then did we truly innovate, connect and deliver.

Small, to me, means anything but beautiful.

A final big question is whether we are inviting this recession upon ourselves?

I think, to an extent, we are.

I have been involved in several organisations that help disadvantaged people into employment. All are now struggling and survival has become their main focus.

But will they merge with each other? Will they share overheads? Will they put ancient differences aside for the greater good? The answer to date has been no.

They would rather moan about each other or how they are being stiffed by the Council . In doing this they are making a choice – to be a victim.

Clear alternatives are available in the form of mergers and collaboration but energy is simply sluiced on negative behaviour.

I have seen similar things happen up and down the UK, it’s a problem everywhere. While it is tough for smaller organisations, we need to choose not to be victims.

This message seems to be hitting home. Last week I addressed a major UK conference for small and medium-sized charities. My take-away point was that success or failure is in organisations’ own hands.

I was impressed by the enthusiastic response of the audience. Five years ago I would have been chased out of the building!

It was clear to delegates that there are ways to prosper as a smaller organisation. These include new partnerships, new financial instruments and new opportunities to develop niche public services.

Delegates seemed to grasp that the horse has truly bolted and that they need to focus on their future, rather than on shutting the barn door.

Sure, Tesco-isation, and all that comes with it, is challenging. But it may also herald opportunity for those willing to choose a different mindset.

Why Social Entrepreneurs have been betrayed by Labour

Tony Blair started his job on the same day as I did.

As he entered Number 10 back in 1997, I collected the keys to our first office in a run-down community centre in Cambridge.

Believe me, as a new-starter I as excited as he was that day! As Blair left Number 10, I asked myself “Has he made a difference?”.

Well, one thing is for sure - he tried.

We have seen a decade of highly active government. And, yes, there have been achievements. A strong economy (31% bigger today than in 1997) has created ample resources to pay for a healthier, happier Britain.

Yet while there are clear, visible changes, there is a lingering sense of failure.

As social entrepreneurs, this failure, stares us, quite literally in the face every day. One in six UK adults of working age is on out-of-work benefits.

This rises to quarter in places like Manchester, Liverpool and Glasgow.

2.5 million of these people has been on benefits for five or more years, making them statistically unlikely to ever work again.

The most excluded are also the least healthy as clearly shown by Mencap’s recent report Death by Indifference.

This report tells the stories of six people with learning difficulties, all now dead, who Mencap says would all have been alive in a properly run health service.

This happened during a doubling in real spending over a five year period. According to the Kings Fund, three quarters of extra money has disappeared in costs, mostly pay, rather than treatment for patients. Productivity has gone down not up.

Until very recently, the way the NHS works has not fundamentally changed from its foundation in 1948, an era of food rationing and German bomb-sites. An active government has not acted in the right ways. And, as Mencap shows, it is our poorest and weakest citizens who are suffering most.

On a deeper level I am frustrated with the Blair government for its top-down approach to social problems. This has been a centralising government that has tried to solve problems from Whitehall.

Despite employing nearly a million extra public sector workers, the government has failed to improve the lot of the UKs most excluded people.

As a social entrepreneur, this grates. My life’s experience tells me that our country’s problems are more successfully tackled from the bottom up.

People working on the front line are far more likely to come up with answers to complicated questions of delivery. Just ask world-leading companies like Toyota, which runs all its plants in this way. Devolving power downwards opens the door to initiative, innovation and individual responsibility.

So, if the citizen is to step forward, the government needs, by necessity, to step back a bit.

Suspend your disbelief for a second…Let’s re-run the last ten years with a little twist.

Imagine what might have happened had the Government had paid for a million social entrepreneurs rather than the same number of new public sector workers! OK, very silly I know.

But the point is a serious one. The state paid itself to do the job The state hasn't trusted us, not in a true sense. They’ve listened to people but not empowered them.

The message at first was, “We’ve heard you but leave the action to us as a progressive government”. And though the language is now changing (“We are partners, so yes please do act,”) the real story in terms of the way money is spent is the same old same-old. Sorry, Gordon, not good enough.

So what about Nick and David?

Both clearly understand the need for a genuine step-change in the role of government.

Both know, in a deeper sense than either Blair or Brown, that government agencies can’t solve social problems any better than they could manufacture cars, steel or ships.

The result of 10 years of Brown's domestic central control has been as much of a disaster for society as the old British Leyland was for UK manufacturing.

The opportunity lost was for a “denationalisation” of responsibility and a wider sharing of government resources to solve social problems.

In this `lost decade', there would have been a key role for social entrepreneurs and charities. The government’s role would be to set the direction of travel then make resources available to those with the skills to interweave them with voluntary income, private money and community energy.

Public spending would then cease to be a single beam of light, often shone in the wrong direction, and become instead a single colour within a much larger rainbow of blended resources.

Social entrepreneurs are specialists at weaving these tapestries and would become key players in cities, towns and neighbourhoods up and down the UK.

But this will remain a dream until government gets back into its rightful place and enables society and its social entrepreneurs to do their work.

Although Blair is now history, I, for one, won’t be. I am still excited now as I was that first day with my new office keys.

I know I am one of a growing band of citizens confident enough to do change from the bottom up. For us, unlike Mr Blair, the best is yet to come.

Great Outcomes depend on Great People


You will either know this instinctively or, like me, you may take a few years to wise-up.

But if you’re going to fulfil your social mission , you will be doing so largely through the good work of others.

Too many social entrepreneurs, including myself in the past, are too happy to leave recruitment to other people.

Don’t. Those first twenty employees will make or break you. For not only are people your greatest asset, they are also your most expensive. Up to 80% of your revenues will go on wages. How that investment performs depends on who you take on.

Get it wrong and its game-over.

I am amazed at how laid-back we are in the third sector about recruitment. We forget that he most capable people, like the most attractive punters in a nightclub, always have choices.

The reality is that its a sellers market. Yet somehow we think that, as employers, hold all the cards. Wrong! This is not `The Apprentice’ . You are not Alan Sugar.

As a social entrepreneur, you should always be out there headhunting the available talent, not waiting for it to walk in the door.

So, you’re looking for new people? My first suggestion is to think again about how you market your jobs. Sell a vision not a job, not the detailed task. The purpose of a job spec is to create a buzz, maximise interest. Nothing more.

The best job specs inspire the right people to get in touch.

Ditch the formal job description and go for a two sider setting out your hopes and dreams for the post In earlier times, I used a job spec template from a local authority with headings such as “Limitations of Authority” and “Principal Accountabilities”. This made our exciting new jobs sound like vacancies in the Albanian state bureaucracy.

Avoid application forms as they put people off getting in touch. Remember that at this stage you’re trying to entice interest.

Who wants to spend Sunday afternoon filling in a form just to get a meeting with you? How would you feel if the tables were turned?

When you’re shortlisting, keep in mind that you’re panning for gold. Your interest needs to be in exceptional people.

Always meet a high achiever, even if its in a completely different field. Its worked for us. Every high achiever has repeated that success with us. This includes former computer-sales people, students, teachers and parent-carers.

Conversely, those we have released have been people with relevant experience but for whom low achievement or a poor attitude has been a lifelong pattern. Look for achievement and attitude not skills or experience

One commentator compared the job interview to the used-car salesroom where the blemishes are covered up and confident patter used to skirt round any difficult issues.

Sound familiar? All the research into job interviews shows a number of things:

1. We tend to select people who are “like us”
2. The single interview doesn’t predict how well somebody will do in a job
3. Our impressions of people’s suitability for a job tend to be gained in the first few seconds of meeting, not on what is said in the interview.

In short, this isn’t a process that can be relied upon. All sorts of subconscious prejudices get in the way. At Speaking Up, after a couple of terrible appointments we abandoned the single interview format.

We wanted to make recruitment less of a used car-buying experience and more like buying a house, where you at least do a survey first. To this end, we replaced our single interview with a new system.

First, invite each of your ten short-listed people to short initial interview (up to 45 minutes Make the focus on past achievement. Remember, this is the biggest single predictor of future achievement.

Then bring that number down to the four highest achievers and run an assessment day to which all the candidates attend together. This should have several elements, including a role play, a written test and a prepared presentation.

Only appoint if you are 100% sure of the person. If you’re not, it’s better to start again, always.

All of our failed appointments have been people we have thought might “develop into the job”. People like that, at best, tend to take up a lot of your time. At worst you end up having to fire them. If they don’t feel right on day one, they won’t ever feel right.

Your success as a social entrepreneur will depend less on your brilliance than that of the people you employ.

So make finding brilliant people your number one priority.

Its Time for Youth

At 38, my youth is well behind me. On the football field or down the hairdressers, I just don’t cut the mustard any more.

The only good thing about the end of youth is that it will be a massive boost to my career prospects.

For ours is a sector where the average senior CEO is 53 and a huge `Do Not Enter’ sign hangs above the door to anyone under the age of 35.

Let me give you a few facts: Of 638 CEO respondents to ACEVO’s 2006 survey of third sector leaders, only twenty-eight were aged 25-34.

That’s 5%.

Of these, only seven were managing organisations with budgets over £1m.

That makes for just 1% of senior sector leaders under the age of 35. We have, in effect, been telling Britain’s brightest young people that their talents are not wanted.

Why does this matter? Firstly, because its wrong. In a sector that’s supposed to champion diversity, we’re excluding young people from top job on grounds of their age. This is indefensible and, now, illegal.

Secondly, its stupid. Rather than coming into the third sector, talented young people go to the private sector or the civil service. Here they are valued, coached, trained and groomed for leadership by a young age. Look at Next plc’s Simon Wolfson who joined the company at 22 and made CEO by 32. You see nothing of this sort in our sector.

At 32, Wolfson would be lucky to be running a provincial housing association, never mind one of the UK’s largest retailers.

Thirdly, it is short-sighted. The numbers suggest we are heading for a big leadership crisis within the third sector. The Baby Boom generation of sector CEOs will all be gone in a decade. 71% of these have no natural successor within their organisation. Our response is to fly in senior people from other sectors in late career. ACEVOs 2006 survey says cites 80% CEOs already coming from other sectors.

What kind of message is this giving to younger people in the third sector?

So, what can we do? I propose a five-point plan of action.

Market the third sector to young people. The super-charities (the 2% which take two-thirds of sector income) plus NCVO and ACEVO need to get together and properly market the third sector as an appealing destination for young people.

They did it with teaching for God’s sake, why can’t it be done for charities or social enterprises?

Recruit more graduates. More organisations need to do what we’re doing at Speaking Up and take on talented graduates straight from college. At the Milk Round we need to be joining KPMG and Glaxo SmithCline in searching for the cream of the crop.

Recruit on potential not experience. Over the years I have met scores of brilliant young people who have found it impossible to get third sector roles due to job specs requiring ridiculous levels of experience.

At Speaking Up we have dropped experience requirements for many jobs. We prefer to look at what people have ahead of them. This is a green light for younger applicants we have found.

Invest in Fast Stream programs to develop future leaders. The Civil Service do it. Top plcs do it. We need to do it too. Future leaders should be identified in their early 20s and fast-tracked into leadership roles by their 30s.

As a sector, we need to get much more clued up about talent management (spotting it, attracting it, developing it, retaining it). Its simply not on our radar yet.

Appoint some younger CEOs to top jobs NOW. 97% of Chairs of Trustees boards are white and 70% are men. The nation’s trustee boards need to stop recruiting to type (Male, Pale, Stale) and entrust some of our brightest young leaders with top jobs in the sector.

A cohort of younger people leading the third sector’s giants would send a huge positive message to young people inside and beyond the sector..

As I edge closer to 40, and my inevitable Harley Davidson moment, I hope that we start taking some bigger risks on youth.

The exciting thing is that they are there in-waiting. Last week, I squeezed in to a get-together of young CEOs supported by ACEVO (one of the few organisations that walks its talk when it comes to developing young talent).

Within this group sit 25 of the brightest young things in our sector. Most of them lead smaller organisations and are proud to do so. Yet without some change, many will not get the opportunity to lead on the big stage.

Not until they are a lot older anyway.

Sack Toxic People!

Last month I attended a lunch with the brilliant Tim Smit, who set up the Eden Project.

Tim was explaining to 25 charity CEOs his approach to building great organisations.

He took his audience through “Tinkerbell” (Tim’s idea that if you tell enough people it will happen, it will) and “Last Man Standing” (his idea that if you are persistent, people will eventually pay you to go away). But it was Tim’s last point that aroused the audience most.

“Sack negative people – they poison your whole organisation”.

As these words passed from Tim’s lips, I heard muted gasps of “Yes!”and “You’re so right”. But it was hard to see who they were coming from. People were checking themselves.

It was as though Tim had said what everyone in the room passionately agreed with, but were somehow unable to be open about it.

On the train home I reflected on this. My heart also raced when Tim spoke because, for me, he hit on a fundamental truth.

Negative people do cause immeasurable damage.

Negs tend to be unhappy people with a downbeat view of the world.

As self-styled mavericks, they foster cynicism, diss the organisation and publicly flag up endless problems for you (never them!) to solve.

They bring other into their fold and spread discontent.

Finally they forget that genuine mavericks are constructively awkward people who add value rather than moaners and whingers who absorb energy.

After ten years building a variety of organisations, I now believe that our sector has to become proactive about dealing with negs.

We’re just too nice. We foolishly blame ourselves for our negs, as though they are our badly parented children rather than adults with choices.

Or we tolerate them, normally because they are OK at some aspects of their job. Modern HR laws say we can’t touch people who are competent at their job, however negative their attitude.

Because of this, HR people advise us to leave them alone.

But this is all wrong-headed. In a modern service economy task and attitude are indivisible. You can’t pull them apart.

And an employee is a grown-up. Their attitude – positive or negative - is a freely made choice.

Employers need to stop beating themselves up about their negative people and start dealing with them.

Where do we start? On the downside, UK Employment Law does us no favours. 13% of all Employment Tribunals now involve third sector organisations.

This is a massive number considering we only employ about 5% of the workforce.

Coupled to this, a massive No-Win-No-Fee industry is encouraging disgruntled negs to grub money from employers who don’t want to face an Employment Tribunal.

Here’s my advice:

Firstly, don’t leave negative people alone. Challenge them. Tell them how you think their behaviour is affecting others and the organisation.

If negs go unchallenged, it gives a big message to other people about acceptable behaviour. In this sector, we need to get better at being honest with people.

I have found it often leads to a solution. Try it.

Secondly, give negs a chance. Offer some access then see how they use it.

Sometimes, people just need to know you’re hearing them and that they’re not in Siberia.
If they are bright, they’ll use this opportunity well and quit negging outside the office door. .

Thirdly, there could be an opportunity to help somebody to make a fresh-start. Therefore, turn their exit into a developmental process.

Negs have often made good contributions and need to be reassured of their worth. Confidence is nearly always a problem and you can pay for coaching or counselling to help them steer a new path.

In short, dealing with people with respect and care can speed them into a fresh-start somewhere else. Win Win.

Where none of this works – the neg won’t admit to a problem – you have little choice but to confront them head-on.

This is a massive investment of time, energy and money, but one which has to be made. Just because you can’t put an exact price on it doesn’t mean the cost of negative behaviour isn’t real.

Set against the eye-watering cash price of removing somebody, most organisations stop at the precipice. A long illness seems better than the pain of expensive, risky surgery.

But hard experience has taught me that, however costly the surgery, it is the only way to preserve the heart and soul of your organisation.

As Tim Smit would remind us, there is only one alternative. Death by Poisoning.

Why I flirted (for a minute anyway) with David Cameron

I’ve got a secret, one which leaves me red-faced and I’ve been wondering whether or not to share it with you. But I’ve decided to because I don’t think I am alone. Not anymore anyway.

My secret is that I was, for a short time, seriously thinking of voting for David Cameron in 2009/10.

I have since woken up and joined the Lib Dems but it was a strong feeling while it lasted. So brought to it?

In two words Gordon Brown. I don’t believe he has a vision for social enterprise that puts us in the forefront of change in this country.

Don’t get me wrong, he’s not hostile, just limited in his view of our potential.

At best, we are enriching rather than transforming the social landscape, a kind of Social Heineken quenching the parts the public sector cannot reach.

By contrast, Tony Blair saw us as a much needed bottle of Snakebite We know that Blair envisaged us replacing the state as provider of certain public services. Brown has not pursued a similar view.

He has been ominously silent on Trust Schools. Brown’s emphasis is on grafting third sector dynamism into public services, not opening them up to genuine competition. ``Personalising' the monopoly - as if you could do such a thing.

This, of course, would be like pouring a can of Red Bull into an elephant and expecting it to pole-vault.

As you’ll have surmised, I have got a problem with Gordon. We’ve tried his way with public services – Public Services Agreements, thousands of targets - and it hasn’t done the business.

People I meet daily – the parent whose child is disabled, the 17 year old with schizophrenia- tell me things are actually getting worse not better.

Yet the state, by and large, remains Brown’s weapon-of-choice.

Back in 1997, when I was a Baby-Entrepreneur, I was excited about what a Labour government could achieve with the third sector on-side.

However, the most visible legacy for my organisation has been regulation. Next month I’ve got three inspectors coming from the Adult Learning Inspectorate to monitor a very modest project run by disabled adults.

This project won a National Training Award last year! The Inspectorate want to set up base-camp in our boardroom for the week. It feels like the world has gone slightly mad.

But it hasn’t gone mad, its just gone Labour. All these silly agencies are the natural culmination of a social-democratic approach to solving social problems.

After a lifetime of voting for them, I’ve finally realised that Labour people believe that it is Government’s job to fix problems, not society’s.

Big State = Better Society. And they don’t mind spending a lot of money to do it.

Social enterprise? We’re just Polyfilla in the wall of state provision.

In 2008, I dream of a Government which says, “Look, we can’t do this, we need social entrepreneurs to help – you connect better to people, you can run a tight ship and attract the right kind of talent – You do it!

I really wish Gordon would heed Osborne and Gaebler’s seminal 1992 book “Reinventing Government”.

In this book, they introduce their concept of an "entrepreneurial" form of government. Their central premise it is not government's obligation to provide services, but to see that they're provided.

In short, it says that Government should solve problems by inviting competing solutions rather than creating new public programmes.

More social entrepreneurs are now realising that competition is the best way to energise organisations in all sectors.

This may sound odd, but the worst thing that could happen to Speaking Up would be to have no competition, to have our bank account filled up by the Government every April.

Am I kidding? No, because we would lose an important imperative to excel. T

his is precisely the position of most of the public sector – and why nearly all of it should be opened up to competition.

It’s a bit early to see what the parties will be offering in 2009/10. But I have a strong feeling that Cameron’s Tories will be the most explicit about the future contribution of social entrepreneurs.

A centrist Conservative Party with a commitment to a reasonable level of social spending and a hawk-like eye for bureaucracy and waste is be a proposition which social entrepreneurs should be taking seriously.

Equally, the Lib Dems could well win all our votes if they started to be similarly explicit about our potential.

And if I, with a lifetime of Labour-supporting behind me, could, if only for a moment, contemplate marking my ballot for Cameron in the interests of social enterprise, then I don’t think I will be the only one with a red face in 2009.

Knowing in the Blink of an Eye - Can entrepreneurs really trust their gut-feeling?

I’d seen people reading it countless times on Tubes, buses, cafes, even beaches. I’m a sucker for fads so in July I went out and bought “Blink” by US author Malcolm Gladwell.

The central premise of “Blink” is that most of what we need to know about a person or proposition can be gleaned or “thin-sliced” from the first seconds of engagement, the blink of an eye.

“Blink” is interesting territory for social entrepreneurs because we, more than most, are people of the instant decision and the snap judgment.

Intuition is our guiding principle, our holy grail. We tend not to `do’ analysis, seeing it as less reliable than our gut feeling. Entrepreneurs tend to say they knew within a micro-moment that their idea would work.

At first, Blink feels like a vindication of the entrepreneurial approach. We are master “thin slicers”, modern geniuses who are instantly able to synthesise a thousand details into a single, fantastic decision. We are, in short, hard-wired, for success.

However, towards the end, this warm jacuzzi of praise runs ice cold. We are warned, in no uncertain terms, of the real dangers of split-second, “gut” decisions. Study after study is cited showing how our prejudices can blind us to the evidence and lead us to make dodgy decisions.

“Blink” concludes that, as often as not, our gut instincts are just plain wrong. Its author may have a point. The fact that 80% of UK entrepreneurs fail within five years probably supports this view.

One in five isn’t a good hit rate for those relying on their hearts more than their heads.

My own experience says this too. A few years ago, I got heavily involved in a new social business called Aspire.

At the start, when I met its founders and City backers, I felt instantly convinced that Aspire would change the world. On a high, and without doing much serious analysis of the market, the business model and the risks, I agreed, with my business partner, to set up a branch of Aspire in Cambridge .

However, when the doors opened, things didn’t work as we had hoped. While in social terms, we succeeded in changing lives, Aspire was a financial disaster-zone.

Things slid from bad to worse before we pulled the plug after about three years. Aspire ended up losing hundreds of thousands of investors’ money and was the first high profile social enterprise to go belly up.

OK, I hear you say, you got it wrong, we all make mistakes. But what hit me hardest as I read Blink was just how completely my heart had disabled my head.

So resolute was my faith in Aspire that it took me about 24 months to see what was obvious to several of our advisers from the very beginning. Namely that the business proposition was a dog, a total non-starter.

In a blink of an eye, I disengaged my brain for two years. Quite scary really.

Was I chastened by this? Yes and no.

Yes, in that I learned that social businesses need to focus, in the early days, on making a profit as much as changing lives.

Yes in that I now consult more widely before deciding to run with something..

But that’s about all. I haven’t really, deeply changed. This is because I am in my heart, still an entrepreneur.

I still hard-wired to make decisions in the blink of an eye, straight from the gut. Whatever Blink says about the dangers, I won’t change.

Does this make me stupid? No, for two reasons.

Firstly, because while I know that my gut instinct can let me down, I know that it can also lead to great things. While I was wrong with Aspire, I was right with Speaking Up, which has been a big success. Gut instinct is the well-spring of innovation and radical vision.

Progress depends on people who follow their instincts, often in the face of accepted convention and sceptical officialdom. Look at Tim Smit or Jamie Oliver for example.

Secondly, I, like many entrepreneurs, have learned to protect myself against my moments of madness.

I have surrounded myself with people who are different to me, If you look at soaring eagles like Anita Roddick, they tend to be working closely with a wise owl with a close eye for the detail, someone who you never normally hear about.

My own wise owl is now a woman called Kathleen Cronin. Kathleen is immensely bright, and, crucially, politely questioning about my ideas.

Finding `cornerstones' who are different, people who challenged us are among our first tasks when setting out as an entrepreneur.

Without other people, Speaking Up would probably, be just me and my dreams.

Or we’d have gone bust pursuing one of my weirder ideas. Instead, we’ve got great organisation with a sensible balance of high and low risk business.

So my learning from Blink is that entrepreneurs do not need to change.

But, if they aren’t getting enough challenge, they urgently need to change the people around them.

Social Enteprise Needs to Think Big

In July’s heat, over an organic smoothie, an entrepreneur friend opined that social enterprise is the big idea for the 21st century.:

Here was his pitch: We are on the point of a breakthough: Key opinion-formers are joining the dots between the environment, globalisation and poverty; the idea of growth as the goal of politics is being seriously questioned; fair trade jeans are now on sale in M & S and the supermarkets are piled high with fairly traded, locally sourced goods. Bill Gates and Warren Buffett are giving away their fortunes.

In this new world the social economy is the only economy.

As my friend talked, I pondered what this might mean for jobbing entrepreneurs like you and I . Truth told, it would mean very little for our businesses. Our world is local and immediate: cash-flow; tender deadlines; silly petitions for air-conditioning…

During the third sector’s Summer of Love with Miliband and Blair, I was in the trenches trying to save one of our award-winning businesses from going bust because the public sector won’t commission fairly from us.

To save that business, my hopes are pinned on another breakthough.

I mean the breakthough for UK social enterprise if large swathes of government services become contestable.

Here, the lobbying efforts of Bland and Bubb appear to be working. But, don’t get too excited, we’re starting from the back of the grid.

The Treasury currently spends a less than 1% of its £550 billion budget through our sector, once Housing Associations are taken out. The good news is that even a small increase – another 2% or 3% - would change social enterprise forever.

This is where it could come good for Speaking Up. In a fair contest, I just know that we now would win hands-down against languid local authority services. Bring em on!

OK, maybe I’ve been drinking the same smoothies as Floyd Landis. But people often think I’m completely nuts when I proclaim the public sector as our biggest obstacle.

“We’re all on the same side, aren’t we?” I see people thinking. Well….wrong!

The public sector has thrived at our expense. It is now 43% of the UK economy up from 38% in 1997. 100,000 new public sector jobs have been created each year since 2000. Meanwhile, we’ve basically marked time.

Had public services got better, I could have lived with it. But for many of the disabled people who Speaking Up work with, life has gotten worse since 1997.

I hear similar stories wherever I go. Public largesse and social decline. Therefore we have a reason to be very angry with the public sector and, to a lesser degree, with Labour for failing to outsource to us till now..

Do we have the answers? Err, yes, actually - I think we have a good many of them. We understand efficiency. We know how to motivate people. We grasp how connect to our customers and deliver on a mission.

However, there’s one huge thing we need to improve if we’re to be the provider of choice over the big private sector. We need to learn to do scale.

Social enterprise in the public sector has to be more than the occasional nurses co-operative.

We have to conceive and achieve bigger, just like Capita and Novartis have done.

We need to move from mere gap-filling mode to market-dominance in certain sectors, such as back-to-work schemes. If all our energy goes into pilot schemes and niche-projects the large PLCs will get the big contracts, not us.

To achieve scale we need the necessary capital. And to do this we need new alliances like the deal CAN have recently done with Permira.

Without new combinations like this, the social-capital market in this country just isn’t sufficiently mature to enable us to compete. Moving into the mainstream means being as impressive as the global plc’s in terms of the investment package and overall quality of the offer.

The July heat is now a fond memory (along with that air-con petition). My friend is still trying to convince me about his breakthrough but I am too cynical to believe that we are in the midst of something epoch-changing.

Give me a decent local authority contract though, and I might start to change my mind!

Social Enterprise - Not yet at the Tipping Point!

Malcolm Gladwell was the author of 1999’s “The Tipping Point” - all about when an outlying idea– like social enterprise - idea suddenly becomes mainstream, part of a new, accepted truth.

Over a latte last week, a fellow social entrepreneur was trying to convince me that we’re in the middle of a kind of a tipping point right now with social enterprise.

Slowly but surely, he said, opinion-formers are beginning to join the dots between the environment, business and the world economy.

In this context, `social enterprise’ looks like less like recycling projects in northern Scotland and more a way of preventing us all being either blown up, drowned or roasted alive sometime in the next 100 years.

In this future, the social economy is the only economy. Listening to senior people, like Lord Browne of BP, it seems that nobody at the top of big business feels that it is enough anymore for companies just to make money. Things really are changing…

Great stuff! But is this really true? Have social entrepreneurs made such a big splash that we can relax as the mainstream economy socialises itself? Some of the signs are very good. You can’t go in a British supermarket these days without noticing a new mass-market for organic and fairly-trade goods which didn’t exist five years ago.

Looking wider, economic growth as the agreed goal of politics is now being challenged by, wait for it, the Conservative Party. Plus there appears to be a breakthrough for social enterprise in government procurement, thanks to the efforts of Mssrs Bland, Bubb, Black and co.

But there are also signs aplenty that the world economy is NOT going social as quickly as all that.

The stark facts, which any reader of the Independent will tell you, still show a world hurtling, almost hopelessly, towards mass starvation, vicious resource-wars and environmental chaos on a scale most of us try hard not to think about.

To this observer at least, separating the apparent from the real remains as hard as ever.

So what does this talk of a tipping-point mean for people like us - jobbing social entrepreneurs?

For most of us, it means very little. Our sphere of concern is inevitably the present, a double-bottom line that makes our jobs doubly stressful.

I’m in the middle of trying to sort out a way of stopping one of my businesses from losing so much money that we have to close it down next year. Its keeping me awake at night.

And if it meant flying round the world to get the investment I need, I would probably do it!

My perception as a working social entrepreneur is that despite the success of ECT and Greenwich Leisure, the social economy in the UK is still to make a convincing breakthrough.

We have to achieve something significant in health, employment services or education if we’re to show the Government that social enterprise is the right direction in which to out-source public services.

And this has to be more than pretty little pilot projects because while we’re doing these, US corporations will be asking for, and getting the big contracts, sure in the knowledge that investors will be lined up to back them.

To achieve breakthroughs, social entrepreneurs like myself need to change too. Working alone may no longer be possible and desirable. We may need to join forces with enlightened corporations in order to create the social businesses of the future.

It may well take their capital and know-how, twinned with our ability to work a double-bottom line that enables us to take on, for example, the US healthcare behemoths.

To do this, we need to swallow some of our holier-than-though attitudes and go make some new alliances. An example of this is the deal between CAN and Permira. I look forward to more like this.

Last time I mentioned Malcolm Gladwell who wrote the seminal book The Tipping Point. His latest book “Blink” has also created a major buzz.

“Blink” says that most of what we need to know about a person or situation can be gleaned from the first seconds of engagement, the blink of an eye.

However, “Blink” also warns us of the dangers of split-second decisions, the main one being how our irrational prejudices can blind us to the evidence in front of our eyes.

This is interesting territory for social entrepreneurs. Most of us do not go for protracted analysis or research, indeed it bores most of us rigid!

Much more important is that feeling we get, often instantly, about a person or project. Sometimes we get it right, like I did back in the 1990s when I simply knew that the Speaking Up proposition would work, despite all the signs otherwise.

But our gut instincts are often wrong, with quite damaging effects. A few years ago, I got heavily involved in the Aspire catalogue which eventually went bust.

I felt convinced at the beginning that Aspire couldn’t really fail and I went in headlong, helping found a branch in Cambridge.

So resolute was my faith, and those of many others, that it took a long time to see what one of our advisers in Cambridge saw right at the beginning - that the business was a dog.

So, several years on, am I any wiser? Do I try to balance my gut with a sober assessment of the facts?

I’m afraid the answer is probably no. I still rely primarily on my first instincts to guide me, whatever the evidence is saying.

Why? I think it comes down to the type of person you are. Personality tests bring me out as heavily intuitive in my approach. My number two, James, would, I am sure, come out as logical and ordered.

The key, for me, has not been to try to change, it has been to have people around me who are different.

This is where so many entrepreneurs get it wrong. Finding cornerstones who are not remotely like you is your first task if you are to succeed.

I am in no doubt whatsoever that without my methodical and more reserved number two, James Baddeley, Speaking Up would still be just me and my dreams.

But the key thing hasn’t been for to change – that is far too difficult and probably unhealthy. It has been to find somebody who blinks differently.

Third Sector Innovative?... Give me a Break!

I recently attended a judges meeting for a major award. Ten luminaries of the voluntary sector decided which charities should be recognised for business excellence.

One of the judges asked how I had made Speaking Up into an innovative, entrepreneurial organisation. The first thing I told her was that we’re not there yet. Despite all the hype, the third sector contains few such organisations. We have yet, I told her, to see the third sector equivalent of the Ipod Nano or Toyota Prius.

OK, so we’re better at innovation than our over-fed public sector. But that isn’t exactly a boast when you look at how a vibrant private sector has transformed the way we eat, drink, communicate and entertain ourselves in Britain in the last decade. Can we really say we have matched that level of innovation when it comes to meeting social need?

So what are we doing wrong? The first thing is that our organisations are not built for innovation. For a start, we are far too slow-moving for most entrepreneurs. We like to find consensus, include everybody. Entrepreneurs can’t work like this. They need power and pace.

Another problem is governance. Charities and social enterprises give Trustees – most of whom aren’t any good at business - the final say on business strategy. And entrepreneurs just scare them to death.

Finally, we live by yesterday’s management theory. This proclaims that we must freight our organisations with military-inspired structures, voluminous corporate plans and process-driven management systems.

All that baggage slows innovation down. We need to learn from organisations such as 3M, GE and Apple, all of which are complex networks of cellular organisations led by entrepreneurs and focussed on innovation.

But the biggest single reason the social sector is not truly innovative is that most of us don’t operate in real markets. Sure, we have users to whom we are supposed to listen when shaping services.

Yet this does not make us “user led”. Users don’t crack the whip in the third sector. Funders do, staff do and board members do. However we dress it up, users still get what we choose to give them. Users lack the single most powerful tool to force innovation – the power to decide to go elsewhere. In their dislocation from users’ preferences., many social businesses are more like public than private sector organisations. More Gosplan than Google.

So what’s the answer? One is to create more markets. To give disadvantaged people real spending power. An example is direct payments . With the “Disabled Pound”, we’re now seeing innovation around the needs of disabled people that years of exhortation about “listening to users” never achieved. While there are obvious limits, the scope for empowering vulnerable people through cash payments has hardly yet been explored.

A final reason we don’t innovate much in the third sector is that it often doesn’t get you anywhere. When did you last hear of a third sector heavyweight being put on the canvas by a nimbler, more innovative pretender?

Instead, the rookie gets a nice award, a flurry of be-suited visitors (“We think this is really interesting”) and then they don’t get called back. Although they would never admit it, the visitors know their organisation is safe even if they don’t invest in new ideas. No, the sector talks innovation very nicely. But we don’t really do it very well.

So what am I doing to help make Speaking Up more entrepreneurial? My answer to the judges went a bit like this.

Firstly, we employ more entrepreneurs than your average social sector outfit. They are out there so find them.

Secondly, we treat our key people like entrepreneurs, not employees. We give them space. We avoid process driven initiatives.

Thirdly we allow risk and failure. The F word is a dirty word in the third sector but is key to successful innovation. Fourthly, we reward entrepreneurs by giving them better pay rises than people who just tick over. Finally, we tell Speaking Up people that if they don’t innovate we will, quite happily, let their projects - and their posts - go. Nobody has a divine right to exist.

The judges, I don’t think, will pick us. I don’t think I said quite the right things. They wanted me to tell them the sector was becoming more entrepreneurial, not how deluded it is.

I honestly don’t think that many people in our sector grasp that that it took a whole new outlook, method of organisation and leadership to create the Ipod Nano and the Toyota Prius. It took risk, faith, courage – and competition.

What sustains me is a belief that social entrepreneurs will, given opportunity by the state, unleash equally radical innovation in response to many of our deepest social problems.

But a word of warning. It won’t happen under Labour. They flirt with us and occasionally even snog. But they still love the public sector too much to start a new life with us.

Our best opportunity may be called Dave or Nick.