Do Intentions Matter in Social Business?
I was talking the other week to a mate of mine with a commercial background who told me he thought that social enterprise was a was a `slippery concept'.
His big point is that the line between `social business' and pure, for-profit business' is actually misleading.
`How so?’ I asked.
`Well’, he said, `think of mobile phones in Africa. There is this company he knows that is mad for making money. So mad in fact that they risked a lot of capital, time and energy on sticking mobile phone infrastructure across a load of African countries. Tricky places to do business. Lots unpleasant Goverments to deal with. High risks’.
He continued `The company is doing OK and money will be made. But the bigger net effect is that lots of African entrepreneurs are now able to develop businesses, build up the economy etc, thus producing a lot of more `social benefit' than, say, a maize-growing co-op run by a social business. A “double-bottom line”, if ever you've seen one!’
`So’, he asked with a flourish,`Which is the more convincing social business? The one doing more good (whatever the starting intentions) - or the one with all the right intentions, ownership models etc.?’
I sat and I pondered. One on hand, my friend's view is a rehash of Adam Smith - the idea that selfish intention translates into communal benefits.
On the other though, he raises an interesting question: Might he actually be right - to a point? That certain ordinary companies' outputs - like the mobile phone one - can also produce quite clear `social benefits' which, were they produced by a social-firm, be celebrated in the end of year social accounts.
And, leading from that, could such a firm be rightfully garlanded as a social business?
The response to all this from the majority in the social enterprise world would always be that the mobile phone co. is not social enterprise. Both the lack of social intent and private ownership would count them out, regardless, it seems of how much good they do.
Where am I ? What it comes down to, I guess, is whether a social business should be defined mainly by the production of socially accountable outcomes (in this case the development benefits produced by mobile phone use in Africa) or whether it always has to defined in terms of intention, the way it is run, its ownership structure and so on.
I personally think that outcomes (what really happens) should have a greater bearing than the way things are put together – though I do also think these things matter too.
Therefore for me, the mobile phone company is a kind of social business. Not quite in the same way as most readers of In Touch – granted – but if their business generates massive social returns, I guess it has to has to be, doesn’t it?
So far so philosophical.
But ask yourself this. The phone rings. Its a 21 year old who had just been given £5m in their trust fund to change the world. He wants your advice.
Knowing what you know now , how would you advise them to do with it in order to make the biggest social benefit? £5 million into a series of CICs - or into those funky guys putting mobile phones into Africa who are looking for their next slug of investment?
I think I know what I'd be saying.