Tuesday, March 16, 2010

Meeting of Minds

`Meeting of the Minds’. While his sounds like a kind of NLP based dating game for the over-educated, it was in fact a gathering in London last night of a small number of leading civil servants, business people and the Social Entreprise Ambassadors. In Admiralty House, under oils of `The Battle for Martinique’ and other British naval glories, we discussed how the sectors could, just maybe, take working together to the next level.

On my table we were joined by Ray Mills of PWC, Rolande Anderson who heads up the Office of the Third Sector and the Minister herself (for about another seven weeks), Angela Smith. Plus the cool and bearded people from innovation company `What if?’.

Our challenge was this: We all hear about partnership between sectors - and we all know that not a lot of it goes on beyond initial conversations. We somehow lose tack with each other quite early. Yet we know that conventional business wants to do more with and for social enterprise and that we can help them to become better business. We know that social enterprise needs some of what some of the larger businesses can offer in terms of scaling, quality and big delivery. We also know that not a lot of what either Government or charities do is making a big enough dent in social problems for the money we spend. There is still an growing underclass, frightening numbers of half-educated schoolkids, a Russian Roulette in many of our hospitals. And a country that, overall is less happy, less employed and less associative than it was fifteen years ago.

Ray Mills, a straight-shooting Geordie, from Price Waterhouse Coopers (PWC) puts his cards on the table. He's just written a paper about partnerships with social enterprise. He likes us a lot. But he thinks social enterprises are also full of little messiahs who don’t want to grow large, successful businesses but prefer, in their hearts to be big fish in a small pool.

He adds that many big companies actually can’t find social enterprises to subcontract to, even when they want to. There just isn’t aren’t enough ambitious entrepreneurs out there – or any real way of finding those that exist. He has been charged by PWCs Board to come up with a strategy for social enterprise and he’s stuck on page one. He doesn’t yet quite know what to say to his Board. Inspire me, he said.

I was inclined to agree with a lot of Ray’s points. There doesn’t appear to be the pipeline of ambitious and capable entrepreneurs out there. Every social investor I speak to bemoans the dry pipeline. There's a lot of us, but few of us, it seems, that match the hunger to develop massive businesses that you tend to find in most private sector entrpreneurs. Part of this is, I am sure, the preoccupying drivers and limiters on many social entrepreneurs. We see growth often as a mixed bag - and, anyway, it is often a lot harder to grow a social solution than a commercial one, particularly if you're having to deal with the state.

At this point, someone then raised the big elephant question “Isn’t that because social entrepreneurs aren’t sufficiently incentive financially for them to go all-out for growth?” A small silence fell because, on some level, we all know this to be true. Social entrepreneurs, while not primarily financially driven are not driven-snow either. I include myself. Indeed when we signed up with Impetus Trust in 2004 I immediately made a deal with my Board which doubled my pay if we hit financial targets within three years. While this wasn’t the sole incentive (we were talking £30k going to £60k), it did actually, help to motivate me, especially when the going got tough. Had that deal not been there, I may have been more easily deterred. Perhaps we just need to be a bit more `out' about the fact that socia entrepreneurs need and deserve decent rewards as their ventures go through the pains of successful growth.

Ray was asking how PWC could help or work with social enterprises. My response was the story of ourselves and Impetus. Which could as easily have been the story of us an PWC, I tell him. Had PWC stood their balance sheet behind us, stuck in £400k (which they could, in fact, have got back later - Impetus elected gladly to leave it in) and put in their best talent to work alongside us, they could have been a partner is the Speaking Up story. It would have been as much their growth as ours. Speaking Up, while legally still a limited by guarantee company, would, in effect, have become a joint venture with PWC, with all the good effects for both organisations.

Unfortunately, back then, the big four were still sending smiling staff teams to repaint recently repainted community centres or dig woodand paths. CSR at that time was still deeply patronizing window-dressing. A day out of the office “all in a good cause”. Today, they want to engage. Not only because they want to do good in a troubled world and report a social bottom line – they do . But because they want the best talent to come work for PWC – and to enhance their financial bottom line.

I made this point to Ray. If the likes of PWC devote even 5% of their energy to social issues, they would probably eclipse the achievements of many of our national charities. Their understanding of value-chains, customers and business processes matched with the insights of social entrepreneurs and, to be fair, many of the major charities – could act as multiplier. Venturing together, using the assets of a successful commercial business in combination with those of a socially focussed organisation with ambition - be it a social business or charity (it doesn't particularly matter in my view) may, I believe, release as yet untapped value.

For once a fascinating evening, a real sense of potential - and a call to make in the morning.

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