It's been a good week or two in the media for social enterprise. The fifteen new NHS `Right to Requests' have been announced and then, yesterday, we heard from Francis Maude all about 12 new `Pathfinder' mutuals about to be launched with mentoring support from John Lewis Partnership and other marquee names from both the corporate and social enterprise world.
The mentors include Lord Victor Adebowale, CEO of Turning Point, and staff from the John Lewis Partnership, PriceWaterhouseCooper, KPMG and Local Partnerships, among others. Other social enterprises involved includeSunderland Home Care Associates, Central Surrey Health, and GLL.
I have been trying to find out a bit more about these new mutuals beyond this and detail is still a bit thin on the ground. The pathfinders, I understand, include a co-operative providing adult social services and community health in Swindon, a Department of Health disability team, which will be a community interest company, housing support services for vulnerable people in Mansfield and a social enterprise helping homeless people in Leicester.
The big question is, of course, will they succeed in first stepping out of the public sector and then becoming viable businesses? At the moment it is, of course, hard to tell. My own view is that this will depend on three main things.
The first will be the scale and capacity of the mutuals to hold their own even in a protected marketplace. Will a department of health disability team - which I presume is a relatively small venture - cut it in the wider disability health sector in which there is perhaps already a lot of competition? It may or may not - but this needs to be given very clear thought before a decision to spin-out.
Likewise, I worry a little for very small chunks of councils or PCTs with dependence on perhaps one customer (I realise that the Pathfinder also includes larger orgs). I may end up being wrong, but I am not sure whether thousands of very small mutual businesses will make sense, when you take into account the support required to get them going and viable in the marketplace.
When I go speak to CEOs and Directors in local authorities and PCTs they are thinking about very large spin-outs. And would you fancy trying to hold your own as a small new local mutual in 25% cuts with commisssioning all over the place as the LA or PCT lurches towards a scale solution, whether this is private or social-enterprise in character? As I keep saying, I may end up proved wrong, but my own instinct is to go for much bigger mutuals which can compete on scale with the private sector in a marketplace which is pretty chaotic just now.
The second will be the quality of the teams leading these new mutuals. For anything to work in management terms you need committed leaders and fantastic top teams. While there will probably be no shortage of deeply motivated folk, I am a little anxious that beyond the CEO-figure there will exist senior teams with the right level of financial and operational nous to work in a brand new, commercially competitive environment, particularly if the venture is small and dependent on a single business relationship. Sure, mentoring and secondments will mitigate this risk, but I suspect each new venture will need investment in new roles and people who bring something new to the party.
The third, of course, will be the quality of support. The Pathfinder has identified some magnificent mentor-partners. This is a great start. Imagine having people with you who have already made the journey. Or support from one of the Big Four consultancies. What will also count is the range and intensity of that support. As somebody who was mentored to grow a 0.5 million business into a 7 million business, I understand the power of mentoring. But it also took a much deeper and more intensive set of external supports - around change-management, rebranding, marketing and sales, value-chain management - to achieve and sustain that growth. Mentoring matters, as much boots matter on a hike. But you also need waterproofs, a map, Kendal mint-cake etc. Wrap-around support. This needs to be out there during years 1-3 of these new ventures, in my view, to lower the risk of business failure.
Overall, as my readers know, I am a supporter of the Coalition in its broad aims. I believe that state provision has to move in large chunks from the state sector to the civil society sector - ideally in the form of social enterprises and into enterprising charities. So I am delighted with what I see going on. My comments here are really to say - let's make sure these new ventures are market-shaped, have access to proper investment and the necessary new blood and are supported in a very full-on way, with the kind of attention you see any investor putting into a growing new concern. This is not a time for a light-touch