In recent years, the role of market-based enterprises has gained importance in economic development. Social enterprises have proved to be driving engines for job creation, inclusive growth, and overall social and economic development. Exploring this emerging field and providing students with opportunities to gain insights about it has been the mission of The Turner Family Center for Social Ventures at Owen Graduate School of Management.
Our team started by developing an understanding of the entrepreneurial environment and investment climate in Guatemala by mapping key ventures and entrepreneurial players, exploring the evolving culture and attitudes, and understanding the interactions between various players. We designed a partner profile checklist and identified the main collaboration goals which helped us to develop a scorecard and partnership recommendations.
Our final deliverables included a market assessment on social ventures and impact investors, connections and recommendations for future partnerships with social entrepreneurs, and a review highlighting challenges and opportunities in Guatemala.
Where can a flight across knowledge borders of basic economics take you? This semester I was welcomed aboard Vanderbilt flight, MGT 6552, from Owen Graduate School of Management to a better understanding of social impact and the social economy. Where did that take my perceptions about poverty and its alleviation? I wish it was plain and simple, but I will try to capture the eye-bird takeaways.
A Journey of Inspiration
The MGT 6552 class (or Project Pyramid) is an interdisciplinary course that flies at the speed of 3000 perspectives per class. The class facilitates opportunities to explore various perspectives on enterprise and innovation for poverty alleviation. As a passenger on this learning experience, I had the windows to examine the role of social enterprises in poverty alleviation through classroom discussions, guest speakers lectures, an immersive onsite experience, interactions with International partners, and working within a diverse multidisciplinary team.
What’s Social Enterprise Anyway?
Throughout 16 weeks of class, our class captains Bart Vector, Mario Avila, and Jim Schorr took us through a nonstop journey to a sweet spot between social impact and business value. As a part-social-part-business typology, social enterprise blends the traditional boundaries between non-profits and the private sector. Unlike nonprofits, social enterprises rely on sustainable revenue instead of relying on funding in the form of donations; and unlike for-profits, social enterprises’ main motivation is social impact. In other words, social entrepreneurs balance the tension between carrying out a social mission and being sustainably profitable.
To elaborate, social enterprises exist to achieve a social mission like poverty alleviation, providing education access to the poor, resolving healthcare gaps in underserved areas. Nonetheless, this new social enterprise phenomenon is fuzzy; what is considered a social issue? Where is the balancing point between social and business? How deep down the Bottom of the Pyramid do we need to go to be considered social? The debate is endless and the term remains vague, but what is evident is that these small organizations are seeking big systematic changes.
Small Organizations, Big Questions
My team and I worked with WELCOMMON, a social cooperative in Athens that supports refugee populations with an ambition of integrating them into the Greek society and empowering them to be self-sufficient. Working with WELCOMMON showed us how social enterprises can be the most forceful social-change agents. As you might know, the Greek economy was already fragile when the influx of refugees and migrants exacerbated the devastating economic effects. WELCOMMON is determinedly working to affect a system-level impact on Greek’s stressed economy by addressing the refugee crisis. We were influenced by the way this small organization was asking big questions of systems change, and we were challenged in supporting their vision to build a more systematic and scalable business while remaining mission-focused and customer-centric.
Social Enterprise Consulting
Within the Project Pyramid class we were a total of 10 teams working with 9 social enterprises across 4 countries both remotely and onsite. I had a unique opportunity of working with our partner organization, WELCOMMON, in Greece while exploring alternative business models in Guatemala. Before taking off with our clients, we learned about social enterprise consulting and how to work with clients using frameworks like the Social Business Model Canvas, Logic Modeling, and the Answer First Framework. We were encouraged to take a human-centered approach in collaborating with our partners to craft profit-and-purpose strategies.
Business as a Second Language
As consultants to WELCOMMON, we were challenged by a language barrier. This was not limited to English language fluency of WELCOMMON’s staff and volunteers team. It was us too! We were a multidisciplinary team coming from different schools and disciplines; Economics, Higher Education, Leadership and Organizational Performance, and MBA. We recognized, early on, the importance of harnessing the best of our talents and understanding the “language” of other schools of thought.
It was a bumpy ride at first, but keying on everyone’s unique strengths helped us to have a common understanding and frame our arguments to reach the right strategic decisions for our partner. Nonetheless, we faced the most turbulence in communicating our solutions to the WELCOMMON team. The challenge was translating complex business strategies in simple messages that can move our stakeholders to action. Tough! More than our fancy slide decks and elaborate business recommendations, what helped us the most was asking first and seeking to understand before being understood.
In the end, the Project Pyramid and our immersive experience with our respective social enterprise partners showed us how social enterprise is a gateway to bigger systematic changes. Regardless of the social and economic baggage, social enterprise will carry on pursuing their missions while keeping a scalable business model. In working with social ventures, we are ought to be respective of their missions and speak their language to land on practical recommendations. Finally, social enterprise consulting is a flight I enjoyed on boarding 🙂 – Thank you, Project Pyramid team.
Activating an organization’s strategy in its program design and evaluation is not an easy task. Our team was working with WELCOMMON, a social cooperative in Greece, to improve WELCOMMON’s programs design and implementation strategies.
The Problem
Our team was supporting WELCOMMON’s Social Programs team which consists of 2 staff members alongside 30+ volunteers that work with WELCOMMON over different periods of times. The volunteers intake fluctuates over the year which created inefficient utilization of both the staff and volunteers’ efforts.
The Process
To help WELCOMMON in achieving their vision, our team started by gaining a better understanding of the refugee crisis in Greece, and analyzing the organizational performance using tools like the Business Model Canvas, Theories of Change and Logic Modeling. Theories of Change were popularized in the 90s as means to capture complex initiatives. Theories of Change were essential in articulating underlaying factors that lead to long-term consequences. Meanwhile, Logic Models enabled us to illustrate WELCOMMON programs’ components graphically, and identify outcomes, inputs and activities.
The Solution
In our initial meetings with WELCOMMON, we developed an overarching journey map and timeline to communicate the desired change management strategy to bring the social programs’ transformation to life. We broke down the profiles of stakeholders who interact with refugees into 3 segmentations, proposed an improved organizational structure, and designed a training program with compelling messaging and key stakeholder communications.
I was escaping New York’s winter with a hot cup of latte. I picked up my phone to check my flight timing for the dozenth time; I was traveling alone and I couldn’t afford being too latte. Suddenly, the empty seat across my table was filled. Puzzled by this event, and a question if I should offer this homeless person sitting on my table a drink, my train of thought was interrupted by loud coughs of the homeless person. A lady in red across the coffeeshop waved at me with troubled eyes signaling the availability of an empty seat next to her. I was unsettled because of the coughs, so I picked up my baggage and changed seats.
The lady whispered to me explaining why she encouraged me to change my table “We don’t judge, but she might be sick; she was coughing”. From my new seat, I was able to observe the encounter of the coffeeshop staff forcing the homeless person to leave and facing resistance. The homeless person eventually left the coffeeshop to battle the ice-cold winter of the big city. I felt momentarily coldhearted. The lady in red turned back to me, “You know, it’s their fault for being in such situation. You need to work hard in this life”. I replied with an uneasy smile. I was wondering: is it really their fault though?
I checked the time once more. If I miss the sub, I’ll miss the air-train and miss my flight, and I can’t afford that. Scarcity in time, money, affection or anything else consumes cognitive resources like memory and attention and leads to cognitive deficits. My condition of minor scarcity was not comparable to a homeless person’s situation, but the psychology behind this is the same. The psychology of scarcity suggests that being in a situation of scarcity leads to cognitive and behavioral responses that are counterintuitive to how the brain works. We place higher value on whatever is scarce. For example, a person living in scarcity will prioritize short-term gains to satisfy that scarcity right away. Being in poverty affects cognition functions and leads to decisions that exacerbate conditions of poverty – a vicious cycle. This insinuates that being in poverty is not only a result of being poor but also a cause for being poor. To alleviate poverty, this cycle all together must end. To alleviate poverty, we need to…. Alleviate poverty?
Giving a poor person a fashionable new pair of shoes, although groovy, does not necessarily help solve their poverty problem. We do good with good intentions. It feels good. However, this good is doing more harm. To our defense, we are socialized into thinking that the poor need our help. Even so, not only do our short-term solutions fail to contribute to poverty alleviation, they also exacerbate its repercussions. Keeping the poor in the vicious cycle of seeking short-term answers limits them from escaping poverty. It also gives birth to generations of poor people who believe that receiving aid is the only way to get out of poverty. The solution lies in thinking long-term and empowering the poor to be self-sufficient. Moreover, the way we perceive poverty alleviation requires a paradigm shift. We need to move from doing the kind of good that just feels good to the kind that actually makes lasting results – the kind that eradicates poverty.
Social entrepreneurship has proven to be the key alleviator of poverty when it empowers populations to solve their own challenges. The innovation in social enterprises addresses poverty at its grassroots levels while applying novel approaches to create social value. This enabled social enterprises to succeed in areas where governments have failed. With this instrumental role, social enterprises need to be driven by their missions first and foremost. If well-intentioned actions can lead to negative implications, then evaluating potential impact is essential to achieve social change. Modeling for both the long and short-term using frameworks like Stanford Business’ Impact Compass, The Centre for Social Impact’s guide to social impact measurement and the World Bank’s Measuring Impact Framework help in assessing impact (or the lack of it) as well as maximizing its potential. Different frameworks are applicable to distinct problems and contexts; no framework fits all. Ultimately, impact is the GPS towards any social good.
