In the news, Inside Track, May 2010
The rise of the social enterprise
I recently read about a new organisation form coined ‘social enterprise’ in the book Hybrid Organizations – New Business Models for Environmental Leadership.
The concept says that between a company like BP who maximises profits for their shareholders at the expense of a healthy planet and safe workers, and a charitable pure-play like PETA, there is a spectrum of hybrid organisations that blur the boundaries between traditional not-for profit and commercial organisations. Take for instance Oxfam, which is a well-known example of a non-profit with income generating activities.
An inspiring example of genuine corporate social responsibility is Balfour Beatty, a global leader in construction and engineering, where the health and safety of their workers and the public is top priority. Their ‘Zero Harm’ programme aims to achieve this extremely ambitious target by 2012, which is nothing short of a revolution in this sector. However, construction by and large is still more about being ‘less bad’ than ‘doing good’, which is the mission of the next hybrid: the social enterprise.
One of the iconic leaders of this hybrid organisation is Ray Anderson. Back in the 90s his carpet manufacturer, Interface, polluted, exploited and harmed. Today, it is a role model for doing good, e.g. the water used in the process leaves the plant cleaner than when it entered. So if you can make great and clean products, earn ‘enough profit’ and write a best seller on the back of it all (Confessions of a Radical Industrialist) then why hasn’t this hybrid form become more mainstream?
In the harsh light of day, it boils down to two sides of the same coin in a capitalist system: most investors want maximum return and mainstream employees want the highest salary. Most of us want change, but we are seldom prepared to incur any loss, or would you be satisfied if your ISA invested in social enterprises which only yielded 3% would you join Burt’s Bees and work for a ‘liveable salary’ of two-thirds of what you make today?
I don’t have an answer, but I do know this – if we really want to develop more of these types of companies, then we can, because we are the system. And incidentally, social enterprises don’t need much regulation because they already surpass what the law requires. So Mr Cameron/Clegg – subsidise social enterprises to render relevant bureaucracy obsolete and deliver your promised cost cuttings!
