SI Series 5: The Principles of Social Enterprise

The Other Side of Innovation.

I’d like to step back a bit from the notion of social innovation, and compliment this blog conversation with more on social enterprise. As noted, a Social Enterprise is “an organisation or venture that achieves its primary social or environmental mission using business methods.”1 Typically, social enterprises have several principles:

– Iterative growth: they’re often seed-funded with less than $20K because they start with a pilot project to begin building the market.

– Self-funding: they’re decidedly entrepreneurial because they are self-funding rather than external funding dependent.

– Market scaling: they’re socially responsible organisations who can define their scope in ways that make it possible to define their growth as a decline after a tipping point. An example of this is ‘literacy.’ If a social enterprise has the goal of getting people to a grade 10 reading level, then when they accomplish this they can dial back and decline their services based on the amount of success.

– Customers as contributors: social enterprises shift from seeing people as needs to be filled and problems to be fixed to seeing people as gifts to be engaged. They use their own customers as their developers (ex. Open-source tech, etc.) which helps democratize the system.

– Agile capacity building: these organisations following the shifting edge of market opportunities.

– Building community: they have one of more approaches to weave social networks within their network of customers as well as creating more connections between customers and their communities.

The key thing to acknowledge in a social enterprise is that the effort is usually to create a culture of meaning in the work participated through economic, financial, organisational, social and environmental means. Social enterprises often have happiness indicators, in that they don’t just work for money, but rather, for a level of job satisfaction, ethical investment and meaning making as part of their work. It is this spirit of the enterprise that transforms regular business to a community of practice that includes revenue generation.

GCL-LogoThe Grameen Bank has seven principles of social business, as conceived by founder Muhammad Yunus. The Grameen Bank is a micro financing enterprise organiser, which puts the power of opportunity into the hands of the poor. It is an excellent example of a social innovation, and the work they do is to create and initiate social entrepreneurism and social enterprise.

Next, we’ll give you a Canadian example of a social enterprise, one that just started months ago and is having excellent success not only financially but also in terms of its social impact.

– Mike Unrau

  1. It should be noted that some of this blog entry is based on Brian Smith’s course in “Social Innovation, Entrepreneurship & Enterprise.”5
Tagged with ,
This post was written by
Comments are closed.