I was lucky enough to be invited to a meeting on Thursday past that included an interesting mix of people. Persons as follows: council social services director, council workers of various levels, social enterprise consultants of different points of view, university professor, social enterprise director, and me. What was supposed to be a meeting about a particular social enterprise and its current issues, turned into a debate about social enterprise in the north of England.
What I found interesting about the debate:
1. No one could really point to any definitive white paper or treatise on the subject.
**They do exist, but I find them to add a bit more confusion than clarity.
2. It is clear that folks are still undecided as to what constitutes a social enterprise.
**There seems to be confusion around social firms v. social enterprises. I think social firms are a type of social enteprise. In fact, it is this very misperception of the social firm as definitive social enterprise that is holding back the potential of the sector.
3. Help for social enterprise is desired, but few can quantify how this help would occur.
**And those that can are divided into the enabling economy camp and free market makers (me!).
What I found most intriguing was the expanding view that the council should play a role in organizing the social enterprise market. I am not sure exactly how this would occur, but it sounded like it would be some sort of facilitation role along with a support role – forcing the council to deliver contracts to social enterprises. Personally, I think the council should limit its interaction with the sector to mirror that of private enterprise. Sure, the council should look into its procurement practices…BUT, not just for social enterprise – for all enterprise.
Here’s what I mean:
Social enterprises are complaining that the council will never give them contracts because they are too small or cost more. Um, did I miss something? I don’t want my tax money being spent on risky ventures that cost more, do you? I don’t mind if the unit price is higher, but the overall value must be more. What needs to be addressed is the way in which procurement views all contracting events. Currently, the procurement officer is driven to find the safest alternative at the lowest cost and does this by looking at unit price and the company’s accounts. A better way, more strategic and long-term in nature, is for the procurement officer to review the contract event from the perspective of the entire council (not just the finance dept). If each event was viewed in context against the councils’ stated mission/goals (Helping its citizens), we would likely see a wider array of types of companies winning contracts. Why? Because the value proposition would move to a more strategic level aligned with core goals and away from the unit cost evaluation. Example: Big firm v. small firm for supply of pencils to the council. On a pound/pence/safety procurement view you would nearly always pick the Big Firm. They will produce cheaper pencils and will be virtually guaranteed to deliver them for the forseeable future and will likely have the capacity to deliver in the volume necessary. BUT, if the procurement officer has a global view during the contracting event they might end up choosing the Small Firm (Social Enterprise or other) because it demonstrates value in other areas such as – responsiveness, social benefit, local economic spend, method of delivery, and customer service. The list could go on, but in my experience bad procurement is not about eliminating the small firm, but rather the absence of any strategic decision making. Note to small firms: sometimes the big firm will win because it can answer the strategic questions better – just because you are small or a social enterprise does not guarantee that strategic procurement will benefit you.
So where do we go from here? I suggest we rally behind social enterprises and entrepreneurs to increase their ability to “sell” while simultaneously asking the council to take a generically more strategic view on procurement. It would be dangerous to set social enterprise procurement quotas and/or guidelines. Instead, improve the process overall.
How do you define Social Enterprise?
Do you think social enterprises need to be given a hand out or a hand in improvement?
In any case, judging from this 2002 speech (which could be inserted today at any social enterprise event), it appears that the debate is not doing a great deal to move social enteprise forward. We need action by entrepreneurs.
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