Management of social entrepreneurial organizations

Leadership in social entrepreneurship
18.02.2020

Content

  1. Mission of the social enterprise
  2. Structure of the social enterprise
  3. Planning and preparation
  4. Launching
  5. Management and organization
  6. The Team
  7. Monitoring
  8. Activities for readers
  9. References

The Social enterprise is going through four stages:

  1. Dreaming: Defining the social need, generating ideas and solutions, analyzing strengths and weaknesses (what you can and what you can’t do), motivating collaborators, supporters, communities.
  2. Exploring: Researching markets, testing feasibility, developing business plan and raising start-up capital
  3. Start-up: Building enterprise and managing capacity, moving towards sustainability and success
  4. Growth: Expanding to new markets, reaching more target groups, offering new products/services

Mission of an SE start-up

The mission is the main long-term goal of an organization i.e. it defines the overall behavior of a social enterprise on the business scene. The fundamental reason why an enterprise is created is its mission. Once a business completes its mission, it is no longer necessary.

Examples:

  • providing access to the labor market for people at risk of poverty,
  • building and developing the social and work skills of vulnerable groups with whom the entrepreneur works,
  • raising public awareness of the significant social problems that the entrepreneur is struggling with,
  • developing social entrepreneurship as a sector in a given country or region,
  • generating funds to support social programs.

Structure of the social enterprise

The structure of the social enterprise is one of the first thing that should be determined in advance. There are several options that might be considered:

  1. Launching the new social venture within already existing organization. This could be a new department, program, or project of a larger organization; a new branch; a joint venture; or a variety of other creative setups. This might be a governmental or private institution, an academic body or professional association. Setting up an organization is costly. It requires time, resources, legal expertise, paper¬work, and ongoing tax, operational, staffing and maintenance costs. Non-profits often compete for valuable resources when they could be joining forces to achieve higher efficiency—whether it be people’s attention or funding.
  2. Start (or incubate) within an existing organization and then spin out on your own. This can provide valuable time and resources to test and improve the product or service.
  3. New business organization (such as company, cooperative, hybrid, charity – see Chapter 1).

Planning and Preparation

Step One

Analyze in details your target market, your goals and your limitation. Know in advance what you want to achieve, what you can achieve and what you cannot achieve:

  • State the main problem that the SE is addressing. Determine what specific goals your SE start-up sets, what kind of change do you think the SE start-up idea will accomplish.
  • Describe the individuals, groups or communities to whom the goals of the SE start-up idea are directed (who they are, what they are dealing with, how they will benefit from the SE start-up outcome).
  • Describe your competences, expertise and strengths (as a team and individually of each team member) and how they can help you in solving the social problem.
  • List the individuals, groups (formal or informal) or communities can assist or support your SE start-up idea with resources, ideas, and/or work.
  • Make a list of activities that your organization cannot perform but are vital for completing the SE start-up. Research and involve relevant companies or non-profit organizations.
  • Analyze your limitations and possible challenges before the start-up

Step Two

Do a stakeholder analysis – who are the participants, target groups, partners, subcontractors, supporters, end users outside the target group:

  • List all the stakeholders who might have an interest in the social venture
  • Identify public interest in resolving this issue.
  • What actions and attempts have been taken so far by other formal and informal organizations to address the SE start-up problem. If available, make a list?
  • Reach and engage stakeholders by establishing reliable channels of communication

Step Three

Make an environmental analysis of the particular region/ industry (economical, political, demographic, social, technology, legislative). What are the development opportunities such as support and regions development plans?

Step Four

Decide how to find funding sources. Look for specific programs/ grants and awards that could support finically the venture. Do a fundraising (optional), contact and attract business investors, sponsors and supporters.

Step Five

Examine the local supply chain. Local supply chain consists of all existing and accessible suppliers who could be used to deliver the desired row materials, products or services. In analyzing them, one should pay attention on their affordability, cost, technology and innovation level.

Step Six

Analyze the competitors – what are their core competitive advantages. Is it possible to collaborate with them for the common socially beneficial cause?

Step Seven

Prepare of a list of specific performance evaluation criteria. How you can be sure that the desired outcome has been achieved? Be as specific as possible. Develop crisis action plan and outline possible measurements to react to unforeseen circumstances and events.

The Young Social Entrepreneur’s Book of Guidelines and Checklists

Launching the social enterprise

  • Development and implement a plan of business activities, necessary for achieving the primary goal of the enterprise. The activities are: a) core activities: specific to the work and b) supportive activities (such as logistics, transport, marketing, promotion, delivery, monitoring etc.)
  • Plan and execute the launching: planning a public appearance, awareness events, posters, media coverage etc.
  • Recruit the right team members.

Management of the social enterprise

There are several principles that should be followed when managing a social enterprise:

  • Transparency. This refers to the flow of information both within the organization and in exchange with the outside world. Transparency in decision making means that all stakeholders know in advance what criteria are being used to make decisions, and by whom. Transparency in accounting means that there is no hidden information on certain costs and revenues.
  • Accountability. This refers to “who is in charge of what.” As a group, you are all jointly accountable for working together to achieve the social outcomes you’ve set out to create for your end users, but the specific departments (or individuals) have specific responsible and accountable for certain tasks and outcomes (ex. the Financial manager takes care primarily with issues concerning finances, revenues, expenses, taxation etc.)

The Team

The Team is probably one of the great asset of the social enterprise and the key factor for success. Building the right team is one of the hardest parts of the social venture. The team members should not only possess the right set of skills and competences for doing their job, but above all, they should be commited to the vision of the social enterprise and work for achieving it despite the possible dawnfalls and sacrifices they will need to endure. May be there will be times that people will have to work without being paid or to toil long hours in adverse, unhealthy and uncomfortable conditions or even take real risks for their lives and safety.

Most often, one of the cofounders takes on the role of the CEO. This is the person who carries forward the mission of the organization, serving as its representative. The chief executive is the face of the organization and works to gather support from others and also is most often the person who is held accountable for the organization’s performance. This is why it is crucial for the chief executive to surround herself/himself with the right team to build the organization. Other executive positions are the COO (chief operating officer who is in charge of the operations and production), CFO (chief financial officer), CMO (chief marketing officer) etc. Depending on the size of the organization, the social enterprise may be comprised of just few individuals who work together and communicate constantly without explicit relations of subordination, while other companies may need a complex organizational structure consisting of several departments with defined responsibilities, and channels of communication.

Team management functions includes:

  • Recruitment and selection of teams, individual specialists and ordinary contractors as per the needs of the project;
  • Preparation of job descriptions and contracts.
  • Allocation of roles, functions and responsibilities among the team members
  • Supporting and effective communication between execution units;

Control/ Supervision/ Monitoring of SE start-up activities

Control is the task of the manager to ensure that the activities in an organization are performed according to plan. Control also warrants the efficient and effective use of organizational resources for achieving goals. Supervision in the management of a SE start-up refers to guiding. Supervision is giving employees specific instructions on what is to be done, monitoring their efforts and holding them accountable for specific results.

Monitoring is checking progress against plans, which may need modification based on feedback.

Developing opportunities for the team members is talent management in SE start-ups. This includes inter alia:

  • Giving a hand and helping in difficult situations
  • Cross-training and smooth transition between departments
  • Featuring guest speakers from the community, a local college, or your own employee ranks who can educate your company in an area of expertise (Skye Larsen, 2018)

Performance monitoring:

  • Ensuring the effective implementation of each stage of a project before launching the next one by drawing up an adequate timetable for the individual activities;
  • Assessment of the correspondence between pre-planning and actual implementation at each stagel
  • Planning the necessary human, financial, technical resources at all stages to ensure the realization of the goals according to the set time limits, budget and quality standards.
  • Assessment of progress includes individual evaluations of team members on work completed and on schedule;
  • Administrative, technical, financial evaluation: assessment of resources utilization and forecasting;
  • Time control (systematic compliance monitoring);
  • Identification of problems with ongoing activities (quality assurance and scheduled monitoring system);
  • Preparation of interim reports (official document relying on the above observations and controls).

Public accountability

In case the social venture is supported by public funds and organizations (such as grants, programs, awards), the management of the SE should prepare the necessary format of reports to present before the responsible authorities. These documents typically include:

  • Annual report to the national agencies
  • Reports with the on-going activities (often published on the web-based sites with an open access.
  • Publication of final technical and financial data for evaluation of project implementation
  • Report on the social impact of the venture (in specific unites for measurement)
  • Promoting good practices and sustainable results

Activities for readers

  1. Watch the videos
  2. CAN-DO LISTS
    • Make a list with possible products and/or services that YOU and YOUR team could provide on the market.
    • Make a list with products and/or services YOU can actually deliver – this is your KNOW HOW.
    • Make a list with the resources you will use/spend to deliver the product or service.
  3. Develop a business plan for your future SE start-up!

Role play game:

Use a role play game to simulate a real case scenario:

  1. Explain the scenario
  2. Assign to each member a different role. Explain to him/her in details what is his/her duties, functions, special features even how he/she supposed to feel in the given situation
  3. Improvise a discussion or action
  4. Give floor for sharing various points of view and perspectives, while seeking a mutually beneficial solution

The role playing promotes expressions of attitudes, opinion and values of the various stakeholders/ participants. It develops empathy and involvement in the issue. The scenario should be realistic and relevant to the topic discussed. It should provide enough information and details about the participants, their motives, goals, actions, etc. Visuals as movies and photos can be used to make the perceptions more realistic.

Source: Active Learning Methodologies https://pdst.ie/sites/default/files/teaching%20toolkit%20booklet%20without%20keyskills.pdf

References and self-learning resources

Achleitner, A.K, Heinecke, A., Noble A., Schöning M. and Spiess-Knafl W. ,Social Investment Manual: An Introduction for Social Entrepreneurs (May 18, 2011).

Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and The Committee of the Regions (2011), Social Business Initiative Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation, Brussels, 25.10.2011 COM(2011) 682 final.

European Commission, 2013. Guide on social innovation, Brussels

European Research Institute on Cooperative and Social Enterprises www.euricse.eu

Evill, S, H. Ellermann, M. Bellamy, S. Rasheed, G, Howells& F. Zalamea, 2014. Guide for the Ambitious Social Entrepreneur, London https://www.clearlyso.com/wp-content/uploads/2013/03/ClearlySo-Guide-for-the-Ambitious-Social-Entrepreneur-3rd-Edition.pdf

Maretich, M., M. Bolton, 2010. European Venture Philanthropy Association: Social Enterprise: From Definitions to Developments in Practice, European Venture Philanthropy Association EVPA publ.

Mendell, M. and R. Nogales (2009), Social Enterprises in OECD Member Countries: What are the Financial Streams? in A. Noya (ed.), The Changing Boundaries of Social Enterprises, OECD, Paris.