The Definitive Guide to Scaling Social Enterprise

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The Definitive Guide to Scaling Social Enterprises, outlining 12 new models for scaling social outcomes that are more effective than the traditional commercial mechanisms of organic growth, …

The Definitive Guide to Scaling Social Enterprises, outlining 12 new models for scaling social outcomes that are more effective than the traditional commercial mechanisms of organic growth, franchising, acquisition and merger.

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  • ...or some combination of these. Commercially, the number of viable scaling models are limited by the need to keep profits, and therefore ownership and control, in-house.
  • Commercial style scaling of social organisations also runs massive risk of replicating process and not quality
  • Social & Commercial organisations may have strong parallels in scaling from startup 1. First horizontal, then vertical growth within the organisation. 2. Followed by horizontal, then vertical growth within problem space. BUT... Divergence occurs in terms of end goal: ~ Final scaling goal for social orgs is to eradicate/solve the problem altogether, while ~ Final scaling for commercial orgs is about dominating/saturating the market in their original country and/or globally. The social goal is externally focused/outcome+end-user oriented, while the commercial goal is internally focused/self-absorbed, and commercial scaling models reflect this self interest, which means that they typically do not translate well in scaling social outcomes.
  • Other than these, social organisations that scale well in traditional ways are usually ones with huge amounts of funding either as seed funding when they started, or because they were in the right place at the right time for a deluge of funding, or because the founder was lucky enough to have or make the right contacts .
  • Challenges 1. Lack of support for replication due to focus on innovation, and lack of sector infrastructure for growth because it is assumed that commercial infrastructure will suffice. Funders also typically prefer not to get involved in making things happen (hands off approach). 2. Mid sized social CEOs don’t have the same management skills – they are usually founders so aren't recruited for commercial skills + they can't employ people who know how to do this type of thing because they can’t afford it, or if they can afford it the people don’t exist... 3. The local space is critically dependent on CEO leadership and no one else is usually primed to fill that role if the CEO gets distracted, for a range of reasons... 4. Finally if all other factors were in place, the brutal fact is that it is much harder to raising the necessary funding/investment... Commercial style scaling of social organisations also runs massive risk of replicating process and not quality Other than that the only organisations that scale well are ones with huge amounts of funding either as seed when they started, or because they were in the right place at the right for a deluge of funding, or the founder had the right contacts Hence the need for different models
  • Challenges 1. Lack of support for replication due to focus on innovation, and lack of sector infrastructure for growth because it is assumed that commercial infrastructure will suffice. Funders also typically prefer not to get involved in making things happen (hands off approach). 2. Mid sized social CEOs don’t have the same management skills – they are usually founders so aren't recruited for commercial skills + they can't employ people who know how to do this type of thing because they can’t afford it, or if they can afford it the people don’t exist... 3. The local space is critically dependent on CEO leadership and no one else is usually primed to fill that role if the CEO gets distracted, for a range of reasons... 4. Finally if all other factors were in place, the brutal fact is that it is much harder to raising the necessary funding/investment...
  • Commercial models are wrongly assumed to be the way to scale for all organisations. We’ve already discussed this earlier in the presentation, but it is still important to reiterate that this is not the case.
  • Mapping process is not the way to scale - the correct way is to map the semantic (meaningful) model, and particularly the critical success factors and outcomes that must be achieved along the way
  • Scaling is often assumed to be achievable through linear growth, when in fact it usually happens as step change. Actually just growing or planning to grow year on year because you always have done is a sure-fire method for creating failure. The challenges in scaling have step shifts, and you have to periodicaly plan to stop scaling to review, learn and redesign before scaling again.
  • The goal is scalable and sustainable outcomes, and as such, the model of change must be seen as separately scalable from the entity itself.
  • The key lies in the focus on scaling outcomes and not organisations, and in recognising that social outcomes are not tied to or dependent on individual organisations. The sustainable and scaled social outcome is more important than the organisation, and the approaches to scaling must reflect this.
  • Scaling models can be grouped in four categories
  • Quantitative = scaling the number of people impacted Qualitative = improving the nature of impact/transformation
  • The implication is strong partnerships during the development stage and a clear outcome oriented model, plus the need for evolving or growing to support scaled roll-out.
  • The challenge here is that organisations end up at the mercy of the whims of changing governments, so planning needs to be flexible enough to cope with sudden changes
  • I don’t have any specific examples here, but a number of the early stage organisations I’m working with are looking at long term scaling strategies that head in this direction, because scaling through traditional organisational growth cannot be achieved at the same rate. The key is to involve these organisations early on in the design and implementation of the model, or at least keep them informed and aware of development so that all parties are already primed for the transition when the time is right.
  • Either in terms of directly providing the service, or by training the new partners. I use the term ‘evolve’ rather than scale to imply changing to meet the new focus. It may require growing to help deliver the actual service, or scaling down and changing to become more of an advisory body taking consultancy or training fees.
  • Implication is reusable systematisation of the model - of approach rather than process in models, and packaging of service in microfranchising
  • Implication is reusable systematisation of the model - of approach rather than process in models, and packaging of service in microfranchising
  • 3. Movement
  • 4. Open Standards
  • Leveraging the power of people, platforms and crowds for funding, development, delivery and design.
  • The financial model here is typically crowd-funding
  • Some governments like Thailand’s already legislate to enable generic copy of patented drugs. We should expect to see more of this.
  • This is an example of an organisation facilitating collaborative networks between surgeons, but this can be applied to any field of people or organisations working towards better social outcomes. It just requires an organisation to act as glue, platform and facilitator, to enable both the collaborative innovation and its reapplication to outcomes through the real world network.
  • ...fast
  • ...and that tacking these on later , however is expensive and often ineffective. For example for corporates, designing to incorporate social outcomes is not costly, and as long as it is part of the operating model there is little additional cost to maintaining it. Tacking on social programs, or using CSR however, is expensive and not mission related so is distracting and not neither sustainable or effective .
  • Brand is becoming personality and not just image, which both enables and creates expectations of brand to act human, for e.g. with twitter profiles. It is therefore no longer easy to interact ‘psychopathically’ as many organisations have historically done. They now have to demonstrate human values to be credible and liked and trusted. They are also learning that social focii have significant commercial returns, from loyalty to new customer bases, and from innovation and recognition to consumer ‘love’.
  • Right now there is already some overlap with the boom in social enterprise, but across the space we’re seeing an increasing cross over and merge of social and commercial ways of working, and we should expect to see this grow further at least for the near future.

Transcript

  • 1. The Definitive Guide to Scaling Social Enterprise Rizwan Tayabali www.socialeffect.org | www.globosocial.org
  • 2. Outline
    • Commercial vs. Social Scaling
    • Three Myths
    • New Models for Scaling Social Enterprise
    • The Future
  • 3. Commercial vs. Social Scaling
  • 4. Commercial scaling is about more money
  • 5. The dream is explosive financial growth
  • 6. Typically via any of 4 scaling models Organic Growth Franchising Acquisition Merger
  • 7. These models are often costly in both their inefficiencies and the challenges of managing quality...
  • 8. ...but profits and easy access to borrowing typically mask these issues.
  • 9. These models are also often assumed to be the ONLY options for ALL organisations.
  • 10. Social scaling however is about better outcomes
  • 11. The dream is a world without hardship
  • 12. Different goals require different approaches
  • 13. Which means that the same models are NOT necessarily the answer.
  • 14. Some SE’s are easy to scale using standard commercial models... ...typically where they offer simple products or packaged services
  • 15. For those with complex human factor programmes it is not so straightforward
  • 16. They face significant organisational challenges in scaling through traditional models
  • 17. Lack of sector infrastructure Skills or capacity gaps Local dependence on CEO/Founder Raising Necessary Investment
  • 18. So we need to start thinking differently
  • 19. 3 Myths
  • 20. Myth 1 Commercial models apply for all orgs
  • 21. Myth 2 Replicating process is the way to scale
  • 22. Myth 3 Scaling is typically linear
  • 23. New Models for Social Scaling
  • 24. True social enterprises create and prove financially viable models of change...
  • 25. ...they are NOT simply about making money in socially beneficial ways.
  • 26. So although scaling for social enterprises involves elements of traditional commercial scaling up to the point of proving sustainable models...
  • 27. ...beyond that, the end-goal is about scaling the outcomes .
  • 28. The SE’s model of viable change must therefore be seen as separately scalable from the organisation itself.
  • 29. 4 Categories
  • 30. NOTE: 1. Scaling can be quantitative or qualitative, but ideally both., so aim for approaches that best achieve these together. 2. The examples given, even if not always perfectly in the SE space, are simply to provide reference and proof that these scaling mechanisms can and do exist. They are a viable basis for customisation, innovation, or mixing and matching depending on your organisation’s model of change.
  • 31. 1. Piggybacking
  • 32. i.e. Leveraging the scale of others
  • 33. Scaling through government e.g. Cimientos who have convinced the Argentinian state to model their 500,000 scholarships on the ones they provide
  • 34. Scaling through policy e.g. Care Peru who prove their models work and then lobby presidential candidates to ensure that policy is amended to safeguard change when they get in power
  • 35. Scaling through transgovernmental organisations e.g. Convincing, or merging with, entities like the Red Cross or UNICEF to incorporate proven models.
  • 36. Scaling through business e.g. Hybrid value chains like the partnership between Carlos Cruz and Danone to offer formal job opportunities to marginalized communities outside Mexico City while creating a new distribution channel for nutritious goods.
  • 37. Organisation must evolve to support delivery
  • 38. 2. Dispersal
  • 39. i.e. Seeding the model and facilitating the spread
  • 40. Scaling through transferability e.g. 826 National and Transition Towns that have seeded a host of local variants around the original model
  • 41. Scaling through microfranchising e.g. Vision Spring’s “Business in a Bag” empowering local entrepreneurs to launch their own businesses selling eyeglasses
  • 42. Organisation must evolve to manage spread or distribution
  • 43. 3. Movement
  • 44. For models where successful social outcomes require changing mass behaviour
  • 45. Scaling through brand e.g. La Usina who are developing a premium clothing brand that raises awareness of disability rights
  • 46. Scaling through mass participation e.g. Ashoka in Mexico who are aiming to create a culture of civil action via a 10 year managed program of ideas for change
  • 47. Scaling through co-operation e.g. Movimento Nossa São Paulo which is a network of 600 civil organisations working together to lobby government with an agenda and set of goals to provide a better quality of life for all inhabitants of São Paulo
  • 48. Organisation must evolve to manage the logistics supporting movement
  • 49. 4. Open Standards
  • 50. i.e. Leveraging open interaction for funding, design, development, and delivery.
  • 51. Scaling through open source e.g. Ushahidi which uses open standards and collaborative networks for sourcing development and leverages the power of crowds for delivering change
  • 52. Scaling through open design e.g. Cipla’s generic retroviral drugs. Open (unpatented) design can and should be extended to product innovations addressing social needs. Innovator may enforce commons licensing for efficiency and learning sharing with organisations that reproduce design.
  • 53. Scaling through collaborative networks e.g. SpineConnect, which is a collaborative innovation network (CoIN) for spine surgeons to collaborate on difficult and unusual cases and develop better outcomes .
  • 54. Organisation must scale to provide advisory support and platforms for continuous improvement
  • 55. The Future?
  • 56. The world is changing
  • 57. Both sectors are realising that building in financial or social aspects at start, adds little extra cost and significant rewards
  • 58. Web 2.0 is forcing companies to converse to build loyalty, which in turns forces them to humanise and stay true to social values.
  • 59. Social entities are using brand , business model innovation , creating revenue streams, and leveraging the power of crowds .
  • 60. The sectors will merge even further
  • 61. New models of operating, new ways of working, and new options for scaling will continue to arise ...
  • 62. Watch this space!!
  • 63. Rizwan Tayabali SE Consultant, Social Effect rizwan.tayabali@gmail.com www.rizwantayabali.info www.socialeffect.org | www.globosocial.org Find me on Twitter & LinkedIn