ALSO - What are the challenges ? In this presentation – Briefly summarise understanding of enterprise growth and sustainability – drawing on academic and policy literaturesCase studies from a study we conducted in 2010/11 – insights and lessons....ConclusionsLittle is known about the processes involved and the growth aspirations and capabilities of such enterprises, these issues are explored by addressing two research questions: They also have to find the resources to compete and grow, a particular challenge for organisations that are often financially precarious and have limited resources generated to invest in R&D and capability building.
Even in context of ‘mainstream’ businesses – nature of enterprise growth and how it occurs is highly debated ....Growth = uneven and discontinuous process subject to uncertainties - nature of the markets, the external circumstances faced, and characteristics/ competencies of entrepreneurs and businesses. Related research has shown how entrepreneurs can enhance their ability to grow and diversify businesses by building entrepreneurial teams with greater diversity of human capital (i.e. knowledge, skills) (Ucbasaran et al., 2003). As well as basic managerial competence, higher order dynamic and adaptive competencies are likely to be of particular importance for ESEs seeking to address ‘low carbon’ markets which may be ill-defined and emergent in character. Business owners/directors exhibit a range of motivations and aspirations, not all of which are monetary
Economic and business growth - desperately sought, but what form and how? - Sustainable development/sustainability – contested to point of meaninglessness? Ecological modernisation ……focus on institutions/ regulation shaping opportunity structures for green entrepreneurs.... Relatedly, Role of values in interpreting/shaping notions of growth and prosperity – different interpretations of policy makers and on part of diverse business and SE organisations. ALSO article p. 9
Grassroots community action – ‘Small is Beautiful’ (Schumacher) vision…… Fluid and contested policy context – what are the recent experiences of contrasting types of social enterprises which claim to integrate economic, social and environmental objectives?SOCIAL ENTERPRISE – NOTE Tensions inherent in the concept within recent policy discourses, particularly given the diversity of organisational forms, motivations and expectations around their role and potential (Teasdale, 2011): ‘Social’ dimension of term lends itself to the traditional concerns of not-for-profit civil society organisations to address social needs which the state and private sectors are unwilling or unable to meet, as well as notions of ‘alternative economic spaces’, egalitarianism, democratic governance and accountability. ‘Enterprise’ dimension of the term lends itself to ‘neoliberal’ perspectives, emphasising business opportunities, the efficiency of unfettered markets and a need to restrict the role of the state, including by transferring responsibilities to the private sector and civil society (Sepulveda, 2009).ALSO article p. 9
Diverse forms of value creationEnvironmental - conservation of ecosystems and biodiversity + life support functions of nature Economic – provision of ecosystem services and monetary/employment outputs in green/low carbon sectorsSocial – growing individuals, relationships and cultures through actions to further self-actualisation and achievement at individual, community and societal levels. (e.g. Korsgaard & Anderson, 2011; Shepherd and Patzelt, 2011) Replication may also occur less formally, whereby ‘green niche’ activities multiply in numbers (e.g. as in the case of increasing public/consumer interest in ethical food and community supported agriculture) or through concepts being absorbed within ‘mainstream’ practices (Seyfang and Smith, 2007).
Size: most of the cases are small (i.e. in employment/turnover terms)…..All demonstrated elements of scaling up and growth, although there were differences in how this was conceptualised. Age - range from relatively new organisations (three established since 2009) to others that had been established for a number of years (the oldest founded in 1989). ESEs contributing to sustainability in multiple ways:strengthening local biodiversity through asset management, through waste recovery and various low carbon products and services. A number of initiatives targeted training, education, rehabilitation and job creation for disadvantaged groups.Some also aiming to influence the behaviours and actions of individuals, organisations and policy makers in ways that were supportive of sustainability. Think3e - most dynamic instance of rapid growth: a consortium of third sector and private waste recycling enterprises established in October 2009 which claimed a turnover of £1.6 million and just under 800 p/t employees/associates by 2010/11.
Size: most of the cases are small (i.e. in employment/turnover terms)…..All demonstrated elements of scaling up and growth, although there were differences in how this was conceptualised. Age - range from relatively new organisations (three established since 2009) to others that had been established for a number of years (the oldest founded in 1989). ESEs contributing to sustainability in multiple ways:strengthening local biodiversity through asset management, through waste recovery and various low carbon products and services. A number of initiatives targeted training, education, rehabilitation and job creation for disadvantaged groups.Some also aiming to influence the behaviours and actions of individuals, organisations and policy makers in ways that were supportive of sustainability. (Think3e - most dynamic instance of rapid growth: a consortium of third sector and private waste recycling enterprises established in October 2009 which claimed a turnover of £2.5million and just under 800 p/t employees/associates by 2010/11.)
CASES used to examine : What are the different approaches to growth adopted and the missions and values that underpin them? What are the resources and entrepreneurialcapabilities needed to effectively implement such strategies?
Danger of simplifying complex reality....... 3 cases clearly fit green niche category.....MCSA and Food Hub Initial aim was to deliver local grass-reared lamb from a soil association registered farm. By becoming a member of the project, individuals are then able to buy flock-shares in advance, thus guaranteeing the farmer some security of income. This scheme helps the local economy by supporting local traditional hill side farmers and re-engaging people with local food.
Think3e – waste recovery services for both private/corporate and public sector customers, involving rehabilitation/job creation for socially excluded groups. -claimed an important advantage over competitor ‘social training companies’ in that they not only develop individuals to be ‘job ready’ but are also able to create and sustain employment, albeit on entry-level minimum wages, and have a positive environmental impact in terms of diverting waste from landfill.
Focusing on some examples of multiple work streams + demonstrating multiple benefits - a particular strength for some: Diversification to further financial sustainability was important in a number of cases, entailing new services which are in some way related to an organisations’ core activities or which take fuller advantage of their resources and assets, such as their skills/competency sets, property or environmental assets.Bike related maintenance training, cycle repairs, pedicab servicesTraining and confidence building for excluded youth, vulnerable adults. Growth in context of local (city) economy conceptualised in terms of turnover, as well as social and environmental value.
A well know example of an ESE...Emphasise diversifying (last point) Controlled by a voluntary board of directors representing local communities and councils as well as local and national businesses.
Cautious attitudes to enterprise growth influenced by ‘alternative’ notions of growth : Environmental consultancy, renewable energy installation, education & training
More conventionally entrepreneurial (?) Think3e established Oct 2009 as a consortium of third sector and private waste recycling enterprises, growing rapidly in terms of its core team and numbers of associates/part-time employees. This growth was achieved by focusing on corporate customers and public sector programmes to support employment and work integration:By the end of the group’s second year turnover had increased to £2.5m. combined both private and social enterprise elements, but with the private sector legal form dominating. This hybrid organisational form was designed to combine control with flexibility, tapping into the knowledge/expertise of local actors and available pools of labour. BUT - While their scale allowed them to build legitimacy and win contracts with local authorities and government agencies, the approach proved to be problematical, with the organisation subsequently fragmenting and parts of the group spinning out in early 2012. Growing tension and conflict within Think3e’s management team around aims/strategy appears to have been an important factor in the subsequent fragmentation of the consortium/group.
Often linked to their expertise and enthusiasms – eg organic horticulture, forestry, cycling, environmental science and green/low carbon technology.In some cases linked to dissatisfaction with current ‘ways of doing things’ (e.g. “I was absolutely pissed off at the way government is mismanaging woodlands”) Some clearly motivated by ‘alternative’ life course decisions and desires for more meaningful employment. (eg uni lecturer, ex RAF pilot....others had left larger orgs)Variations in willingness / propensity to engage in business / policy agendas and with large/powerful actors...... Some cases particularly demonstrate how the organisational missions have evolved over time. At times there can be conflict between the different goals, but in other cases the social aims and environmental objectives are combined into a single service. This leads to questions over the motivation to grow and the extent to which organisations consider ‘growth’ to be a positive thing.
Cases showed strengths in : - Functional management skills – eg finance, HRM, logistics (or access to external support for gaps)-Sector specific competencies - eg organic horticulture, land management, environmental science, low carbon tech- SE specific competencies – eg managing volunteers, bid writing, engaging with a wide range of stakeholders + building markets that may be nascent/ill defined, and reporting on soc/env impacts (SIM/SROI)Strategies for growth need to be understood in relation to the markets/customers targeted and the shaping influence of formal institutions and regulations, such as those relating to waste management, nature conservation and organic standards for food production, as well as state welfare to work policies. In all eight cases achievements have been dependent on building relationships and partnerships with beneficiaries/clients, volunteers, and various stakeholders, including with other social economy organisations, universities and (to a lesser extent) the corporate sector. In cases involving knowledge based services and consultancy, links to universities have been important. Hill Holt Wood had benefited from two Knowledge Transfer Partnerships with the region’s university (as had one other initiative surveyed but not examined here). The graduate projects enabled and overseen by Studentforce for Sustainability have been important in developing their climate change adaptation work, extending this beyond the East Midlands: “By the end of it we had over 40 graduates doing these projects over the country, so if ever anyone wanted some adaptation work doing we had a huge knowledge bank of case studies of what had worked, so we could simply plug it in and take the same project service to another locality.”
Concerns about coalition government policy/austerity measures Changes to conditions for funding seen as undermining ability to meet needs of client groupsScepticism of ‘Big Society’Interviewees expressed critical attitudes and distance from government actions, including with respect to the conditions for funding on which they had been dependent and changes (actual and impending) that were seen as undermining their ability to meet the needs of their client groups, including young people and the ‘hard-to-help’ long-term unemployed. Most autonomous of both the public and corporate sectors were the two food enterprises, these being particularly rooted in local consumer markets and voluntary action support.
Initial focus on organic upland sheep farm -evolved from its original CSA conception by seeking to extend its customer base to a wider local community of interest, with the MD representing this as a necessary cultural shift away from a ‘deep green’ motivational philosophy towards a more commercial and inclusive orientation: Case highlights the importance of building relationships with a range of local stakeholders, including small businesses and the need to set up new businesses to plug gaps in local supply chains and enable the further development of local food provisioning. Organisations also need the ability to learn and adapt to changing multiple objectives that balance the environmental, social and financial elements – the dynamic capabilities identified by the management literature (e.g. Teece et al., 1997). Matlock illustrates a process of reflexive learning and change in response to debate about the limitations of the CSA amongst its members. Health and environmental concerns arising from the focus on meat (primarily organic lamb) were initially voiced by vegetarian members of the local Transition Group. Subscribing CSA members also found that they were consuming more meat than initially intended (i.e. particularly given that typically half an animal carcass is supplied and with ‘nose to tail’ consumption encouraged to minimise waste) raising associated health concerns. Moreover, the need for members to drive to a remote farm to collect the meat was seen as undermining of the initiatives environmental/low carbon aims. At the same time, the CSA had been poor at creating jobs, only supporting the tenant farmer’s income and being over-dependent on unpaid input from a small group of the most committed volunteers (some being paid with meat). Through a process of collective debate it was therefore decided to adopt a broader approach to local food, encompassing vegetarian concerns, local growers and other local food businesses. As a result, activity shifted to developing a Food Hub to replace the CSA (CSA tenant farm will be a small part of this) to act as an online shop and a more centralised / easier access outlet for the local area.
GRADUATE PLACEMENT SCHEME / CONSULTANCYChangeAgents UK (Studentforce for Sustainability) has developed beyond its original local/regional focus to become a nationally renowned graduate placement programme. This organisation also provided sustainability related consultancy services, including climate adaptation work for local authorities in the East Midlands which was then rolled this out to the South West, playing a key role in Gloucester LA’s delivery of their climate change mitigation/adaptation agenda.Ie ‘crowd sourcing’ of ideas……Drawing on creative ideas and developing ‘co-production’ through relational learning with user communities and other actors (von Hippel, 2005; also Maclean et al., 2012).
Few examples of partnerships with the private sector, with Think3E being a notable exception as an organisation oriented around engagement with the private sector. Can also be dynamism in how organisations’ present themselves externally +language used. Those that had worked most with the corporate sector emphasised the importance of the different language and approaches that may be needed when building relationships. Think3e - appealing to the corporate sector was described in terms of presentational strategies tailored to the language of customers + avoidance of terms associated with the social economy and social enterprises (see quote). Some interviewees, particularly those that had some involvement in consultancy, were particularly explicit in their criticism of private sector practices, which they viewed as ‘unethical’ and the extent to which such practices benefited ‘insiders’ and incumbent businesses. Such comments reflect the reluctance of some social economy organisations, at least, to engage with the private sector (DOMINANT PROFIT MOTIVE)Matlock CSA had experienced tensions in its early stages, with some of its members rejecting such engagement and the ‘language of business.’ A woodland collective, originally part of this initiative, had ‘split because [they] didn’t like the business side, didn’t want to talk about business plans.’
The cases show that ‘growth’ can take multiple forms, is sometimes contested, with the need to explore what it means in specific contexts, both in terms of economic indicators (turnover, profit, or employment) but also in relation to wider objectives which may involve differing approaches to sustainability and conceptions of social impact. Growth also presents new dilemmas with the scaling up to cover a wider geographic area resulting in a potential loss of local focus and partnering with organisations with a different set of values, raising concerns amongst some stakeholders around the extent to which ethical aims may be diluted or compromised. The cases show how such increase in scale and scope requires a constant reflection on how this affects social and environmental value, especially organisations that are embedded in local communities.
1 Small and beautiful’ - maintaining their distinctiveness, with ‘growth within limits’ in context of local economies & management of environmental assets – eg ethical food/CSA initiatives. Restricted to niche/premium markets (e.g. ethical/organic food); High dependence on voluntary input; Deepening impact dependent on building alternative supply chains through engagement with other actors; Lack specific business skills – need for low cost/sympathetic support; Oppositional/countercultural values – limiting willingness to engage/compromise with large/powerful actors. ‘Green knowledge economy’- with strong links to a wider knowledge base (i.e. inc universities and other sources of expertise), with specific expertise and innovative ideas, influential in sustainability strategies of some public and private sector organisations. Income strongly reliant on niche markets driven by regulation/incentive structures and sustainability policies of public sector; Growth and competitive market pressures may increase tension between value-based sharing and need to capitalise on know-how/intellectual property‘Green collar army’ (or providers at scale) – eg of recycling/job creation initiative demonstrating rapid growth (beyond the region).Dependence on public quasi-markets in which ESEs often subordinate to corporate prime contractors (e.g. welfare to work programmes); Limited empowerment of trainees/ employees in positions which may be temporary and on minimum wage; Limited policy support for green/sustainable job creation.
Beyond green niches, ian vickers, brass and tsrc april 2013
Beyond Green Niches? Growth modes ofEnvironmentally Motivated Social EnterprisesIan Vickers & Fergus LyonBrass & TSRC EventCardiff 16th April 2013Funded by:
Key questions1. What are the different approaches to growthadopted by environmentally motivated socialenterprises (ESEs) and the missions and valuesthat underpin them?2. What are the resources and entrepreneurialcapabilities needed to effectively implementsuch strategies?
Explaining enterprise/business growth• Growth - indicators such as turnover, profits, sales,employment, market share and physical output.• Business/entrepreneurial skills and human capital -sector specific knowledge, and managerial skills.• ‘Higher order’ (dynamic) capabilities – innovation andlearning (Teece et al, 1997; Foss, 1997)• Motivations – not always monetary (Gimeno et al, 1997).How converted into strategies for economic, social andenvironmental value?• Trust and legitimacy building amongst communities,networks/key actors (Bloom & Smith, 2010)
Sustainability – different visionsand meanings (1)• Ecological modernisation - progressive reform of existingeconomic, political and social institutions (Hajer, 1995;Murphy, 2000). Market mechanisms/technology toachieve a low carbon economy (e.g. BERR, 2009).• Government - ‘green stimulus’ for economic recovery,and ‘green-collar’ jobs (e.g. GNDG, 2008; Ottmar andStern, 2009).
Sustainability – different visions and meanings (2)• ‘Alternative’ / ‘Green social economy’ – communitarian, ‘bottom up’responses, origins in environmental politics/social movements (Pepper,1996; Smith, 2005).• Transitions Network – critical of limited government actions, emphasis oncommunity-led innovation and eco-localisation(http://www.transitionnetwork.org; Scott-Cato & Hillier, 2010).
Models and strategies for scaling upenterprises and impacts• Green niche markets - e.g. local producer/consumer co-operatives to harness collective purchasing power andeconomies of scale for sales (Seyfang & Smith, 2007; Littleet al, 2010)• Replication eg social franchising (Litalien, 2006; Traceyand Jarvis, 2007)• Alliances - consortia to tender for public sector contracts(e.g. waste recycling – Rowan et al. 2009)• Influencing mainstream organisations/practices (Seyfang& Smith, 2007).
Source of evidence• Research part of a Knowledge Transfer Partnership withSocial Enterprise East Midlands• Online survey and interviews - sampling frame of 600organisations in the English East Midlands• Survey between August-November 2010 (n=87).• Follow-up interviews with ESEs (early 2011) – 8 casesselected for further analysis.
Enterprise name Sector/activityEmployees/volunteers (2011)Change Agents UK Placement scheme for graduates -sustainability sector8 + 20 volunteersCorner Plot Food – organic smallholding 1 + 8 volunteersCommunity SupportedAgriculture MatlockFood - local/organic lamb + Food Hub Farmer & family+ 40 volunteersFuture Cycles(Leicester Ltd)Transport, recycling, training 7Hill Holt Wood Woodland management, education &services32Seagull Recycling Recycling, training + nature reserve man. 4ft 3pt20 volunteersT4 Sustainability Ltd Environmental consultancy, renewableenergy, education3 ft7 ptThink3e Recycling and training 40 ft360 pt/associatesCase study ESEs – activities and employment
What are the stages, forms andprocesses of ESE growth?NicheMoving beyond niche.....?High growth.....?
Enterprise Mission/objectivesCorner Plot Organic produce and box scheme , willows for basket making as well asincreasing wildlife habitat. Contribute to social inclusion through educationalvolunteering opportunities.Future Cycles(Leicester Ltd)Bike related maintenance training, cycle repairs, pedicab services and sales oftheir own range of ZombikesTM: donated bikes renovated and given a newlease of life; Training and confidence building for excluded youth, vulnerableadults.Matlock CSA& Food HubTo support traditional upland farming, environmental conservation andhealthy eating by supplying local organic meat;To create and develop a local Food Hub, and to re-engage people with theirlocal food system through newsletters, cookery events and farm visits.‘Niche’ ESEs
EnterpriseMission/objectivesMovingbeyondnicheChange AgentsUKGraduate placement agency to help green universities and colleges; Toproduce innovative projects that can be used as best practice, furtherdeveloped and rolled out on a wider basis.Hill Holt Wood To maintain ancient woodland for use by the public; Teach and developyoung people; Create products and services valuable to the community;Promote the cause of environmentalism and sustainability.T4 Sustainability To bring about positive env. change by: encouraging people to think aboutissues in a quantitative way; to set practical examples; to supportcommunity projects.SeagullRecyclingTo provide services and training to businesses, individuals and thecommunity and voluntary sector related to recycling/reuse activities;Manage a coastal Eco Centre.HighgrowthThink3eConsortium &GroupEmployment - innovative services to tackle worklessness; Education - arange of training and apprenticeships; Environment - a wide range ofrecycling and reuse options.‘Beyond Niche’ ESEs
Diversification and multiple work streams“...it’s a case of hitting the right kind of things [...] you wantto do something that’s a bit innovative and catches people’seye [...] The good thing about cycling is that it ticks a lot ofagendas. [...] because its recycling and re-use, it’s health, it’sjob creation and training and it’s sustainable transport.”Future Cycles
• A small (34 acre) self sustainingwoodland using traditional crafts• Managed as a habitat to beconserved, with the natural resourcesused to achieve employment,education and training goals• Diverse range of learners of all agesand abilities - reduces antisocialbehaviour and costs• Diversifying – eco-design/building
Attitudes to growth (1)“People often comment that the company is not growing fastenough, but we are growing in other ways that we feel areimportant - we are fans of prosperity without growth. [....] Abusiness can aspire to become the optimum size and remain so,which is a perfectly credible goal.”T4 Sustainability
Attitudes to growth (2)"So when we went into our very first customer, we werentgoing to the local corner shop; we were going to[supermarket chain]. Day one: meet the big corporatesand landing the business. There was an element ofpunching above our weight, in the fact that we had atarget 7,000 square foot, but it’s amazing what you coulddo with a good website. [....]. Within three months, we’dgrown out of that into a 20,000 square foot unit and thenby March/April last year [i.e. in 2010] we moved into thissite.”
Motivations of founders/core staffExpertise &enthusiasmsCriticalperspectivesLife coursedecisions –alternatives
Strategic relationships: public servicedelivery• 5 ESE cases with established/high trust relationships withLAs/ gov agencies• Providing services more cheaply than others, while alsoaddressing social needs for education and training ininnovative ways• Concerns about coalition government policy/austeritymeasures
Capabilities and relationship building - examples“We are working in town withother groups – the Matlockpartnership, town centrepartnerships, council, business,voluntary sector etc. [....] it’s notjust the Transition Group now, toincrease the scope andmainstream element of it. Getsome more traditional backing. Toencourage other people into themix, so it’s not just a green thing,trying to get away fromhippyism...”
Capabilities and learning“By the end of it we had over 40 graduates doing theseprojects over the country, so if ever anyone wanted someadaptation work doing we had a huge knowledge bank ofcase studies of what had worked, so we could simply plugit in and take the same project service to another locality.”
Capabilities - presentational• Different language/presentation needed when buildingrelationships, eg with the corporate sector:“[W]e try to portray ourselves as professional anorganisation as we possibly can be and it’s integral. [...]We’re in that phase where we’re stopping describingourselves as a social enterprise, even though we are, we’renow talking about us as a commercial company that cancompete head to head with commercial companies, andnot on a UK scale but on a European scale.”
Conclusions• ESEs make multiple contributions to economic, social andenvironmental value.• Need a range of skills/ competencies + dynamiccapabilities.• Values shape missions and growth modes and arethemselves subject to change/compromise.