This document summarizes a roundtable presentation on leadership in social enterprises. It discusses that leadership is a key but neglected area of study for social entrepreneurship success. Common leadership styles for social entrepreneurs included ethical, transformational, and empowering styles. Developing multiple bottom lines beyond the double bottom line of social mission and income could further facilitate marketing and partnerships. Effective leadership requires understanding an organization's culture and fitting leadership style while avoiding poor CEO fits or not balancing social and financial missions.

1. A Roundtable Presentation at the USASBE
2016 Conference, San Diego, CA
Understanding Leadership in Social
Enterprises
• Mark Pomerantz, Worldshapers!, Seattle U.
• Seema Pissaris, Florida International U.
• Robert S. D’Intino, Rowan U.

2. Introduction
Social entrepreneurship is a promising
development that may lead into a new
era in which we more effectively
harness private initiative, ingenuity,
and resources to improve social and
environmental conditions. We need to
provide the right support and we need
to address fundamental questions.
Dees, (2007)

3. Understanding Leadership in Social Enterprises
• Roundtable Question One:
–Is the importance of leadership a
neglected area of study in social
entrepreneurship that is key to the
success of social enterprises?

4. What is Social Enterprise?
• The basic definition of a social enterprise
is an organization that has a double
bottom line; fulfilling a social or charitable
mission and generating significant earned
income. (From many sources)

5. Social Entrepreneur Leadership Styles
• “However, social entrepreneurs seem to be rather similar
in their leadership style. The study found that, according
to their direct followers, i.e. key team members, Schwab
social entrepreneurs across the board scored very high
in ethical leadership, transformational leadership and
empowering leadership, with means ranging from 5.15 to
6 out of a maximum of 7 points in the survey.
• In contrast, the often less desirable autocratic leadership
was least represented, with only 2.8 out of 7 points, on
average. The middle ground (4.4-5.5 out of 7) was taken
by the different aspects of transactional leadership ”
Heinecke, Kloibhofer, & Krzeminska, Schwab Foundation for Social
Entrepreneurship (2014), P.4

6. More Dominant Social Entrepreneur Leadership Styles
• Ethical Leadership
– Concern for Employees and Mutual Trust
– Ethical Standards Enforced
– Ethical Personal Life
• Transformational Leadership
– Leader imparts common uniting vision
– Employees challenged to test old perceptions and ways of thinking
– Employees appear to like this style best
• Empowering Leadership
– Independent action by employees encouraged
– Developing employee potential and encouraging creativity
Schwab Foundation (2014), P.4-5

7. Less Dominant Social Entrepreneur Leadership Styles
• Charismatic/Authoritarian
– Leader takes full responsibility for decision-making and policy
– Communicates in a commanding way
– Appears to force opinions and values onto others.
• Transactional
– Employee performance linked to predictable financial rewards
based on positive or negative feedback by the leader
– Employees seem to regard transactional leadership skills as
important to an effective leader
– However, majority of social enterprise leaders in survey seem to
lean towards transformational style
Schwab Foundation (2014) p.5

8. A New Middle Ground?
• Transcendental Leadership
– More strongly motivated to directly inspire employees
and stakeholders with change vision than
transformational leader
– More directive than empowering or servant leader
– Combines strengths of charismatic leaders with those
of transactional and transformational leaders
– Counteracts negatives of authoritarian or charismatic
leader with more spiritual focus reflected in concern
for welfare of clients and employees
Sanders, Hopkins, and Geroy (2003)

9. Framing the Social Enterprise Organization’s
Leadership
1. Investigating the organization's basic culture, including its politics
and symbols;
2. Investigating and characterizing the organizations existing
leadership type or pattern, e.g., charismatic or authoritarian
leadership, servant leadership, transactional leadership,
transformational leadership, transcendental leadership, and etc.;
3. Investigating the organization's structure, strictly hierarchical, flat
with people entrusted with authority based on their knowledge and
ability, or some combination of the two;
4. Investigating how personnel are managed and employees treated in
the organization, e.g., do they take a Taylorist approach, more
traditional human resources approach, or a more innovative human
performance technology approach?
5. Using the data to frame a more efficacious leadership pattern that
best fits the organization’s culture and needs.
Bolman and Deal, (2008)

10. Leadership Pitfalls to Avoid
• Hiring CEO or senior manager with poor organizational fit as
reflected in not sharing the:
– Social mission fit
• Guarding the primacy of the social mission while balancing it with the
financial mission
– Cultural fit
• Seeing employees as an asset and fostering their satisfaction, motivation,
commitment and intention to stay
• Stressing collaboration as much as competition
– Founder fit
• Working well with and complementing the strengths and weaknesses of the
founder.
• (Often, the founder of a social venture is more creative and visionary than
organized and attentive to details,)
• Being respectful of the founders vision while adding day to day management
skills
Schwab Foundation (2014), pp. 8-11

11. Impacts of Positive Leadership in Social
Enterprises
1. Setting an ethical leadership
example for other organizations
2. Rebalancing an organization that
may not be functioning as well as it
could to serve clients better;
3. Serving the needs of the greater
community by lessening its
economic and environmental burden

12. Multiple Bottom line Organizations
• Roundtable Question Two:
–Is it efficacious to turn a double
bottom line organization into a
multiple bottom line organization?

13. Multiple Bottom Lines in Social Enterprises
• The double bottom line of a social
enterprise is the mission of the
organization and generating earned
income.
• Developing multiple bottom lines such as
serving the greater community, preserving
the environment, advancing the well-being
of employees, etc. are also important
• Multiple bottom lines may also help
facilitate marketing and strategic
partnerships

14. References
• Bolman, L. G., & Deal, T.E. (2008) Reframing
organizations: Artistry, choice and leadership, 4th Edition
Jossey-Bass: San Francisco.
• Dees, J.G. (2007) Taking social entrepreneurship
seriously. Society, 44(3), 24-31.
• Heinecke, H., Kloibhofer. M, & Krzeminska, A. (2014)
Leadership in social enterprise: How to manage yourself
and the team, Schwab Foundation for Social
Entrepreneurship/World Economic Forum: Geneva.
• Sanders, J.E., Hopkins, W.E., & Geroy, G.D. (2003)
From transactional to transcendental: Toward an
integrated theory of leadership. Journal of Leadership &
Organizational Studies 9(4), 21-31.