What Star Wars can tell us about Social Enterprise

If you asked me to name my favourite films, my gut instinct is to say Star Wars (episodes four, five and six that is, although one, two and three aren’t as bad as all that, apart from Jar-Jar). What's this got to do with social enterprise I hear you ask - well just cool your Hoth-resistant moon boots and stick with me. 

With the new Star Wars film just around the corner I'm watching the trailers with awe and excitement. I feel a bit like the seven year old who saw the first film in a small, dingy cinema in Cornwall in the 1970s.

So to social enterprise. The nature of the battle of the Rebellion versus the mighty Galactic Empire got me thinking about the parallel with social enterprise and standard business. I know all big firms aren’t really hideous Vader-esque clichés but, hey, I’m having a bit of fun here.

On one side you have the fragmented Rebel Alliance - a rag-tag fugitive fleet (er - I’m mixing my science-fantasy metaphors, that's Battlestar Galactica) being pursued across the known universe (isn’t that from Dune?) founded on some mystical mumbo jumbo. This is like the social enterprise community. No one can really define it (I'm sorry Dave, I’m afraid I can't do that). It is slippery; a loose federation of coops, CICs, charities, registered societies and other exotic, hybrid special purpose vehicles cobbled together to form a movement. The politics are complex and sometimes unity seems a far horizon. 

Compare this to the Empire; a vast, malevolent machine with a clear governance structure directed from the top. Its minions are motivated by fear and greed. For the Rebellion (read social enterprise) power is diffused and the motley collective struggles against the Empire which is dominated by one man, the Emperor Palpatine. I should like to inspect his declarations of interest for swanky lunches paid for by Trade Federation corporate lobbyists.

And it always seems to be a man. Look at the Empire, can you find one female role model? Are any Stormtroopers secretly clone women? Despite some movement on this, FTSE100 companies are still dominated by men. Unlike social enterprise where there are large numbers of women leaders. The recentSEUK State of the Sector report points to 40% being led by women. This needs to get well above 50% of course. The Republic had strong female role models. Is Sophie Tranchell the Princess Leia of social enterprise? Is June O'Sullivan our Mon Mothma? Claire Dove our Amidala?

Let's look at the capital assets of the empire. Huge star destroyers, even more massive super-star destroyers. Then mightiest of all, the Death Star itself, which can destroy a planet (much like a massive oil spill or endless carbon emissions). Maybe, if Grand Moff Tarkin, of foul stench fame, had hired Futureclean - a social enterprise - to wash the seemingly limitless squadrons of TIE fighters, the packs of AT-ATs and the swarms of speeder bikes - he would be still be alive. All that stuff was beautifully maintained, sleek and impeccably clean wasn’t it? Just hold that image and think of a well-resourced corporate business that can seemingly throw money at all the equipment and gear it needs.

Compare this to the Alliance with its rusting speeders, bolted together X and Y Wings and its used, dirty tech. This is social enterprise: under-capitalized, lacking assets, begging and borrowing although sticking to good principles of reducing, reusing and recycling.

Then there is research, development, marketing and training. The Empire invests enormously in the Imperial Naval Academy, in clone armies, in new ways to crush and terrorize the opposition. They can even obliterate planets: “Fear will keep the local systems in line. Fear of this battle station.”

Many social enterprises lack marketing and training budgets and often struggle to invest in new services and products to grow but they are strong on innovation as the State of the Sector reports. The Rebel Alliance had to innovate and be clever to survive - finding hidden weaknesses, moving their secret bases, using cunning tricks to get past guards on forest moons. 

However, it is not all as gloomy as a Dagobah swamp. The rebels have key allies strung across the galaxy. They - and social enterprises - are motivated by values. They may have a small workforce (compared to the colossal Stormtrooper/corporate army) but they have an untapped pool of supporters. Many worlds and peoples will rise to support them, even lowly Ewoks. The lack of marketing, lobbying and corporate power in the Alliance and social enterprise is offset by the passionate tales that are handed down and heart-warming stories of the few taking on the mighty. And that mystical mumbo jumbo may well end up being quite useful after all.
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We all know who wins in the end, right?

£1 million for Plymouth

Here at Iridescent Ideas CIC we’re co-delivering (with the Zebra Collective) a funding advice and business planning contract for Plymouth City Council.

The scheme - called Pop Ideas - runs until March 2017. So far the partnership has achieved some great successes. For instance, we have:

1. Helped bring in over £1 million of funding to 50 community groups
2. Delivered workshops on issues such as legal structures, social impact, funding bid writing, project management, project development and financial management
3. Run the quarterly Plymouth Fund-Raisers Network which has seen over 60 people gain knowledge about Lottery funding and fund-raising best practice
4. Supported around 150 organizations across the city with business planning, funding searches, starting up and more
5. Sent a weekly newsletter and kept an active social media presence sharing funding and other opportunities.

So what have we learnt over the last year and what do we need to do next? 

What has struck me is the tremendous diversity of the organizations we have supported. There are community groups and social enterprises working in all corners (and the middle!) of the city and they are engaged in all areas of the social and economic fabric of life. From hairdressers tackling alopecia to gyms to theatres to marketing companies to beach schools to play groups and many, many more, the reach of the voluntary, community and social enterprise sector is astonishing.

The reach is far-ranging but these organizations need to engage more publicly about the impact they have on people, families and the communities they work in. It is likely that these groups make a deeply profound contribution to their communities, however, there is a need to evidence and talk about this more effectively. A common issue is a shortage of marketing and PR capacity and a lack of experience in this area.

I think this is a result of at least two key factors. There is an inherent paradox whereby many people (not all) in the voluntary and community sector have an ingrained humility that gets in the way of self-promotion. Also, the reticence seems to come from a struggle to evidence the social impact they create and then to build powerful marketing messages from this.

Many people we work with know the value of what they do in their hearts but find it harder to put this on paper or provide the robust evidence to prove it. Also, proving social impact is one thing, marketing it effectively is another.

So what about all the organizations who have applied and been turned down for funding?

The feedback we’ve seen from funders suggests that there were two main reasons for this:

1. Lack of evidence of need for the project
2. A need for better linking of proposed activities of the project to the expected outcomes. 

These are inter-related and go back to the fundamentals of understanding your community needs - be that geographic or of interest. It is also about putting these needs down on paper in a way distant funders - no doubt sat in plush offices in London far from the pressing issues you face - can understand.

So where next for Pop Ideas?

We need to continue to deliver solid funding advice. This brings cash into Plymouth, creates jobs and helps good things happen. We also need to support groups to plan effectively, to start-up with the appropriate governance structures and to plan to thrive. We need to help groups work more in partnership and develop brilliant solutions to community needs. We need to reach out to a wider range of stakeholders.

We also need to help social purpose organizations develop solid theories of change. It’s about proving impact; it’s about evidence. More than anything it is then about marketing this impact so more people grasp the issues and support good causes. It’s about backing public engagement for social good.

Ten myths of social enterprise and social entrepreneurship

1. Social enterprises are not-for-profit

WRONG!

'Not for profit' is a tricky phrase. Most social enterprises we see are ‘for profit’ but they dedicate their profits to achieving a good cause. Many social enterprises can also pay dividends from profits to investors and shareholders although this is usually restricted so that a majority of profit is dedicated to social causes.

2. Social enterprises can't pay salaries

WRONG!

Social enterprises can pay salaries and bonuses. A social enterprise that turns over tens of millions of pounds would be justified in paying their CEO a salary commensurate with running such a business. Directors of social enterprises - depending on the legal structure chosen - can also receive remuneration.

3. Social entrepreneurs can’t run a real business

WRONG!

Many social entrepreneurs come from successful business backgrounds. Social entrepreneurs are just like other entrepreneurs - some will succeed, some will change track and some businesses will fail. Most social entrepreneurs we meet are acutely aware of the need for their business to succeed so they can tackle the social issue that they are passionate about.

4. Social enterprises are just small businesses

WRONG!

There are many examples of large social enterprise businesses. Examples include large healthcare providers, big leisure trusts and universities. These are usually multi-million pound businesses with thousands of employees that have chosen social enterprise as their business model.

5. Social enterprises rely on grants

WRONG!

The whole point of being a social enterprise is that you trade to achieve a good cause. This means selling goods, services and products. Many social enterprises do access grants to help with start-up or with certain projects. Our advice is that a social enterprise should aim to use a grant as an investment with a view to developing an income generating idea once the grant runs out.

6. Social enterprises are automatically more sustainable

WRONG!

Social enterprises will only succeed if they can sell their services and products to customers. Many charities have survived for decades by relying on grants. That said, being dependent on grants can be challenging and developing successful, socially enterprising income streams can improve sustainability. Social enterprise should not be seen as a panacea - you need a strong business model, excellent market insight and an ability to deliver what customers want and need. Much like a ‘standard’ business really.

7. Social enterprises are more likely to fail

WRONG!

There is plenty of evidence that suggests that social enterprises are more resilient than their ‘standard’ private sector counterparts. We can speculate on the reasons for this including diverse income streams, social purpose and tenacity of social entrepreneurs. Recent research into longevity of the top 100 PLCs and top 100 social enterprises showed that, over the last 30 years, 41% of social enterprises have survived compared to 33% of PLCs.

8. Social enterprises are not scalable

WRONG!

Social enterprises are no different to ‘standard’ businesses in this regard. If you have a great product or service, a great team, the ambition, the drive, resolve and a clear plan for scaling there is no reason why you cannot significantly scale your business.

9. Social entrepreneurs are only concerned about social impact

WRONG!

Whilst most social entrepreneurs we meet are motivated by social or environmental issues they also understand that their business needs to be profitable to enable them to achieve their good cause goals. Focussing only on social impact without paying regard to finances, marketing, customers and all the standard business issues is a surefire path to trouble.

10. Social enterprises only operate in health and social care

WRONG!

Social enterprises operate in many sections of the economy. There are social enterprises in banking and finance, media, creative industries, business services, agriculture, tourism, fashion, education, entertainment, energy, heritage, housing, sports and more. Pretty much any business could be a social enterprise (maybe not selling cigarettes?).