New politics, a new hope

Is Brexit the rebellion of the voiceless?

No this is not another Star Wars themed blog!

Yesterday evening I attended the Nexit: What next for Plymouth and the South West event organised by RIO and the RSA at Devonport Guildhall. Around 200 people showed up - a sign of increasing politicization maybe and great to see so many engaged people. The waiting list was nearly as long as the attendance list apparently.

So a big turnout. And big ideas were discussed. There were initial ‘provocations’ from Molly Scott-Cato, Green MEP for the South West; George Cowcher, Director of Devon Chamber of Commerce, John Harris, a Guardian political journalist with a penchant for anything non-Westminster and two young people - Joe and Tom from Our Way Tech.

Molly asked for a second referendum, proportional representation and a need to reclaim our country. Citizen’s juries and a ‘progressive alliance’ of Greens, Lib-Dems and Labour were also mooted.

George gave a precise talk about business issues post Brexit. He said a majority of businesses wanted to remain in the EU and that there was still no real vision for what leaving looked like. In the South West we are particularly vulnerable to potential export problems caused by Brexit as 60% of our exports go to Europe. The main point that resonated with me was his direct question to business: “Exactly what ‘red tape’ do you want to change?” There is a lot of bluster about EU regulation but no-one can seemingly put their finger on what they want to remove.

Joe gave an eloquent and heartfelt speech (written on the back of a napkin in an impressive five minutes) expressing his fears about right-wing populism and invoking the spectre of fascism. Tom produced one of the quotes of the night: “A window has been broken - but that is good for people who fix windows.” I was left a bit bemused.

John Harris then gave an excellent talk on his approach, Brexit and the deep cynicism about politics. He said that a leave vote was just as valid as a remain vote and that we need to understand why Brexit happened. He called the Brexit vote a ‘rebellion of the voiceless’. In a telling moment he asked if anyone in the room had voted leave and only one or two people raised their hands.

We then had discussions in table groups. I was honoured to be asked to lead one of these. Our topics ranged widely over education, housing, environment, representation, inequality, economics and more.

We decided to develop our own new political party - the ‘Greater Britain Party’ - taking back the language of ‘great’ and ‘Britain’ from the far right with a new progressive manifesto:

1. Talk about politics in schools and everywhere

2. Proportional representation

3. Lower the voting age to 16

4. Sort housing and jobs

5. Improve environmental protection.

Ok, so some work needed on the detail but it was fun, lively, inclusive, honest and had real conviction.

What I found particularly refreshing was the ability to talk about politics in a community, non-party political setting. It felt natural and engaging. Yes, most people were in broad agreement but judging from responses there was a mix of Greens, Lib-Dems and Labour (new and old) and possibly some Conservatives too.

I think the event could have been improved with a ‘Leave’ key-note speaker and maybe we needed more dissent in the room around the opportunities presented by Brexit. A criticism could be that it was a large number of ‘Remainers’ talking to themselves.

John Harris wrapped things up with a call to arms - to find innovative solutions - one being found in Plymouth’s burgeoning social enterprise movement. His most powerful argument was his last. He said: “Dark forces are at work in the country - any attempt to overturn the referendum result through legal or other means could further disenfranchise the ‘voiceless’ turning them to more extreme politics.”

We must not let that happen.

Marginal gains in governance

Here at Iridescent towers - currently disappearing into the Plymouth mist and storm Imogen - we’ve been delivering the Pop Ideas funding and business planning advice scheme on behalf of Plymouth City Council, in partnership with Zebra Collective, for well over a year now.
 
This successful project has now seen over £1.5 million brought in to 69 community groups across the city. This represents a return on the City Council’s investment so far of 25 to 1!
 
In our last blog on Pop Ideas we talked about the reasons for organizations not getting funding. Another point that is becoming apparent is that well governed groups are more likely to succeed.
 
That’s obvious right? Well yes, but it seems to us that getting governance right can be a challenge. In the light of the Kids Company fiasco and the accompanying government report, governance is high on the agenda. That report focusses on when governance goes wrong. And we only really hear about governance when it goes wrong because that’s the sensation that makes the news.
 
However, we think that good governance shouldn’t be difficult or scary or dry. It is about common sense, judgement and proportionality. It should be the bedrock that enables your business to thrive.
 
What is governance?
 
I like this definition from Good Governance in Australia: “Good governance is about the processes for making and implementing decisions. It’s not about making ‘correct’ decisions, but about the best possible process for making those decisions.”
 
This older definition from Chris Cornforth, still stands the test of time: “[Governance] is the systems and processes concerned with ensuring the overall direction, effectiveness, supervision and accountability of an organization.”
 
What happens when governance goes right?
 
Why bother with governance? It’s all policy, red tape and dull isn’t it? Well there appears to be evidence that getting it right can help. There is some research about the link between good governance and growth of organizations. These studies tend to look at private sector businesses rather than those in the social economy (there’s a gap in the market there) but the concept is similar.
 
In 2014 a report in the august publication ‘Principles of Contemporary Corporate Governance’ (Cambridge University Press) stated that: “There now exists ‘empirical proof’…that good corporate governance is important to companies and does add value and make a difference”.
 
An Association of British Insurers report in August 2013 found that good corporate governance adds value: “Good corporate governance enhances…a company’s long-term sustainable performance: it is critical to…economic growth.”
 
Others are a little more sceptical: The ‘Business Case for Corporate Governance’ (again Cambridge University Press) states that it is “Inconclusive that there is a direct link,” however; it points out that, at the very least: “Sensible corporate governance activities may prevent the destruction of value.”  We would sagely argue that it’s important to stop the ‘destruction of value’! Even the government report into Kids Company says that it did good stuff. Sadly that value appears to have been 'destroyed' by poor governance.
 
So what have we seen in Plymouth?
 
Our experience is that groups with good basic foundations in place; those with policies and procedures appropriate to their work, size and complexity can prosper. These organizations win more tenders, gain more grants and gather more supporters. However, a caveat, the reverse may also be true: again look at Kids Company; on the face of it they were phenomenally successful at fund-raising.
 
We have all seen examples where governance may not be outright terrible but it can be flaky. Of course the problem is that governance is not sexy. But the academic evidence and our own experience seems to suggest that good governance can help you. In times of austerity, cuts and competition for funding any edge you can find will help.
 
It’s like David Brailsford’s theory of marginal gains in cycling that led to oodles of gold medals. Increase one, two, three percent in each area and it all adds up to significant improvement. This takes leadership, vision, drive and time. But broken down into manageable chunks it is achievable.
 
We’ll leave you with a question: What can you do each week to marginally improve your governance?

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.
​
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?).

All the fun of the festival

Last week was Plymouth's fifth annual Social Enterprise Festival. Held, appropriately, during Global Entrepreneurship Week, it saw over 300 people attend nine different events on social enterprise themes. My highlights were as follows.

The week kicked off with a wonderful and animated talk by Rubies in the Rubble founder, Jenny Dawson. Jenny's passion and practicality struck me. She just got on with it and learned as she went. There was clearly deep strategy and clever thinking involved but also the sense of bootstrapping - so common to social entrepreneurs - was strong. If there's a lesson around the perceived need for endless business planning and analysis versus learning by doing this was it.

We at Iridescent Ideas delivered a masterclass on measuring social impact alongside Sara Burgess, CIC Regulator. The need to start some kind of social impact measurements, even if bespoke and limited in scope, was a key theme. The sooner you start, the sooner you learn how to do it better and the sooner you'll get great information on your impact.

Wednesday saw the flagship event, the Social Enterprise City Summit, hosted by Plymouth City Council. There was a variety of speakers including a great rabble rousing speech by Peter Holbrook, CEO of Social Enterprise UK. We also heard from some of the investees of the Council's Social Enterprise Investment Fund. A common theme was the need to remember social impact along with talk of the economic benefits of social enterprise. The looming general and council election was an ever present context. The ideas in the Social Economy Alliance's great manifesto also need to come to the fore over the next few months. Now is our chance to shape the social, economic and political landscape. Now is when we need to be clear about the world we want to see over the next five years.

The Next Big Things, an exhibition of newer social enterprises at Thinqtanq, was a fascinating insight into the needs of new entrepreneurs. Many are looking for start-up investment and also beginning to clarify their business and social ideas.

Finally Friday saw an insightful talk by Jessica Smith of Poached Creative - known for their excellent work on the Buy Social campaign - on marketing for social enterprises. This was full of practical and strategic advice.

The week showed me that we all - large and small, new and established - need to sharpen up our understanding of our markets, our ability to sell our products and services and to build strong brands to survive and thrive. We also need to get back to first principles on why we exist, the social causes we tackle and the impact we are having. Finally, the need to talk to politicians and campaign for change was brought into sharp focus. 

In defence of social enterprise

I read Iqbal Wahhab's article on the supposed death of social enterprise the other day. A piece that demands a response.

Firstly, to declare an interest, I am a director of several social enterprises and also involved in a local social enterprise network, so, clearly, I'm a flag-bearer for the idea. As I've argued many times, I think that businesses that create economic, environmental and social returns are better for the UK. 

Wahhab talks of there being no 'credible explanation' and no 'agreed definition' of the term social enterprise. Well there is clearly a credible explanation and as close as you can get to agreement on a definition. Two of the leading organizations in this debate - Social Enterprise Mark and Social Enterprise UK - have a virtually identical set of criteria to define a social enterprise. They can be found here and here. Spot the tiny difference. The Labour party is even proposing to legally define social enterprise if it wins power in 2015. Good luck with that.

Wahhab goes on to describe a failed social enterprise restaurant as if to highlight the flaws inherent in the concept of social enterprise itself. I find this a bizarre claim. Do we say that all private sector models are flawed because one business goes bust through selling a poor product or service? That is the nature of the market and social enterprises compete like any other business. I'm not sure we should decry an entire business sector because some firms make a loss or don't make huge profits. Many sectors work on tight margins.

To the 'social entrepreneur' Wahhab calls a boardroom beast: I say challenge him; ask for his socially entrepreneurial credentials. Just look at what happened when the Advertising Standards Authority investigated A4E for claiming they were a 'social purpose' organization.

Wahhab's final point, to claim that somehow social enterprises are not 'real' businesses is unnecessarily provocative. To argue that real businesses - I assume he means 'standard' private-profit making firms - can tackle society's problems lacks credibility. Are those the same real businesses that have driven the world to the brink of ecological disaster, that have screwed workers, that evade and avoid tax, that miss-sell time and time and time again?
So let us be pro-real-business. Be pro-business that achieves economic, social and environmental 'dividends'. Pro-business that treats staff fairly. Pro-business that creates wealth, prosperity and jobs for all; not a tiny minority. Pro-business that rewards success appropriately. Pro-business that makes a profit, makes it ethically and honestly and does something profoundly decent with that profit to help make the world a better place. You are more likely to find that those 'real' businesses will be social enterprises.

Don't get me wrong, there are brilliant private businesses that go further than greenwash and bolt-on CSR. However, I just do not believe that there are enough of these businesses that will 'own society's problems and fix them'.

The last five years has surely shown us that we need a new way of looking at business and how it can resolve the world's issues and yes, business can be a driving force for achieving positive change and doing great things to advance humanity.