Tag Archives: prove it

Why independent certification is important for social enterprises

Why certify in the first place?
If it looks like a duck, quacks like a duck – is it a duck? Or does it matter if it’s a duck or a Christmas turkey disguised as a duck when it tastes nice and lays good eggs? (not that I’ve ever tried turkey eggs!)

Social enterprise is a term that has been around for a number of years now, but there are many people who are confused partly because there is no legal definition and partly because the term seems to have been adopted by so many different people, all having their own ideas about what it is. There’s also been a culture which ignored the integrity of such businesses, as long as it got the right results and demonstrated social impact.

Have customers really thought about the type of business that they are buying from though and if they knew, would they make different choices?

Witness the high-street banks. We all thought they were doing a great job, until the short term shareholder profit motivation and bonus culture was exposed along with the associated behaviours. Then there are the ethics – why should a company that is set up to support some of the most vulnerable in our society, then take individual profit for doing this?

In addition, how can you protect the integrity of something if you don’t know what it is that you are protecting?

Certification is necessary as it places boundaries and criteria which develop common understanding of the product, what it does and what it stands for.

So why not self-certify after all it’s quicker, cheaper and potentially more accessible?

Easy accessibility is its key downfall. It does not protect integrity, it is inconsistent and is open to self-interpretation and in the worst cases, abuse.

Having run the Social Enterprise Mark since the beginning, we have developed the criteria in partnership with the sector and have protected and owned these criteria fiercely. It is our experience that interpretation of the criteria is a technical job and not easily carried out by anyone. We are constantly learning about new forms of social enterprise and the way that they operate. Our Assessment Manual has taken years of work to develop and our certification panel has taken its job very seriously in developing those precedents which have been set.

This might all sound really boring and techy but it’s important for the future of social enterprise if we are not just to be subsumed into the wider corporate responsibility camp.

We stand for so much more and our Mark proves that this is the case.

For a more indepth understanding, have a look at Social Enterprise Mark’s criteria

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Angels dancing on the head of a pin?

There is a medieval legend that religious scholars spent time and effort debating how many angels could fit on the head of a pin. Whether it is true or not, it has become a saying that illustrates the futile nature of some debates.

It’s an analogy I would draw when the circular debates start on the definition of the term social enterprise – it takes a lot of time and energy for no particular useful purpose.  I’m afraid that these types of discussions do not unify but serve a wider divisive purpose which marginalises and ensures that social enterprise will remain ‘an extra’ rather than having a ‘starring role’ in the future of the business world.

Pin dancers seem to have disproportionately loud and occasionally abusive voices and they marginalise the majority who choose not to engage in futility, rudeness and negativity but rather continue spending their time making a difference to others’ lives.   I know which one I would opt for any day.

There is a time for criticism, but I would always qualify that with the requirement to be constructive and explore ways forward.  I held a discussion at an academic conference last week about the Social Enterprise Mark and the vexatious issue of definition came up.  For me, these debates will carry on and we will listen and work with partners to try to address legitimate concerns – we have always said that the criteria are not set in stone.  I would also point out that we have consulted extensively in the development of the criteria over the years – but we can’t please everyone.  In addition, there will always be work that is underway, that we are not ready to talk about publicly; as I hinted at the conference, we are currently in discussions with trades unions and co-operative representatives.

Most importantly, engaging in the public domain about these debates means we are in danger of losing the plot and turning off potential converts to social enterprise in general.  The aim of the Mark was never to provide a ‘catch all’ or an exclusive club, but to enable the sector to come together, to promote itself more effectively to the outside world, in a way that is simple and uncomplicated.  By using a consistent message with a unique selling proposition, the term social enterprise can be understood by many more people. Already, there are almost 450 Mark holders integrating the Mark into their marketing strategies and in turn reaching thousands of their own stakeholders – all learning what’s different about social enterprise.

Anyone who has constructive suggestions about further criteria development, wanting to work in a co-operative and collaborative way, please get in touch: media@socialenterprisemark.org.uk

Supply chains must be challenged

Further to a recent debate on the Guardian’s social enterprise network, focussing on ways social enterprises could engage with big business, I believe its time social enterprises engage more actively with large corporations and other businesses to increase their impact and financial sustainability, moving on from the traditional corporate social responsibility (CSR) agenda.

Over the past decade or so social enterprises have been encouraged to build their businesses in order to deliver government policy, through public sector procurement and other ways.  Government strategies focused on this and the sector largely followed on.  In fact, the sector was encouraged to take ownership under the last government, and sometimes it became difficult to distinguish government policy from our own growth and sustainability strategies  – probably further exacerbated by the funding streams available centrally and regionally.

I’m not saying that all of this was bad, but it made us complacent.  I remember at the time, my friend Nigel Kershaw from the Big Issue saying, ‘What about social enterprises which operate in the open market?  Where are they in these discussions and policies?’   He pointed out that the Big Issue was borne out of a recession and had learned lessons about how to survive.

In these times of austerity, we still seem to be clinging to the same hopes that we had about turning towards government for answers.

These hopes are likely to be dashed.

We need to think much more independently of government; to promote the benefits of buying from a social enterprise; to be much more forthright and clear in our efforts  to achieve this.

In discussions with Social Enterprise Mark holders, there is a sense of frustration that much publicised support from both government and the wider private sector is just rhetoric.

We need to start to hold them to account in the ways that they too do business.  Supply chains must be challenged.  If business and government really believe in social enterprise, why aren’t they buying from them more widely? I’m not just talking about the delivery of public services – what about catering, events management, HR advice, marketing – the list is endless.

Social enterprises, of course, struggle with the procurement processes of both government and business – which often favour the big ‘standardised’ product.  But as a colleague pointed out, although it might be more complicated for the buyer, the rewards are greater AND benefits  society and the environment (… trading for people and planet).  Buying from social enterprises has the benefits of using resources efficiently to add value to the product or service and in addition, provides an alternative model for CSR.  The Social Enterprise Mark guarantees this;  therefore making  a compelling case to buy from Social Enterprise Mark holders.

Just check out the directory of Mark holders – they are a comprehensive and ready source of genuine social enterprises that can prove it!

Useful links

http://www.guardian.co.uk/social-enterprise-network/2011/jun/27/corporate-social-responsibility-and-social-enterprises-live-discussion?INTCMP=SRCH

http://www.socialenterpriselive.com/your-blogs/item/why-csr-why-now

Suffering from social enterprise identity confusion?

One of the challenges that the social enterprise sector currently faces is clarity about its own identity versus the exponential explosion of company labels, such as:  Social Business, Social Purpose Business, Social Purpose Organisations, Ethical Business, Social Enterprise, to name just a few.

What do these all mean and do the terms have any meaning to anyone outside the sector, or even within it?

Do they count for anything or are they just applied by the business on a self promotional basis? For instance, A4E describe themselves as a ‘social purpose business’ despite much publicity about the high proportion of profits that end up lining the pockets of individual shareholders.

Many people argue that what we call ourselves doesn’t matter, it is only the social/environmental impact that counts rather than how we get there.  Of course impact is extremely important.  But without looking at what motivates that business and the genuineness of that motivation, you risk only looking at the finished dish and its impact on the waistline, whilst ignoring the ingredients and the recipe.  The way that we do business has to be an important part of the impact equation – and we know that consumers care about it.

Who cares about profits if the service is delivering?

This question ignores the fundamental principle that consumers are increasingly questioning the ethics of the way that service is being delivered, look at the food business – the growth of Fairtrade and other ethical Marks.

Why should it be that ‘shareholder profit margins’ are the overriding consideration in the delivery of a public sector contract to help people get into jobs? Why isn’t the public asking this question?  Looking at the response to the banking crisis, I think they are beginning to.

I know that not all businesses behave in this way, but it is only by being clear about what we stand for that we can hope to benefit from our unique selling point – social enterprises are genuinely trading for people and planet and the profit that we make is for public good.  The Social Enterprise Mark is the way to prove it and for the term social enterprise to mean something.

In a recent Senscot bulletin, Laurence DeMarco talks about the need for an ‘asset lock’ to ensure that a social enterprise is genuine – we agree.  We require that all Mark holders have an ‘asset dissolution clause’ which ensures that on wind-up, assets cannot be redistributed for shareholder gain – this is checked annually.  Over and above this we also require an ‘asset redistribution clause’ which limits the amount that shareholders can take from the business on an annual basis.

The Social Enterprise Mark is singing a constant and consistent tune in standing by its position and I know many people world-wide agree.