Every Enterprise – A Social Enterprise (Part 1)
Every Enterprise – A Social Enterprise – Fundamentals of a Tri-Sector model for a more equitable world
In our warp speed, VUCA world, we often come across challenges that cannot be solved incrementally and require transformative approaches. So, let’s begin with this fundamental question – what must be the key, non-negotiable ingredients in a quest that makes transformation possible. Is there a magic model?
Why do we need transformation? One look at the UN SDGs makes it abundantly clear that despite the tremendous macroeconomic growth we have had with global GDP galloping away (Fig 1), our global inequality, at relative levels- has risen at an astonishingly disconcerting rate as evidenced by the Gini coefficient – a measure of inequality of incomes. (Fig 2 )(Source https://www.wider.unu.edu/)
Progress? Really?
The challenges the above paradox poses not just to the SDGs but to our daily lives is unprecedented. An increasingly inequitable world potentially can create huge instability and in-turn generate poorer and poorer ROI for all; even for those who benefit from this inequity. Hence, we require a transformative approach to solve for this – an approach that does not just incrementally build on a steady state but allows for disruption for good, and with speed and at scale.
We need transformation that is system-wide, non-linear and one that is triggered via keystones inviting greater participation from all. In the long run, such transformation would require relatively little administration and can self-perpetuate, fuelled by its own success!
Before I posit a solution – I would invite us back to asking some fundamental questions. We must ask why the responsibility for executing for inequity or social change should principally reside with the social sector? Isn’t that an unfair expectation? The social sector, at best, is a catalyst for change which provides vital last mile execution as well as advocacy and championship. Why mustn’t this responsibility be an important one for all – even a principle one at that! Surely the outcome of a better world is a better outcome for all.
Hence, I believe that the foundational premise for such transformation must be anchored in a collaborative approach which involves the best of the govt, private enterprise and catalysts of social change i.e. NGOs and Advocacy groups. This tri-sector approach allows each of these entities to work as an Enterprise in a world where Every Enterprise must be a Social Enterprise. Be it government, private or social enterprise, all must identify as social entrepreneurs utilising specific skills and domains, collaboratively to make all lives better!
So here are three principles – an axis for each of the three players in the tri-sector model that can at least guide our thinking but hopefully also help create some bold executions.
1. Transformative Mental Model Shifts – Private Enterprise
Contemporary literature is replete with a call-to-action to all enterprises, particularly private, to be Purpose driven and mission oriented . Also, the rallying cry is to do this in a way that allows for greater participation from all stakeholders and with suitable rewards for all. But is it fair play?
“In business, compassion is necessary and a focus on community is important.
Business without a concern for others is exploitation.”
His Holiness-The Dalai Lama
For context, here are the Purpose/Mission statements of some of our world’s leading organisations:
“To give customers the most compelling shopping experience possible.”
“Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
“Bring inspiration and innovation to every athlete in the world. – If you have a body, you are an athlete.”
“We help customers realize their hopes and dreams by providing the best products and services to protect them from life’s uncertainties and prepare them for the future.”
“We empower people—our colleagues, our clients, our communities—to change the world.”
“To make food the world loves.”
“Uniting people to celebrate all life’s moments.”
“We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come.”
“Raising the world’s expectations for how much good food can do.”
“Connecting people. Uniting the world.”
At first instance all of the above seem fine, purposive even, and of course inspiring. Surely, these will allow for millions of employees and vendors to work smarter and harder. So where is the problem? Perhaps we have missed the vital fact that what these statements simply represent is a pursuit, where the outcome is nowhere near assured and certainly not in a manner that actually serves all. Inspiration provided by these statements can help the private enterprise attract and retain talent and customers but does it truly turbo-charge all its activities to serve in a way they admittedly aspire to? Stating a transformative purpose is certainly good but owning it every step of the way is great!
To begin this journey, we need a fundamental shift in the way we think of enterprise and entrepreneurship. At the heart of this quest must be the question – who do we serve? Inspiration apart, Enterprise must empower as well as educate its people and processes to embrace this vital fact that if we were to truly live our purpose, we need to be thinking very differently about where our responsibilities lie so that we not only serve better immediately but also be socially sustainable.
Sadly, there is a vital gap here. The World Benchmarking Alliance recently announced that of the 1000 organisations studied by them, 99% did not show even a foundation level understanding of what truly will help them become socially sustainable!
It is a lose-lose situation!
At a fundamental level, organisations must understand and re-calibrate their Purpose Statements to assess whether these truly represent why they are in business and even more importantly, whether the measured outcomes align with that purpose. Else the purpose might seem transformative and serving a brilliant cause while all reward mechanisms largely celebrate unit sales which may in turn be creating an adverse environmental footprint! A recipe for un-sustainability.
Mental Model shifts aren’t just inspirational, they infuse vital energy into organisations to improve daily and transform exponentially. Authenticity isn’t just a valued trait of great leaders; it must be demanded of organisations too. And there must be sense of urgency around this for today we must turn ocean liners at warp speed because the icebergs are emerging thick and fast!