Consulting and support for social enterprise in Canada

Tag: entrepreneurship

Leadership in Social Enterprise

Society often celebrates leadership as admirable–indeed, we idolize those we call leaders–yet there is no universal agreement on what truly makes a leader. Leadership can be approached in many ways, and some scholars suggest that different situations demand different leadership styles. Leadership models vary—some emphasize inherent traits and skills, while others focus on the ability of leaders to adapt to the circumstances they face. Expectations for leaders are high, but many may hesitate to adopt the title for fear of disappointing or alienating their team by assuming a hierarchical stance.

In my experience as a social enterprise consultant, I have observed three principal archetypes who are drawn to lead the creation, launch, and growth of social enterprises.

The Aspiring Solopreneur:
Often young and idealistic, these individuals are usually motivated by personal experiences of social injustice, either witnessed or endured. They are the warriors and activists who seek change, often working long hours without compensation. Charismatic and articulate, they quickly gather a group of supporters who share their vision. However, their impatience can be a drawback, particularly when they don’t understand why established institutions aren’t responding to their logical arguments and impassioned stories. This frustration can lead to under informed accusations against governments, corporations, and multilateral agencies. They may also lack connections within the broader social field and might face significant personal financial challenges later on, such as mortgages or raising children, which could force them to abandon their work.

The Seasoned Social Change Agent:
Typically older, these individuals have seen their idealism tempered by years of working to make incremental changes. They often work within established organizations—typically non-profits or co-operatives—that share their vision of a better future. Well-connected within their communities, regions, or even globally, they have often struggled to secure funding through philanthropy and grants and are looking for sustainable ways to finance their projects. However, their experience may make them cautious, leading to a “poverty trap” where they fear taking risks or investing in essential business efforts such as market research, supplier engagement, fair staff compensation, or marketing.

The Enlightened Business Person:
These are individuals from the business world who transition into social enterprise, often driven by personal experiences or causes they encounter later in life—such as a rare disease diagnosis or a direct connection with someone in crisis. These entrepreneurs are often capable, experienced entrepreneurs who may not need advice on balance sheets or brand ambassadors. However, as they enter the social change arena, they may be unaware of the extensive network of individuals and organizations already deeply involved in the social issues they are just discovering. Additionally, they may be criticized for applying a simplistic cost-benefit analysis to complex social problems, such as housing insecurity, addiction, mental health crises, or environmental degradation. Frustration can arise when they perceive the decisions of those on the “front line” as irrational or overly consultative and slow.

Each of these archetypes brings unique skills, passions, and blind spots to their social enterprise journey. As a consultant to social entrepreneurs and a student of what makes a successful social enterprise, I believe that effective, lasting social change requires highly functional teams united by a shared vision of improvement. Leaders with emotional intelligence (often referred to as EI or EQ) are better equipped to manage interpersonal relationships judiciously and with empathy, which helps create stronger teams.

The traditional “command and control” leader is increasingly obsolete. While this leadership style remains necessary in emergencies, on the battlefield, and in life-or-death situations, creating social change requires a more nuanced, interactive approach.

Two common leadership styles in the social sector are Transformational Leadership (also known as Visionary Leadership) and Servant Leadership (sometimes referred to as Affiliative Leadership):

Transformational Leadership involves leading by example and inspiring others through a clear vision and engaging techniques. This style is well-suited to aspiring solopreneurs and can be combined with Authentic Leadership, where the leader remains true to their values and ethics, fostering trust within the team. However, transformational leadership can be idealistic and difficult to sustain over time, especially in stable environments that do not require constant change.

Servant Leadership takes the opposite approach, with the leader prioritizing the needs of the team, often at their own expense. This approach fosters an inclusive environment and empowers the team to take responsibility and ownership of their work, with the leader providing support. However, this seemingly selfless form of leadership can overlook the potential for power struggles and may lead to a loss of focus on the original mission. Additionally, servant leadership can result in decision-making delays if there is no clear directive from a group of actors.

Gone is the pervasive belief that leaders are born rather than made. Increasingly, scholars and practitioners recognize that leadership skills—such as active listening, situational assessment, and mindfulness—can be learned and that different leadership styles should be applied as situations demand. The three archetypes of social entrepreneurs—solopreneurs, seasoned social change agents, and enlightened business people—all benefit from developing their emotional intelligence to learn from and work with others who are vital to their success in creating social change.

Finding your passion. Meh.

       At some time in the latter 20th century work became something that identifies who we are. The first question between strangers is often “So what do you do?”  The newest incarnation of this preoccupation with work as one’s purpose is now to aspire to have purposeful work. Expectations and aspirations in the changing workforce appear to tend towards some sort of cross between corporate billionaire and altruistic social worker.  Having your cake and eating it too.

I actually don’t believe in this new religion. I believe that work is an avocation; it is a job needed to pay the bills, put food on the table, and lubricate all the good things in life like health, education, community and love. It is perfectly reasonable to enjoy what you do, and in fact, I recommend making every effort to find joy in what you do, but don’t expect it to define you.

Work…whether as a social entrepreneur, a government bureaucrat, a corporate executive, a teacher, a builder, or a garbage collector…is likely going to be 10% amazing and 90% meh (and of that 90%, some significant percentage may be absolutely awful.)  If you are lucky, you might get to a 25/75 split…

Entrepreneurs are celebrated when they succeed, but 4 out of 5 fail. And those who do succeed often work 60-100 hours a week, and sometimes those hours are spent doing the most banal of jobs: issuing invoices, filing paperwork, responding to confusing client needs, managing your (social) media, waiting in an airport lounge, editing documents,  or even simply buying office supplies or other inputs for your business. For some, each of those tasks might be a gleeful challenge, but for most, they are just the nuts and bolts of business: necessary, unremarkable, obvious—or even punitive—when left undone, and less than inspiring.  Hardly finding one’s passion.

Remember that most value in our communities comes from the informal sector. Parenting, social gatherings, conversations, kindness to a neighbor or a stranger, reading, painting, crafting, cooking, exercise and other hobbies all help to create a strong community fabric and personal value, yet none of them are necessarily well compensated financially, if at all. As my grandfather said, meaning most often comes in simple actions, not grand gestures. For most of us, the informal sector will be where we will leave our mark and where we can reasonably expect to find/create personal joy and purpose.

Social enterprise offers a promise that business can—and should—be conducted with a greater community purpose. This is a lofty and laudable goal. But make no mistake, business is hard work, and some days you’ll have to really think hard about the positive vision you have for the future in order to motivate you to carry on with the present.

Don’t be fooled by a glib instruction to “find your passion” in your job. Instead, choose to work that is meaningful and beneficial to others, do it well, remain diligent, and reward your passions by having a strong work-life balance. I believe that we all have a responsibility to add value to our community, and I believe that social enterprise is one tool that can help us contribute. Nevertheless, never pretend that every daily task as an entrepreneur will fill you with joy and passion.

Be defined by who you want to be, not by solely by where you want to work.

The peril of social entrepreneurship

Even the most potent idea will be watered down to nothing if you put it in a turbulent sea.

Social Delta is in the business of helping organizations and individuals create business solutions to social problems. We believe in social entrepreneurship as one possible, powerful tool to sustainably create change. But we don’t believe in fads nor do we believe that social change happens because one person thinks that they have developed a quick fix.

Increasingly, we meet and work with young people (ages 14-40) wanting to become social entrepreneurs out of a sense of disenfranchisement in the free market economy, buffeted about by political fictions and misinformation, and feeling either beaten or inspired by their perception of the world going off the rails.

When we work with these new, or aspiring, social entrepreneurs, we want them to grasp a few basic concepts before they launch into their dream career:

  1. Be ready to work harder than ever. Social entrepreneurship is hard work and 99% of the time has very little glamor. Starting and maintaining any business is hard, but starting and maintaining a business with a non-negotiable social bottom line is very hard work.
  2. You are not the solution. Social change can be catalysed by individuals, but it is created by many people, often working in an imperfect cauldron of partnership, competition and collaboration.
  3. Anything you can think of has (likely) been thought of before. Our best piece of advice for new social entrepreneurs is: study what others have done and are doing to address the social concern that is the foundation of your business. It is shocking what an internet search will reveal. Years of study and learning about the issues and the root causes of the social problem are often necessary for you to truly understand why the issue is so hard to solve. Sometimes it is better–as in more effective–to join and existing team of passionate social actors than to create your own business.
  4. Be prepared for the long haul. An app will not solve plastic waste problems. A year of selling coffee will not save a youth at risk from addictions. A single day hack-a-thon (sic) will not solve poverty in your community. Intractable social problems are called intractable for a reason: they often have no quick or easy solution. If you are choosing a career in social enterprise, you will more than likely need to devote multiple years (perhaps a lifetime) to realize the change you envision. We live in a world motivated by expediency, but social change of any sort doesn’t happen overnight…even with a business mindset.
  5. Don’t be fooled by success stories. Every social enterprise is on the knife edge of survival, and success is both a relative term, and a difficult status to maintain. Rather than lauding the successes of contemporaries, learn from their daily challenges and seek to maximize your own social impact.
  6. Measure what you are doing. From day one, set measurable social goals and evaluate if you are doing the best you can to address the social problem that inspires your business. Measurement has to include both business indicators like sales or inventory levels, but more important is to set social goals and measure if you are getting close to them. If not, you’ll likely need to change your operational (business) decisions to ensure that your social mission is, in fact, being served best.

We recommend that every new social entrepreneur read a recent Stanford Social Innovation Review article entitled “Tackling Heropreneurship.” The author expresses concern that social enterprise is becoming so fashionable that it is—like a potent idea in a turbulent sea—being watered down by those who want fame, fortune and a better world crafted by their own hands.

Building a social enterprise requires a balance of egotism and altruism. You need to be self-confident, committed, and something of an idealist. However, at the same time, you need to be humble, patient, collaborative and willing to rely on the efforts of others.

Social entrepreneurship should be considered less of a career and more of a calling, and in our experience, academic institutions, media, government and intermediary organizations are increasingly spouting that entrepreneurship is THE new tool for solving social problems. As a result, many of our most idealistic young colleagues are not fully understanding the social fabric that needs to be changed before they embark on their personal entrepreneurial journey to change it.

Being a social entrepreneur is like owning a sailboat

If you are a sailor, you invest time, money, and passion in your boat. You may even build a community around this recreational hobby. You do not expect repayment. At the end of each day, however, you get paid with that which is immeasurable and intangible. You are paid in the beauty of the open water, the glory of nature, perhaps the company of friends, and the wind in the sails.

Similarly, social enterprise is not about making money, or making a name for yourself, or building an empire. It is about creating a better, more peaceful, more sustainable, more just world. The investment pays dividends that have no financial currency, but are of tremendous value.

I’ve heard that sailboats are frequently described by owners as “a hole in the water into which you throw money.” Sadly, a social entrepreneur will likely lose more money than they will make as they conceive, design, launch and build their business. Most effective social enterprises are never sold for a profit, nor are they franchised into a stream of future income. In fact, the majority of social enterprises do not make a profit year over year, and when they do, their very existence compels them to reinvest in maximizing their social mission.

However, social entrepreneurs—I argue—should not be motivated by money; they have to be motivated by the social change that they deem is necessary.

I was once approached by a social enterprise leader, asking if I’d like to invest in their fair trade business. He flat out told me, “This is a terrible financial investment.” However, he said that it is an investment in the right way to do business, where co-operative farmers (who I will never meet) will be able to live a sustainable, healthy life, a life where their children will get an education and opportunity. The investment has indeed been a financial loss, but an exceptionally lucrative social decision. The social enterprise has continued to operate (in part) because of my capital, and they continue to help individuals in a sustainable, meaningful way. I put money into justice, and my recompense is enormous.

I meet a lot of people who believe that social enterprise is cool. Some even call it innovative and new. However, social enterprise is actually an old concept with a new name. Early business was never about profit. It existed to allow entrepreneurs to make a living, providing goods and services that are needed for a community: food, haircuts, building materials, and the like. Business can be designed to cover costs, including salaries, and provide value without maximizing profit.

As we work to build purposeful and meaningful businesses, we ought to banish the thought that social enterprise is going to be a way to retire wealthy. As with the investment in a sailboat, we might enjoy retirement happy, satisfied, and full of calm knowing that our sacrifices are worth every penny we put into it.

The long-term payment for the social entrepreneur is a social wealth that is far beyond riches.

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