Consulting and support for social enterprise in Canada

Tag: social enterprise (Page 1 of 6)

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.

Municipal Partnership

Rather than writing a post outlining the ways municipal governments can support positive social change, I defer to my colleague Shaun Loney. Shaun is a social enterprise leader in Canada and has drafted an opinion piece in the Winnipeg Free Press that lays out concrete and cost-effective ways to improve the lives of the citizens of Winnipeg.

His observations and recommendations should be considered by all local governments.

Beneficiaries may be clients, but they are not always customers.

Social service organizations have beneficiaries; these are the people who benefit from the programs and services being provided. Non-profits, and those who register as charities, often will refer to these beneficiaries as “clients,” but this nomenclature gets confusing when the organization starts a social enterprise.

It is Social Delta’s practice to refer to clients or customers as those who PAY for a good or a service, and to specifically use the term “beneficiaries” for those folks who benefit from FREE (or more accurately, subsidized) benefits and services offered in our communities.

Members are different again. Members are those individuals who support an organization with an exchange of value, but they are not really customers. Membership dues or fees are paid in exchange for a bundle of goods and services reserved for members alone (newsletter, voting rights at the AGM, discounts with third-party suppliers, etc). It is notable that many of these member benefits are not used by the majority of most members of a non-profit organization. Ironically, although “membership” revenue might be characterized as an income earning line of business, the membership fee in most cases is more like a donation than a purchase of goods or products.

The first question many might ask is: “Why it is important to make a distinction, when customers, members, and beneficiaries are getting value from the organization?” The answer lies in how these groups of individuals can be identified, contacted, cultivated and supported.

When are beneficiaries considered customers? Rarely.

Yes, in some cases, beneficiaries can be—or can become—customers. It does occur. Tenants in low-income housing run by a charity typically pay something for their housing. There may be a nominal fee for parts in a non-profit bicycle cooperative. If a social enterprise operating from within a non-profit organization starts charging for goods and services it has traditionally offered for free, then they are migrating from a “free to fee” model of delivery and their customers may very well be beneficiaries of the social mission through the organization’s social enterprise activities.

Those who are benefiting from programs, services and products offered by a community organization are often not good prospects as paying customers. Unsurprisingly, this statement is especially true for organizations working with the most marginalized and needy in our society. It is incredulous to think that a domestic violence victim would have to pay for their room at a shelter, for example. Likewise, an at-risk youth living on the street is not likely to accept help if they have to pay for it. 

Knowing that past beneficiaries are not typically good customer prospects is important in setting expectations for new social enterprises. Many board members and senior non-profit staff might assume that their mailing list of past beneficiaries is a “warm prospect” list when they start selling something.

However, it is the experience of Social Delta that the conversion of a beneficiary to a customer is arduous, typically yields less-than-expected sales, and can jeopardize how a charity is viewed by the people it is trying to help. A modest fee might support a sense of dignity for a beneificiary, but it will rarely generate the revenue needed to pay the cost of providing that good or service.

Beneficiaries are not always customers…but customers are always beneficiaries of a social enterprise.

“Which stakeholders are the best prospects?”

It will vary by organization, and by what is being sold, of course, but current and past volunteers and donors, particularly monthly donors and/or high value donors, may both be worth cultivating as warm sales leads. Members, perhaps counter-intuitively, typically bristle when the individual elements of their “membership bundle” each get a price tag, and they will often not become loyal customers.

The stark truth, however, is that most successful social enterprises look outside of their stakeholder network to acquire the sufficient number of customers to become sustainable. Early and significant investments in marketing will help to reach out to new audiences…and in doing so, will convert these new customers to become stakeholders in the mission of the organization through their purchases.

‘Tis the season…gifts from social enterprises

As we live through the onslaught of holiday promotions, sales and hype, keep in mind that buying from social enterprises is a great way to both support your local economy, buying quality products while helping to provide other social benefits.

Your holiday and seasonal purchases from social enterprises can help provide employment opportunities for individuals marginalized in our communities, support environmentally sound products and services, participate in upcycling and recycling initiatives, or support culture, the arts and recreation.

To find a social enterprise selling goods that you’ll feel proud to give, you can visit the following websites: https://seontario.org/, Buy Social Canada, or the directory at the Centre for Social Enterprise Development (Ottawa)

Social Enterprise Job Opportunity in Ottawa

OREC (the Ottawa Renewable Energy Cooperative) is seeking to hire a part-time Communications Manager to support the day-to-day operations, member and investor relations, and public-facing communications of the co-operative.

You can see a full job posting on their website, here: https://www.orec.ca/careers/

Applications for this position are to be submitted by December 7, 2021.

Chatbots in social enterprise

Some estimates state that 80% of all companies will use chatbots to generate leads or build customer loyalty in the next few years. How does this, and how should this, affect social enterprises?

First, what is a chatbot? It is an automated “instant message” discussion that “pops up” on a website or social media platform to engage the potential customer with either a text or voice conversation. The goal of a chatbot is to mimic genuine human interaction through clever writing and the use of artificial intelligence. In some cases sophisticated algorithms combined with user data ensure the outputs are as personalized as possible, only more efficient.

Chatbots typically start with an open question, such as “How can I help you today?” Users who choose to engage will often ask a question that can be answered by one of perhaps hundreds of pre-programmed responses (Chatbots, then become a customer service robot that can access an almost infinite number of responses in a Frequently Asked Questions database).  As the “conversation” proceeds, the bot typically will request a prospect/customer’s name and email address and remarkably, statistics show that the majority of site visitors will actually provide that information (which is very hard to get via other customer development tools and activities).

Chatbots are counter intuitive to many marketing professionals, and to social change entrepreneurs. They challenge the notion that personal interaction is one of the most effective ways to generate leads, build loyalty, and engage customers. The thought that artificial intelligence can do this work for social enterprise may feel, somehow…wrong. Duplicitous even.  

However, chatbots are tireless workers who never need time off, can respond to thousands of interactions simultaneously, and can create new leads from browsing users, effectively deliver key messages or marketing promotions, and can, in fact, answer the majority of basic questions. Websites are static, whereas chatbots create the illusion of dynamic interaction. If a user wants to find out the store’s opening hours on the long weekend, they can choose to find that information on what might be thousands of pages on the website…or they can simply ask the chatbot and have a response in seconds. However, it is important to recognize that chatbots should not compensate for bad web design, they should augment an easily navigated website.

There are some downsides, of course. Estimates suggest that the programming and technology required to create an effective chatbot can cost $20-$30K. This is a lot for an early stage business, and it may be difficult to justify without concrete proof that it will help bolster sales and the customer relationship. Investing in a chatbot, fundamentally requires a leap of faith, and it can also diminish (or deplete) available funds for other forms of marketing. It is not surprising that the relatively simple-to-use chatbot plugin for Facebook has become common. From the 2016 launch to mid-2018, there were over 300,000 active chatbots on Facebook.

Also, chatbots need to be able to pass the (prospective) customer to a live agent if the customer becomes frustrated, or if they are not getting the information they need. It is often difficult for small businesses to make this transition from bot to human interaction seamless. A bot can book an appointment with a customer representative, but there is often a few hours delay (or more) and this means that the “lead” might grow cold or even find an alternative product online.

So, is a chatbot the right thing for a social enterprise? In truth, chatbots are becoming the norm on many commercial websites, and in the last few years, online users appear to be embracing them as useful tools to help them access information on a company or its products. However, chatbots are most useful only if your customers embrace them and only if they work well. They can be particularly effective for businesses that have high web traffic, and in cases were simple responses are all that is needed in most circumstances. If your business sells a toy that has specifications that are important to share (are they recyclable, for example) that is an easy question to answer. However, if your business is selling facilitation services, then answering a prospective client in person might be a better way to convey your value.

Social Delta has been surprised at the statistics on the effectiveness of chatbots, and therefore advises that they not be dismissed as a tool in the marketing toolbox; however, as with all marketing tools, chatbots should be evaluated by the social entrepreneur by considering their value to the business. They should strategically employ the technology if there is an expectation of benefit (financial or mission impact) that exceeds the cost (money or time or reputation).

However, social entrepreneurs should not presume the tool to be invasive or annoying; somewhat remarkably, the studies show chatbots to be a strong customer cultivation tool in many cases.

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Dutch Social Enterprises: Leading by Example

In the Netherlands there is a national organization dedicated to promoting and supporting social enterprise.

They recently released a report that documents how leading social enterprises in their country are affecting the way business is done. Those social enterprises, by doing business the right way, are leading by example.

I particularly like their analysis which indicates that social enterprise can effect change in three ways:

  • Raising the possible are the activities that show how business can be done responsibly, so that other businesses can choose to adopt those sustainable practices as well.
  • Raising the desirable are the activities that change norms and values in society and increase cultural pressures, which motivates executives to act sustainably.
  • Raising the acceptable are the activities that contribute to higher institutionalized, formal standards, so that it becomes unacceptable not to adopt more sustainable practices.

To paraphrase, social enterprises can show what is can be done, they can challenge existing business practices and they can actually set the bar higher for other businesses to emulate.

The report is full of excellent resources, ideas, and indications of what success looks like for any social enterprise. It offers an aspiration view for social entrepreneurs wishing to grow their social impact.

Social Delta recommends it as inspirational (yet practical) reading. Download it or read it online for free here.

Build Back Better

These are times when starting or expanding a social enterprise is either a fantastic opportunity or an impossible folly.

There are unquestionably many challenges facing people and communities locally, nationally and globally as a result of the COVID-19 pandemic. At the same time, and perhaps not entirely by coincidence, we see cracks and fissures appear in the social fabric: polarized and angry democracies, growing income disparities, wildly unsustainable consumerism, incredibly potent and punishing environmental changes, more xenophobia and irrational fear of “others,” increasing intolerance and racism, and a sincere lack of resources as our economies are (and have been) shown to be fragile constructs.

If social action is borne of injustice and and fomenting of the desire for positive change, then surely we must look at new ways of creating a just and sustainable society. Social enterprise is potential tool to make that happen, although starting any sort of business in a pandemic is risky; fantastic or folly, indeed.

I have many thoughts on how we can redesign business and movements and individual actions and responsibilities. However, I believe that my colleague and friend Vinod Rajesekaran, of Future of Good, expressed it brilliantly in his recent article “Stop idolizing your sector and demonizing another.” I quote from him directly:

Let’s build back better by asking different questions. When an organization or a project inspires you, don’t ask about their legal structure. Instead, look deeper and ask about their values, intentions, and actions. Look at the ratio between the highest and lowest paid workers, look at their carbon footprint, look at how diverse their leadership teams and boards are, look at how they act on reconciliation everyday, look at how well they include and give voice to their stakeholders, and follow the money — look at where they save and what they invest their money in. 

One of the first questions I get from aspiring social entrepreneurs is about how (and when) they should incorporate. I always tell them “form follows function” and that they should wait as long as possible before they formalize their social purpose in an organizational structure. Only once they’ve identified and lived by their values, intentions and actions (ie determined their function) will they know the best structure to support their work. In fact, once they’ve started their work in earnest, the form of their business is almost always determined for them.

We are, regrettably, stuck with largely antiquated legislation that enshrines for profit, co-operative, or non-profit structures, myths, and expections. However, we can–and must–push the parameters of each of these structures to create businesses that measurably improve social conditions, justice, fairness and protection of the environment.

In the coming years, we can, person by person, build back better.

The art of getting people to do what they don’t want to do.

Social entrepreneurs operate businesses that create social benefits. Surely, selling services and products in the pursuit of justice, environmental sustainability, and support for the marginalized should be easy. After all, doesn’t every consumer want to make the world a better place?

Well, no, actually.

Most consumers buy to satisfy some personal need. They may be hungry and buy food. They may desire to smell nice and buy body products or perfumes. They may want to be entertained and buy a video streaming subscription. They may want the cheapest price and buy from huge online retailers. Not many make purchases based upon maximizing social welfare.

There are some consumers, of course, who shop based upon a set of community values, but as much as we’d like to think otherwise, these conscious consumers remain in the minority. We must also remember—particularly now during economic challenges for many—that some consumers may not be able to afford to purchase according to their altruistic values.

The art of encouraging citizens to undertake something that creates social value is called social marketing. Whether it is to reduce speeding, or to encourage voting, or to purchase ethically sourced food, social marketers use commercial marketing techniques and concepts—advertising, traditional and social media, direct mail, email broadcasts, word of mouth, customer journey, relationship marketing, etc—to bring about and support social change.

A recently read article provides some useful guidance to anyone trying to convince someone to do something that they don’t instinctively want to do. Summarizing somewhat, the recommendations were as follows:

  1. Break down the activity into small steps
  2. Provide progress indicators (or an understanding of the cost/commitment required)
  3. Provide incentives for completion (intrinsic rewards whenever possible)
  4. Instill competence (allow people to learn or share their knowledge)
  5. Allow for autonomy (people resist being controlled)
  6. Ensure they understand the context/purpose (relatedness).

These recommendations work well if you are convincing a child to get immunized (the example used in the article), to encourage someone to get sober, or to complete a university course.

But how do we use these recommendations to encourage consumers to make the right purchasing decisions? Below is a rephrasing of the recommendations to support social marketing efforts for the social entrepreneur:

  1. Don’t try to explain your entire social value proposition at once. Recognize that consumers may need to understand elements of your mission, not the entire social challenge you are addressing.
  2. Whenever possible, link their purchase to a tangible goal. “By purchasing this product, you’re providing a young person with job training.”
  3. Use loyalty programs, discounts, contests or other “prizes” to reward your customers. Use these extrinsic rewards whenever the intrinsic rewards—like the knowledge that they are helping to support their community—are insufficiently motivating.
  4. Provide your consumers with links to further information, crowdfunding, ways to get involved, or other learning and empowering tools. Think of each consumer as a potential ally in your social mission, and use language, images, and information that give them competence.
  5. Do not undermine your competition, or use negative advertising messages to insinuate to your customer that they need to buy your product over the competitor’s product. If you engage them based upon their own needs and expectations, that provides them with the autonomy to make the (right) choice to buy your product.
  6. Provide context for your social enterprise. It is a challenge to not overwhelm your customer with details while informing and engaging them in your mission. Providing succinct context can help them relate to how their purchase contributes to not only meeting their needs (for example, great coffee) but also the community needs (for example, fair wages). Context links their action as a consumer with your mission.

One last note that we frequently share with our social enterprise clients: Do not assume that your social mission alone will sell your products or services. The vast majority of purchasing decisions are affected by price and market perceptions of quality (which also includes convenience and availability). If you aren’t competing on price and quality, social marketing strategies and activities will have only a marginal effect on consumer choices.

Rock Camp for Girls+ online

Girls+ Rock Ottawa is fueling creativity and community during uncertain times. Social Delta loves what they do, and strongly encourage girls and gender diverse individuals aged thirteen to eighteen to apply for the flagship Rock Camp for Girls+ program online.

In this exciting new digital format, campers will be able to learn their instrument through online learning modules and weekly interactive group video sessions with local music teachers. Camp participants will write an original solo and film their performance, which will be shared at a live virtual showcase. 

The virtual camp will run over the course of eight weeks, from October 7 to November 26, 2020, and is open to No musical experience is required and instruments will be provided to participants who need them. 

Registration is now open and more information about this new Rock Camp for Girls+ format is available on the Girls+ Rock Ottawa website. Special thanks to the Ottawa Community Foundation for their support of this year’s brand-new Rock Camp format and to MusiCounts for providing our instruments to help us keep music accessible. 

About Girls+ Rock Ottawa
Girls+ Rock Ottawa is a volunteer-run community organization that provides music-based programming to foster empowerment, inclusivity and community to girls, women, and gender diverse individuals – all while having fun. The organization also hosts monthly jam sessions where girls can access studio space to practice and hosts a variety of workshops about different aspects of the music industry and creative skills where girls can organize a music show while gaining project management, communications and financial literacy skills.

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