To Everyone in Social Enterprise: How to Get Big Without Getting Bad

One of the memorable moments from my time mentoring at the Unreasonable Institute was in a room filled with fellows and mentors. A social innovation fellow began to trash big business as the enemy of good—blaming the corporate world as the cause of all the ills we’re working to rectify.

A mentor stopped the momentum of kvetching (spend some time in New York and you will learn Yiddish osmotically) by asking the fellow why he was at Unreasonable in the first place. “To scale my enterprise,” said the fellow. “Then what will you be when you succeed?” asked the mentor.  The fellow laughed and said, “big business.”  Precisely.

Big business has become synonymous with evil in the world: with climate change, toxic waste, factory farming, tainted food, abused workers, and rampant consumerism. But there is nothing inherently evil with “big” or with “business,” they are neutral. When we open our minds to that notion will we reach the scale we want and need in order to make our work matter.

My students at DSI surprise me at times as well, with their vehement conflation of all business into “big bad business”––an antipathy that, no matter how much evidence there is to the contrary, is difficult to dislodge.

They give us someone to blame, a place to vent our anger and frustration. But convenience is almost always suspect, and the truth is inevitably more complex than it first appears.

Right now, the lack of warmth or curiosity between big business and social enterprise are mutual. We don’t speak the same language and have yet to find a compelling reason to change.

Yet it is clear that our goals, and the requirements for our survival, become more mutual each day: social enterprise needs to become mainstream––to be part of the everyday, good old default global economy if it is to survive; it needs to scale radically, not incrementally. In order to make a significant impact, social enterprises, like for profit businesses, must be built to last.

Big business needs to solve the endemic problem of employee disengagement that costs them billions of dollars in lost productivity each year (by giving work more purpose, perhaps?). Only if corporations take the health of the societies they serve into account can they remain healthy themselves. and only if they find a way to profitably serve underserved societies can they continue to grow, since most of developed markets are oversaturated for just about every category.

I have lived in both worlds. I have been in the belly of the big business beast, working with many companies I admired and avoiding –– sometimes not completely and not soon enough –– those that I did not. I have worked with hundreds of social entrepreneurs all over the world to help them grow. There are intrinsic differences that may help understanding, and some shared values that may help bridge the gulf. Here’s a short list of what I’ve learned so far.

There are differences:

  1. Efficiency vs sufficiency. The goal of business is to reach its goals ––delivering quarterly earnings, getting products out the door, putting on a big show for investors or customers –– at all costs. It’s the results that matter, and if waste is created or people are overlooked in the process, that’s just the price of progress.Social enterprise is based on a very different premise: one that is more aligned with the rule of nature, which is sufficiency: using only what is necessary in the way of energy and resources to achieve a desired outcome, but no more. These are very different approaches to progress, and the implications on impact and unintended consequences are enormous. The take no prisoners business approach is more a question of habit than necessity, and there are lots of successful companies that are changing the game. But understanding the traditional mindset is key to understanding the reason we often feel we’re speaking different languages.
  2. The need to know the future before it comes: design for control vs emergence. The very nature and structure of business is designed for control, from the hierarchy of leadership and management, to the way communication is used to establish and maintain power, to marketing studies that try to understand and predict customer’s desires. Social enterprise, and design for social innovation, is more attuned to an awareness of emergence—of noticing and reacting to changes in society and the environment as they happen, and choosing the right next step accordingly.  Very big difference, and easy to see why they don’t naturally fit together.
  1. There is one measure of success, and it includes a dollar sign. Pubic businesses are trapped in the prison of needing to measure all success financially. They can’t change it no matter how hard they try. It colors everything, stifles experimentation, deadens souls.
  2. Top down, locked in corporate structures. To understand how to work with business, it’s crucial to understand the structural ecosystem. It traps everyone in an inflexible role. They can’t go around barriers if the barrier is in the form of a boss. Even CEOs are limited in the impact they can have and the freedom they have to change. The vast majority of people in business are so consumed by meetings that are scheduled for and not by them that they don’t have time to even think about solving problems in a new way, or innovating. What this means is that although many people inside corporations would like to change, they don’t know how. That’s a noble subject for social innovation.

Business has important things to teach us:

  1. Business can be thrilling in its ability to get stuff done. Compared to the social enterprise and non-profit worlds, where it can be excruciatingly difficult to move the peanut forward or make decisions or act quickly, the ability that businesses have to make decisions and mobilize people towards a common goals is both inspiring and invigorating. Clear goals, inviolate deadlines, clear responsibility and accountability are essential.
  1. Be sustainable. Money is not everything, but that doesn’t mean it’s not important. Don’t make a sustainable business model the last thing you think about when you’re planning your enterprise. Charity and grants or public support eat up too much of your life securing them. Build a model for your enterprise with ongoing income streams from the start.
  1. Democracy isn’t the answer to everything. While complicated org charts and calcified middle managers should be avoided at all costs, so should a lack of leadership. The thing about great leaders is that they have vision and they keep the organization focused. They make decisions, keep people inspired and engaged, and take responsibility when things go wrong so they can right them. Every organization needs strong leaders, so be one.
  1. Become a part of the mainstream economy. We will fail in creating a more just society if we are always the alternative rather than the main event.People cannot sustainably work for free or next to it because a mission is worthwhile. We have got to solve the problem of building companies that do social good and make money. A dear friend of mine says: “There is no such thing so far as either a truly sustainable company or clean money. So we start there and try to improve the situation.”

Social enterprise has a lot to teach business in return:

  1. Don’t forget why you exist. Most businesses were founded to serve a need in society. And many have succumbed to the pressures of Wall Street, crushing their soul in the process. Businesses that don’t serve a real need (not just, say, a more flavorful snack) for humanity will not survive. Revisit the fire that drove the founding of the organization and ignite it again. Everything changes when there is a north star worth following.
  1. See yourself as part of an ecosystem, not just a fierce competitor. Because you are. The people, planet and resources that you depend on for life need to be healthy, and you have a critical role to play in that.
  1. It’s ok not to have an answer to everything all the time. Nobody does, so stop pretending. Become a learning organization.
  1. Master the creative process. Forget innovation techniques, design thinking, all the fancy consultants and labs and incubators. The creative process, which is accessible to every individual and every organization is the heart of life. So much more to say here, but of course not now. Read Robert Fritz, The Path of Least Resistance for Managers.

Most important for all of us is to try not to generalize. There are brilliant business minds entering the world of social enterprise. And there is an army of businesses working to change the way business works. The American Sustainable Business Council (ASBC), founded by David Levine and Jeffrey Hollender, is a network of enlightened business leaders from every industry working to create an environment in America where businesses that want to be sustainable can thrive. The organization is working to influence policy to make it easier to be a sustainable business, they are working to make chemical policy more stringent, to protect water and other natural resources, to fight for rights for workers, for policies that mitigate against climate change,  change policies that increase access to capital for women and minority-owned businesses, GMO labeling, campaign finance reform, net neutrality, minimum wage, and in general, to make the government and citizens aware that there are businesses who want to make the world a better place.

Peter Senge said that “All boundaries are arbitrary. We create them and then ironically we find ourselves trapped within them”. That is one of the most profound insights to our modern life. We make a distinction between big business and good business that is trapping us within an arbitrary boundary of our own making.

Back to ASBC: Check them out, make some new friends, and start a conversation. ASBC.org