What Business can Learn from Social Enterprises

Being a business student, one of the first things you learn is that the big goal of any business is to make profit. If a business does not run at a profit then it’s just a sinkhole of money that will not attract investors and will not motivate enough most of its workers.  While this is a philosophy I don’t personally identify with, it is something that, once you work in a small business, starts to makes a lot of sense. If you cannot pay your employees, if you cannot pay your suppliers, if you cannot pay yourself consequently it makes it very hard to run any kind of business.

So if that cannot be removed as the law paramount of a business entity (it is actually written in law), what’s the point of learning from social enterprises? To clarify that I need to talk about the three sectors, what social enterprise actually is and why it’s different from enterprise in general.

The first two sectors are the ones most known, the private and public sectors, or business and government. The first, as said, focuses on profit, the second, in theory, on providing services that can run at a loss for taxpayers. Meaning, the third one must be charity! Well, it includes charities, other volunteering institutions, NGO’s, non-profits and also social enterprise. The point of these companies is to tackle a normally social based cause, e.g. hunger charities, making them different to the core to both other sectors.

So the social starts making sense! But no, they aren’t charities, unlike the rest of the social sector, social enterprises strive to run at a profit. The analogy lies on the concept of a charity that makes money. However, social enterprises are something different: they get their core from the third sector, while getting their business acumen from the private sector.

Not so different to a company after all? Well, yes, it is, because the ultimate goal of a social enterprise, following the logic that they’re working towards solving a problem fully, is to not exist, while when establishing a business you’re assuming perpetual life (by law).

GiveMeTap is a social enterprise, a company that sells the desired product of a long-lasting stainless steel bottle with the attached service of the ability to fill it up at many convenient locations, while investing half the cost of the bottle into water projects in Africa. They give easy access to water to people in London, UK, which causes them to be able to bore for clean water in Kpakpalamuni, Ghana.  If Edwin and Sanum are able to sell GiveMeTap bottles all over the developed world the goal of GiveMeTap’s existence of satiating Africa is resolved. Again, this is a theory, and usually social enterprises give themselves tasks too big to realize.

Photo by Amadu Salam Muni-Balonno & Hikaru Okamoto for GiveMeTap
Photo by Amadu Salam Muni-Balonno & Hikaru Okamoto for GiveMeTap

So what can Apple, Unilever and Rolls Royce learn from GiveMeTap, Kiva.org and Edible Bus Stop? Well, they can learn how to have a point, or alternatively a pull. Or just something that is core to them. Some companies can portray their mission very sexily, but in the end, most don’t really have a belief to be found.

“To refresh the world… To inspire moments of optimism and happiness… To create value and make a difference.”

That is Coca-Cola’s mission statement. Inspiring, maybe, but open ended and nothing really new.

They don’t have to be social goals, they don’t even have to be concrete, but at least consistent. There are companies that represent values of business perfectly, like Zara represents logistics – as, in my opinion,it is the only fashion brand that can react properly to mid season trends – and Apple represented innovation, but those aren’t very relatable, they’re amazing if you look how good these companies were at those values, but lacking the umph.

So lastly, why does this bother me – the writer of this piece? What made me stay up late at night thinking about this and made me consider this something worth writing about? Simply put, because I don’t like CSR (Corporate Social Responsibility) in practice, as mostly it’s just a coat of sprinkles a company applies at the end of an exercise. It is an answer to the questions “What will look good?” or “What will increase our profits?” instead of “What can we do?”

I’m not saying that these values should come in detriment of profit, but in conjunction with profit, and the best example I can find for that is Innocent, a company that does well financially and is good too. 10% of their profits go to charities, projects, etc. Tom Shoes also donates a pair of shoes with each pair it sells. They are feel good brands. Brands that try to improve the world in their way. Why can’t more brands do that?

Benjamin Tirone Nunes

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s