Entries For: October 2008
2008-10-28
Combining Components
As we shall see, these four components do not drift aimlessly through what Dees accurately described in 2008 as the ecosystem of social entrepreneurship. Rather, they come together on occasion to create a strategy for change.
Some strategies emphasize the entrepreneur’s dispositions and traits, while others focus on the context created by organization, and still others emphasis ideas and opportunities as central ingredients that are shaped and noticed by entrepreneurs and organizations.
As we shall also see, the key to success may be in assembling the four components together to take advantage of a specific opportunity, develop a particular idea, use an entrepreneur’s special skills, or focus energy within an organization.
As such, creating social entrepreneurship may be very much like solving a jigsaw puzzle. Some will start at the corners, others at the center, and still others with a color. But it is unlikely that the puzzle can be solved without some combination of all approaches, especially as the number of pieces increase.
Some strategies emphasize the entrepreneur’s dispositions and traits, while others focus on the context created by organization, and still others emphasis ideas and opportunities as central ingredients that are shaped and noticed by entrepreneurs and organizations.
As we shall also see, the key to success may be in assembling the four components together to take advantage of a specific opportunity, develop a particular idea, use an entrepreneur’s special skills, or focus energy within an organization.
As such, creating social entrepreneurship may be very much like solving a jigsaw puzzle. Some will start at the corners, others at the center, and still others with a color. But it is unlikely that the puzzle can be solved without some combination of all approaches, especially as the number of pieces increase.
2008-10-21
Organizations
Organizations are the fourth component of social entrepreneurship, but were often an afterthought in the definitions I read. Indeed, many definitions focused on organization and management as adversaries of change.
Jane Wei-Skillern, James E. Austin, and Howard Stevenson took a neutral stance about organizations and social entrepreneurship in 2005. Writing about the opportunity, people, capital, and context involved in creating social value, the three authors noted the importance of organizational alignment in achieving results:
Although organizations impose clear operating constraints, they also provide essential capacity. As Wei-Skillern and her colleagues continued, the challenge is to determine how much the organization can achieve with limited resources: “Seeking to address a very broad set of issues with very limited human and financial resources may actually result in low social impact because the organization’s resources are spread too thin.” Simply put, organizations cannot be ignored as a component of successful social entrepreneurship and a potential source of failure.
Wei-Skillern and her coauthors clearly understood the point—their 19 page article in Entrepreneurship Theory and Practice used the word “organization” or “organizations” 127 times, and the words “entrepreneur” or “entrepreneurs” 109.
Jane Wei-Skillern, James E. Austin, and Howard Stevenson took a neutral stance about organizations and social entrepreneurship in 2005. Writing about the opportunity, people, capital, and context involved in creating social value, the three authors noted the importance of organizational alignment in achieving results:
Remaining attuned to how contextual changes can affect the opportunity and the human- and financial-resource environment causing the need for realignment is a critical skill for the social entrepreneur. Furthermore, practitioners should remain cognizant of a unique characteristic of the operating context, namely, that the societal demand for social-value creation is enormous. This creates a plethora of opportunities for social entrepreneurs and a concomitant ever-present temptation to address more and more of them.
Although organizations impose clear operating constraints, they also provide essential capacity. As Wei-Skillern and her colleagues continued, the challenge is to determine how much the organization can achieve with limited resources: “Seeking to address a very broad set of issues with very limited human and financial resources may actually result in low social impact because the organization’s resources are spread too thin.” Simply put, organizations cannot be ignored as a component of successful social entrepreneurship and a potential source of failure.
Wei-Skillern and her coauthors clearly understood the point—their 19 page article in Entrepreneurship Theory and Practice used the word “organization” or “organizations” 127 times, and the words “entrepreneur” or “entrepreneurs” 109.
2008-10-14
Opportunities
Opportunities are the third component of social entrepreneurship, and were at the center of most, but not all of the definitions I reviewed over the past two years. Viewed as a moment of possibility, opportunities are sometimes taken as a Peter Pan phenomenon—that is, if you believe you can fly, you will fly.
Writing in 1998, Dees offered a very difference view. Like Drayton, Dees reserved a significant role for the entrepreneur as the starting point of change. However, Dees also argued that a powerful vision is not enough to create disequilibrium. Opportunities must be identified and exploited. Indeed, entrepreneurs are defined in part by their ability to recognize and “relentlessly” pursue new opportunities. “Where others see problems, social entrepreneurs see opportunity,” he wrote. “They are not simply driven by the perception of a social need or by their compassion. Rather they have a vision of how to achieve improvement and they are determined to make their vision work. They are persistent.”
Opportunities also provide resources and the potential for collaboration, which leads to Dees’ notion that social entrepreneurs work around the obstacles embedded in an opportunity.
For Dees, social value is always the ultimate goal. It is why social entrepreneurs pursue opportunities in the first place, learn and adapt as they proceed, and act boldly without regard to resources. And it is why they are called to action in the first place. Nevertheless, they could not act without the ability to recognize opportunity when it arises.
Writing in 1998, Dees offered a very difference view. Like Drayton, Dees reserved a significant role for the entrepreneur as the starting point of change. However, Dees also argued that a powerful vision is not enough to create disequilibrium. Opportunities must be identified and exploited. Indeed, entrepreneurs are defined in part by their ability to recognize and “relentlessly” pursue new opportunities. “Where others see problems, social entrepreneurs see opportunity,” he wrote. “They are not simply driven by the perception of a social need or by their compassion. Rather they have a vision of how to achieve improvement and they are determined to make their vision work. They are persistent.”
Opportunities also provide resources and the potential for collaboration, which leads to Dees’ notion that social entrepreneurs work around the obstacles embedded in an opportunity.
Social entrepreneurs do not let their own limited resources keep them from pursuing their visions. They are skilled at doing more with less and at attracting resources from others. They use scarce resources efficiently, and they leverage their limited resources by drawing in partners and collaborating with others. They explore all resource options, from pure philanthropy to the commercial methods of the business sector. They are not bound by sector norms or traditions. They develop resource strategies that are likely to support and reinforce their social missions. They take calculated risks and manage the downside, so as to reduce the harm that will result from failure. They understand the risk tolerances of their stakeholders and use this to spread the risk to those who are better prepared to accept it.
For Dees, social value is always the ultimate goal. It is why social entrepreneurs pursue opportunities in the first place, learn and adapt as they proceed, and act boldly without regard to resources. And it is why they are called to action in the first place. Nevertheless, they could not act without the ability to recognize opportunity when it arises.
2008-10-07
Ideas
Ideas are the second component of social entrepreneurship, and are also found in all of the definitions I have collected. Comparing business and social entrepreneurship in 2007, Martin and Osberg argued that the critical difference between the two is the “value proposition.” Unlike business entrepreneurs who focus on serving markets that can afford a new product or serve, social entrepreneurs seek no profit for their investors or themselves:
Entrepreneurs clearly play a significant role in transformational change, but only when they are absolutely committed to the idea. Indeed, writing in 2003, Martin warned the social benefit sector to avoid “heroic leadership trap.” “Take-charge leadership misapplied not only fails to inspire and engage, it produces passivity and alienation.
And this is true not only in the for-profit and government sectors. When nonprofit leaders assume ‘heroic’ responsibility for making critical choices, when their reaction to problems is to go it alone, work harder, and do more—with no collaboration or sharing of leadership—their ‘heroism’ is often their undoing.”
Instead, the social entrepreneur aims for value in the form of large-scale, transformational benefit that accrues either to a significant segment of society or to society at large. Unlike the entrepreneurial value proposition that assumes a market that can pay for innovation, and may even provide substantial upside for investors, the social entrepreneur’s value proposition targets an under,, neglected, or highly disadvantaged population that lacks the financial means or political clout to achieve the transformational benefits on their own.
Entrepreneurs clearly play a significant role in transformational change, but only when they are absolutely committed to the idea. Indeed, writing in 2003, Martin warned the social benefit sector to avoid “heroic leadership trap.” “Take-charge leadership misapplied not only fails to inspire and engage, it produces passivity and alienation.
And this is true not only in the for-profit and government sectors. When nonprofit leaders assume ‘heroic’ responsibility for making critical choices, when their reaction to problems is to go it alone, work harder, and do more—with no collaboration or sharing of leadership—their ‘heroism’ is often their undoing.”
