On Saturday, we stumbled across the TATA Social Enterprise Conference 2012 live streamed on the web.
The morning keynote speech was given by Liam Black, who has created a dozen social businesses in markets including manufacturing, recycling, logistics, retail and catering. From 2004 to 2008, he grew Fifteen, with Jamie Oliver, into a global social enterprise brand.
Black is known for his straight talking approach to business and this presentation was no exception. He outlined the key traps entrepreneurs fall into when trying to create a company with a social purpose.
Here are Liam Black’s seven deadly sins of social entrepreneurship.
A belief that tweeting, blogging and going to conferences are entrepreneurial activities
“Twitter, Facebook and blogging is great”, Black said, “but it shouldn’t be confused with action.”
“Action is what separates the real entrepreneurs from the wannabes and the poseurs,” he added. “It is possible to spend all your time going to conferences but act, jump, do it. Whatever step it is that will make it happen for you; act.”
Black concluded this section with a quote from entrepreneur and venture capitalist Ivor Royston: “There are three types of people; those who make things happen, those who watch things happen and those who ask ‘what happened?’”
Insufficient ruthlessness about purpose
“Be really focused on what it is you really want,” Black advised. “Outline exactly what it is that you want to achieve and communicate it to all who come across your business.”
Grameen Bank, the micro-finance organisation set up by Nobel Prize winning social entrepreneur Mohammad Yunus, is a good example of a social business with a strong purpose, Black claimed. “It is really clear about what it wants to do,” he said, ‘we’re going to put poverty in a museum and everything we’re going to do is towards that end’”.
Black called on social entrepreneurs to be clear about exactly what they want to achieve and know which bit of an impact is directly because of them and their business.
Unwillingness or inability to prove impact
“There is an enormous amount of bulls**t talked around social enterprise and impact,” Black complained. “One thing I always say to any social entrepreneur is ‘where is your evidence?’ Wearing your heart on your sleeve and telling me about your good intentions isn’t good enough.
“If we spent as much time trying to verify the impact that we have and putting financial metrics around them as we do on giving each other rewards and saying how great we all are, we’d make a much bigger difference.”
Inability to nail the business basics
Black confessed that when he ran social enterprise factories in the North West, he “used to pontificate in the media about changing the world through social entrepreneurship”.
But one morning he returned to his office and a post-it note had been left on his desk explaining that staff wages hadn’t been paid.
“I was out there saying I was going to save the world but back at base, the basic stuff wasn’t working because I thought it was a bit dull,” he said. “We set ourselves up as an enterprise that offered paid work to those people who no-one else would employ. Getting paid weekly in cash is really important when you’re in that world.”
“While they may be dull, the business basics are necessary and must be done if you want your business to be a success,” Black said.
“I blundered through and was lucky enough to get people from the private sector onto my boards who showed me how to do it. You need to build an enduring organisation; not a personal brand.
“Too much in social enterprise is around the person,” Black added. “I will always swap someone who’s good at talking to the media with someone who is good at building an enduring organisation. If that’s not you, get someone who’s really good at it.
Being a poor leader
“Once your business scales and you can’t get everyone in the same room as you, you have to think about what type of leader you are,” Black said.
“You need to be a mindful leader,” he advised. “What is the leadership style that you have? What is the culture you want to create? What leadership behaviours will lead to creating it?”
Not understanding your customer
“You cannot spend enough time understanding your customer,” Black said. “Many companies that go off the rails do so because those behind them weren’t close enough to understanding what the customer wanted.”
The social entrepreneur confessed that one of his previous companies, Revive, aimed at revolutionising charity shops, failed because he didn’t understand the customer. While the business spent “a fortune” on the shops, few customers showed up.
“You can get away with it in the early days of setting up a company but when it comes to someone putting money into your till or not, the line between getting it wrong and going out of business is very short.
“The further away you are and the more you rise up the organisation, the better you think the service is but you’re not close enough to know if it is or not. Stay close.”
Trapped in a ‘sector’ mindset
Many social entrepreneurs like to think they are firmly in the good, out to save the world social enterprise sector and in competition against the evil, out to take everyone’s money private sector.
But the truth is, you need to “be promiscuous and build networks across different sectors and industries”.
As Reid Hoffman, founder of LinkedIn, said: “The good relationships and alliances you create define your mutual ability to be effective.”
Black concluded: “If you want to solve a big social issue, you can’t do it on your own. You need partners and you need to understand the politics around getting them.”