Close

Four principles every business can learn from social enterprises

Judit Maireder shares four things that make a social enterprise successful.

Last week, Christchurch was hosting their largest conference since the earthquake, the Social Enterprise World Forum 2017. 1,600 delegates from 45 countries came together to share their wisdom and experience of how to create a more sustainable future. Here are 4 of my key takeouts of what makes this sector so successful – something every business could learn from.

  1. Start with solving an existing problem

In the aftermath of the Christchurch earthquake in 2011, more than 10,000 buildings had to be demolished. That’s a lot of trash. Juliet Arnott was urged by the necessity to find a way to reuse it and started redesigning it as furniture and other useful objects. Rekindle was born, and instant success. The organization uses creative ways to be more resourceful – their Whole House Reuse project even involved re-purposing the entire material of a single house, otherwise destined for waste.

In a similar way, Propeller, a social enterprise based in New Orleans, was created by Andrea Chen in the aftermath of Hurricane Katrina. “The government was not working fast enough.” Andrea aligned the local community to help with what was needed, for instance, local artists to paint street signs that haven’t been replaced by the government in 18 months after the storm. “Where there is a need, there is an opportunity,” she said during her presentation. “As social entrepreneurs, we need to change the system.” Out of that need grew Propeller, an incubator and co-working space, supporting entrepreneurs that tackle social and environmental disparities in the region. “Maybe you need a shock to really open that space up – that really strong leadership.”

  1. Align behind a common purpose

When various people align behind one common goal. That was how Christchurch’s Pallet Pavilion was created: emerging designers, established professionals and a bunch of volunteers came together after the earthquake to build a much-needed event centre. From scratch, and entirely from loaned, reused and donated materials. “A visible structure that merits social structures,” says Raf Manji, Christchurch City Councillor. The centre was a place where people could reassemble, connect and come together in the weeks and months after the catastrophe.

For social enterprises, alignment behind a purpose is part of their success. Working and creating something bigger than the financial return for the enterprise is crucial to get teams aligned, and motivated. Today, it is more important than ever, according to Colin Downie, CEO of to the WildHearts group “85% of the workforce is unengaged. 25% would actively sabotage their organization from within.”

  1. Be unconventional

“The key is to be unconventional,” according to David Flynn from Thankyou, an Australian consumer goods brand selling everything from water to baby products. And he means it. To get the attention for leading Australian retailers, they circled a helicopter above their head offices for several hours with an invitation to change the world. A couple of years later, Thankyou products are placed in key retailers. A tremendous success of a company that has grown without any external capital: 100% of the profit goes to fund projects that help fight global poverty, currently active with hygiene and food programmes in 16 countries. To date they, have helped 545,360 with water and sanitation services.

Clary Castrisson of 40k Group has a similar point of view: “We need to change the debate. We need to get rid of the common mind blocks and get funding for social purpose through convincing with the commercial one first”. The organization runs learning pods for children that teach English through technology in villages in developing countries. According to him, the key is to not see these people as beneficiaries, but customers. By making the service not free, but cost-effective, it enables the organization to not rely on external funds, and scale their impact globally. Their break-even point is when 343 kids from a village pay $4/month. And of course, this is only possible through technology – which brings us to the next point:

  1. Digital and technology are the key

“We are in the golden age. Emerging technologies are giving us possibilities like never before. Technology subsidies what resources can’t solve.” says Castrission. Social Enterprises are a relatively new industry, many are digital businesses by using the advantage of technology as a key to solving problems. “Every company is a tech company,” according to Jim Fruchtermann, founder and CEO of Benetech, a Silicon Valley nonprofit technology company, which seves as a bridge between the social sector and Silicon Valley, by working with communities to identify needs and software solutions that can drive positive change.

Many traditional businesses would be better off embracing these notions. “Social enterprises are common sense. Let’s make it more common,” is how Downie puts it. In other words, according to Raf Manji, “business was always about social outcomes. Social Enterprises just help us to find back to that track.”

Judit Maireder is the founder and director Y brand, a brand and digital consultancy with focus on purpose. 

Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription, an Idealog t-shirt and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).