Social Enterprise
Business Planning Workshop:
Organizational Readiness
Presented by:
Kim Alter
Virtue Ventures LLC
Social Enterprise Conference
October 30-31, 2006
Culture is the # 1 Reason Why
Social Enterprises Fail
"But we are a nonprofit! We're not supposed
to make money!"
"Socially oriented practitioners (and their sympathizers) are raised by
experience and training to distrust money, business, and capital. We
develop a mind-set that views money as evil. Grow up. Money is
valueless; it's what people do with money that counts. Your job is to
get as much of it as you can so you can stay in business, hire people in
need, pay a good wage, contribute funds to your program, and stabilize
your community. Greed may not be good, but money is. After all, there
is no glamour in poverty. Go out there and get your piece of the pie
and then feed it to the masses. If you aren't comfortable with that idea,
don't start the game."
New Social Entrepreneurs: The Success, Challenge and Lessons of Non-profit Enterprise Creation, by
Jed Emerson and Fay Twersky
Mission – Money Matrix
$$
 $$$$
 Mission
$
 Mission
Low
 $$$$$
 Mission
$
 Mission
High
Mission
Challenge
Financial
Viability
Social
Impact
Problems with Duality…
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Confusion
Indecision
Mistrust
Conflicts
Culture Clashes
Cognitive Dissonance
©PeterSCrosby
Cognitive Dissonance...
n
Cognitive DiSsOna cE...
Culture Clash
Social Sector
Business
1.
Social impact
1.
Profit maximization
2.
Complex - difficult to 2. Concrete –
measure
straightforward
measure
3.
Lack of precision
3.
Precision and accuracy
4.
Process oriented
4.
Results oriented
5.
Risk adverse
6.
Bureaucratic / slow 5. Risk-taking
moving
6.
Agile / quick to respond
Organizational Issues
Fear of losing sight of the
mission
 Resistance to and fear of
change

Organizational Strategies






Inform and educate internal and external
stakeholders
Communicate the vision by a factor of 10
at all levels!
Get buy-in (bring critics to the table)
Build and present clear and consistent
vision and values
Articulate motivations and expectations
Create transparent process
Board Issues




Challenges why some board members
preside
Low risk tolerance--nonprofits have little
financial cushion
Concerned about perception--Public trust
Tax status and liability--UB income
Board Strategies

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Cultivate champions at the board level
Set up and enterprise team/committee
Tie board members into the process at
the beginning
Bring in outside expertise
Integrate social enterprise planning
with other strategic issues
Purge deadwood
Management Issues





Time
Relinquishing control
Threatened by new “businesslike”
culture
Skills and capacity
Focus / priorities
Management Strategies



Executive director provides resources
and support
Set up internal “social enterprise team”
Present process plan and business plan




Strategic/value alignment
Coordinated business model
Transparent process, open
communications
The “right people on the bus”
Staff Issues

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Fear of job change or redundancy
Inability to see the big picture
Comfortable with status quo
Staff Strategies

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
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Understanding and addressing staff’s
fears
"Incentivizing" change
Providing training, resources, support
and recognition
Involving staff in the process
Communicating down
Managing Cultural Tension


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Holistic SE vision
Culture where both business and social
mission are valued
Adaptive culture
Transparent process
Structure and integration that facilitates
healthy communication, respect, etc.


corporate strategy and business model
Balance and equilibrium