ABCLAPPEENRANTA UNIVERSITY OF TECHNOLOGY

LUT LAHTI

INNOVATION BOOK FOR SOCIAL ENTERPRISES

ABCLAPPEENRANTA UNIVERSITY OF TECHNOLOGY

LUT LAHTI

INNOVATION BOOK FOR SOCIAL ENTERPRISES

AUTHORSVirpi Koskela, Tuija Oikarinen, Suvi Konsti-Laakso, Suvi-Jonna Martikainen, Helinä Melkas

GRAPHIC DESIGN AND COVER ILLUSTRATION Petri Hurme, Vinkeä Design Oy

PHOTOGRAPHS Virpi Koskela ja Suvi-Jonna Martikainen

TRANSLATIONSophy Bergenheim, Aakkosto Oy

Lappeenranta University of Technology LUT Lahti LUT Scientific and Expertise Publications Tutkimusraportit – Research Reports No. 31

ISSN-L 2243-3376 ISSN 2243-3376 ISBN 978-952-265-759-6 (PDF) (electronic publication)

Original Finnish version “YYAapinen – yhteiskunnallisen yrittämisen innovaatiokirja” (2014) ISBN 978-952-265-654-4 (printed publication) ISBN 978-952-265-655-1 (PDF) (electronic publication)

Swedish version “ABC – Innovationsbok för samhälleliga företag” (2015) ISBN 978-952-265-758-9 (PDF) (electronic publication)

Lahti 2015

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Foreword 6

A

1. Innovation Dictionary of the ABC Book for Social Enterprises 8

2. The History of Social Enterprises in Finland – A Short Version 12

3. Viewpoints on Social Enterprises 13

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4. How to Get Started as a Social Entrepreneur 20

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5. How to Maintain and Disseminate Social Activities 26

6. Where Could the Path Lead? 32

Afterword 36

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ForewordThis innovation book for social enterprises furthers the cause of sustainable development and holistic innovation. It is aimed at everybody interested in the activities of social enterprises. It can serve as a resource for regional actors, such as municipali-ties or organisations or funds for regional develop-ment. The book is intended to raise questions and thoughts, rather than provide answers. It is meant to inspire and encourage. Hopefully it will also increase understanding of social enterprises and their importance for readers who are not yet that familiar with the concept.

The innovation book is also available in electronic form at www.lut.fi/lut-lahti (“Julkaisut”, 2015).

Lahti, February 2015

The authors

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1. Innovation Dictionary of the ABC Book for Social Enterprises

Innovation = a product, service or mode of operation that has been adopted or realised.

Social enterprise = a company that focuses not only on business activities, but also strives to solve social or environmental problems through its activities. Social enterprises can further their social goals both through their own activities and by using most of their profits in a way that furthers the cause. www.avainlippu.fi/en/symbols/finnish-social- enterprise-mark

Practice-based innovation = the idea for a new product, idea or mode of operation is born through a practical (problem) situation, and often involves the cooperation of experts from different fields. The innovation itself is born by experimenting, doing and learning in collaboration at the intersec-tion of different knowledge areas.

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Work integration social enterprise (WISE) = a social enterprise that seeks to ease a difficult employment situation by employing disabled and/or long-term unemployed people. The activities of work integration social enterprises are based on a law that came into force in 2004. The objective is to offer employment opportunities for disabled and long-term unemployed people. At least 30 per cent of a WISE’s employees must be disabled or long-term unemployed. The Ministry of Employment and the Economy maintains a register of social enterprises. www.tem.fi/en/enterprises/social_enterprises

Job bank = the job bank trial is a project run by the Ministry of Social Affairs and Health, which involves developing a business model to facilitate the employ-ment of partially disabled and long-term unemployed people, young people without a first degree and other people who are at a potential disadvantage in the labour market. The objective is to create business terms and conditions and a common operating principle for job banks, to integrate job pools as part of job bank activities, to improve and develop work incentives, to employ people who are in a difficult position in the labour market, to assess the need for public assistance in job bank activities, and to organise job bank activities on a nationwide level. The job bank trial is one way of organising and supporting the creation of ‘common good’.

In Finland, the concepts of work integration social enterprise and social enterprise are easily confused. The Finnish term for WISE is ‘sosiaalinen yritys’ (‘social enterprise’), whereas social enterprise is ‘yhteiskunnallinen yritys’ (‘societal

enterprise’). The confusion stems from the English word ‘social’, which has the dual meaning of social/societal, which often leads to translation difficulties. In this case, it often raises the misconception that a social enterprise operates within the field of social care.

It could be useful to add definitions for social enterprises according to their field: an environmental social enterprise, for example.

In other words, a social enterprise can operate within any field, just like any ‘ordinary’ company, but in addition to business operations, a social enterprise strives to produce common or social ‘good’ for the environment or some community.

Job bank enterprise = a limited company or cooperative that engages in business activities and employs people at a potential disadvantage in the labour market (partially disabled, long-term unemployed, young people without a first degree) in their own production, through subcontracting or by leasing workers and finding job placements at client companies. Job bank enterprises canvass and strive to develop their workers’ skills alongside their work duties and lease workers according to the needs of client companies. The employment relationship between the worker and the job bank enterprise remains in force during lease periods. When the worker is not working, they can participate in education or training. www.tyopankki.fi/info (in Finnish)

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A social innovation can be defined in several different ways. In this book, a social innovation refers to a new mode of operation which addresses the social needs of an individual or community, and thus improves quality of life and well-being. A social innovation is often the result of the creative activities of an individual, group or community, which combines existing provisions, practices and know-how in a new way. In other words, a social innovation means seeing a familiar thing from a new perspective; a new kind of comprehensive understanding, which teaches people to operate in a new way. Examples of social innovations include the maternity package, paternity leave, Nordic walking, the Common Responsibility Campaign and free-of-charge school meals.

Sustainable development thinking is based on the concern about inequality between people and the vitality of ecosystems that form the basis for life. Sustainable development focuses on three themes:

• ecological sustainability

• economic sustainability

• social and cultural sustainability.

Sustainable development is social change that occurs and is guided on a global, regional and local level. Its objective is to ensure that present and future generations have the opportunity to have a good life. Sustainable development has played an important role in the strategies and programmes of the Finnish government since 1990.

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Social sustainability is one of the focal points of sustainable development. Its purpose is to diminish inequality between people, to ensure that every-one’s basic needs (such as food, education, freedom of speech) are met and to create preconditions that allow individuals to take care of their own well-being. Current social challenges in Finland include unemployment, social exclusion, ensuring the future activities of public services, and the growth of income inequality.

As far as innovation is concerned, what is essential is to combine things in a new way. A social enterprise is in itself a form of innovation, which combines the creation of social good and entrepreneurship.

In the future, keep your eyes peeled and your ears to the ground: what is the problem? Innovations spark new innovations; social enterprises could seize the opportunity and sniff out new opportunities to create new practice-based innovations.

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2. The History of Social Enterprises in Finland – A Short VersionSocial enterprises are a relatively new and unknown phenomenon in Finland. Around the world, social enterprises have been seen as a solution for society’s ‘wicked problems’, such as unemployment, social exclusion or environmental problems. A social enterprise is thus a broader concept than the work integration social enterprise, which according to the law focuses on social employment. There are different views on how the phenomenon of social entrepreneurship was born and how the concept should be defined, but the central issue is around maximising social value.

Even though the ‘social enterprise’ is a concept of the 21st century, the roots of the phenomenon date further back in time. The early 20th century work centres, which later became Christian settlement houses, and rural cooperation activities and cooperative social insurance funds were early manifestations of the social mission. One of the most famous of these is the Linnanmäki amusement park. In 1950, six associations engaged in child welfare founded the Linnanmäki amusement park, and a few years later, the Children’s Day Foundation. The purpose of the foundation is to raise funds for child welfare work in Finland by maintaining and developing the Linnanmäki amusement park. During the latest years, Linnanmäki has raised an annual profit of 3 million Euros for its social mission. The Children’s Day Foundation was established by the Swedish-speaking Barnavårdsföreningen i Finland (the Finnish Child Welfare Association), the Federation of Mother and Child Homes and Shelters, the Central Union for Child Welfare, the Mannerheim League for Child Welfare, Parasta Lapsille (The Best for Children) and Save the Children.

The concept of social enterprise (sosiaalinen yritys) was coined in the mid-1990s. Social enterprises were born out of business development activities within social workshops and work cooperatives. The Act on Social Enterprises entered into force in 2004. According to international definitions, these Finnish social enterprises are work integration social enterprises.

In 2011, the Finnish Social Enterprise Mark was launched as a result of work by the Ministry of Employment and the Economy, and is governed by the Association for Finnish Work. Holders of the mark commit themselves to the criteria for social enterprises, which include, among others, restrictions on profit distribution, transparency of activities and the generation of social good. In 2014, nine social enterprises founded the Finnish Association for Social Enterprises to represent and further the cause of social entrepreneur-ship. The association is a member of the Confederation of Finnish Industries (EK). Elsewhere in Europe, social enterprises have been attracting broader interest for a long time; a similar development is probably coming in Finland.

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3. Viewpoints on Social Enterprises

Social enterprises are traditional enter-prises as well. What makes these enter-prises social is the fact that the operation of the companies focuses, in addition to the traditional issues, on, e.g., social sustainability or the renewal of society. Social enterprises can also be based on a philosophical viewpoint: a strong ethical perspective, for example.

You need to master a lot of things as an entrepreneur. Substantial know-how is paramount. In addition, you need to know how to manage your business: production, marketing, accounting and HR. You have to be able to develop your business: envisage, set goals, plan, organise and implement. Follow-up and evaluate. You have to be a good business partner and have good communication skills. You need to believe in your own competence, be brave, take risks, take the initiative. You must be independent, persevering and goal-orientated. Oh, and of course you have to be eager to learn new things!

3.1 Entrepreneurship

The direct and indirect implications of private enterprises on employment, well-being and the success of our national economy are significant. New means for supporting Finnish enterprises are being researched and devel-oped, and there is much discussion regarding the topic. A great deal of effort is being put into furthering the establishment of new companies and the growth and internationalisation of existing companies (see, for example, EK’s website: ek.fi/mita-teemme/yrittajyys/, in Finnish).

Being an entrepreneur is a tough job – but also very rewarding at its best. When entrepreneurship and companies’ business activities are observed from the perspective of an ‘ordinary’ company, it is clear that many traits are needed in order to be successful.

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The same skill set requirements apply to a social entrepreneur as well. The business activities of a social enterprise and a regular enterprise can be very similar. However, the important difference is that a social enterprise does not only seek to generate profit for its owners, but acts as a tool for doing some-thing beyond that: generating social good. The results of a social enterprise cannot be evaluated using the same indicators as a regular company.

What, then, is required of a social entrepreneur, compared to an ordinary entrepreneur? In Finland, the criteria of the Association for Finnish Work are usually used for defining social enterprises (www.avainlippu.fi/en/symbols/finnish-social-enterprise-mark). The most internationally recognised definition has been formed by the EMES European Research Network:

» commercial production of products and/or services → distinction from the third sector (activities of associations and organisations)

» freedom of decision-making → the company cannot be under the control of an outside owner or the public sector

» economic risk → the operations must generate enough profit to finance production costs

» wage paid for made work → business activities cannot be based solely on volunteer work or business support

According to EMES, the criteria for a social enterprise are:

» the objective is to generate benefits for the community

» the activities have started as a joint effort and shared objective of a community (group)

» rights to make decisions are not tied to ownership

» engaging decision-making practices, shared leadership

» restrictions on profit distribution

Even one person can establish a social enterprise by themselves to further their goals. Is it still important that the objectives and values of the enterprise are taken into account and shared with the employees at the time of recruitment or as the activities are kicked off, at the latest?

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Well, by engaging the people who are truly affected by the enterprise’s cause as soon as the starting phase…

By paying special attention to making sure that the workers can both perform their work in a mean-ingful way and develop their work.

I jumped here from page 32. There’s a whole lot going on about these big issues in the rest of the book. Hey: keep on reading!

I heard that social enterprises can be used for solving society’s wicked problems… Oh yeah: how?

… and by genuinely working together. Without clutching on to the role of the heroic entrepreneur and individual performance!

By seeing to the quality of work life. In everyday work life, it is important to pay attention to the personnel’s well-being and equality.

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3.2 The challenges of reforming society

Our society is in a state of constant and rapid change. There are more challenges than we have time to address – with conventional means. How will we solve the challenges and problems related to unemployment, the ageing population, loneliness and pollution? These ‘wicked’ problems are multi-faceted, and it is challenging to develop sustainable solutions. Social enter-prises can act now and in the future as one of the keys for finding solutions.

The changes occurring in Finnish society are not only about reforming the social and health care sector, for example, but about taking into account everything that is going on around us and in our environment. Many organisations are more and more aware of how they can participate in the surrounding world through their own values and actions. The ‘neigh-bourhoods’ within enterprise and organisation fields and local actors are increasingly important partners – good neighbours have become a part of the brand and profile of every self-respecting company. Social and ecolog-ical viewpoints have gained foothold in business strategies.

The procurement rules of orderer-producer services are undergoing changes which are to the benefit of social enterprises in Finland as well, where services form the largest share of total production. We are seeing, and will be seeing, the birth of new, less hierarchical organisations, which are not governed by the rules of economic profit maximisation, but are based on more sustainable values, transparent modes of operation and flexible employment. At the same time, consumers have grown to be increasingly aware of the value choices made by service producers. Indi-vidual municipalities and organisations operating within municipalities and regions also make themselves known to consumers through their values.

A consumer operating from a sustainable perspective puts thought into their selection of a company when they need a service or product. Has the company taken account of social sustainability (e.g. the social exclusion risk of young people, or the growing unemployment rate) or other perspectives of sustainable development (e.g. climate change or biodiversity)? What kind of energy does the company use; do they recycle or favour local production? Is the service or product that the company offers a practice-based innova-tion, created collaboratively to address genuine ‘grassroots-level needs’? Does this product cater to the needs of the consumer, who is often looking for solutions to practical problems?

So it seems that all this change and turmoil in society is a million-dollar question for social enterprises…

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Society is thus changing on many levels – in terms of individuals’ values, attitudes and methods of action, organisations and sectors, nationally and globally. In a thoroughly networked world everybody’s choices and modes of action affect the whole.

3.3 The philosophical perspective

From the philosophical perspective of sustainable development, social entrepreneurship is linked with socially, ecologically, culturally, economi-cally and spiritually sustainable values – and ethics. The metaphor that can be used to describe this relationship is one of the world’s oldest symbols: The Tree of Life. The figures that gather under and around the Tree of Life represent the kind of ‘common good’ that everyone living on this planet needs now – in a time of deforestation, climate change, pollution, erosion, famine, inequality, wars and diseases – maybe more than ever.

The perspective linked with the Tree of Life is connected to an environmental or eco philosophy that deals with the interaction between man and nature. In order for the human race to survive, ‘ego philosophy’ must turn into ‘eco philosophy’. We need a paradigm leap from accumulating personal wealth and utilising natural resources to a more plane-tary, wholesome way of living – a leap from exploitation to collaboration.

The Tree of Life way of thinking originates from native people and old cultures. It has been revived in recent years to develop the innovativeness and leadership of organisations, among other things. Now, in an era of crisis, we are also experiencing a time of communal and ecological convergence, as if we were ‘waking up from a dream’.

Life on this planet is sacred, and maintaining life makes our existence meaningful. This philosophically virtuous and ethical concept is beginning to replace the mechanistic conception of the human as a mere cog in the machine. People who have had enough of the treadmill have noticed how the experience of meaningfulness strengthens commitment and creates more sustainable attitudes and methods of action, with regard to work as well as everyday life in general.

Social entrepreneurship is suited to a Tree of Life way of thinking, since the space for common sharing (which we will talk more about in Section 5.3)

I can see far into the future from the branches of the Tree of Life! All the way to my, my children’s and my grandchildren’s future.

Woof! Woof!

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required for creating and running a social enterprise is a circular, demo-cratic, socially and ecologically sustainable ‘space’, in which the ‘common good’ is taken into account – just as with the Tree of Life.

The Tree of Life represents the heart that has a multifaceted connection with its surroundings. All of its parts are equally important: the seeds, sprouts, trunk, roots, branches, leaves, flowers and fruits. Cultures that led a more sustainable life than current generations have for thousands of years gathered around large trees (‘wise professors’) to teach, learn and spread information – experience, in other words.

In our current everyday work life, the space for common sharing by living organisms, organisations, is a concrete example of such a ‘common log fire’ or ‘cross-pollination’ that is needed for observing things globally from the perspective of shared life.

How does your workplace/organisation/job take the ‘Tree of Life’ into account? In what ways do you further the ‘common good’?

How could the ‘common good’ be measured?

In work life and entrepreneurship we value the head. We think with our mind, even if it is matters close to our hearts that we are willing to fight for. If your heart says one thing and your mind the other, I suggest that you choose whichever furthers life.

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B

The ‘Dreams and Fears’ workshop run by the preliminary board, summer 2012, before the actual business idea workshops.

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4. How to Get Started as a Social EntrepreneurEstablishing a social enterprise is not necessarily that different from establishing a regular company, but on the other hand it can involve a significantly different process. There are many kinds of variations. Social enterprises differ, for example, in their recruitment processes and in how they initiate the founding process.

The following describes the first phases of the foundation of a social enterprise; where it all began and how the ideas for the business were gathered. Among its differences from an ordinary company, in our example, the process was not initiated by an entrepreneur with a business idea which was entirely deliberate. Instead, hundreds of mental health care rehabil-itation clients were asked to throw in ideas about what kind of company they might want to start. In order to bring up, distribute and develop ideas from such a large and heterogeneous group, non-conventional working and innovation methods were needed. Functional expression methods were utilised to process the business ideas created at the common workshops.

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An example of founding a social enterprise: Business idea workshops at the Bee for Common Economy

During 2012–2013 in Lahti, a social enterprise was planned in cooperation with mental health care rehabilitation clients and the Bee for Common Economy (Yhteisen talouden talkoot), i.e. four third-sector actors. The Social Psychiatric Foundation of Päijät-Häme (Päijät-Hämeen sosiaalipsykiatrinen säätiö), the Family Association Promoting Mental Health and Lahti Clubhouse gathered business ideas from their members in workshops organised by the Lahti School of Innovation of Lappeenranta University of Tech-nology during autumn 2012. Applied art and silence methods, sharing personal experiences and developing these ideas further in groups were selected as the means for gathering the

Could opportunities and new work-places be created on the basis of a community’s know-how and passions? What if having a sense for such things is having a true nose for business?

The workshops for innovating social enter-prises worked on the participants’ own dreams regarding future businesses, among other things. Here is one dream collage.

Testing and developing ideas in the business idea workshop, autumn 2012.

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ideas. Engaging exercises helped participants to detach from conventional, mind-focused brainstorming and instead adopt new perspectives – and reach a state of common innovation. Six workshops lasted one afternoon each, with 10–30 participants per workshop.

The following pages describe the basic structure of the workshops, which shows how creative, functional methods are well-suited for finding new ideas. Throwing around ideas is not a matter of a dialogue inside one’s head, or a discussion within a group, but involves the whole human life experience, and first and foremost, experiences of meaningfulness. The workshops aimed to bring out every participant’s own experience of where, how and why they had felt they were doing ‘something meaningful’. This also facili-tated identifying people’s own inner potential, since the ‘business opportu-nity’ is closely linked to the moments and experiences of human life.

The ideas born during the workshops were gathered on both the ‘idea wall’ and the ‘idea form’ specially crafted for the business idea hunt. The work-shops generated over a hundred business ideas. The participants them-selves selected the ideas that they wanted to develop further. During 2013, two ideas progressed further, one of which went all the way to planning the business model and the testing phase. In 2014, it was time for the pilot phase, which turned out to be successful. Now, on the basis of the pilot, a Lahti-based social enterprise is about to see the light of day. It offers peer support services for mental health care rehabilitation clients.

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WORKSHOP MODEL FOR THE BUSINESS IDEA HUNT

Opening the workshop

1. Introduction

2. Warm-up

3. Orientation

4. Improvisation

5. Silence

6. Opening up to one’s own experiences / mental exercise

7. Sharing experiences / developing ideas further

8. Presenting business ideas

Detailed description of the content:

1. Introduction: The ‘person in charge’ of the project and the leaders of the workshop introduce the idea of the afternoon, i.e. ‘leave your brain in the cloakroom’, in order to open up the participants’ experiences and imagination to finding new perspectives and ideas.

2. Warm-up: Who am I and where do I come from? What mood am I in today? What have I brought along?

a. Suggestion: the ‘creative child’ intro-duction: Introduce yourself ‘with the wrong hand’, ‘new name’ and ‘new title’. Your new name consists of your own second name and your mother’s maiden name; your title stems from your childhood idol (for example, what did you play as a child? Who did you admire)? For example: ‘Alice Jones, country singer’. Every participant introduces themselves to the group in turn.

b. Suggestion: ‘The Finnish map’ exercise: The participants form an invisible map of Finland on the floor: where am I from? (The leader marks south and north for the participants; chatting with the other participants, everyone locates their own spot on the ‘map’.) Variation 1: The same exercise, with the following addition: ‘my roots and how local people have affected me’. For example, whose memory do you cherish and why? Variation 2: A typical description of your home region / share a memory related to the place. Group discus-sion, after which the group leader highlights a few experiences which focus on today’s theme.

3. Orientation to the theme: Inspiration is sought from ‘work pictures’. The participants choose from a picture selection compiled for the workshop a picture that repre-sents their own vision: what picture illustrates what it could be like to work in the company being planned? The participants are then divided into groups based on the pictures. Group discussion: what kind of company could the people in the pictures form? Thereafter the groups play statues that form a still picture. The picture illustrates a situation from the future: what is happening in the company on an ordinary Wednesday at 10.45 a.m.? As each group plays statues, the other participants discuss what is going on with the statues and give the statues (and company?) names.

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4. Improvisation: According to Keith Johnstone’s improvisation philosophy, creativity is born when people’s ordinary thoughts encounter each other in an accepting atmosphere. In this way, thoughts can interact and change in the interaction. Improvisation is the background behind the ‘Yes, and …’ exercise, which serves as a basic principle and rule for throwing ideas about and commenting on others’ ideas. The objective of the exercise is to accept every idea raised within the group with enthusiasm, and to take it further with one’s own idea, all the time adjusting to new ideas in an accepting way. The magic words are ‘Yes, and …’ Simply put: “I have an idea about a café …” “Yes, and you could organise fly tying workshops there …” (not: “I don’t know, I think there are too many cafés as it is, but you could sell fishing equipment …”) The goal is to reach the source of creative thinking without press and as a group joint effort.

5. Silence: The leader asks the participants to close their eyes and seek a position they can maintain without moving for a while. People either sit in their chairs or lie on their back on the floor, hands and feet relaxed, but with a straight spine. Breathe in deep breaths and guide your breathing and conscious-ness to the lower abdomen. Create an image of breathing ‘in and out of your navel’ to the rhythm of your natural breathing. Release all tension in the body. If you notice thoughts coming, just let them come and go: do not hang onto them. Once you concentrate on following the movement of your breathing, the thoughts will dissolve. Continue for 10–20 minutes. Try to stay as still and quiet as possible.

6. Opening up to one’s own experiences / mental exercise: The leader asks the participants, who are still in a state of stillness and silence, to let images rise to their mind: images of moments when they feel they have done something with such enthusiasm that they forgot about themselves, something that was enjoyable, something ‘meaningful’: Think about experiences when you have done something that felt meaningful, when you have been truly present in what you do. Observe your memories and experiences and choose one to share with the group. Pay attention to the details of the experience: What? Where? When? With whom? Why? The meaning-fulness and relevance of work are important criteria for the quality of work. In this exercise, the participants bring to mind their experiences of meaningful doing and work.

7. Sharing experiences / developing ideas further: The participants write down their experiences and the ideas that arose from them on post-it notes, which are gathered on a large wall. When the wall is complete, all of the participants can move and divide the notes with similar themes into groups. Once the grouping has been done, the participants form groups according to the groups formed by the notes. This section of the workshop is called the ‘space for common sharing’, which was mentioned previously.

8. Business ideas and improvisation: The groups develop common expe-riences and ideas into business ideas, which are then presented to the other groups through posters or adverts. At this stage, it might be useful to remember the ‘Yes, and …’ principle.

C

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5. How to Maintain and Disseminate Social ActivitiesA social enterprise must get by in the market through its own competitive advantages, just like a traditional company. A social enterprise must also reform itself, just like a traditional company. And being innovative is not any easier in a social enterprise than it is in other kinds of enterprise. How do you maintain the drive and passion for social entrepreneurship, then? How can continuous innovation support the vitality of social enterprises?

5.1 Identify and communicate the impact of social entrepreneurship

It is not always easy to identify impact. We get easily caught up in what we want to do. We may even recognise what results our actions have. But what do these actions and results affect, in the end? Who benefits and how? It is central to argue how you believe your company will achieve the desired results: what is the connection between actions and effects? What benefits are sought through the social enterprise, from the perspective of the entrepreneur, employee, community, partners, region, branch, Finland, Europe or the whole world?

Social enterprises can be pioneers that grab hold of new things as society changes, and do things differently. In order to create innovation, you must first identify the effect you wish to have, and then work out how this can be achieved. Social enterprises should brace themselves for being asked about their impact and how it can be demonstrated. Once you know what you affect and how, your business becomes more meaningful for yourself, it is easy to share your viewpoint with your clients, and you can demonstrate the effects of your business to interest groups.

What is the engine of your field of operation? What kind of drive would be needed within your field? And what about our common field of operation, the whole planet?

How do you keep your own passion alive? How can you spark that passion in your clients and interest groups?

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The benefits and impact of my bistro? You mean in addition to providing fun work for my employees and myself?

Mary wants to become an entrepreneur in the restaurant business and employ herself. She wants her restaurant to act as a meeting place for the local commu-nity and thus create community spirit. Her wish is to create a space for presenting young artists’ artwork. She wants to offer people healthy food, whose preparation creates jobs for people who are in a difficult position on the labour market and immigrants, as well as internships for students. Regarding raw materials, she wishes to employ local food producers, which would also keep the transportation distance short.

Mary’s bistro’s impact on the city: » the company’s tax revenue balances

the city’s economy

» unemployed citizens get jobs; income support expenditure and social exclusion is decreased

» increases well-being and communality

» develops multiculturalism

» promotes equality

» improves the cityscape and the city’s image

» inspires others to start their own social enterprise

» enlivens the local culture and art life and highlights the skills of art students

Mary’s bistro’s impact on the employee: » work and income

» learning and developing skills

» mental well-being, an experience of meaningfulness, a sense of belonging

» facilitates young people entering the labour market

» helps immigrants to integrate into society

» gives a partially disabled person the opportunity to work according to their own strength, or a person who is soon to retire the opportunity to ease their workload gradually

» according to some studies, having meaningful things to do is one of the most important factors contributing to happiness! Source: Workshop organised by LUT LSI

(20.3.2014), discussion between the facilitator Jaana Merenmies and the participants on how to identify impacts.

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5.2 Familiarise yourself and understand the procurements and strategies of your field

Social enterprises are client-orientated and engaging by definition. In inno-vation activities, the client is a central, if not the most important, source of information – after all, it is the client who decides whether a product or service is worth buying. It is therefore advisable to take the client into account from the very beginning; to try to understand the client’s world as accurately as possible and to develop solutions for their problems. User orientation also includes observation and, for example, stopping to think about client feedback. What lies behind the words?

Where consumers and private companies are the masters of their own funds, the public sector is a special case as a client. The procurement activities of the public sector, such as municipalities and cities, are regu-lated by the relevant legislation, rules and regulations. When a company receives a procurement request from the public sector, the process is practically already hammered through and the only thing left is to see that everything happens in accordance with the law. The process is like a long-distance train pushing through, with no extra stops.

However, the procurement process is being reformed. The objective is to update procurement methods so that they create opportunities and encourage innovative procurements. Public procurements can affect young, growing fields of business, in particular. In terms of efficiency and impact, for example, the social and health care sector needs innovative solutions.

However, the challenge for the municipal procurement organisation is to recognise where services can be bought. It is important to develop new approaches and to utilise networks to address this challenge. One new

approach is HankintaSampo. HankintaSampo is a data-base-based discussion and communication platform, through which even small procurements can be organ-ised. However, the authorities who are in charge of procure-ments are not always aware of how what seems like a small amount of money to them can be a vital deal for a small local business. This is where good, clear communication comes into play.

Just a tip: build networks, inform yourself about the municipality’s strategy and use it to justify the importance of your business. Identify your clients’ – e.g. the social and health care field – procurement practices and the objectives of their procurement programmes. Observe and listen to the client. Engage your employees in innovation and development work. Participate in your clients’ development projects yourself. And try out new things, learn from them, and try again!

Also see the description of the business idea hunt workshop on page 23.

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5.3 Utilise new methods

Finding new solutions requires new methods. The starting point for the following method is a space for common sharing. The space for common sharing refers to circumstances that allow equal sharing of experiences and the fact that a shared understanding is formed and developed. The space for common sharing consists of the dialogue between engagement, participation and involvement, in which everybody’s voice and experience is heard.

The space for common sharing comes in handy, for example, when you want to change or develop the activities of a work team, community or organi-sation. It facilitates a group-orientated, so-called new leadership, and the employees’ stronger involvement in the organisation’s activities. And as has been seen previously, these are often key components of a social enterprise!

The space for common sharing can be described as a three-stage process as follows (adapted from Kaarina Mönkkönen):

1. Building a shared understanding involves sharing experiences of the work organisation; its current situation, its challenges and its successes. Through the sharing of experiences, a so-called ‘shared understanding’ or ‘shared space’ is formed, in which everyone is easily able to hear, listen and be heard.

2. Challenging through dialogue involves pondering and addressing the arisen questions in a construc-tive manner, respecting and without judging others’ opinions and experiences, even if they are very different from your own. This is the only way to reach a sufficient level of understanding in order to change modes of action.

3. Sufficient understanding means challenging new perspectives and practising new ideas, for example by starting a concrete change process – in collaboration. Everyone is ‘in the same boat’ and committed to whatever happens next.

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Examples of different techniques for creating a space for common sharing

The following section describes some methods which can be used for finding new solutions.

Innovation sessionThe central issue in the innovation session method are ‘outside’ experts – people who are not cooperation partners, but with whom a collaborative relationship could have potential. The objective is thus to find completely new viewpoints and solutions, maybe even radical innovations, by combining fields of expertise in a new way. The innovation session is a challenging method, because reaching a shared understanding between experts and fields of expertise which are far apart requires hard work: questioning and re-evaluating one’s own self-evident truths and premises. The ‘moderator’ or ‘chair’ plays an important role: their task is to foster a fruitful dialogue between the different participants, which requires both cognitive and social skills.

The client’s voice Client orientation is the cornerstone for developing business activities. But how can a company involve its clients in development work? And who is the client? After all, the user and buyer of a service are not always the same person or organisation. In such cases, both parties’ voices should be heard in the development work. Traditionally, client orientation has translated into companies asking for their clients’ opinions and feedback on the company’s existing business and services. But what if you wish to create something entirely new? The client cannot necessarily formulate what service they would need, if they are not familiar with the latest tech-nological development or what services and service providers exist, for instance. To create new products and services, and modes of operation, a process of collaborative creating is needed; a process that involves end users, buyers, service providers and other potential partners innovating together in a ‘yes, and …’ atmosphere and building a shared understanding of the possibilities of tomorrow.

The client parliamentWhen a service or product has awakened interest, clients who have experi-ence of it are invited to the client parliament. They are interviewed and asked to talk about concrete examples of their user experiences. The story theatre method can be used for making experienced knowledge visible and heard. Actors interpret and portray the clients’ experiences and thus provide a basis and development method for the common discussion. The client parliament has been used for developing home care for the elderly and for making the voices of the clients of adult education centres heard, among others.

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The talking stickThe participants are settled in a circle, seated or standing, around which the talking stick, which gives its holder the floor, circulates from one participant to the next. The length of comments is agreed upon beforehand, and every participant must stick to the time limit. Everyone listens to the person with the talking stick, without interrupting, commenting or judging. This method enables even the quiet ones to get their voices heard. Respec-tively, the more vocal ones learn to listen when others speak, without interruption or other reactions.

Press-free innovationThe method for innovating is open acceptance: things do not have to be ‘either-or’; they can also be ‘both-and’. Remember ‘Yes, and …’!

Detective agency of non-clientsNon-clients are asked to find factors that could wake their interest for trying or using a service. The non-clients also create a profile of them-selves, for example on the basis of mini biography questions.

Finding the source of meaningfulness/relevanceThe method’s objective is to find sources of meaningfulness by utilising silence, meditation or writing (see, for example, the mini biography ques-tions). Ponder what business activities could be like, if they were based on meaningfulness.

Mini biography questions The mini biography questions can guide individuals to their personal sources of meaningfulness (the questions are based on the work of everyday explorer and collective artiste Meiju Niskala):

1. The … … best news … … most delicious meal … … greatest idols … … most communal experience of my life?

2. Realised dreams?

3. Dreams that have yet to become reality?

4. The greatest lesson I’ve learned?

5. My biggest accomplishment?

6. A life guideline or wisdom I believe in?

7. I get strength from … (write a list)

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6. Where Could the Path Lead?This chapter attempts to map the future a little, largely through the words of social enterprises themselves. Could you become a social entrepreneur or a worker at a social enterprise? If you already are, what could you do differently? Or how could you support social enterprises? What good could they generate in the future?

The objective of businesses is to increase growth, enter international markets, become highly competitive and generate profits for their owners…

What a leap, all the way from page 15! Dear reader, now that you have come this far in this book, you can answer the following question: is the purpose of business different when it is evaluated from the perspective of sustainable principles? Do the goals change?

The primary criteria for a social enterprise are generating social good, transparency of operations and restrictions on profit distribution. Could the above-mentioned criteria form the selling point of social enterprises? Do they attract clients?

Choose your image and brand so that they are meaningful to you; so that you stand behind them solid as a rock. What do you want to further?

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The image of business – what kind of ideas and practices do you want to create and further?

The world changes and reforms, as do people’s attitudes and perspectives. Ordinary people are becoming more and more aware of the powers and choices that affect the environment, themselves and their communities. People appreciate reliable, easily recognised brands and images that are based on a comprehensive understanding of people’s everyday lives, values and surrounding reality. It is already known that every mundane act and action has an impact on the whole.

Workplaces and firms that take such things into account are the ones that give birth and raise the future new life; a life very welcome in the business world, as well.

Test your social entrepreneurship potential

» Do you think something should be done about an issue you find important?

» Do you / your organisation / your network have concrete experience in the matter?

» Could the idea be combined with the establishment of a social enterprise?

» Are you ready to share your ideas and thoughts with members of your network who have similar viewpoints?

» Could you create a so-called ‘space for common sharing’ for gathering thoughts and ideas?

» Do you want to send out a message that you can be trusted?

If you answered ‘yes’ to all or most of the questions above, you are a potential (social) entrepreneur – and this book did not end up in your hands by coincidence.

The following pages envision the future, content and meanings of social enter-prises in 2024, according to social enterprises and entrepreneurs themselves. Which branch will you climb onto?

Why don’t you give it a try?

In 2024, there are no more divisions between people! All kinds of people are equally represented and part of the group.

Everyone who wants to live communally gets to join the community.

… people live in small community houses or housing estates, which are social enterprises.

All companies, or at least most companies, are social enterprises!

Work life includes flexible decision-making.

Environmental crises force us to develop new solutions…

Virtues and generating good instead of material things become the status symbols!

People buy things only for true needs and things that are compre-hensively good, not only cheap.

People recycle, move and travel sustainably and are able to choose their services on sustainable grounds. For example, a bank or insurance company!

Cooperation creates sustainability in as many life areas as possible.

In 2024

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… and there are other kinds of funding than project funding or business support.

Everybody wins: the individual, the company and society!

The worker gets real pay for a real job.

Sales work means genuine communication and interaction.

Companies are profitable and have their own personal characteristics…

It is trendy and cool to work in a social enterprise.

The buyer and seller work together for a shared cause and goal.

Source: Workshop organised by LUT LSI (14.5.2014), group work envisioning the future.

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AfterwordThis book is the result of two projects by the Lahti School of Innovation at Lappeenranta University of Technology. The Social Entrepreneurship in Innovative Value Creation (SOCENT) project (2013–2014) was funded by Tekes and was implemented in collaboration with the LUT School of Business. The Päijät-Häme as the Leading Area of Practice-Based Innovation Activities (Päijät-Häme maailman johtavaksi käytäntölähtöisen innovaatiotoiminnan alueeksi) project (2011–2014) was funded by the European Regional Develop-ment Fund, the Regional Council of Päijät-Häme and the City of Lahti.

The objective of the SOCENT project was to increase the understanding of the operating environment and special characteristics of social enter-prises, to offer participatory innovation support for social enterprises, and to support the strategies and politicians who wish to support and further the development and utilisation of the unused or underused intangible capital of social enterprises and their employees.

The SOCENT project group at the Lahti School of Innovation consisted of Senior Researcher Tuija Oikarinen and Project Researchers Virpi Koskela and Suvi Konsti-Laakso. Professor Helinä Melkas acted as the responsible director. Project Coordinator Suvi-Jonna Martikainen from the Lahti School of Innovation also contributed to the creation of this book. In the early stages, Project Coordinator Laura Mellanen participated in the project; we wish to thank her for documenting the workshops and for planning the book and its visual appearance. Project Coordinator Hilkka Laakso has been a valuable support in creating this book and throughout the project.

The authors of the book wish to send a warm thank you to Tekes – in particular the supervisors of the SOCENT project, Mervi Pulkkanen and Christopher Palmberg, as well as Minna Suutari, who acted as the supervisor in the project’s early phase. In addition, we would like to thank Kaisu Puumalainen, Helena Sjögrén and Pasi Syrjä, who participated in implementing the SOCENT project at the LUT School of Business. We also wish to thank the steering group and the company and organisation representatives who participated in the network event for social enter-prises and the related three innovation workshops at Lahti in spring 2014. A special thanks goes to the workshop facilitators, Jaana Merenmies (Impact House), Minna Halonen (City of Lahti) and Jukka Lindberg (VATES-

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säätiö). These meetings clarified for us which themes we should select for this book. The members of the steering group at the end of 2014 were Tiina Hanhike (Ministry of Employment and the Economy), Jari Huovinen (EK), Sami Metsäranta (the Social Psychiatric Foundation of Päijät-Häme PHSPS), Kimmo Nekkula (the Association for Finnish Work), Harri Niuk-kanen (Tramel Oy) and the representatives of Tekes, Mervi Pulkkanen and Christopher Palmberg. A large thank you goes to Sami Metsäranta, Christian Lilius and Mervi Piiroinen from the Soteho group of the Bee for Common Economy for letting us participate in the foundation of a new social enterprise.

“A dream for which we are ready to work together, generates good and does not exploit anybody, is bound to become real” (J.L. Padilla)

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Literature Defourny, J. (2001) From Third Sector to Social Enterprise, in Borzaga, C. & Defourny, J. (eds), The Emergence of Social Enterprise. Routledge, London & New York, 1–28.

Defourny, J. & Nyssens, M. (2006) Defining social enterprise, in Nyssens, M. (ed.), Social enterprise. Routledge, Abingdon.

Demos Helsinki (2010) Parempi diili. Available at: http://www.demoshelsinki.fi/julkaisut/ (viewed 13.8.2014).

EMES International Research Network (2014) www.emes.net

EU (2013) Social economy and social entrepreneurship – Social Europe guide – Volume 4. Publications Office of the European Union, Luxembourg.

Galera, G. & Borzaga, C. (2009) Social enterprise: An international overview of its conceptual evolution and legal implementation. Social Enterprise Journal, 5 (3), 210–228.

Innopakki - käytäntölähtöisen innovaatiotoiminnan käsikirja (2012) Available at: www.lut.fi/innovation

Johnstone, K. (1979) Impro. Improvisation and the theatre. Methuen Drama, London.

Melkas, H. & Harmaakorpi, V. (eds) (2012) Practice-based innovation: Insights, applications and policy implications. Springer, Berlin & Heidelberg.

Mönkkönen, K. (2013) Dialogisuus - hyvä sana, mutta vaativa laji, presentation at the National Meeting for Social Work for Adults 21.5.2013. Website: http://timelessflow.wordpress.com

Playbook for strategic foresight and innovation (2013) Available at: www.lut.fi/innovation

Scharmer, O. & Kaufer, K. (2013) Leading from the Emerging Future - From Ego-System to Eco-System Economies. Berrett-Koehler Publishers, San Francisco.

Sveiby, K.-E. & Skuthorpe, T. (2006) Treading lightly – the hidden wisdom of the world´s oldest people. Allen & Unwin, Australia.

Työ- ja elinkeinoministeriö (2011) Yhteiskunnallisen yrityksen toimintamallin kehittäminen. Online publication. Available at: www.tem.fi/files/29202/4_2011_web.pdf

Yhteiskunnallisen yritystoiminnan tutkimusverkosto FinSERN (2014) www.finsern.fi

The innovation book for social enterprises furthers the cause of sustainable development and holistic innovation. It is aimed at everybody interested in social enterprises. The book is intended to raise questions and thoughts, rather than provide answers. It is meant to inspire and encourage. Hopefully it will also increase understanding of social enterprises and their importance for readers who are not yet that familiar with the concept.