Journey to Social Enterprise

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  • Journey to Social Enterprise

    As observed by Marcus Coetzee

    2 August 2016

  • Introduction

  • www.MarcusCoetzee.co.za

    Table of Contents

    Introduction

    What is a social enterprise?

    Outline of the Journey

    Introduction to Strategic Inflexion Points

    Transitioning through the Points

    Reflection

    Conclusion

    Mama Mimis is a social enterprise bakery that operates

    in Cape Town, South Africa.

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Who is Marcus Coetzee?

    Helps leaders to cultivate Strategic Clarity

    Social enterprise advocate

    Advocates for mixing social purpose and business

    thinking

    Works very closely with:

    o Social Enterprise Academy

    o Bertha Centre for Social Innovation and Entrepreneurship

    o Imani Development

    o Business Sculptors

    o Citizen Surveys

    Served over 100 clients since 1996.

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    First phase of my career focused on the why:

    1996-2012

    Advocated for social enterprise + mixing business

    thinking and social purpose

    Second phase focused on the how:

    2012+

    Coaching organizations and leaders along the Journey to

    Social Enterprise

    Building supportive ecosystems

    Afrocharm Choir & Education

    From Why to How Social Enterprise

    http://www.marcuscoetzee.co.za/

  • What is a social enterprise?

  • www.MarcusCoetzee.co.za

    Key Ingredients

    A social enterprise is an organization that adopts a

    business like approach to tackling a social or

    environmental issue. It is a social business.

    Key ingredients include:

    o It has an explicit social (or environmental) purpose

    o It generates the majority of its income through business

    activities

    o It uses its profits to further its social mission

    o It is accountable and transparent.

    Ludwick Marishane developed Dry Bath, a clear

    germicidal and moisturising gel, that can be used where

    clean water is not available.

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Some Social Enterprises in South Africa

    http://www.marcuscoetzee.co.za/

  • Introducing the Journey

  • www.MarcusCoetzee.co.za

    Introducing the Journey to Social Enterprise

    Social enterprises dont just magically

    appear.

    The Journey to Social Enterprise typically

    takes many years to complete.

    Multiple obstacles need to be overcome.

    Both non-profit organizations and

    businesses can embark on the Journey.

    Zip Zap Circus School was founded in 1992 to inspire

    young people to dare to dream and build a new culture of

    peaceful coexistence in South Africa.

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Convergence to Social Enterprise

    Donor-

    Dependent

    NPO

    NPO with

    Income

    Activities

    Social

    Enterprise

    High-impact

    Business or

    B-Corporation

    Socially-

    Responsible

    Business

    Traditional

    Business

    Journey for NPOs Journey for Businesses

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Donor-

    Dependent

    NPO

    NPO with

    Income

    Activities

    Social

    Enterprise

    High-impact

    Business or

    B-Corporation

    Socially-

    Responsible

    Business

    Traditional

    Business

    Expanded Classifications

    Social Enterprise: Broad Definition

    Impact EnterpriseImpact Entrepreneurship

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Why Embark on the Journey?

    Reduce Risk

    Build reserves

    Decrease reliance on donors

    Diversify income sources

    Maximize Impact:

    Fund expansion of operations

    Discretionary expenditure

    Beneficiary Employment:

    Provide vehicle to employ or create

    customers for beneficiaries

    Motivation for NPOs Motivation for Businesses

    Future Proofing

    Ensure that the business has a future

    decades from now.

    Improve Business

    Increase customer engagement

    Increase staff engagement

    Improve supply chain

    Improve business context

    Become Responsible

    Minimize social & environmental harm

    Play a Broader Role in Society

    Embrace a social purpose; make a real

    difference in the world

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Journey Takes Up to 5 Years

    The Journey involves a fundamental shift in an organizations strategy.

    Timeframe of 3-5 years before a new pattern can be established.

    o Year 1 Gather support from stakeholders

    o Year 2 Explore ideas, gather resources, develop plans

    o Year 3 Formal experiment with significant shift

    o Year 4 Refine and extend

    o Year 5 Consolidate and evaluate

    Good leadership and change management required throughout.

    This means that donors and impact investors should commit to a 3-5 year timeframe if they want to assist organizations on their Journey.

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    There will be times when you need to pause on the journey to reflect or let

    your organization settle into a new pattern.

    This both ok and necessary.

    http://www.marcuscoetzee.co.za/

  • Intro to Strategic Inflexion Points

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    Strategic Inflection Points (Transition Points)

    A strategic inflection point (SIP) is a time in

    the life of business when its fundamentals are

    about to change. That change can mean an

    opportunity to rise to new heights. But it may

    just as likely signal the beginning of the end.

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Drivers behind Strategic Inflexion Points

    Tax laws (e.g. PBO

    laws)

    B-BBEE policies

    Exchange rates

    Inflation

    NPO policies

    Government

    procurement policies

    New financial

    instruments

    Funding shortages

    Increased competition

    Unmet demand by

    beneficiaries

    Leaders choosing to

    reposition or rebuild

    organization in order to

    strengthen it and

    improve impact.

    Climate change

    Planetary boundaries

    Population growth and

    urbanisation

    Food security

    Resource shortages

    Politics and Macro

    Economics:

    Market Forces: Sustainability

    Megatrends:

    Intention:

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Transition Points on the Journey

    NPO 1: Experiment

    and Improve Skills

    NPO 2: Rethink

    Business Model

    B2: Embrace a Social

    Purpose

    B3: Dedicate Profits

    B1: Become a Good Citizen

    Donor-

    Dependent

    NPO

    NPO with

    Income

    Activities

    Social

    Enterprise

    High-impact

    Business or

    B-Corporation

    Socially-

    Responsible

    Business

    Traditional

    Business

    http://www.marcuscoetzee.co.za/

  • Transitioning through the Points

  • www.MarcusCoetzee.co.za

    Point NPO1 Experiment and Improve Skills

    Possible Focus Areas:

    1. Call to action.

    2. Overcome objections to business activities.

    3. Pilot various business ideas.

    4. Share and learn from other organizations experiences.

    5. Measure social outcomes.

    6. Learn how to cost business activities, make proposals profitable. and track business income and expenses.

    7. Understand SARS rules regarding income generation.

    8. Learn how to develop, package and sell products.

    Donor-

    Dependent

    NPO

    NPO with

    Income

    Activities

    Social

    Enterprise

    High-impact

    Business or

    B-Corporation

    Socially-

    Responsible

    Business

    Traditional

    Business

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Transition Point NPO1 Example of STEPS

    STEPS works to eliminate clubfoot in

    Southern and East Africa.

    Helped over 8,200 children since 2005.

    Secured the rights to import a popular

    orthopaedic brace (Ohio brace) to sell to

    health services in Southern Africa.

    These braces are required for treating

    clubfoot using the Ponseti method.

    The feasibility has been assessed.

    Busy developing a formal business plan.

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Point NPO2 Rethink Business Model

    Possible Focus Areas:

    1. Seek clarity of purpose.

    2. Commit to chosen business direction.

    3. Rethink fundamentals of business model.

    4. Recruit specialized staff.

    5. Change organizational culture.

    6. Consider leadership change.

    7. Create new governance structures (e.g. specialized steering committee)

    8. Investigate whether hybrid structures are required.

    Donor-

    Dependent

    NPO

    NPO with

    Income

    Activities

    Social

    Enterprise

    High-impact

    Business or

    B-Corporation

    Socially-

    Responsible

    Business

    Traditional

    Business

    http://www.marcuscoetzee.co.za/

  • www.MarcusCoetzee.co.za

    Point NPO2 Example of Greater Capital

    Greater Capital is a social enterprise