Guardian Blog

This is the full text of the blog piece on the most difficult social enterprise of all published in the Guardian Online earlier today...

The basic business proposition of social enterprise is pretty crazy: to go out into the market place and compete, but with one hand tied behind your back – by your higher cost base.  Most of the 'social value' we add has some kind of cost implication. It might be the higher environmental standards of green businesses, for example, or paying more to suppliers as in fair trade.  The trick, of course, is to find a business model that can realise the added social value in higher prices or cost savings elsewhere.  Green and fair trade businesses usually do charge a slight premium, sell into sympathetic markets, and fair trade usually shortens the supply chain too.  In fact there are many ingenious ways social enterprise realises the social value it creates (in my training sessions I delineate 5 basic strategies, but within these there are many more options).

Most difficult of all – because of the overwhelming significance of labour costs in most business models – is social enterprise that tries to create employment for people with disabilities or other severe disadvantages in finding employment.  Social enterprises like Blue Sky – whose strange boast it is that they ONLY employ people with a criminal record.  Or the Impressions Restaurant in Margate – whose extraordinary recruitment strategy involved asking the local Job Centre to send down anybody on their books they thought would never work again.  The Job Centre sent 20 and Impressions took 14 of them on.  That was 7 years ago – and many of this original workforce are still there, including one man who had previously been unemployed for 25 years.  Pack-It, another Social Firm down in Cardiff, now replicated in Hereford, has helped turn people that were not only on welfare benefits, but also in reciept of local authority care, into the main breadwinners for their families.

Stories like this are not just evidence of the genius of social entrepreneurs - and the ability of those written off by the rest of society to turn their lives around, given half a chance - they are evidence of the systemic failure of the wider business world to create employment where it's most needed.  And if you're sitting smugly in the public sector, by the way, you should know that for all it's equal opportunities machinery the public sector does no better than the private sector when it comes to employing disabled people (only the 'third sector' does better).

But social enterprise whose mission it is to employ the very people other organisations reject is always going to have a higher cost base than its competitors.  For many, making this work implies very complex business models indeed, like running two or more synergistic trading activities - a hotel and training in hospitality work for example - that effectively cross-subsidise each other within the shell of a larger enterprise.  Are these guys crazy?  Well some of them really are – like the speaker at one Social Firms UK Conference who insisted on speaking from the back of the room, then quipped that he felt quite at home there since last week he had addressed a conference on paranoia, where everybody was looking over their shoulder.

It is precisely because this kind of social enterprise is the hardest of all that the characters that make it work are the most inspirational – and that's why the one social enterprise conference I never miss is indeed the Social Firms UK Conference, this year in Leicester on 11th-12th July.  Believe me, if you really want to know how to make social enterprise work, this is where you go.

And it doesn't stop at the difficulty of making a business work with an automatically higher cost base. Social Firms and 'WISEs' (Work Intergration Social Enteprises) are not just about creating jobs for disabled and disadvantaged people; they are also experiments in a whole new way of doing business from the inside, of people relating to each other in a more inclusive workplace; of challenging the alienation that is still what work means to most people.  Really, this is social enterprise's cutting edge, and it often challenges not only conventional business wisdom, but also the social enterprise movement itself.  Social Firms and WISEs tend to be individualistic and local and quirky – they take me back sometimes to the wholefoods and radical books pioneers of UK social enterprise in the 1970s and 80s - businesses rooted in alternative values and lifestyles, but outrageously entrepreneurial.  If you sometimes find social enterprise conferences a bit bland and, well, corporate, you're probably about ready for Social Firms UK.