Blogs

Top ten tips and techniques for transformative social enterprise terraforming

By 7th August 2015 No Comments

Working in social enterprise and regeneration over the last few years, I’ve had the opportunity and the privilege to travel the length and breadth of the UK and to work in some of the country’s most beautiful places. From Penzance to Penrith and from Inverness to Irvingstown I’ve looked at a variety of approaches towards rural regeneration and observed the pivotal role that social enterprise has had in driving economic growth and tackling some of our most intractable social challenges.

So in no particular order, here are my top tips and techniques for supporting social enterprise growth in rural areas.

1. Training – While social enterprises and entrepreneurs will need a range of support throughout their journey, there will always be a role for collective training provision; bringing groups of learners together to develop shared knowledge and competencies. From new starters to seasoned leaders, social enterprise is an innovative and dynamic sector and there is always more to learn, in order to raise the bar and maintain high standards. From the Social Enterprise Qualification to the Social Enterprise Academy there are a range of great offers out there that are as efficient and affordable as they are impactful. Learning is always its own reward.

2. Bespoke – Where collective training provides a cost effective way of imparting knowledge and a range of skills to groups of learners at scale (and at distance), the needs of individual social enterprises are often quite specific to them. Be it financial planning, governance development, brokering relationships with key customers, marketing, menu development, web design or just straight forward mentoring, the needs of an artisan cafe and a wood fuel business are often quite different. Therefore the provision of 1:1 bespoke business support is a vital part of the offer.

3. Shared support & surgeries – Somewhere between training and bespoke support there’s room for something else. Where bespoke business support can be costly and collective training provision may lack specificity, shared support and surgeries can offer a useful middle ground. This is where a small group of ‘supportees’, with similar needs, possibly working in a similar area – asset transfer or food retail for example – can benefit from collective consultancy support, working with one consultant in the same place at the same time. The benefits here are around cost benefit analysis and peer support. Surgery sessions are another approach, where a consultant can ‘set-up shop’ for a day in a location and support can be accessed through drop-in and booked sessions by a number of clients. Both of these approaches are particularly important in rural settings where travel costs have a significantly negative impact on productivity. Both the Engine Room and SENSCOT Legal provide great examples of surgery based support.

4. Account management & incubation – Many social businesses do, or have the potential to, create higher levels of economic (and therefore also social) impact, or are addressing a particularly vital set of social challenges and therefore justify an added level of deeper and longer-term support. Here support is more rigorous, comprehensive and invasive; over time placing a larger commitment and a set of expectations of both parties. This is the idea of either incubation – bringing social enterprises into a shared physical space where they are supported – or they are incubated at distance (which is important in rural settings) in their location through a process of account management as is common at HIE. Either way, the support here is often much the same. While it will generally involve combinations of the above, support is often augmented by the provision of direct funding and investment, the process of consultants ‘acting on the behalf of’ the client, the sharing of back-end support (‘back-ending’ where specific support services: HR, marketing, finance, staff etc. are shared across multiple companies) and even more structural interventions where consultants take temporary board positions within the client organisations.

5. Hubs – Incubation requires the presence of physical work hubs for social enterprises, though social enterprise hubs provide and create much more than that. In addition to directly enabling interventions such as back-ending, the creation of work hubs has significant positive impact around the ideas of innovation and productivity. The bringing together of mission-driven organisations in one location provide peer-motivation, inspiration, learning and support. These all have a knock-on effect for productivity and impact. Furthermore there is a need to bring the work place to communities, not just to bring communities to places of work. In addition to fuelling rural regeneration, stemming rural decline, helping to sustain more isolated communities and countering the drain of younger people and the more mobile into urban areas, the creation of hubs also supports productivity. In rural areas travel costs (in terms of both money and time) often create barriers to employment, specifically when considering employment in weaker rural market areas. Bringing work to people in the countryside increases productivity for those areas. Hubs don’t have to be big, they can be a social enterprise themselves and provide a range of other services across the community, supporting key rural sectors such as tourism and renewables.

6. Customer facing key sectors – Within rural settings there are often a number of key sectors that are vital to the local economy but also struggle as weak and/or narrow markets. Lorne Crerar the chair of HEI identified these for highland Scotland as tourism, food and drink, renewables and culture, though this could apply equally to Wales or South West England. From the North Harris Trust, to Fifteen and Yurt Works in Cornwall, social enterprise provides an effective model for these businesses. Being able to operate on thinner margins and aggregate other local enterprise activities and social provision, social enterprise continues to thrive and grow in these areas. What’s more, if we want to grow the social enterprise movement we need to further engage the wider public, enabling people in the street to make consumer choices that support the sector; a key focus of Social Enterprise Scotland. This means having more social enterprises that people understand i.e. good business that sells products directly to the public – like food, culture, energy and holidays!

7. Funding & investment – It’s obvious, but fundamental, so worth repeating. Social enterprises, like all businesses need pump priming during start-up and growth if we want them to succeed in becoming self-sustaining, financially independent companies which fulfil economic outcomes and create social return. Like the human and social capital investments listed above, businesses need adequate economic capital investments. This can be in the form of capital and/or revenue grants, debt loans or equity investments, either way they need to be structured in such a way as to achieve a profit-making model and therefore must be based on a sound business case. As social enterprises, particularly in a regeneration setting for instance, will often be operating in a weak market area, the time needed to achieve profitability should not be underestimated. Social enterprise is tricky, however the rewards for the economy and communities from established social enterprises are substantial and will keep giving for years to come, outweighing any initial start-up costs.

8. Procurement – Social enterprises are in many ways best placed to deliver procured government services; driven by social value as well economic return and relatively free from the perverse profit incentives of proprietors and substantial shareholders. However it’s not an even playing field and relatively speaking social enterprises are the smaller and/or new players in a market dominated but very big private interests. Therefore more support is needed in helping getting social enterprises ‘contract ready’ and working in alliances and consortia. The development of Public Social Partnerships in Scotland offers an interesting new approach.

9. Eco-system: the seed & the soil – While the tips above focus of the ‘seed’ of the organisation (investing in staff and ensuring a good business model etc.) to grow a good crop you don’t just need good seed, you need good soil too! This means supporting and developing the environment in which social enterprises operate and this means partnership. This includes advocacy, supportive government policy, collaboration between social businesses and engaging with the public to promote wider cultural change. The wide ranging complex nature of this process goes beyond what can be given sufficient attention here; however the example of Plymouth Social Enterprise Network and Plymouth City Council, working with SEUK’s Places scheme, provide a great example of collective impact.

10. Going the distance – The needs of social enterprises, and the broader sector in rural settings is in truth, comparatively similar to the support needs of social enterprises in more urban areas, there is however one key challenge that is different – distance. Rurality incurs significant costs in terms of transportation, travel time and distribution. Here in the south west we come from a place that is long, thin and far, far away. Charming though that it is, this creates additional running cost barriers across all aspects of the business, from getting a product to market to getting customers to the product. While particularly good trading models for rural transport still remain elusive, technical solutions are increasingly abundant. From common communications tools such as skype through to niche manufacturing techniques via digital printing, new technologies are shrinking the world around us, Scotland’s MAKLab is blazing a trail here! And it’s not just new tech, that old 19th Century innovation the train is still a cracker! The car is so often the enemy of productivity (not to mention the environment). Apart from having crap conversation on some hands free set, all you can do while driving a car is, well, drive. Last week on the train I got paid double, completing client work while on the go and getting paid for travel time from another client – starts making up for that rural productivity deficit!

Well that’s my top ten tips and techniques for transformative social enterprise terraforming, what are yours? Can you add a few more? Tweet me @EdWhitelaw!

Written by RIO’s Head of Regeneration, Ed Whitelaw