Journey to Social Enterprise As observed by Marcus Coetzee 2 August - PowerPoint PPT Presentation

Journey to Social Enterprise As observed by Marcus Coetzee 2 August 2016

Introduction

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 Mimi’s is a social enterprise bakery that operates in Cape Town, South Africa. 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. www.MarcusCoetzee.co.za

From “Why” to “How” Social Enterprise 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 www.MarcusCoetzee.co.za

What is a social enterprise?

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. www.MarcusCoetzee.co.za

Some Social Enterprises in South Africa www.MarcusCoetzee.co.za

Introducing the Journey

Introducing the Journey to Social Enterprise • Social enterprises don’t 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. www.MarcusCoetzee.co.za

Convergence to Social Enterprise Donor- NPO with High-impact Socially- Social Traditional Dependent Income Business or Responsible Enterprise Business NPO Activities B-Corporation Business Journey for NPOs Journey for Businesses www.MarcusCoetzee.co.za

Expanded Classifications Donor- NPO with High-impact Socially- Social Traditional Dependent Income Business or Responsible Enterprise Business NPO Activities B-Corporation Business Social Enterprise: Broad Definition “Impact Enterprise” “Impact Entrepreneurship” www.MarcusCoetzee.co.za

Why Embark on the Journey? Motivation for NPOs Motivation for Businesses Reduce Risk Future Proofing • • Build reserves Ensure that the business has a future • Decrease reliance on donors decades from now. • Diversify income sources Improve Business • Increase customer engagement Maximize Impact: • Increase staff engagement • Fund expansion of operations • Improve supply chain • Discretionary expenditure • Improve business context Beneficiary Employment: Become Responsible • Provide vehicle to employ or create • Minimize social & environmental harm customers for beneficiaries Play a Broader Role in Society • Embrace a social purpose; make a real difference in the world www.MarcusCoetzee.co.za

Journey Takes Up to 5 Years • The Journey involves a fundamental shift in an organization’s 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. 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. www.MarcusCoetzee.co.za

Intro to Strategic Inflexion Points

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.” www.MarcusCoetzee.co.za

Drivers behind Strategic Inflexion Points Politics and Macro Market Forces: Sustainability Intention: Economics: Megatrends: • • • • Tax laws (e.g. PBO Funding shortages Climate change Leaders choosing to • • laws) Increased competition Planetary boundaries reposition or rebuild • • • B-BBEE policies Population growth and organization in order to Unmet demand by • Exchange rates beneficiaries urbanisation strengthen it and • • Inflation Food security improve impact. • • NPO policies Resource shortages • Government procurement policies • New financial instruments www.MarcusCoetzee.co.za

Transition Points on the Journey Donor- NPO with High-impact Socially- Social Traditional Dependent Income Business or Responsible Enterprise Business NPO Activities B-Corporation Business NPO 2: “Rethink B1: “Become a Good Citizen” Business Model” B2: “Embrace a Social NPO 1: “Experiment Purpose” and Improve Skills” B3 : “Dedicate Profits” www.MarcusCoetzee.co.za

Transitioning through the Points

Point NPO1 – “Experiment and Improve Skills” Donor- NPO with High-impact Socially- Social Traditional Dependent Income Business or Responsible Enterprise Business NPO Activities B-Corporation Business Possible Focus Areas: 1. Call to action. 2. Overcome objections to business activities. 3. Pilot various business ideas. Share and learn from other organizations’ experiences. 4. 5. Measure social outcomes. 6. Learn how to cost business activities, make proposals profitable. and track business income and expenses. Understand SARS’ rules regarding income generation. 7. 8. Learn how to develop, package and sell products. 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. www.MarcusCoetzee.co.za

Point NPO2 – “Rethink Business Model” Donor- NPO with High-impact Socially- Social Traditional Dependent Income Business or Responsible Enterprise Business NPO Activities B-Corporation Business 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. www.MarcusCoetzee.co.za

Point NPO2 – Example of Greater Capital • Greater Capital is a social enterprise providing social research, enterprise development and due diligence services. • After struggling to find donations, Greater Capital repackaged its work as consulting services. • Eliminated certain product lines. • Now over 100 paying clients. • Earned income covers 100% of costs • Become an influential organization. www.MarcusCoetzee.co.za

…and from the other direction

Point B1 - “Become a Good Citizen” Donor- NPO with High-impact Socially- Social Traditional Dependent Income Business or Responsible Enterprise Business NPO Activities B-Corporation Business Possible Focus Areas: 1. Engage with stakeholders (e.g. investors, beneficiaries) to identify social and environmental responsibilities. 2. Adopt social and environmental KPIs and set alongside financial indicators. 3. Start to measure social and environmental impact. 4. Mitigate harm. 5. Comply with an ethical certifications and industry standards. 6. Be congruent with responsible brand. www.MarcusCoetzee.co.za