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Social Entrepreneurship and Innovation

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We are a world of wall builders, partitioners, and dividers of space. ... Aspiring. IFS Conference 2008 Jamila Aman's Presentation. 45. Partnerships, Alliances ... – PowerPoint PPT presentation

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Title: Social Entrepreneurship and Innovation


1
Social Entrepreneurship and Innovation
2
Presented
  • byJamila Aman

3
Workshop Purpose
  • Celebrate and build on success
  • Outline systematic approach
  • Earned income
  • Establish business objectives/criteria
  • Product development
  • Product screening
  • Risk management and readiness
  • Shared services (MSO)
  • Venture philanthropy

4
Social Entrepreneurship
  • We are a world of wall builders, partitioners,
    and dividers of space. We long for the security
    of safe places. We construct these barriers in a
    vain attempt to control the elements, to keep the
    rain from dampening the fire, the wind from
    covering ours lives with the inevitable dust.
    Many of the walls we build are essential to our
    survival. Many, however, are not. By fortifying
    the unnecessary walls, we in business (for profit
    and not-for-profit)..huddle in the systems we
    have closed. The consequences thinking decays
    and novelty vanishes.
  • Open Boundaries- Howard Sherman and Ron
    Schultz1998

5
Social Entrepreneurship
  • Application of entrepreneurial attitudes to
    social sector
  • Change is the norm
  • Embrace change
  • Seek change
  • Client focused
  • Shift resources from low to high productivity
  • Calculated risks
  • Create something new
  • Strive for Transparency

6
  • Organisational ReadinessRisk Management

7
Issues
  • Fear of loss of control
  • Resources financial/human
  • Risk averse culture
  • Conflicting ends
  • Lack of structure/governance for success

8
Organizational Readiness
  • Strategy
  • Governance
  • Human resources
  • Finances
  • Operations, Products and Services
  • Market perspective

9
Strategic Management Overview
D. Throughput
A. Output
  • C. Input

Current State
Strategic Implementation
Annual Strategic Review and Update
Future State
Change Management
5. Current State Assessment and Business Planning
Parallel Process with Key Stakeholders
2. Strategic Planning Vision, Mission, Values
4. Objective Development
B. Feedback
3.Strategic Priority
10
Mapping the Future
  • Ideal Future Vision
  • Formulate dreams that are worth believing in
    fighting for by meeting 3 challenges.
  • Challenge 1. Vision Statement
  • Challenge 2. Mission Statement
  • Challenge 3. Core Values

11
Ideal Future Vision
  • Answer all or any of the following questions
  • What will put you out of business?
  • What is your ultimate vision of success?
  • What is your ideal community vision?
  • Answers may be - end of homelessness, hunger etc.

12
Mission
  • What is your organizations part in achieving the
    vision?
  • What do we produce?
  • Who do we serve?
  • How do we do it?

13
Values
  • What do board members employees stand for
    embrace?
  • What are the rules?
  • May include integrity, transparency,
    entrepreneurship, innovation etc

14
Strategic Priority Development
  • Balanced Score Card Format
  • Consider organizational success from more than
    one perspective, for example
  • Internal Business Processes
  • Client
  • Financial
  • Human Resources

15
Strategic Priorities
Financial
Answer the question How do you wish to appear to
your owners/funders?
Internal Business Processes
Client
Vision Mission Values
Answer the question In order to achieve your
mission, what business processes must you excel
at?
Answer the question How do you wish appear to
your client/customer?
Human Resources
Answer the question How do you sustain your
ability to learn and grow?
16
Earned Income
17
Results in Other Ventures
  • 90 of successful ventures relate to the
    non-profits mission
  • Planning matters
  • 46 of non-profits with ventures have more than
    one
  • 69 are profitable
  • Profitability is reached in 2.5 years on average
  • Only 10 use a spin-off cutting edge
  • The largest benefit is the creation of an
    entrepreneurial culture (58)

From a survey of non-profits operating business
ventures
18
Systematic Approach
19
Systematic Approach
  • Determine organisational
  • Need for innovation
  • Purpose
  • Organisational readiness and commitment
  • Product development
  • Search for opportunities
  • Create new services and screening
  • Research, design, testing
  • Launch, evaluation and revision
  • Portfolio approach

20
Strengthens OrganisationsAchieves Mission
  • Generates revenue
  • Unrestricted
  • Greater degree of control
  • Enables growth beyond funding base
  • Supports mission and strategic plan
  • Create valuable new services/SROI
  • Enhances profile

21
Balancing Mission and Financial Return
22
Product Development ProcessPlanning for Success
23
Definition of a Good Idea
  • Meets a significant customer need a market
  • Return on investment
  • Risk managed
  • Competitive advantage
  • Cost
  • Performance
  • Leverages a strength/asset
  • Fits with mission/values

24
Enterprises
  • Mission related products or services
  • Same product, new market geographic or customer
  • Programme related products (manuals)/services
    (EAP)
  • Staff resources (MSO/training)
  • Public sector contracting
  • New product/leveraging organisational strengths
  • Client resources (social firm)
  • Soft assets intellectual property
    (licensing/franchising)
  • Hard assets (rental)
  • Unrelated business (Ben Jerrys)

25
Product CreationPre-work
  • Scan
  • Community trends and needs
  • Potential market opportunities market research
  • Attend conferences/read magazines/annual
    reports/web/etc
  • Assess what competitors are doing
  • Scan
  • Internal capacities (swot)
  • Leading edge networking

26
Brainstorming
  • Use information/knowledge/fantasy/dreams/intuition
  • Build on experiences of and skills/knowledge in
    the organisation
  • Lateral thinking, scramble patterns
  • e.g. pose a problem and only outrageous solutions
    are suggested
  • Look at data for opportunities, look at it from
    other peoples perspectives
  • Be excited, accept thoughts/play with them - have
    fun
  • Bring experts from different organisations
    together
  • Discuss with others, family, friends, associates

27
Level 1 Screening Criteria
  • Does the idea further your vision, mission,
    values and strategic priorities?
  • 1no, 2partial fit, 3full fit
  • Is there a potential customer benefit?
  • 1none, 2some need/some customers, 3urgent
    need/many customers
  • Are there profit potential (by third year)?
  • 1 less than 20K, 2more than 20 k but less than
    50k, 3 more than 50k
  • What investment is required?
  • 1 major investment , 2 minor investment, 3
    achieve with current resources
  • Is there a champion?
  • 1no, 2 neutral 3yes
  • Is there risk?
  • 1 high risk (no known mitigation), 2 medium
    risk (new strategies needed), 3 low risk
    (strategies in place)
  • Scoring each idea will have a score of 6-18

28
Screening Phase 2
  • Create a concept statement
  • Describe product
  • Target audience and reason for buying it
  • When, where, how?
  • Product attractiveness
  • Financial results
  • Marketing issues and competitors
  • Risk factors
  • Does it fit with the organisation?
  • Test with sample of external experts

29
Screening Phase 3Feasibility Analysis and
Priority Setting
  • Does the product have financial potential?
  • How likely is the product to implemented
    successfully (easy or hard)?
  • Is an investment required?
  • Is an investment justifiable in terms of
    financial or mission improvement?
  • Does the product advance mission
  • and strategic priorities?

30
The Success Quadrant
Fit with Organisation
31
First Set of Measures
Product A
32
Second Set of Measures
Product A
33
Product A
Strength of Idea
Fit with Organisation
34
Screening Phase 4Business Planning
35
Benefits of Writing a Business Plan
  • Refines the idea
  • Writing it down makes it real
  • Creates a framework for making the idea happen
  • Method of external communication
  • Internal due-diligence tool

36
Guidelines for Successful Plans
  • Aim for a maximum of no more than twenty pages in
    the main body of the plan 
  • Be as brief and crisp as possible when explaining
    your idea and strategy
  • Quantitative
  • Specific
  • Cover what investors are looking for
  • Address risk and exit

37
Business Plan Format
  • Cover Page and Executive Summary
  • Description of the business
  • Industry and Market Analysis
  • Marketing, Communications and Sales Plan
  • Management and Operations / Launch Plan
  • Risk Assessment and Contingency Plan
  • Exit Strategy
  • Financial Plan for Your Venture
  • Supporting Documents

38
After That.
  • Development
  • Testing
  • Launch

Entrepreneur
39
Organisational Structure
40
Why Separate?
  • Different cultures/ends
  • Shield non-profit from business risk
  • Raise external capital
  • Enhance focus on non-core markets without
    compromising non-profits purpose or funding

41
Structure
Non-profit Organisation
Business
Business
Business
Intellectual Property
Enterprises Holdings
Business
Operational Support Purchase Of Service
Investors
42
Transition
  • Clean break, separate entities
  • Share resources, purchasing services
  • Conflict of interest
  • Sharing management
  • Compensation
  • Share purchasing
  • Transition plan and monitoring

43
Relationship With Non-profit
  • Customer/vendor/owner (major shareholder)
  • Separate companies consistent vision
  • Some price concessions to keep charity as a
    customer and meet mission
  • Mutually beneficial for Enterprises to succeed
  • Negotiated and governed by contract

44
Significant Key To Success
  • Foster a dynamic, success generating,
    entrepreneurial ethos
  • Provide support to staff who are
  • Creative
  • Innovative
  • Entrepreneurial
  • Productive
  • Successful
  • Aspiring

45
Partnerships, Alliances Mergers, Acquisitions
46
  • Working together
  • Creating efficiencies
  • Enhancing quality
  • Allowing for a focus on services
  • Supporting social enterprise

47
  • Context
  • Pressure to create efficiencies
  • Enormous duplication

48
One Approach - MSO
  • A management service organisation (MSO) is an
    integration that includes the creation of a new
    organisation in order to integrate administrative
    and fundraising functions, and thus to increase
    the administrative efficiency and effectiveness
    of participating organisations. It may include
    co-location.

49
Benefits
  • Enhances quality, strengthens organisation
  • Generates revenue cost savings/profit
  • Frees management time
  • Keep up
  • Enhances profile/reinforces advocacy partnering
  • Reduces risk
  • Entrepreneurial spirit
  • Supports mission and strategic plan

50
Examples of Savings and Quality Enhancement
  • Procurement
  • Average 26, Up to 50 on certain items
  • One organisation 32 savings (equivalent of a 1
    FTE freed up for the organisation)
  • Finance/HR/IT
  • Higher quality, more comprehensive service
  • Potential for savings/minimally breakeven
  • Fundraising access to focused expertise at low
    cost

51
MSO Possibilities
52
Process
  • Creative/interactive/inclusive
  • Full participation of the stakeholders, leading
    to a strong sense of ownership
  • Mentoring
  • Idea creation and implementation process
  • Systematic

53
Way Forward
  • Initial meeting/test concept
  • Research/interviews/preliminary assessment
  • Workshop/obtain commitment to the process
  • Business feasibility and priority setting
  • Stakeholder meeting/commitment
  • Business planning and communication
  • Partner meeting/buy-in
  • Launch/build scale
  • Add products
  • Add members/customers

54
Process
  • Refine Business Plan with Trustees
  • Council support - letter of intent - 1.25M
  • Identify other markets
  • Discussions with other potential partners
  • Fundraising
  • Commitment from Trustees to MSO
  • Launch MSO Early 06

55
One Final Thought
56
The acid test for shared services (Tom Peters)
  • Are we good enough to sell this service on the
    open market?

If not, why are we buying from ourselves when
nobody else would buy it from us?
57
Venture PhilanthropyHigh Engagement Giving
58
What is Venture Philanthropy?
  • Capital and human resources invested in charities
    by various types of investors in search of a
    social return on their investment. VP involves a
    high engagement over many years with fixed
    milestones and tangible returns and exit achieved
    by developing alternative, sustainable income.

59
Venture Philanthropy Investing In
Programmes Services
Infrastructure
Commercial Ventures Social Enterprise
60
Elements
  • Capital for growth, reliable money
  • Human resource expertise/strategic coaching
  • Partnering internally and externally
  • Performance centred, results orientated
  • Long term, exit strategy to sustainability
  • Business case/plan
  • Business to business presentation
  • Management, board, cash management, impact

61
Venture PhilanthropyPriority
  • Significant problem
  • Appropriate solution
  • SROI
  • Enthusiasm/being with a winner
  • Impact/building on success
  • Innovative and entrepreneurial
  • Fit with your values/vision

62
VP Benefits A US ExampleWhat Funders and
Grantees Say
  • Partnering
  • Reliable, long term grant money
  • Improved organisational capacity, better
  • Evaluation systems
  • Marketing business and strategic planning
  • Fundraising
  • Improved organisational performance/growth
  • For every 1 invested, 3 gained in expertise

63
UK VP ActivitiesJust Beginning
  • Funds
  • World-in-Need
  • Impetus
  • Laidlaw/Ryan
  • Corporate Involvement
  • Shell
  • Diageo
  • EU VP Association
  • Examples
  • Charity Technology Trust
  • Plan International
  • Tomorrows People
  • Help the Hospices

64
Investor Motivation
  • Apply knowledge/intellectual stimulation
  • High engagement
  • Joy of giving
  • Image enhancement
  • Social return on investment
  • Corporate social responsibility
  • Help business units achieve their goals

65
Case Study Corporate Venture Philanthropy
  • Diageo plc
  • Small number of very high engagement initiatives
  • Directly led to the creation of Tomorrows People
  • Board and management support
  • Measurement and accountability
  • SROI evaluation
  • Communication of value to stakeholders in
    community
  • Exit strategy in long term

66
Case Study Strategic Partnerships
  • New Profit, Inc.
  • Modelled after a venture capital fund
  • Significant support to few investments
  • CEO coach from Monitor Group
  • Board of Directors position
  • Portfolio manager
  • Access to other resources

67
Trade Association Driven Fund
  • Social Equity Fund
  • Created by trade association to further its
    business objectives
  • Special purpose fund managed by the trade
    association using VP principles
  • Invests in charities in a competitive fashion
    an market place for innovation
  • Mechanism for member organisations to act as high
    engagement donors

68
Trends
  • Increased/new capital and expertise
  • Impact on/leverage with other funders
  • VP model will evolve
  • Impact on charity behaviour

69
Increased Capital
  • New philanthropic giving - people or corporations
    who may otherwise not be philanthropic
  • Opening up opportunities beyond CSR departments
    to access funds/expertise from the various
    business units
  • Increase the level of commitment of existing
    donors, reinvigorating and advancing mature
    funding relationships
  • Success stories will lead to expansion in Europe

70
Leverage Outside Of Movement
  • Traditional grant makers will adapt some of the
    principles of the movement
  • Increase in the acceptability of infrastructure
    funding
  • Traditional grant makers will co-invest with
    venture philanthropists
  • Venture philanthropy due diligence/investment
    will act as a positive signal to other grant
    makers
  • Venture philanthropists will provide services to
    support other grant makers

71
Evolution Of The Model
  • Partnering in a true sense - working within the
    mission of the organisation as opposed to driving
    the mission
  • Social return on investment evaluation will
    continue to be applied, leading to more efficient
    practices
  • Increase in investing in mission-based social
    enterprise/trading for a FROI/SROI

72
New Capital Structures
  • Funders will create blended fund portfolios
    diverse funders, joint working
  • Charities will lead the creation of captive funds
    in support of their mission

73
The Organisational Strategic Plan
Internal Marketplace
ORGANISATIONAL EXPERTISE
Funds Portfolio
BUSINESS PLANNING Extra capacity expertise
Capital Innovation Fund
Revolving Innovation Fund
INVESTOR EXPERTISE
Endowment Innovation Fund
INVESTOR
bidding
investment
74
Changes In Charitable Organisation Behaviour
  • Charities will proactively encourage venture
    philanthropy and create venture philanthropists
    creating an internal market
  • Increased emphasis on social return on investment
    will encourage a more efficient use of resources
  • Increased familiarity with business language and
    practices

75
Screening Criteria
  • Significant problem/appropriate solution/SROI
  • Good strategy, business plan, exit strategy
  • Good management team
  • Do the numbers make sense?
  • Enthusiasm/being with a winner
  • Building on success
  • Innovative and entrepreneurial
  • Fit with your values/vision

76
SROI Elements
  • Issue/problem
  • Solution (product/service)
  • Investment required
  • Desired outcomes
  • Client
  • Organisation/enterprise
  • Stakeholder/investor desired outcomes
  • Data management/evaluation
  • Social and financial return on investment
  • Social enterprise financial performance/value
  • Cost savings/gains to government
  • Client
  • Sources of information
  • Roberts Enterprise Development Fund
  • New Economics Foundation

77
Strategic Issues
  • Develop criteria in partnership
  • Trust, partnering and control
  • Due diligence and fit
  • Innovation and risk taking
  • Organisational readiness
  • Cultural differences
  • Exit and sustainability

78
Process with a Charity
  • Product development/feasibility study
  • Finalise programme/infrastructure/commercial
    selection and internal fund structure
  • Finalise readiness issues and solutions/plans
  • Prepare business cases and business plans
  • Research, preparation and training
  • Launch, implementation and evaluation
  • Networking and business to business presentation
  • Follow-up and negotiation

79
Identifying Potential Investors
  • Current supporters and their networks
  • Existing member/donor database
  • Member/donor networks
  • Staff/volunteer knowledge
  • Research
  • Competition
  • Rich lists
  • Trusts
  • Media
  • Investor groups
  • Companies
  • Demographic identification and analysis
  • Networking/interviews/feasibility testing

80
Business Case(Two Pages)
  • Quote
  • Problem/market
  • Solution/business idea
  • Right strategy
  • People to make it work
  • Exit/sustainability
  • SROI/FROI
  • The organisation and its desirability

81
Success Factors in Obtaining The Investment
  • Is the proposal convincing?
  • Did the unique value come through?
  • Is the proposal customer driven?
  • Was it credible? Was it enthusiastic?
  • Would you remember the presentation? Was the
    presentation style compelling?
  • Did it catch your attention in the first minute?
  • Was the ask or proposal clear?

82
Key Learnings
  • Build on current network, donors and investors
  • Research the investor
  • Focus on and engage the investor, think laterally
  • It is a sales process
  • Be patient/persistent, it could take up to 2
    years
  • It is partnering, be organisationally ready

83
How would you apply earned income/MSO/venture
philanthropy to your Organisation?
84
Some Great Resources
  • Fraser Valley Centre for Social
    Enterprisewww.centreforsocialenterprise.com
  • Social Enterprise Alliancewww.se-alliance.org
  • Social Venture Network, www.svn.org
  • Social Venture Partners, www.svpi.org
  • Centre for Community Enterprisewww.cedworks.com
  • Centre for Social Innovationwww.socialinnovation.
    ca

85
More Great Resources
  • Toronto Enterprise Fundwww.torontoenterprisefund.
    ca
  • Aperio Consultingwww.aperio.ca
  • Andrew Horsnell Associateswww.AndrewHorsnell.co
    m
  • Canadian Social Entrepreneurs Networkwww.csen.ca
  • npEnterprise Forum, www.npEnterprise.net
  • Sustainable Enterprise Resource
    Centrewww.sustainabilityincubator.com

86
More Great Resources
  • Canadian Conference on Social Enterprisewww.socia
    lenterprise.ca
  • Business and Sustainable Developmentwww.bsdglobal
    .com
  • Canadian Centre for Social Entrepreneurshipwww.bu
    s.ualberta.ca/ccse/
  • Canadian Business for Social Responsibilitywww.cb
    sr.ca
  • Sustainable Enterprise Academywww.sustainableente
    rpriseacademy.com
  • Net Impact, www.netimpact.org
  • www.GreenBiz.com
  • www.greenleaf-publishing.com

87
Yippy! We Are Done!
88
Jamila M. Aman 4330 Brandon Gate Drive
Mississauga, OntarioL4T 3K4 Direct
416-618-3041 jaman_at_northw.ca http//www.northw
.ca
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