Cartography: Rotterdam

March 23, 2016

Cartography[n.]: Mapping, review

This is part one of a short series of the insights I gathered throughout my field visits in the Netherlands and Belgium. Fair to say that I got a snapshot – rather than deep insights – into the sector of social enterprise support. Nevertheless, I have gathered some of the learnings and highlights from the trip which will be presented in this four-piece-series.

Enviu

Visiting Enviu was a great kick-off to my visit in the Netherlands. I loved learning about their crowdsourcing/co-creation approach to sourcing social business concepts – the big upside having a large pool of diverse ideas to solve a specific challenge. These concepts are then filtered, adapted, tested, filtered and adapted again. I think this has enormous potential for Enviu at the very beginning of the support pipeline for social enterprises. There probably is room for streamlining their crowdsourcing platform – I had trouble finding it and knowing how to get involved.

If you want to draw a crowd, you need to make it easy for them to find your platform. Click To Tweet

As Wouter said: “We are not a platform provider for crowdsourcing projects.” and I agree. But I wonder how this can be professionalized to streamline processes and increase efficiency. After all, if you want to draw a crowd, you need to make it easy for them to find it. Be aware that the interview with Wouter was focused on only one of their programs when in fact they offer much more than what we could cover during those two hours. Pop over to enviu.org to learn more about what they do!

Outside Inc.

A spin-off from Enviu, Outside Inc. aims to ignite social innovation within the corporate sector – quite a lever for large-scale change. Outside Inc. refers to their concept as CSE – Corporate Social Entrepreneurship. Rather than defining new territory, I would probably stick with social intrapreneurship and contribute to this discussion (see Ashoka/Forbes, Echoing Green, BMW Foundation), but that’s just me. After our interview and my research in CSE, here is what I have been mulling over:

As opposed to Corporate Social Responsibility, CSE is defined by Outside Inc. as maximizing positive impact (not minimizing negative ones), being part of the core business (rather than separated), and creating stakeholder value (instead of responding to stakeholder expectations), to name a few.

CSR vs

To me, this is a simplified juxtaposition. I know that we often use those to draw a line, emphasize a comparison, highlight differences. But instead of presenting CSE as everything that CSR falls short of, I would suggest giving credit where it’s due and emphasizing where CSE adds value to the well established concept of Corporate Social Responsibility (see the works of Archie B. Carroll, Dirk Matten & Jeremy Moon, etc. over the last decades). I believe CSE creates a different kind of value; one that enhances a company’s competitiveness and innovation potential. It may actually complement a company’s CSR efforts and become one of the tools in creating sustainable value. If companies abolished their CSR departments and replaced them with nothing but Corporate Social Entrepreneurship, I doubt it would fly.

CSR meets corporate social entrepreneurship - a path for sustainable business? Click To Tweet

I look at it this way: CSR helps define an ethical corporate conduct and culture, CSE is a method to spur corporate innovation; if that innovation adheres to the ethical values of the company – even better. By the way, I am not entirely sure what defines the “Social” in Corporate Social Entrepreneurship, but let’s assume Outside Inc. has an eye on that.

In short, to me, CSR and CSE are a great match – rather than opposites – for companies that want to create sustainable value in an triple-bottom-line world.

Despite the quarrels of definition that I am having with myself here, I do believe there lies great potential in Outside Inc.’s model of spurring innovation for greater good through co-creating with companies. I would love to hear more about the actual learnings from running the program and find answers to questions such as:

  • How do you effectively involve the right kind of employees and coordinate tasks of the CSE program with their daily job responsibilities? Do co-workers have to fill in for jobs that fall of the edges of program participants?
  • What kind of commitment is required from corporate leadership and employees, how can one influence the other?
  • How do you arrive at a “Central Challenge” that all involved parties perceive as such, and want to work on?
  • What does the company really get out of it? There must be tangible outputs (new products & services) as well as intangible ones (impact on company culture, learning, enhanced collaboration). How does that compare to their initial expectations? How can this process be assessed and managed?
  • What are the transaction costs in running this program for the different parties? What kind of friction develops and how does it impact the success of the program?
  • And since we are talking about success – how is it assessed in terms of company value, employee satisfaction, greater societal value? How can sustainability of the program outcomes be guaranteed?

Some of these questions seem to have been addressed in Outside Inc.’s CSE Lab #1 in May this year. I look forward to seeing what #2, #3 to #50 come up with and wha we can learn from Outside Inc. as one of the pioneers in this area.

Again and still, corporate intrapreneurship, or CSE, has strong potential in building a bridge between social entrepreneurship and the corporate sector. I look forward to meeting more support organizations that work in this field to search for answers to my questions!


Cartography: Amsterdam

Cartography: Brussels

Guest blog: Wouter Kersten

wouter kersten

 Wouter Kersten

The Importance of Relevance

Roughly from the start of this century, there has been a proliferation of statements regarding the inefficiency of charity-based aid and development programmes. For the purpose of this blog I do not want to go into the discussion whether that is an absolute truth nor whether it is a law of nature that charity-based programmes are inefficient. What we can safely say is that initiatives that solely rely on charity (donations and subsidies) make themselves vulnerable: their inflow of funding may dry up anytime, also before they have achieved their goals.

Where social entrepreneurship comes in

This is where social entrepreneurship makes its entrance. By and large social entrepreneurs aim to achieve a social impact but with an autonomous earnings model. What they provide constitutes value and they have found a way to capture that value financially, paid for by their direct beneficiaries (end-users) perhaps topped with ‘sales’ to interested 3rd parties.
While the volume of their revenue streams depends on how well they perform their activities, there is a certain need to pay attention to the cost side, i.e., to “efficiency”, especially because the revenue streams are likely to be less voluminous than companies who put ‘just another product’ in the market. Once again, whether charities do not pay this attention is beyond the scope of this article. My concern are the social entrepreneurs: how well are they able to manage the mix of achieving impact (being relevant), attracting revenues (being financially autonomous) and working in a sufficiently efficient way (managing the cost side)?

Mixing it up, in a good way

A social enterprise basically has to combine three mindsets: the entrepreneurial mindset takes care of financially capturing the value that is created (the revenue streams), the social mindset takes care of the creation of impact (relevance), and the manager mindset takes care of the efficiency. In my opinion, one of the biggest pitfalls is that the management mindset gradually takes over. The entrepreneurial mind-set will have to satisfy “social investors” since they are still investors and thus want to see a financial return. The social mindset will have to make sure that the activities achieve impact, i.e., that the enterprise stays relevant. So where does this leave the management mindset and how much will it be influenced by all the talk about efficiency?

One of the biggest pitfalls is that the management mindset takes over. Click To Tweet

This is my assertion: if due to whatever reason the management mindset takes over and pushes the efficiency considerations too high on the agenda, there is a serious risk that the social mindset will suffer. This means the creation of actual impact, and therefore relevance will decrease and obviously in due time this will erode the revenue streams.

Achieving the virtuous circle

What can we conclude, if anything? I think two things: more so than in regular companies, social entrepreneurs need to be the ultimate business cooks. If the statement is true that the majority of entrepreneurs that start a company are in it for reasons of purpose, changing the world etc., then this prospect should attract them: their challenge and therefore achievement will be more impressive. Secondly, a regular ‘check back’ is required to make sure that the three pillars are in check, or even better push each other upwards in a virtuous circle: achieving more impact equals increasing revenue streams providing opportunity to create (scale and other) efficiencies that make sense. If the emphasis and order is reversed, I worry whether the circle will not become vicious.

Don’t kill your chicken

It’s a variant of the ancient chicken-egg question. To use that analogy, the egg needs time to be hatched to its full potential, and replacing the chicken with cheaper artificial heat sources is not the solution. Just going for the egg gives you focus but you lose the broader picture. In short: social entrepreneurs, don’t kill your chickens.

twitter@wouterkersten

Netherlands Warm Up

Before heading to the Netherlands I came across a 2011 report by McKinsey & Co. “Opportunities for the Dutch Social Enterprise Sector“. It is four years old, the researchers analysed 700 social entrepreneurs, 100 of them in more detail – I figured this was as close as I was going to get to a country-specific report on the social enterprise sector.

Observation #1: Willemijn Verloop seems to be the person to know. Along with some introductions, another Social Venturer sent me an article about Social Enterprise in the Netherlands, featuring Willemijn Verloop. Co-author of this McKinsey report: Willemijn Verloop. Founder of two support organizations for social entrepreneurs in the Netherlands: Willemijn Verloop. The book “Social Enterprise Unraveled – Best practices from the Netherlands” that some interview partners recommended – written by: Willlemijn Verloop. I didn’t get to chance to meet her, tracking down this mastermind seems difficult. But if you read this, Willemijn, I’m waiting by the phone, coffee is on me!

Observation #2: The Dutch seem to have it together when it comes to being and working with social entrepreneurs. The report starts of with defining social enterprise as “a company with the primary goal to deliver social value in a financially sustainable and independent way”. Concise and without much lingo. I like it.

Dutch social enterprises: challenges and supporters

If you are one of the 4,000 – 5,000 social enterprises in the Netherlands, you are most likely active in sectors of biosystems, cleantech, economic development, civic engagement health and well-being, or education. Secondly, the challenges you are most likely to encounter are these:

  1. Developing business models – at the time only 42% of social enterprises under study were profitable
  2. Becoming a manager both internal and external: leading the company through a stage of scaling and growth, and in the process managing an increasing number of clients, data, and responsibilities
  3. Gaining access to venture capital
  4. Legislation
Challenges of Social Enterprises in the Netherlands, McKinsey, 2011, p.10

Challenges of Social Enterprises in the Netherlands, McKinsey, 2011, p.10

Let’s get to the juicy bits: The report has an entire chapter dedicated to support networks for social entrepreneurs internationally, and the Netherlands more specifically. Giving social venture support organizations concrete marching orders is great! If every country report ever written on social enterprise did that, I wouldn’t be doing this work. So, should you ever write a report for me, or with me, or about me, please include a chapter that talks about and to support organizations directly. Dankewell! For the Dutch sector the report lists four main types of support organizations:

  • coaches and education facilities
  • investors and match-makers
  • researchers, and
  • lobby organizations (to improve legislation)

The core of the report is a set of recommendations in which the authors call for

  • Promotion: awareness and visibility of the sector in the Netherlands
  • Education: gearing more talent towards the social enterprise sector
  • Support: management support in developing triple bottom line business models, coaching and access to relevant networks
  • Capital: access to seed and especially growth capital and matchmaking intermediaries
  • Guidelines: (inter)national standards for measuring both financial and social impact
  • Government recognition and support: for example in creating right conditions and opportunities for Social Enterprises to grow (e.g., supportive legislation)
Current Providers of Seed and Growth Capital in the Netherlands, McKinsey, 2011, p. 12

Current Providers of Seed and Growth Capital in the Netherlands, McKinsey, 2011, p. 12

To be fair, this was the first report of this kind that I have come across (point for the Dutch sector already), and with little material for comparison, I think it’s very concrete and direct. I was already looking forward to what I would find in the following week!

Enviu

Sourcing Social Business Concepts from the Crowd

“Enviu emerged in 2004 when society looked pretty much black and white at the evil corporate sector in one corner and the do-gooders from the charity/nonprofit world in the other. The founding group of Enviu, headed by official founder and current Director Stef van Dongen  wanted to get young people involved in breaking open these crusty paradigms. Under the mantra “Inspire. Engage. Make it happen.” they started Enviu.” This is how Wouter Kersten introduced me to Enviu in March 2015.

After a week in Scotland I stepped off the plane in Amsterdam on Tuesday afternoon and made my way to Rotterdam where I was going to visit Enviu. Fast forward 2 hours and I found myself at Panekoekstraat (pancake street – promising, I could tell already!), stomping up the stairs with my backpack and burst into their very silent large office introducing myself. The next two hours of that sunny afternoon I talked to Wouter Kersten – innovation manager – about the challenges and upsides of developing lean social businesses and – in several cases – crowdsourcing ideas for social innovation.

Initiating Social Enterprise Concepts

As a support organization for very early stage social entrepreneurs, Enviu is an idea incubator for pre-start-ups. Many of the ideas they are working on come either from inside or individuals outside the organization.They ideate, develop and test (validate) new social business concepts with two outcomes: either they prove to be viable (launching customers, partners and investors) or turn out not to work (better catch it early).

In various cases, there is not a single idea as starting point. The purpose is to mobilize the wisdom of crowds through a process revolving around co-creation. Together with their partners (at the moment primarily, family offices, larger foundations and governments), they design a challenge and call their community of innovators to come up with possible solutions. These innovators are individuals who have an interest in the subject and are keen on co-creating with others. “In the process, inspiration, concrete ideas, enrichment thereof and entrepreneurs are brought together.

The ideal outcome is one or more social business concepts that can be developed towards… Click To Tweet

The community that is created usually results in various network spin offs (people connecting to each other) and inspiration (people using the challenge as starting point for own endeavors)” Wouter says.

Enviu

The most promising concepts go on to the second stage of “business development” during which ideas are refined and various stakeholders – including the (potential) entrepreneur, experts, customers, partners and investors – work together in teams towards validation. Only then the start-up process starts, at which point the entrepreneurs have a validated business model thanks to initial testing with early customers and other stakeholders. Wouter: “At any given time we have between five and ten concepts – in various stages of development – running.” Start-ups are then ready to begin operations. The entrepreneur is now in charge and Enviu remains involved as minority shareholder.

What makes co-creation for a third party difficult?

There are many reasons why any approach has its challenges. Two specific ones when trying to combine co-creation, entrepreneurship and social business development are:

#1: The partner suggesting the challenge will in some cases have an idea in mind about what the solution should look like when, in fact, the process of Social innovation does not work based on assumed, desired outcomes. I would go as far as to say that pre-defined expectations and the need for certainty are detrimental to generating innovative ideas and thinking the unthinkable.” In Wouter’s words: “The outcome is by definition uncertain, so partners must (learn to) be comfortable with this.”

Social innovation does not work based on assumed, desired outcomes. Click To Tweet

#2: Finding the right mix of people who are willing to co-create. Everyone who has been involved in promoting a support program, and further, in the selection process of participants, knows how difficult it is to find entrepreneurial minds who are coachable and good team players. Enviu’s model specifically aims to trigger a community of social innovators who enjoy the process of presenting their ideas and working on them with others, always at the risk of dismissal or adaption-beyond-recognition in the next step. While the Lean Startup preaches the idea of rapid testing and – possibly – dismissal of a product idea, it is difficult – in particular for early stage and less experienced innovators – to put their ideas under the scrutiny of a larger audience.

Enviu is looking for entrepreneurial team players with a great idea. Click To Tweet

Enviu manages to activate a great number of individuals to contribute their ideas to Challenges, Wouter also recognizes that you need different types of people to take the “right” idea forward. This is why they are all brought together in the process: ”In the end, to succeed we need individuals that make good entrepreneurs, have a great idea, and are willing to co-create! It’s rare to find all three qualities in one person. Amen.

Enviu in review

When I asked what makes an effective support program for social entrepreneurs, Wouter responds “Having own experience and having ‘skin in the game’: “If your stake is the same as the entrepreneur’s you can truly co-develop. Click To Tweet” If you only ‘facilitate’ or ‘provide network’ you stand to lose very little.”

Enviu’s program taps into a large pool of people who suggest new and enrich existing ideas. At the same time, working with external partners requires skills in managing expectations. I need to find other support programs that apply the crowdsourcing approach and explore how they facilitate the process online and through web-based platforms.

twitter@enviu

enviu.org

Aviary Photo_130766745317133032

Calling it a day in Rotterdam

Spotlight: Wouter Kersten

Wouter Kersten

What drives you?

Combining positive impact with entrepreneurial activity. I like to boost that process (whenever necessary) by making new connections and restructuring information, for example by asking different questions, testing them and conveying these attitudes to others. “Only if you ask different questions will you get different answers.

Biggest SocEnt trend have you seen over the last 5 years?

Seeing platforms like Social Enterprise NL pop up in the Netherlands has proven that there is a lot of momentum in the field. We are all doing something relatively new here; social entrepreneurship is still in its early childhood years, certainly in the Netherlands, so we are all trying out different approaches to find the right balance between being efficient and being relevant with what we offer.

What are you reading right now?

Right now I am reading „Gone Girl” which got adapted into a movie which was screening last year;
My last sort of work related book was Art of the Start 2.0 by Guy Kawasaki;
And the next book I am looking forward to is the autobiography of Mark Twain.
The next ‚work related’ book I will read is WISER. Getting beyond groupthink to make groups smarter by Cass Sunstein and Reid Hastie.

 

Background

Wouter has a background in industrial engineering and management. He joined a telecommunications company because, as he says: ”I like working with people and solving problems, but at some point I was fed up with solving problems for big companies, earning them another million with something that for me did not seem very valuable for society. I thought moving to a smaller company would change that, but it still wasn’t the kind of meaningful work I was looking for. So I decided to invest in my new future; I did a one-year master program in Environmental Science, during that time I encountered Enviu (which at that time basically was a cool name, a pilot with a few interns and a web-site) and became involved in setting it up. Unplanned, but in hindsight not by coincidence, for the last 10 years I almost always have had two employers in parallel because I like operating in the two worlds of academia and practitioners.” Right now, for example, I work at Enviu and at the University of Delft: I love making new connections between ideas and people, and see the sparks when the two worlds meet!”

Read Wouter’s guest blog post on efficiency and relevance!

twitter@wouterkersten