Yesterday I was preparing to teach my January class at MIT Sloan (ignore they got my name wrong) and came across an interesting article--Identifying the Drivers of Social Entrepreneurial Impact--by Paul Bloom and Brett Smith (1). I like models, heuristics and other systematic theoretical approaches to business problems. Such theory generally provides a comprehensive starting point to understand an issue.
The article identifies seven capabilities an organization needs to achive scale on social ventures:
- Staffing--"the eﬀectiveness of the organization at ﬁlling its labor needs, including its managerial posts, with people who have the requisite skills for the needed positions, whether they be paid staﬀ or volunteers"
- Communicating--"the eﬀectiveness with which the organization is able to persuade key stakeholders that its change strategy is worth adopting and/or supporting"
- Alliance building--" the eﬀectiveness with which the organization has forged partnerships, coalitions, joint ventures, and other linkages to bring about desired social changes
- Lobbying--"the eﬀectiveness with which the organization is able to advocate for government actions that may work in its favor"
- Earnings generation--"the eﬀectiveness with which the organization generates a stream of revenue that exceeds its expenses"
- Replicating--"the eﬀectiveness with which the organization can reproduce the programs and initiatives that it has originated"
- Stimulating market force--"the eﬀectiveness with which the organization can create incentives that encourage people or institutions to pursue private interests while also serving the public good"
1 and 5 are not unique to social entrepreneurship and required for every for-profit business model. 2 is a critical insight and the key to establishing "value creation" and "brand" in a "change" strategy. 3 is particularly challenging given the large number of low quality partners available. 4 I tend to ignore in favor of individual empowerment but it may have value. 6 is the real key to scaling and particularly challenging in the developed world when one considers replicating selling, distribution and perhaps manufacturing. 7 is sort of a key performance indicator. When the private sector starts to compete with you then scaling really starts, but the question arises about whether you can still compete. A serious approach to 1-6 will surely help.
For anyone perhaps silly enough to approach social change through a non-profit (except for museums, performing arts centers and a limited number of other projects that cannot attract capital from financial markets), I think the seven capabilities also apply.
(1) Journal of Social Entrepreneurship Vol. 1, No. 1, 126–145, March 2010