Liam's Got Issues: July

1 July 2009
Liam Black, founder of Wavelength

Liam Black, co-founder of Wavelength

When the going gets tough... social entrepreneurs don't act like politicians, argues Liam Black

Failed leadership everywhere. Shame if the expenses farce obscures the biggest betrayal by this government: the gap between haves and have nots which Brown has let widen during 12 years of missed opportunities to shape this country for the better.

And isn't it so New Labour to draft in Alan Sugar - the caricature of stone age business leadership; use and dispose of people, bully those with less power than you and always - always - keep one eye on the cameras. And what's next? A government led by Duck Island multimillionaires drawn from a narrow elite of white men who all went to the same private schools and universities?

In Ireland the systematic sexual and physical oppression of poor children by the religious orders plunged the country into angst and recrimination. No one emerges looking good. Doctors who treated the beaten and raped children and then handed them back to their abusers. Police who ignored the pleas for help. Politicians who funded the schools and then entered into a sweetheart deal protecting the rapists and sadists from public exposure. It is sickening.

Growing cynicism about leaders is all too understandable. They're all in it for the money/power/position, aren't they? So, what of the leadership of social entrepreneurs who act without a mandate from anyone and are accountable only to often very weak boards? I have long warned about the dangers of over hyping social enterprise. It is proclaimed as the future of business, somehow magically able to create wealth and reduce inequality.

Yet many social enterprises - some well known - are this close to insolvency and closure, their leaders caught between the brute realities of their struggling businesses and the demands of the industry's spin machine. An extra bottom line does not shield you from the challenges faced by all businesses. It makes you more vulnerable.

The world is hungry for new ways of doing business, yes. But the leaders of the movement must be honest about the limitations of the not-for-profit 'social enterprise' model and avoid the hyperbole and wishful thinking that too often drives strategy. Tell the truth and shame the devil, as my mum says.

Liam Black is co-founder of Wavelength and a regular Social Enterprise columnist

Comments

A new way of doing business

Submitted by Jeff Mowatt on 9 July 2009 - 5:16pm.

That was the headline describing a for-profit model of social enterprise published free to use, on the web 12 years ago. It had originated from a white paper for the Committee to re-elect the President in 1996.

It proposed a business model in which at least 50% of profit be re-invested in community purpose with seed funding provided by a trust fund mechanism.

http://www.p-ced.com/about/history/

In the booming US at the time, though the idea spread rapidly around the campus of UNC in Chapel Hill where first published, there was little interest from mainstream economists. It was at the time considered almost heresy. That changed rapidly when in Russia, efforts to stimulate the economy ended in disaster with a 1000 fold devaluation of the rouble. The author too off to Siberia to propose a bottom up or microeconomic approach and that is where P-CED was first proven.

12 years later, the concept of this 'new form of capitalism' has since become more mainstream.

http://oxfordhub.org/oxsef

Jeff Mowatt
People-Centered Economic Development

p-ced.com
people-centered.net