Applying the Performance Criteria to the Social Enterprise Methodology

To be relevant as a methodology for social sector practitioners, social enterprise must address the challenges common to all social sector organizations, while offering novel approaches to addressing these challenges.1

At the core of social enterprise methodology lies a simple observation: private sector markets—like it or not—are predominant worldwide, massively overshadowing public sector markets. At the same time, many social sector challenges can be demonstrably related to the inclination of private sector markets to provide for the short-term needs of a few rather than for the long-term common good—particularly when the two are not deemed compatible.

The social enterprise methodology differentiates itself in the way it seeks to associate social sector challenges and private sector limitations. It addresses both concurrently by leveraging the strengths of private sector markets (as exemplified by the business methodology) to achieve social gain.2 The beauty of social enterprise is that commuting business practices to effect social change offers so much more possibility than just money.3 Social enterprise methodology harnesses the power of the private sector by actively engaging in the market and strategically employing market mechanisms in decision-making to solve social problems and generate value for the greater good. Other methodology tenets include operating the social enterprise with the financial discipline, innovation and determination characteristic of private business, which promote savvy survivalist behavior time-tested in markets.

  Address social sector challenges… …by leveraging private sector strengths while addressing its limitations.
Depth of Impact:
How effectively do we address the social problem?
  • Address the root causes of the social problem.
  • Rely less on short-term "quick fixes" that come from palliating the symptoms of social problems.
  • Leverage commercial markets’ ability to provide for a vast array of individual wants and needs.
  • Address, from within, the market's inclination to address opportunity based on short-term profit potential while ignoring long-term social impact.
Blended Value:

How effective are we at integrating social and economic value creation?
  • Rely less on economic wealth generated externally and develop means of internal wealth creation.
  • Change the current paradigm; social value creation shouldn’t depend on financial resources created without regard to social impact.
  • Leverage the market's long-standing track record of wealth generation.
  • Address, from within, the market's failure to make economic wealth creation more dependent on social value creation, so that one cannot exist without the other.
Do we systematically strive to do more with less?
  • Implement process reengineering and keep up with the need, expectations and potential for increased productivity.
  • Question established knowledge and conventional processes in a constructive manner.
  • Leverage the market's track record of supporting innovation and producing high-yield solutions to address market demand.
  • Address the market's tendency to create superficial needs to leverage existing solutions (solutions in search of a problem), instead of creating solutions to more fundamental needs (problems in search of a solution).
Are we willing and able to respond to changing conditions?
  • Implement flexible structures, mindsets and decentralized control mechanisms.
  • Question the status quo and challenge complacency.
  • Leverage the market's track record of supporting calculated risk-taking, complementary (even contradictory) approaches, and a willingness to embrace change.
  • Address the market's inclination to seek change for change’s sake, to go along the path of least resistance, or to fail to "stick with it.” Instead, demonstrate long-term commitment to addressing fundamental needs.
  • 1We are not implying that being novel automatically makes you better; instead we are saying that to be relevant, a new methodology obviously has to bring something new; whether it performs better has to be judged on, well, how it performs! This seems rather obvious but important to avoid falling in the trap of innovation for the sake of innovation.
  • 2This "fighting-fire-with-fire" aspect is probably what makes the social enterprise methodology both effective and hazardous at the same time.
  • 3Alter, Kim. “Social Enterprise Models and Their Mission Relationships,” in Social Entrepreneurship: New Models of Sustainable Social Innovation. Oxford University Press, 2006.