Four Hot Spots of Social Enterprise Quarterly Goal Setting: Part 1 of 8
Want to move to the front of the sustainability pack in social enterprise?
Quarterly Goal setting is often discussed and then, discussed, and then discussed again. Unfortunately, just like our personal goals, our short-term goals end up shoved aside into tomorrowland. Or, worse yet, never attempted. Ugh, we have all been there!
Assuming we don't need to discuss the WHY of setting short-term goals (think about daily distractions), let's move right to the categories you need to cover each quarter.
Disclosure: We, at Gingras Global, don't claim to be experts in everything. However, we know a lot about social enterprise 'in-operation.' And, we work with impact investors who regularly communicate their thoughts about reporting and goal setting. So, we suggest you give this some thought!
If you are a social enterprise, you have to do more than the average bear. You must be an Olympic athlete to pull off this type of business.
We suggest you focus on these four areas:
We further break down the four areas into two sub-categories totaling eight areas for quarterly goal setting and metrics for your social enterprise.
They are as follows:
Business: Your Product/Service and Your Customer/Client
Social Impact: Your Measurement Options and Your Related Goals
Operations: Your Staffing and Your Processes
Marketing: Your Promotion and Your Sales
Over the next several blogs, we will tackle each one!
Today, we begin with the first of Four Categories...
Business Enterprise: Your Product & Service
Your product/service is the enterprise engine that fuels the social impact.
Every quarter we suggest you pick one of the following categories to work on during the next three months:
*Product/Service Distribution Improvement
*Product/Service Research or Testing/Beta
*Product/Service Cost of Goods Sold analysis/reduction
Step One: Pick one of the categories above
Step Two: Write a description in no more than two sentences what you want to tackle during the next three months.
Step Three: Ask yourself if it is measurable (i.e. how will you know if you have accomplished this 3-month goal). If not, go back to Step Two.
Step Four: Decide on your Key Metric. What will you use to understand if the goal has been met? Observation? A Report? Your Team? Be specific.
Step Five: Ask yourself if it is a small enough goal that can be done (we mean completed) during the next three months. Ask yourself how much time it will take to accomplish this goal and what resources it will require. Remember: you are setting yourself up with 8 of these at the same time. We are firmly encouraging something small so that you can build a pattern of success, not failure, for your reporting.
Step Six: Write down the benefits of accomplishing this goal to your social enterprise. What will this mean to your organization?
Step Seven: What strategy will you use to make the goal? Write this down in no more than two sentences.
Step Eight: Decide where you will record your activity, strategy, key metrics; decide where the team can visually feel accountable.
Step Nine: Communicate this goal with your team, be in agreement.
Step Ten: Calendar a time NOW in 90 days that you will review this goal. REPEAT!
We encourage you to follow this eight-part series all the way through so that you can move your team to the front of the social enterprise pack!
We know you can do it and we are here for you!
Speak Truth. Demonstrate Impact. Declare Life.
Is it possible that the attempt to define social enterprise has restored the honor of profit today?
It appears to be a trend from my perspective.
Establishing a definition of social enterprise has been both exciting and frustrating. Just ask anyone who has been participating in any of these conversations for the last 5 years.
The Recent Past
Only 3 years ago I found myself defending for-profit entities with respect to social enterprise. I tend to bristle at extremes of any kind. So, when I would hear well-intended persons use words such as ‘greedy’ and ‘money hungry’ with respect to for-profit entities, it would be difficult to be in agreement. I would especially have a reaction when words such as ‘monster’ or ‘evil’ were used as adjectives to describe for-profit entities.
I would gently attempt to remind that blanket statements in any direction can be dangerous. I would attempt to remind that while the media splashes headlines of the ones who are not doing it right that many for-profits ARE doing it right. That, as a matter of fact, many of the for-profits were creating an income tax base for the local and larger economies. They were creating employment, making donations with their cash/in-kind services to the non-profits, governments, and faith communities.
Just as I would address the issue someone from the for-profit camp would jump in with a comment such as “Yeah, and by the way, you non-profits don’t know how to run your organizations anyway! You are inefficient and wasteful!” Oh my. Thanks for the comment. Not helpful.
The Definition I Observe
Risking all here I am going to make a statement of definition of social enterprise. I would define social enterprise as an organization that is attempting to solve a social issue and create a positive cash flow for all or part of their organization. It is a dually focused entity driving toward social impact and cash flow generation. One or the other is not an afterthought. The duality is part of the overall identity of the organization.
Some social enterprises are for-profit structures attempting to use part of the profit from products and services to fund social impact by giving their resources or hiring staffing that may not have access to traditional employment.
Non-profit structures can also be social enterprises. In this case the non-profit has created some type of business or ‘enterprise’ within their organization to bring in some cash flow in an attempt to reduce donor fatigue. Think of the Girl Scouts or Salvation Army as examples. They are selling products to help fund their work.
This is the theme of social enterprise: selling products or services to fund social impact.
The very nature of adding an enterprise element to a non-profit entity is acknowledging the potential assistance positive cash flow can make from sales of products and services.
My, oh my, have conversations changed!!!!!
The tableside conversations now look more like “Romy, doesn’t EVERY for-profit business create social good?” and “I believe that just by creating one job this business is solving social issues!” and, my favorite this week “If we don’t begin to understand that ALL for-profit business is creating social good then we have a lot of work to do. This nation is misled!” Oh my. Here we go again. I can’t help but smile.
I love the passion. I love people. I love that we are attempting to define and solve. I love that while everyone has been debating the definition of social enterprise the value and honor of profit has been restored. It has been restored by the average person on the ground making something work out of their garage giving us an example of strength and perseverance. I love it that the entrepreneur could care less what the definition declares. They just want to make a difference in their neighborhood. And, they are.
Let’s keep talking and observing what is working on the street and what is not.
Therein lies the truth of the moment.
I love garage bands. I love the whole concept of a couple of people gathering together in a small space to create some music. I love the idea of practicing a passion and trying something together. Sometimes the fun is just getting together to play. Sometimes, it is that moment when someone tries something and a discovery is made. It is in those moments that an explosion of energy happens and everyone is fed with excitement.
As we all know, some garage bands with the humblest of beginnings have gone on to become well-known and earn an income to support many!
I find myself lately referring to many of the social entrepreneurs I spend time around as ‘garage bands.’ It seems especially fitting in some of the urban areas such as Detroit where I spend a large amount of my time.
While the world calls them micro businesses or small businesses I have been affectionately referring to them as the ‘garage bands’. Oh, how I love the garage band social entrepreneur!
The collaboration, the joyful discovery of unique personal talents, the willingness to serve, and the creativity are all common threads I see energizing the scene! They are, literally, fun to watch and listen to!
I think of a middle aged woman pumping cupcakes out of her 6ft by 8ft kitchen and selling them in local stores. She is hiring one or two people from the neighborhood creating incomes and taxes for the local economy.
How about the man who decided it was more important to help the youth in his neighborhood learn employable skills than it was to keep running his religious organization? This very man purchased a couple of lawnmowers and landscaping tools to teach the youth and clean up his neighborhood. Does it matter than he only has 3 commercial contracts to float it all? He is serving out of a garage!
How about the restaurant, barber shop, and art classes that are happening in backyards and garages? Do they qualify as legitimate businesses? You bet they do!
Lastly, just this past week I learned of my 6th social entrepreneur setting up his or her office in a garage.
The garage bands - a trend or a season? Time will show us. For now, this wonderful observance is my truth of the moment!
Forge on garage bands!
Does it seem like it is taking longer than usual for supporters to ‘buy-in’ to your social enterprise?
You may be right on track.
Since this blog is about trends and patterns I observe, I am going to tackle this one and shine some light on it.
Lately, I am running into people in the field who are wondering if they are off track because of the extensive concept proving requests from funders and supporters. As I observe, many social entrepreneurs wonder how long the proving season will last. My answer would be that it may be longer than you think, and, that is okay! However, there are a few things you can do to shorten the time period.
What is a concept testing or proving season? For the purposes of this article I would simply define it as a time period that the social enterprise/entrepreneur is ‘proving’ to a set of people that their product, service, or overall organization possesses something of sustainable value.
The set of people targeted could be investors or customers. They may be governance members such as Board or Advisory members. They may be vendors or other professionals.
What are you proving?
Generally, the concept testing phase refers to two main areas of discovery:
1) The product or service works; has been tested
2) There is a market or customer base/demand for your product and service.
While there are many different focuses during concept testing phases, I would submit that most of the testing falls into the two listed categories above. Other elements can be items such as: unique value proposition, other uses of the product, easier methods of production, or details on customer demographics. There are many points of initial discovery that are important.
The season or period of time lasts long enough to satisfy enough people that your organization will now move into a new phase of actually selling your products and services MORE than you are explaining the products and services.
Proving Three Concepts Instead of Two – Social Entrepreneurship
We all know it is normal to move through a season of demonstrating that your product or service has validity. However, there is something unique to social entrepreneurship that I have begun to witness as a pattern.
Social Entrepreneurs are also proving the validity of their organizations’ dual nature. They are literally proving out that an organization can deliver a social impact AND sell a product or service.
I spend a lot of time with impact investors, funders, and curious observers. The magnetic draw to the dual nature of the organization pulls them in. I think we have all watched many social entrepreneurs enjoy the media attention and praise for their concept.
The joyful singing stops suddenly when the potential funders start to ask questions about the sustainability power of the organization. I watch the investor begin to drill in with very technical questions while simultaneously watching the social entrepreneur begin to realize that they are about to have this conversation for the 100th time.
The most gifted business professional will still have questions about the concept. Why?
Okay, get ready for this very technical answer. Ready?
Because it has not been done before with consistent success. Yup, it is not yet normal for many. The reality is that we do not have millions of working examples for hundreds of years. It is new. That is all!
The truth is that social entrepreneurs must prove out three concepts instead of two. It is just how it is right now! They must prove:
1) Product validity
2) Market of customers
3) Organization Model
Given the bigger proving set, the social entrepreneur can, at times, become discouraged. It appears as though it is taking longer than most other businesses. That is because it is true. It is taking longer!
The social entrepreneur may be embraced faster in the local community and praised for their effort earlier than a traditional model. Yet, when requesting funding, the process can take 2- 5 times as long as a traditional business model. This is because of the need to prove out the third element of the organizational model.
Shortening the Season
Here are a couple of key strategies on shortening the season that we are observing in the field.
1) Prepare some materials to address your organizational model head on. Jump right on that elephant in the room and talk about it! Become an expert on this part of your sales pitch.
a. Prepare some written materials that demonstrate how your model works from a financial perspective. For example, a for-profit model can highlight the cost of the social mission that will offset profit. A not-for-profit organization can illustrate how adding in an ‘enterprise’ element to the organization can help reduce donor fatigue.
b. Illustrate your knowledge of the compliance, legal, or tax issues when combining social impact and your legal structure. Demonstrate that you understand how to comply with the highest standards.
Tip: Don’t take a path of a rogue here. It is only cool in the movies.
c. Talk about your team- the depth and the expertise. Include governance persons in your discussion. This shows your willingness to be ‘governed’ for a season if you are asking for funding.
d. Be excited about addressing this organizational model issue. Be excited in front of your supporters that you are a responsible pioneer and honored to do it!
Tip: Don’t have a victim mentality about needing to explain your model.
2) Learn the investment and financial language to shorten the translation. Now, just as I am asking you to learn the language, I am having twice as many conversations with the investors around your language and your models. This is a discovery around credible financial management. Remember that the investor is already at the table because they are interested in you but must be able to demonstrate a financial knowledge so the investor can feel comfortable that basic mistakes will be avoided. The bottom line is that if you can demonstrate that you understand your financial strategies and statements, you will build credibility faster and shorten your concept testing phase.
Putting it all together
So many social entrepreneurs can feel like they are misunderstood or dismissed. I am hoping we have highlighted that you may have been missing a great opportunity to sell your organization by highlighting the validity of your organizational model. If there is any group of business leaders that we want to be capitalistically driven, it is the ones with a social conscious!
As we all know it has been either a capitalistic or social silo type structures. As we combine them we must demonstrate a knowledge of both enterprise and social. While we are not dismissing the social impact it is imperative that the enterprise model is highlighted and honored.
Therein lies the truth of the moment.
Forge On Social Enterprise!
Romy interviews Ginny Fischbach of Impact 100 in Oakland County, Michigan.
What happens when 100 women each bring $1000 for social good? Find out in this great episode.
Jump over to the website for the podcast at www.bonfiresofsocialenterprise.com
Give us a question to the mailbag!
Romy interviews Noam Kimelman on his venture Fresh Corner Cafe in Detroit. They also discuss his non-profit partner, Detroit Food Academy, and the motivation of the youth in the city of Detroit! Noam is a very intelligent and engaging guest. Great Detroit artist at the end of the episode to round out another great show!
Jump over to the website for the podcast at www.bonfiresofsocialenterprise.com
Give us a question to the mailbag!
Chelsea Koglmeier of O.R.O. on Bonfires on the Move
Jessica Robinson, our mobility expert, interviews Chelsea Koglmeier of Bicycles O.R.O.
Chelsea Koglmeier, founder of Bikes ORO, joins us on this episode for a conversation about bicycles as a vehicle for social change. Her own product is a bicycle that’s thoughtfully designed with inspired simplicity and beautiful utility to make riding simple and fun. By partnering with World Bicycle Relief, she has also built a social mission into the core of the company, proving that bikes can be engines of social and economic change for people globally, enabling kids to get to school, families to access professional opportunities, and anyone to reach quality health clinics.
United Nations Girl Up SchoolCycle: https://girlup.org/schoolcycle/
Jump over to the website for the podcast at www.bonfiresofsocialenterprise.com
Give us a question to the mailbag!
Find us on Facebook and Twitter @bonfirespodcast
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...an excerpt from Chapter 4 of The Duality of Social Enterprise E-Book by Gingras Global
The Bait of the New Grape
Social Entrepreneurs are the easiest group of people to distract. I am one of them.
Early on in my career as an entrepreneur more than 25 years ago I learned about the bait.
If the bait is something that distracts us, then social entrepreneurs are the easiest fishing targets.
Entrepreneurs, in general, tend to be risk takers and able to juggle multiple things at one time. We have the ability to find a positive vision and strategy to solve almost anything.
Consider now the socially minded individual who personally finds themselves responsible for addressing nearly every need presented to them. Now, combine these two extremes and you have a potential vine running out of control that can grow wildly all while declaring the rationale “Well, I am growing grapes already I can just tweak this recipe a little and have a new grape and a new product with the same field and tools….”
Sounds good, doesn’t it? We sell it to ourselves just like that. We do it in 2 seconds flat. We are pros, and we are creative. We are a social enterprise!
Slow down buck-a-roo and stop to re-evaluate your capacity and market. Is this new grape appealing to your current customer? What will this little tweaking of a recipe require in the form of financial resources? What will it need in a set of skills? More importantly, what area will you pull the resources from AND what is the result of pulling that support for this new grape?!!
So, often I find the heart of the social entrepreneur willing to do whatever it can to help another while everyone cheers from the sidelines “Go! Go! Go! We love you! Go!”
Transporting the Pregnant Mothers
There was a great little business I was observing in the Detroit area. A social entrepreneur was putting together a plan to help non-insured mothers-to-be with prenatal care and delivery. All was going well until she opened up her clinic and realized that none of the mothers-to-be had transportation to her location. Her location was not even on a bus route for public transportation. So, what does our superhero do next? She, of course, uses her resources to go and get them now giving her a new service (grape) to manage on her vine. It turns out she needs a different kind of liability insurance and resources to make this happen. And, oh, by the way, she began to use some of the initial investment that was given to her for a phase two of equipment in her location.
About six months into her second grape stage she realized that many of her mothers-to-be were malnourished. Well, our superhero needs to solve this too so she begins to grow vegetables out back in her location. She had space, right? She had seeds from her garden at home and the knowledge. It seems logical to add the third grape, right? It would help her to have all of these services, right?
Unfortunately, the lesson was not learned immediately. Fast forward as our superhero ended up with wild animal problems eating all of her planted vegetation out on her back patio. The animals began to scare away her mothers-to-be. She was not charging for the services she was providing because her mothers-to-be could not afford even the small fees.
Just like that, our superhero is down. She used up all of the initial funding on her new grapes. She was out of resources. The original funding investor did not appreciate her good intention-ed deviation. Trust is broken. Another grapevine is wilting in the sun.
Navigate with Ease:
I think you get the point of the story. No matter how good of an idea you have to ‘compliment’ your services nothing is worth the overall failure of your social enterprise.
The bait we can take a new product or service is not characteristic of the dual nature of the social enterprise. It does, however, make unrecognized issues of duality worse.
Think of the advice many married parents will give to another couple who believe bringing a child into a dysfunctional marriage will help the marriage. Most would advise fixing the marriage first before adding children.
One can apply the same principles to social enterprise. If we know that a duality unrecognized can create problems AND, we are aware that social entrepreneurs can be easily baited then we can stop and consider. We can find the best path to accomplish our desired goals.
If you feel you have a legitimate add-on that fits properly then take the proper strategic steps:
1. Do an analysis on the nature of the problem. Is anyone else providing this service? What is the cost? What is the complete list of ALL of the costs? What is the tax or legal ramification of the add-on? Do your research without emotions. Remain calm. Take your time. If your business cannot function without the add-on, then you better stop everything you are doing immediately and seek counsel! It happens. Even the best research and plans can have hiccups. Do you need a hard stop/evaluation or do you need to pivot? Halt the leak and address the situation.
Before you begin, start a journal. Make columns with labels for minutes and tasks. You will record every item in minutes. These are the minutes you are going to spend away from your current commitment to your current business. These are the minutes you will spend distracting yourself from your original mission. Check.
2. Assess your capacity. What do you already have available to you that is NOT used for another purpose? Let me say that again “What do you already have as an available resource that is NOT USED for another purpose?” For example, if I am a butcher and need a meat grinder for 10 hours a day to get my new grape up operational. I ask myself “do I have a meat grinder” I will answer ‘Yes’ to myself. Instead, if I ask the question “Do I have a meat grinder I can use for 10 hours each day” the answer may be “No, I have a meat grinder that can be utilized for 3 hours as it is already in use for another purpose.” See the difference? It is small, but this is the way we fool ourselves.
What resources do you need? Consider items such as equipment, skills, money, marketing, communication, operations management, etc., etc., etc.
If you have them available, then move to Step 3.
If you do not have them available, and you feel it is necessary or makes for an excellent opportunity then make a business case for it and present it to your staff, your governance body, and begin to ask for the resources to implement your new grape.
3. Communicate with your employees, governance body, your current financial supporters (lenders, donors, investors, etc.). Be sure not to run wild in the West. Remember there are others around you that would enjoy the respect of your communication. Healthy relationships are one of the hallmarks of a well-run social enterprise.
Upon obtaining agreement and consensus go ahead and move forward with your new grape.
If you do not achieve agreement and consensus on your new grape idea then do not move forward!!!!! Do not move forward. I promise you this is how others get hurt with your desired new idea. If there is one word I can give a passionate social entrepreneur it is this: give respect and consideration to those around you. You may cast a vision like a prized fly-fisherman on the Colorado River, but everyone else is stuck cleaning your fish.
Right now is a good time to figure out how many minutes you have spent in steps 1-3 as it is ALWAYS more than you think. Know that the amount will need to be multiplied by at least 100 as a rule of thumb during the implementation phase. Consider the minutes spent so far. Could they have been better spent growing your current vine and set of grapes?
4. Go! Implement It! You have the capacity, full agreement, and research. Move with vigor and joy is growing your new grape. Done.
The community of Albion, Michigan is about to get some help from the Albion College Alumni. The Alumni group is providing a way to get involved with capital investment and talent. The mission and goal of the new impact capital group is...
"To partner with the efforts of Albion College and other for-profit, charitable, educational and government organizations to build a new model of economic sustainability for small towns across the nation. By rebuilding the City of Albion, we can show how to rebuild small towns across America."
New Albion Impact Group, LLC will enjoy the leadership of Impact T3 Management Co, LLC and plans to use Albion College students to assist with Assessment and due diligence in partnership with Gingras Global.
Some of the private equity impact capital organizations are groups and some are registered as funds. While both may provide capital, some of the organizations are providing additional support in the form of coaching, mentoring, skill building, networking, projects, and forums. The additional services provided have an impact on two organizations: the investee and the capital organization by allowing additional reasoning for SEC exemptions.
The New Albion Impact group is accepting accredited investors through mid-June of 2016!
Have you BOLDLY defined the difference between your social enterprise customer and your social mission beneficiary?
Too many times we see the lines blur between customer and beneficiary causing extra expenses, staff confusion, mixed marketing messaging, and overall confusion in the planning.
Part of missed perception around this issue comes from a desire of our heart to be near and serve the social mission beneficiary. We accidentally begin to target them with all of our efforts. We can, inadvertently, end up marketing to our beneficiary instead of our target customer.
The solution is to make a list. List out every characteristic about each one. We would suggest you also list out the locations of each and make a profile of a typical customer and social mission beneficiary.
Take the challenge and let us know what happens! We would love to tell your story!
Congratulations to Impact T3 for an incredibly successful capital raise on their first fund company, Impact C3 Group!
Impact T3 now has 48 members and they closed April 30th of 2016 for social impact investing in Pontiac, Detroit, and the broader Woodward corridor!
The Impact T3 team successfully found a way to offer a way to pool philanthropic-hearted capital for true investment.
The low initial dollar amount gave many a chance to get involved and learn about social impact investing.
Thank you for bringing so much credibility to this new space of investing.