Social enterprise is good business

Kiran Mathur Mohammed

kmmpub@gmail.com

Our social problems are evident on every street corner and in every shack, shed, school or shelter. Solving them often seems a painful slog.

We have thousands of charities with passionate founders helping everyone from wheelchair users to sick children. They have a sense of purpose. But they are chronically short of cash and resources to organise efficiently.

We have a government with huge resources at its disposal. But in such a large organisation its social mission can get lost. It is easy for civil servants to get lost in the cogs, particularly if they feel unable to personally find autonomy or growth.

We have private businesses. They have ample profit incentives, and resources. They are efficient and driven. Yet they are often too lasered-in on short-term profits and competition, at the expense of growth and innovation.

Many workers in the private sector still feel less than motivated and lacking in purpose. That broader social purpose drives growth. Without that concrete social goal, markets go untapped and social problems remain unsolved.

The great structures of government, charity and business have delivered tremendous gains over the years. But many of their characteristics can constrain growth. How do we leap this hurdle?

Enter social-impact enterprise. “Oh boy,” you might be thinking. Here we go again, another wishy-washy management term.

Quite the contrary. Social enterprises are for-profit organisations with a social mission. They usually have a “double bottom line,” measuring both profits and social impact. As the World Economic Forum puts it, social enterprises move past the “false dichotomy between “it’s a business” and “it’s a charity” to experiment with business models.”

They take business incentives and efficiency and add a broader social mission and approach to problem-solving. In doing so, they can elegantly overcome some problems in traditional organisations.

First, they can be sustainable. They are profit-driven and don’t depend on sporadic charity. Second, they are more flexible and efficient than a large bureaucracy. They allow their teams autonomy.

Third, and critically, they have a clear social mission. This allows them to motivate their team and boost productivity more than a traditional business. It also allows them to have a longer-term strategic vision that focuses on growth more than competition. Social enterprises often find opportunity in untapped or underserved markets thought too poor or too unsophisticated to be worth the attention of traditional businesses.

Silicon Valley has long espoused the values of social enterprise. Though that rhetoric can sound hyperbolic (and slightly dubious, given the weighty fines some tech giants have racked up recently), their approach is useful. The traditional tech start-up focuses on solving problems first. They figure out how to make money from the solution later on. A social mission can drive innovation.

There are plenty of good examples. TOMS Shoes donates one pair for every one sold. As of 2018 it has donated more than 70 million shoes to developing countries.

Then there is Nobel Prize winner Muhammad Yunus, who boasts a 97 per cent recovery rate from the 8.93 million borrowers from his Grameen Bank, a pioneer in micro-lending to women.

Nigeria’s Babban Gona has developed a profitable model that delivers low-cost agricultural inputs, financial services and training to a franchise network of smallholder maize and rice farmers. Its methods increase the farmers' crop yields to 2.3 times the national average. By boosting farmers’ incomes, Babban Gona created its own market for its products and services.

Local pioneers are also leading the way. TT’s WHYFARM recently won Mexican cement giant Cemex’s award for entrepreneurship for work building young people’s capacity for farming.

Erle Rahaman-Noronha’s sustainable permaculture farm in Couva has been the subject of a documentary, A Quiet Revolution, by directors Edward Inglefield and Rhonda Chan-Soo, and has attracted scores of international visitors.

Health is probably our greatest local precedent. I spoke with Dr Renata Pooran, who often sits for hours with underprivileged patients at her private Renand clinic. The clinic’s work with companies and embassies helps to make giving back sustainable.

Christian Aboud’s Wellfor Medical runs a patient advocacy programme, Health Direct, which uses data to empower patients and guide them through an often-daunting healthcare experience.

At a greater scale, Prof Ronnie Bhola uses a public-private model. The non-profit Trinidad Eye Hospital partners with the private Caribbean Vitreous and Retina Surgery to serve thousands of patients. In the last two weeks alone, it teamed up with visiting doctors from Utah’s Moran Eye Centre to do scores of free surgeries.

Social enterprise is no silver bullet. But we have quite enough bullets. I’ll settle for a quiet revolution instead.

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh