Social Entrepreneurship
Introduction
Social
entrepreneurship encompasses the activities and processes undertaken to
discover, define and exploit opportunities in order to enhance social wealth by
creating new ventures or managing existing organizations in an innovative
manner.
Characteristics:
1.
Change
agents in the social sector: Social
entrepreneurs are reformers and revolutionaries, as described by Schumpeter,
but with a social mission. They make fundamental changes in the way things are
done in the social sector. Their visions are bold. They attack the underlying
causes of problems, rather than simply treating symptoms. They often reduce
needs rather than just meeting them. They seek to create systemic changes and
sustainable improvements. Though they may act locally, their actions have the
potential to stimulate global improvements in their chosen arenas, whether that
is education, health care, economic development, the environment, the arts, or
any other social field.
2.
Adopting
a mission to create and sustain social value: This is the core of what distinguishes
social entrepreneurs from business entrepreneurs even from socially responsible
businesses. For a social entrepreneur, the social mission is fundamental. This
is a mission of social improvement that cannot be reduced to creating private
benefits (financial returns or consumption benefits) for individuals. Making a
profit, creating wealth, or serving the desires of customers may be part of the
model, but these are means to a social end, not the end in itself. Profit is
not the gauge of value creation; nor is customer satisfaction; social impact is
the gauge. Social entrepreneurs look for a long-term social return on
investment. Social entrepreneurs want more than a quick hit; they want to
create lasting improvements. They think about sustaining the impact.
3.
Recognizing
and relentlessly pursuing new opportunities: Where others see problems, social
entrepreneurs see opportunity. They are not simply driven by the perception of
a social need or by their compassion, rather they have a vision of how to
achieve improvement and they are determined to make their vision work. They are
persistent. The models they develop and the approaches they take can, and often
does, change, as the entrepreneurs learn about what works and what does not
work. The key element is persistence combined with a willingness to make
adjustments as one goes. Rather than giving up when an obstacle is encountered,
entrepreneurs ask, “How can we surmount this obstacle? How can we make this
work?”
4.
Engaging
in a process of continuous innovation, adaptation, and learning: Entrepreneurs are innovative. They break
new ground; develop new models, and pioneer new approaches. However, as
Schumpeter notes, innovation can take many forms. It does not require inventing
something wholly new; it can simply involve applying an existing idea in a new
way or to a new situation. Entrepreneurs need not be inventors. They simply
need to be creative in applying what others have invented. Their innovations
may appear in how they structure their core programs or in how they assemble
the resources and fund their work. On the funding side, social entrepreneurs
look for innovative ways to assure that their ventures will have access to
resources as long as they are creating social value. This willingness to
innovate is part of the modus operandi of entrepreneurs. It is not just a
one-time burst of creativity. It is a continuous process of exploring,
learning, and improving. Of course, with innovation comes uncertainty and risk
of failure. Entrepreneurs tend to have a high tolerance for ambiguity and learn
how to manage risks for themselves and others. They treat failure of a project
as a learning experience, not a personal tragedy.
5.
Acting
boldly without being limited by resources currently in hand: Social entrepreneurs do not let their own
limited resources keep them from pursuing their visions. They are skilled at
doing more with less and at attracting resources from others. They use scarce
resources efficiently, and they leverage their limited resources by drawing in
partners and collaborating with others. They explore all resource options, from
pure philanthropy to the commercial methods of the business sector. They are
not bound by sector norms or traditions. They develop resource strategies that
are likely to support and reinforce their social missions. They take calculated
risks and manage the downside, so as to reduce the harm that will result from
failure. They understand the risk tolerances of their stakeholders and use this
to spread the risk to those who are better prepared to accept it.
6.
Exhibiting
a heightened sense of accountability to the constituencies served and for the
outcomes created: They
understand the expectations and values of their “investors,” including anyone
who invests money, time, and/or expertise to help them. They seek to provide
real social improvements to their beneficiaries and their communities, as well
as attractive (social and/or financial) return to their investors. Creating a
fit between investor values and community needs is an important part of the
challenge. When feasible, social entrepreneurs create market-like feedback
mechanisms to reinforce this accountability. They assess their progress in
terms of social, financial, and managerial outcomes, not simply in terms of
their size, outputs, or processes. They use this information to make course
corrections as needed.
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