Creativity and innovative approaches in social enterprise practices. Business leadership

 Learning Objectives

The main goal of this module is to aid the leaders of social enterprises in finding the right balance between development and possibilities, in determining the important rules for their effectiveness that can work in a complex and changing environment.

Estimated time

It will take about 90 minutes to go through this module. The application of tools and exercises will require additional time.

 

Introduction

Innovations are a starting point in studying a lot of trends in today’s world – in economy, business, technology, social sciences, engineering… We often speak of innovation, but often we mean different things by the word; innovations are most often taken to mean an invention. Is this true?

In literature we can find many definitions of the term “innovation”: „Realizing a new idea that adds value”, Innovation network USA „A crossing point of invention and insight, leading to the creation of social and economic value.”, National innovation institute, USA. „Developing new ideas and their economic application as a new product or process”, Department of trade and industry, UK.

It is obvious that the term “innovation” reflects a multifaceted concept and it would be a serious mistake to simply equate innovation with invention.

 

Therefore, the term “innovation” should be linked with business, economics, markets and rapid growth. Innovation springs where there are new ideas and people willing to consume them, where there are profits and development.

This is why we can offer a simplification that mostly serves as a starting point for innovation and applying a coherent approach in social enterprise: „Innovation is realization of NEW IDEAS, bringing PROFIT and creating a NEW (SOCIALLY ADDED) VALUE by POSITIVE CHANGE in the organization, society or the market.”1.

Today market development and socio-economical dynamics requires the creation of hybrid companies that can fill the market niches and act where the state cannot fulfil its obligations. The chief difference between social enterprises and traditional companies is that they do not redistribute profits, are collectively managed and solve various social problems.

Chief success factors in social enterprise practice involve application of several key componen

1. Cultural compatibility:

  • Business initiatives are not suited for every organization
  • Engagement of the interested parties;
  • Existence of a legal environment and traditions for entrepreneurial organizations

2. Engagement:

  • The money should not be the chief motivator for a social enterprise;
  • The organization that would develop social enterprise should have clearly defined priorities;
  • There should be awareness from the start that creating a social enterprise will require a lot of time and effort from the developing team

3. Capacity:

  • Presence of human resources (the members of the developing team should have undergone specialized training for leadership/business skills);
  • Presence of financial means (assets/resources) or access to programs with such an aim.2

Thus, a social enterprise is a “socially motivated business”, where social and business goals are equally important; this combination is widely known as “dual identity.” Social enterprise means a different way to do business. Added value in social enterprise comes from the generated income being used to maximize social, societal or economic benefits.

If you have decided to start on the road to social enterprise, mind the careful combination and balance between the social and economic aims. Whether your social enterprise succeeds depends most on the way you organize your economic activity and how it combines with your social goals.

Social enterprise is an additional option for non-profit organizations to realize profits from economic activity in looking for new and resilient resources to fulfil socially beneficial activities.

People and their needs come first in planning a social enterprise; therefore the economic activity is only a means to achieving a social end. The mission is what brings the social enterprise together: what do you aim for and what do you want to achieve?

1 “The Innovative Approach in Bulgaria and the EU Funds”, nginno.com
2 Counterpart International – Bulgaria, Training for Social Enterprise Educators, Introduction to Social Enterprise, Why Star SE; Models and Structures (2006)