References Social Business

In the last 5 years I’ve been holding several workshops, coaching sessions and trainings on the topic of social business and social entrepreneurship. The audience was manifold from activists in most rural parts of Nepal, hardly having any commercial education asking how they can escape the dependency of donors. Some others where young entrepreneurs from more urban area, interested in establishing their second or third business in a more socially impact full way. All of them were searching for more operative tools, which helps them to develop a strategy on how to maximise their social impact or how to develop a social business.

Meeting Prof. Mohammed Yunus in Dhaka in April 2014

Initially I’ve followed the Social Business idea of Professor Mohammed Yunus, following the 7 principles. Under his leadership we can find important case studies in Bangladesh, such as Grameen Danone or Grameen Shakti. However, Tthe seven principles of Yunus are same like a mission statement or a vision something very helpful to not loose track of the direction, yet they lack a certain degree of operationalisation to give guidance to a new start-up or a more specific definition of what is and what is not a social business.

While searching for a tool to measure the social impact of our incubatees in Nepal Social Business I came across the idea of the common good economy.

A team of pioneer businesses, consultants and activist around Christian Felber has developed a matrix to measure the social impact of any organisation, be it a one-man company, a factory or a university. The matrix works along 5 basic values (I.e. solidarity, democracy …) and discusses its impact in relation to various stakeholders which resulted in 18 indicators, which can be fulfilled in 4 different steps. In its comprehensiveness this matrix was ideal to grasp the various aspects of activities and within a few workshop sessions, we were able to adopt the indicators to the environment of a developing country.

Meeting with LCIF president in Toronto working on Social Business

Yet, while introducing our incubatees to the matrix, it became clear soon that they rather became discouraged by the complexity of the subject. It was soon clear, introducing start-ups and potential entrepreneurs to the full matrix was like introducing Shakespear Novels to a beginners class of English. It was clear that many of them would start a new business, with or without social aspect. So rather than discouraging them, by overwhelming them with the complexity of the task, the challenge was about providing them a better step-by-step tool, which allows them to set a social business framework from beginning on.

5 types on Social Business

During my research I came across a very well developed typology of social businesses by Kim Alter. Her elaborations do not only give a better framework to the different levels of financial viabilities social businesses have, a measurement strategy which she refers to as the four lenses but also a typology of social businesses as she has observed them in south America. Based on the insights of these three main authors together with my Nepalese colleagues I have developed training material for start ups as well as an assessment methodology for the selection of the most impactive applicants.


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