Archives for November 2008
Still the biggest barrier I find to helping clients to implement best practice approaches to people management is that ‘we do not have the time’.
‘But Mike I have 4 people in my team – are you really saying that I need to find 2 hours a week to invest in their 121s? Don’t you understand how busy I am?’
It is a bit like a motorist saying ‘I haven’t got time to check the oil and the water and to fill up the petrol tank – because my car keeps breaking down’.
Except that the latter is statement is clearly ridiculous – while the former often passes for management wisdom!
When we choose not to invest time in managing staff what are we really saying?
‘I can create more value by spending my time elsewhere’ – this may be true but managers are paid to create a return on investment by managing people;
‘If I invest time in my people I may not get a good enough return on that investment’– this may be true but then you are not a competent manager;
‘if I spend time on managing people I will be operating outside the cultural norms of my organisation’ – this may be true but then I question the long term future of your organisation. Unless we can harness the intelligence, passion, creativity, drive and energy of all our employees then we are, AT BEST, likely to achieve mediocrity.
Often what managers are really saying is that they actually quite like the adrenaline, energy and status that they get as a mole whacker, a problem solver, a crisis crusader.
So we are in mire and the politicians decide that now is great time for them to incentivise employers to create jobs. The promise of £2500 if we take someone who has been unemployed for at least three months into employment.
No doubt there would be some takers but, I suspect, not as many as they would hope. There are a group of business people who are always looking for ways in which government programmes can be exploited. And usually they generate bad press as benefits intended for the ‘needy’ are used to prop up the profits of the ‘greedy’!
Most of us recognise that our job is to create value for customers – not to create employment. That is not the responsibility of the entrepreneur. It maybe a very welcome by-product – but it is not a responsibility.
We should not be bribing entrepreneurs to create jobs. If the right people are available to create value, and the market is available then the potential for profit will (and should) drive job creation. If an incentive of £2500 is the thing that makes a difference between increasing payroll or not then one really has to question viability of the decision.
Where does a social enterprise get its start up capital from?
I understand that they may get it from a wide range of sources – but in essence where is that value created before it is made available to a social enterprise?
If I am right then it comes from:
- involuntary or voluntary taxation on ‘for profits’ (which may or may not themselves already be providing positive social outcomes)
- gifts or
- other forms of voluntary taxation such as the national lottery, foundations etc
But ultimately the source of nearly all of this cash is the ‘for profit’ sector*. In essence money is taken from, or given by, those who have created profits to invest in ‘social enterprise’, including public services, that have little realistic potential for generating sufficient profit to make the risk of private investment worthwhile.
The extent of the ‘stealth’ in the ‘taxation’ varies widely in different contexts. For example if I buy fairtrade chocolate I know that I am paying a premium to provide a social good. The chocolate bar is clearly labelled and I can easily find out more about how my premium is used to derive social gain.
However if I rent an office in a managed workspace provided by a ‘Community Interest Company’ am I equally clear on the premium that I will be paying to enable them to generate a profit in order to re-invest back into the community?
Is the product clearly labelled in the same way that my fairtrade chocolate bar is?
Are the mechanisms for re-investing my taxation clear and transparent?
I can see lots of salaries that need to be covered from my rental. I can see additional overheads (atria, gyms, cafes, sexy furniture, light fittings etc) that need to be paid for before any profit is created for re-investment. And I can see prices that are significantly higher then the local market rate. I can’t clearly see how my premium will be used to benefit the local community. It feels like a stealth tax!
Even if the labelling is transparent and the mechanisms for re-investment are clear then I still have a problem with this model. While both service provider and service user are engaged in a fair exchange from which both gain, I am not sure about what drives excellence in the service provider in the long term. It feels a little like any other subsidised public service – and these have been notoriously difficult to manage efficiently and effectively. As much energy goes into maintaining the subsidy as into generating value. The ‘taxation’ gets locked in.
So is social enterprise just another stealth tax? Well that would explain the massive extent of political interest. But social enterprise can and must be so much more than this. It can be the genuine organisation of a community around the concept of using enterprise to create social value. It is this vision of a genuinely ‘social’ approach to enterprise that I believe we are at risk of losing.
*I believe that there is a tiny venture capital movement developing to invest in social enterprise – but I am not sure what the return on investment is that these venture capitalists seek. If it is a true VC model then it will be a substantial profit on their risk capital. If they just want to see social good then it is not venture capitalism as I understand it – but just another form of giving.
The vast majority of time and effort that goes into ‘supporting enterprise and entrepreneurship’ is focused on developing the technical skills involved. You know the kind of stuff:
- cash flow forecasting for dummies
- how to develop a marketing strategy
- making money from your hobby using e-bay etc etc
On the other hand very few providers think seriously about how they help people to learn to be more enterprising in the way they think, in the attitudes and beliefs that they hold, an din how they develop the resilience that enterprise demands.
Wepromote the technical aspects of enterprise ahead of the psychological aspects – just about every time.
But it comes down to this:
You train someone who does not think like an entrepreneur the technical aspects of business development and you have achieved next to nothing.
You train someone how to ‘think’ like and entrepreneur and you have one! Bingo!
So let’s start to think hard about the way that enterprising people think, the belies that they hold and the assumptions that they carry – and lets learn how to help more people to develop and share this enterprising psychology.