Five Stages of Social Entrepreneurship

Five Stages of Social Entrepreneurship2016.6.30.Gamechanger InstituteYutaka Tanabe (Japan)[email protected]

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ISTR's 12th International ConferenceStockholm, SwedenErsta Skondal University CollegeF12 Theorizing on Social Enterprise

Index

● Introduction 3● Research Question 4● Literature Review 5● Method 6● Results 18● Conclusion 20● References 21

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Introduction

● Economic Inequality is growing globally. (Piketty, 2014)● Human Security is in peril, i.e. welfare cuts or refugee crisis in Middle East

and Europe.● Social entrepreneurship (SE) pursues to solve systemic problem by social

innovation.● However, the stages of SE are not sufficiently researched. This is why

researchers and practitioners are not sure how to build capacity of social enterprise methodologically.

● Why the gap between successful social enterprises like Teach For America (TFA) or Grameen Bank and many other unsuccessful social enterprises is happening? How we researchers and practitioners can fill the gap?

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Research Question

To define five stages of social entrepreneurship, and to research its effectiveness for social enterprise’s development.

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Literature Review

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Non-profit perspective

Dees, Emerson, and Economy 2002

They argued “Creating value and assessing performance -> Growing and exploring new directions”

Perrini and Vurro 2006

They defined “Opportunity definition -> Organizational launch and functioning -> Financial resource collection and leveraging”

Robinson 2006 They addressed “Opportunity identification -> Opportunity Evaluation & Exploration -> Opportunity pursuit”

Haxeltine, Wittmayer and Avelino 2013

They conceptualised TSI (transformative social innovation) theory which defined the relationship between game changers, social innovation, systemic change and transformative discourses/paradigms with four dimensions (governance, social learning, funding and monitoring).

Entrepreneurial perspective

Eckhardt and Shane 2003 They clarified the role of opportunities in the entrepreneurial process.

Moroz and Hindle 2012

They tried to discover generic and distinct about entrepreneurship as a process, but is has not been adequately addressed within entrepreneurship field.

Previous researchers haven’t addressed SE stages starting with “systemic problem.”

Why Social Entrepreneurs tackle social issues? Because they discover and define Systemic Problem. Then, they aim at Systemic Change through capacity building.

Method

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IndividualizedActivity

SystemicProblem

SocializedActivity

OrganizedActivity

SystemicChange

Unlike previous researches, “Systemic Problem” is the beginning for social entrepreneurs to pursue “Systemic Change” in this framework, which reframes previous researches and practices.

MethodFive Stages of Social Entrepreneurship

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5 Stages

Meaning

1. Systemic Problem

2. Individualized Activity

3.Organized Activity

4.Socialized Activity

5.Systemic Change

Definition

Systemic Problem is a problem derived from overall social system; the root cause of inequality, human insecurity, or crisis of global sustainability.

Individualized Activity is an activity by the founder (or, co-founders) of a social enterprise solely. (e.g.weak brand, small capital, professional immaturity)

Organized Activity is an activity by team of the social enterprise utilizing Theory of Change (ToC).(e.g. vision and mission shared by ToC, quality development, alliancing)

Socialized Activity is an activity by stakeholders in society who strive to solve systemic problem collectively.(e.g. multi-stakeholder engagement, shared estimation, policy proposal)

Systemic Change is a fundamental change at the level of social system, which prevents or alleviates systemic problem per se.

Success factor to move on to next stage

Opportunity to create social enterprise generated

Strong leadership of the founder generated

Strong and professional teamwork to tackle systemic problem

Ecosystem, Collective Impact, Impact Investing, Legislation

Sustainability and social resource circulation getting realized

MethodTheory of Change (ToC)

“Theory of Change is essentially a comprehensive description and illustration of how and why a desired change is expected to happen in a particular context.” (Center for Theory of Change, www.theoryofchange.org )

ToC can be compared as “backbone” of human body. If we lack “backbone,” we will be “octopus.”

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MethodTheory of Change (ToC)

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Ultimate Outcome

Vision / Long-Term Outcome

Preconditions / Outcome




Accountability Ceiling

How do you achieve Ultimate Outcome?

How do you achieve Vision / Long-Term Outcome?

How do you achieve Preconditions / Outcome?

Assump-tion A

Assump-tion B

1 2

3 4

: Intervention

www.theoryofchange.org

Method

Seven cases were chosen to meet following criteria.

● They are widely regarded as successful examples of social entrepreneurship.● They are from multiple regions including US, Bangladesh, Japan, Cambodia, India, etc. ● They have been described in available literature sufficiently to answer our key questions. On-site

interview was available with Teach For America (2011, 2012, 2013, 2014, 2015, 2016), B Lab (2011, 2012), Kamonohashi Project(2013, 2016), UTEC(2015), and Figure Skating in Harlem(2011, 2013).

● They have exhibited at least some potential for systemic change within which they have been implemented.

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MethodTeach For America (TFA)

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5 Stages

Case

1. Systemic Problem




5.Systemic Change

TFA status

Founder Ms. Wendy Kopp defined education gap.

She founded TFA in 1989. She survived budget crisis and constant criticism from outside.

She and TFA team created and shared ToC. TFA’s goal and its impact understood among team.

TFA alumni (former TFA teachers) increased exponentially and work collectively to pursue TFA mission.

Students in marginalized community can access to excellent TFA teachers in schools and explore their future.


Opportunity and mission of TFA defined

Strong leadership of Ms. Kopp was generated

Strong and professional teamwork to tackle education gap

Ecosystem to tackle education gap generated and spread among sectors

For example, Tennessee implemented systemic change in education.

MethodB Lab

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5 Stages

Meaning

1. Systemic Problem




5.Systemic Change

B Lab status

Jay Coen Gilbert, Bart Houlahan, and Andrew Kassoy dis-covered need for B corp.

They found B Lab and developed B impact assessment in 2006.

B Lab utilized ToC. GIIRS, IRIS and benefit corporation legislation were realized.

B corporation movement spread globally. 1,752 B Corporations, 50 Countries, 130 Industries.

Definition of good company is being changed from “best in the world” to “best for the world.”


Opportunity to create B Lab generated

Strong leadership of the founders generated

Strong and professional teamwork to develop B Lab

Ecosystem to harness B corp spread in US, Canada, Europe, Australia, etc.

B corps all over the world aim at sustainable society by declaring and certification.

Method Grameen Bank

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5 Stages

Meaning

1. Systemic Problem




5.Systemic Change

Grameen Bank status

Prof. Muhammad Yunus discovered gender economic gap.

He started research project to rural area and launched Grameen Bank.

Grameen bank is authorized by Bangladesh government and developed microfinance. However, its ToC is implicit.

By 2006, Grameen Bank branches numbered over 2,100. Microfinance methodology diffused globally.

Grameen Bank explored new option for disadvantaged people, aiming at ending poverty.


Opportunity to create microfinance institution generated


Strong and professional teamwork to tackle gender economic gap

Ecosystem for marginalized people generated by Grameen bank.

Multiple microfinance institutions gather money from small investors in developed countries.

Method Kamonohashi Project

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5 Stages

Meaning

1. Systemic Problem




5.Systemic Change

KP status

Ms. Sayaka Murata knew child prostitution issue in Cambodia.

She and Mr. Kenta Aoki, Mr. Keisuke Motoki co-founded KP.

They created ToC to impact supply side and demand side of child prostitution.

They established rural factory to create employment (reduce supply) and trained police (reduce demand) effectively.

Child prostitution issue in Cambodia is almost solved; KP started to move on to India.




Strong and professional teamwork to tackle child prostitution

Ecosystem, Collective Impact, Impact Investing, &/or Legislation

KP’s social enterprise in Cambodia will be independent from KP HQ.

Method UTEC (United Teen Equality Center)

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5 Stages

Meaning

1. Systemic Problem




5.Systemic Change

UTEC status

Youth at risk issue is severe in lowell; teen rescue program was crucial.

Steve Pearlswig found UTEC and started to rescue teenagers involved in gangs.

UTEC created ToC and organized its programs to increase its impact, and get support from society,

UTEC is pursuing to improve recidivism, employment and education by ToC-backed high performing program and community support

Although UTEC programs generate splendid outcomes, the challenge continues.




Strong and professional teamwork to tackle youth at risk problem

Ecosystem of UTEC and supporting community is generated.

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MethodFigure Skating in Harlem

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5 Stages

Meaning

1. Systemic Problem




5.Systemic Change

FSH status

Sharon Cohen was asked to teach figure skating in Harlem and found systemic problem with girls there.

She found FSH, and developed its program through teaching skating.

(Teamwork is confirmed. However, ToC is not defined on FSH’s HP.)

(Collective impact or ecosystem of FSH is not confirmed.)

(We can’t confirm Systemic Change derived from FSH because of lack of ToC.)




- - -

Method Giving Pledge

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5 Stages

Meaning

1. Systemic Problem




5.Systemic Change

GP status

(Systemic Problem is not defined on GP’s HP currently.)

Bill Gates and Warren Buffett created GP, but they ask other donors to join individually.

(ToC is not defined on GP’s HP. Teamwork by GP members as a whole is not confirmed currently.)

(GP’s impact is spreading globally, but direction of donation is not disclosed. Not collective currently.)

(We can’t confirm Systemic Change derived from GP currently.)


-

Strong leadership of the founders generated

- - -

Results

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Teach For America

B Lab

Giving Pledge

: Satisfied the definition: Not satisfied the definition

stagescases

Grameen Bank

Figure Skating in Harlem

UTEC

Kamonohashi Prj.

Systemic Problem

Individualized Activity

Organized Activity

Socialized Activity

Systemic Change

US*HQ in US **

Country

Bangladesh

US

learning/educationEconomic Development

Field of work

Human Rights

Economic Development

***

US Economic Development

Japan, Cambodia, India Human Rights

US Human Rights****

* “Teach For All” is the global network to share its methodology globally.. ** B Lab has partners in Canada, South America, Australia & NZ, Europe, UK. *** ToC of microfinance institute including Grameen Bank is assumed to be implicit. (Datar, S. Epstein, M. & Yuthas, K. 2008) **** Regarding Cambodia, the child prostitution will be ending thanks to KP.

Results

(a) Mission and “Theory of Change” make it possible to grow SE from individualized activity to socialized activity.

(b) Creating Ecosystem including alliance with (local) government, corporations and/or citizens facilitates SE to be a socialized activity.

(c) SE contributes to build Peace Economy by providing Human Security.

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Conclusion

● Comprehensiveness of the framework needs to be more researched.● Practitioners can find progress or management issues of a social

enterprise by the framework easily: the framework will be effective.● Many new areas for future research

○ Quantitative research○ Comparison by region, countries, field of work, etc.

○ What kind of intervention works for social enterprise to move on to the next stage? (e.g. support from intermediary like Ashoka, foundation, pro-bono, company, government, etc.)

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References

Alvord, S. Brown, D. & Letts, C. (2002). Social Entrepreneurship and Social Transformation: An Exploratory Study. The Hauser Center for Nonprofit Organizations. The Kennedy School of Government. Harvard University.Bloom, P. & Dees, G. (2008). Cultivate your Ecosystem. Social Innovation Review. Stanford University.Churchill, N. & Lewis, V. (1983). The Five Stages of Small Business Growth. Harvard Business Review.Datar, S. Epstein, M. & Yuthas, K (2008). In Microfinance, Clients Must Come First. Social Innovation Review. Stanford University. Dees, G. (1998). The meaning of “Social Entrepreneurship”. Stanford University. Dees, G. & Anderson, B. B. (2006). Framing a theory of social entrepreneurship: building on two schools of practice and thought. ARNOVA.Dees, G. Emerson, J. Economy, P.(2002). Strategic tools for social entrepreneurs. Wiley.Eckhardt, J. & Shane, S. (2003). Opportunities and Entrepreneurship. Journal of Management.Perrini, F. and Vurro, C. (2006). Social Entrepreneurship: Innovation and Social Change Across Theory and Practice. Palgrave Macmillan.Goodhand, J. (2014). From war economy to peace economy?. London School of Economics Research Online.Kerlin, J. A. (2006). Social Enterprise in the United States and Europe: Understanding and Learning from the Differences. Voluntas Volume 17, Number 3, 246-262Haxeltine, A. Wittmayer, J. and Avelino, F. (2013). Transformative Social Innovation:A Sustainability Transitions Perspective on Social Innovation. Social Frontiers.

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References

Moroz, P. & Hindle, K. (2011). Entrepreneurship as a Process: Toward Harmonizing Multiple Perspectives. Entrepreneurship Theory and Practice.Moore, G. (1991). Crossing the Chasm, Harper Business EssentialsPiketty, P. (2014). Capital in the Twenty-First Century. Belknap Press.Robinson, J. (2006). Navigating Social and Institutional Barriers to Markets: How Social Entrepreneurs Identify andEvaluate Opportunities. Palgrave Macmillan.Rogers, E. (1962). Diffusion of Innovation, Free Press.Rose, S. Ackerman. (2005). Competition between non-profits and for-profits: entry and growth. Voluntas Volume 1, Number 1, 13-25Sherman, D. (2005). Social Entrepreneurship: Pattern-Changing Entrepreneurs and the Scaling of Social Impact. Case Western Reserve UniversityShort, J. Moss, T. Lumpkin, G. (2009). Research in social entrepreneurship - past contributions and future opportunities. Strategic Entrepreneurship JournalWelter, F. (2011). Contextualizing Entrepreneurship — Conceptual Challenges and Ways Forward. Entrepreneurship Theory and PracticeWestley, F. Zimmerman, B. Patton, M. (2006). Getting to Maybe, Vintage Canada

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Five Stages of Social Entrepreneurship

Small Business & Entrepreneurship

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