There was much laughter in the office last week, when I got slightly too excited about some great new function I had discovered in Excel. Though Excel functions are not uncommonly discussed in the SP office, it did give me pause for perspective...
SP is one of a relatively small cohort of organisations that deploy an overtly business-like approach to social reform. We adopt the tools and behaviours of successful businesses to achieve systemic social change, and tackle disadvantage at scale. As the COO at SP, I spend a good deal of my time creating financial models, reviewing cashflows, running sensitivity tests, compiling Gantts, and refining operating processes. Having come from the world of business, I know that we do not just pay lip service to business methods, but live by them too.
Although there are many social sector organisations that provide transformational support to their beneficiaries, the simple fact is too many are sub-scale - so their impact is dwarfed by the sheer size of the problem. One of the reasons they remain sub-scale is a passion for their cause which can create either a myopia, or worse an outright suspicion of the financial planning and operational controls necessary for sustainability and growth.
In this context, it is important to understand that business methods go far beyond the Excel spreadsheet, and certainly do not require us to throw out our social mission, or our concern for those in disadvantage. Indeed, commercial businesses that survive and flourish are usually marked out by excellent client service, and a deep commitment to understanding the needs and wants of the market in which they operate. The most successful business leaders are typically evangelists for the cult of the consumer – Steve Jobs being just one example. The better you know and serve your client, the more successful your business can be.
With the launch of Big Society Capital, the social sector is seeking greater professionalism in pursuit of improved investibility and increased scale. As we do this, the parallels with commercial businesses suggest the commitment to, and understanding of, those we seek to help should actually grow - rather than diminish as a consequence of business rigour. It is equally myopic - and counter to business thinking - to turn clients into just another data-set, as it is to reject data-sets altogether. The real lesson from the business world is this: only when combined with a rigorous analysis of the financials, an understanding of the market and the implementation of process does a genuine commitment to the consumer show itself in terms of effective service provision, high impact and sustainable results.
This informs our approach at SP, where our starting point is always to understand the needs of our clients – those who benefit from our ventures; and of our customers – those who pay for it:
• Though The FranchisingWorks Licence Fund does have robust investment models, 13 week cashflow forecasts and 5 years projections, we have spent the last 18 months on the ground in Greater Manchester, working with those who are long term unemployed, and helping them to start a franchise. Our processes and models are constantly being refined in light of this first-hand experience, so that the support and guidance we offer is accessible, relevant and practical.
• For Looking Up, our venture lead, David Baker, is working on the front line in the London Borough of Lewisham, using face-to-face conversations with those with multiple and complex needs and also with current service providers to design our business model. Yes, we are crunching the data, identifying KPIs and mapping the operating processes – but we are doing so based on a direct understanding of the beneficiary’s needs, and the problems that service providers face, with a view to offering a better service in the future.
• I was recently talking to one of our Partners, Chris Mould, about his experience scaling foodbank – possibly the fastest scaling social enterprise in the UK at the moment. In the past year foodbanks have fed over 125,000 people, and adopt delivery model akin to commercial franchising with a strict process manual. The operating procedures are repeatedly refined drawing on the everyday experiences and stories of those in need, starting from the first beneficiary who – 12 years ago – went to bed in Salisbury unable to feed her 3 children.
At SP, adopting a business-like approach to social reform does not mean surrendering our social conscience to an Excel spreadsheet. This is a false, and indeed dangerous dichotomy. We must know, understand and care for those we seek to serve – that is the sine qua non whether you are in the social sector or the business world. But we should recognise that only when we combine social mission with operational analysis, financial control and sensible risk management, can we deliver sustainable and scalable impact – which is what really motivates us.
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