Social enterprises: it’s about what we do rather than the structures we choose to build – an historical view

There is much talk of the types of organisation that enable social enterprises to take off and succeed.  Options discussed often focus on the ‘John Lewis Partnership’ model, provident societies, charities, trusts, cooperatives, community interest companies and the like.

I’d have thought that a company limited by guarantee that issues shares publically or privately should also serve as a role model.  Take companies in the FTSE 100; they are accountable to shareholders for their decisions and more often ‘owned’ by us in pension plans or other savings.  Many of the shareholders are also employees who see what’s going on.  There are also public meetings and documents that provide some transparency as to what’s going on.  So what has gone ‘wrong’ and what makes us turn to other organisational solutions.  Having asked this important question there are a number of different ways that I could go with this (so there is more here for future blogs including one on the draining effect of the pursuit of ‘shareholder value’ since the 1970s).  For the moment I will focus on culture and the choices people make in organisations.

A few years ago I bought an old book which attracted my attention on two counts: my interest in organisations and fondness for beer.  It was the 50 year anniversary book The Story of Watneys, published in 1949.  Now, those of you who know anything about beer will know that a drop of ‘Watneys Red Barrel’ was not a joy!  This was not always the case; this was a company with a proud tradition that managed to lose its way in the 60s, 70s and 80s and after a number of mergers now exists somewhere in Diageo’s archive of companies.

Going back to the book and the company of 1949 there are a few points worth making.  I know that I am drawing my information from the company itself and hence it will inevitably be a little ‘rose tinted’.  That said this company was not unique with many similar stories existing elsewhere.   I have attached the Chairman’s preface to the book.  He could have chosen to talk about shareholder value, the number of acquisitions they had made over the 50 years or efficiency savings, but he didn’t.  Instead he chose to acknowledge the company’s place in the wider economy and society and in doing so recognised their wider responsibility.  He also understood its place in history and the traditions of the industry and society.  Later in the book they describe at great length the staff’s welfare facilities and their involvement in the community.

I am not suggesting that we should go back to such a paternalistic type of organisation (even if that were possible) or suggesting that this was an organisation without its problems.  My point is broader than this.  This was an organisation that existed as a ‘regular’ company that chose to act and behave in the way that it did.  Perhaps the word ‘chose’ is wrong; it was a part of their culture that largely went un-noticed as the worked through their day-to-day challenges.  As such there was little in way of choice to be had.  What worries me about the wider current debate on social enterprise is that we miss a vital point.  To me the focus of the discussion should be on what we value; what we actually do; how we see ourselves in the wider community; our commitment to our people; and, the inheritance we offer to future generations.  And only then to think about how our current systems and ways of working enable or hinder these aspirations.

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2 thoughts on “Social enterprises: it’s about what we do rather than the structures we choose to build – an historical view

  1. Thanks Patrick. I thought that the Chairman’s preface was an interesting example of vision (not that they used the word then) in the sense of stressing examples of what they actually did and how this relates to what they hold dear for the future. This seems to contrast with the current use values and vision when they often have little by way of context and specifics that people can relate to in their day-to-day job. I hope that the current wave of social enterprises will hold onto that sense of vision as to what they are about in a way that connects to practical day-to-day realities.

  2. I agree Rob that it is about what we do (outputs, outcomes) rather than structures (process). Watney’s Chairman’s preface is interesting because it highlights why the Company exists. The Company flourished when it focussed on why it existed (outputs, outcomes) and could have done better when shareholder value (process) took centre stage. Social Enterprises seem to have many plus points and Community Interest Companies do too.

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