So what’s the next step in making for-purpose business simply ‘business as usual’? We have to go to the heart of strategy and understand business model design.

In this four part blog series, we unpack the what and how of for-purpose and social enterprise business models in our new internationally recognised For-Purpose Business Model Workbook.

In parts one to three of the series we explored your impact model, your customers and your products and services. In the final part in the series, we unpack why collaboration matters, and how to balance your model.  Get your copy of the workbook.

The eight steps in for-purpose business model design

Every for-purpose business leader should be able to answer the eight core questions relating to the eight steps in for-purpose business model design:

1. What social impact will you create for which beneficiaries (what’s your theory of change, what’s your corporate strategy, and how do they link)?
2. Who are your customers and what do they want?
3. What products and services will you offer?
4. Who are your collaborators and what are the market dynamics?
5. What is your for-purpose business type/s?
6. How will you finance the model and design your pricing?
7. How will you organise your resources and design your operating model?
8. Is your portfolio streamlined and balanced?

Let’s explore steps four to eight.

Step four: understanding the market and deciding on your approach to collaboration

A fundamental difference between a for-purpose business model and a corporate business model is your approach to collaboration.

For a traditional business, the goal is to acquire and defend. For a for-purpose business, the goal is to contribute to the ecosystem so that all for-purpose businesses working to the same goal are enhancing each other’s impact. The higher the tide, the more all boats rise.

The first step is to identify all the players in the ecosystem and markets where you operate. This should include your competitors, partners or collaborators and any others that play in your space.

The second step is to map all those organisations into the power matrix. Using an excel table, give each organisation a score from 1-10 for their level of ‘interest’ and their level of ‘influence’.

• Interest = concern or care for your mission
• Influence = ability to support or resist you in delivering your mission

Once the scoring is complete, you can plot all the market players into the competitor and collaborator map below.

While this analysis will give an overview of the key competitors and external stakeholders in the marketplace there is still some more analysis that will be useful in getting your business model completed. You can find advice on tools that will help with this process on pages 28-30 of the workbook.

Step five: the 16 for-purpose business model types

Through our research and practice we have identified 16 for-purpose business ‘types’ (you can find all of them on pages 33-34 of the workbook).

The idea at this stage of the process is to use those types to generate ideas about how you might structure your for-purpose business, using the inputs from steps 1-4.

Exploring for-purpose model types is more than an academic exercise. The value of the different ‘types’ at this stage is:

• Recognition that there are a diversity of ways to achieve social impact through a for-purpose business and that there are ‘different ways to make and bake the cake’.
• Recognition that your for-purpose business may combine different ‘types’ to achieve your social impact(although fewer types is always simpler).
• Ideas and precedents that can provide a valuable ‘proof of concept’ to inform the development of your own for-purpose business.

This is the point where you should test your assumptions from steps 1-4 (strategic architecture, customers and products/services) and tweak your thinking if needed.

Step six: financing the model and designing your pricing strategy 

Step six in the process is all about answering the vital question: how will you finance the model, including designing your pricing. There are four things to consider at this point:

• Revenue model: how will you generate financial income?
• Financial projections: what revenue do you need to cover all your costs over what period of time to ensure you always have cash (cash flow is the most important element of financial projections – run out of cash and your business stops!)?
• Sources of finance: how can I avoid debt-finance, and what other funding options are available for a for-purpose business?
• Costs and price points: what will it cost you to generate revenue and subsequently what price will be sufficient to cover costs while at the same time be acceptable to your customer/markets?

Depending on whether you’re already an established for-purpose business (in which case completing this step will not be new to you) or at start-up stage (in which case you may want to see if you can get some pro bono support at this point) financial modelling tools are pretty much the same whether you are in the private, public, charity or for-purpose business sector.

For advice on pricing strategy and resources for financial modelling, check out page 36 of the workbook.

Step seven: creating your operating model

Once you have sorted the finances out, the next step is to sort out the major operational issues and answer another question: how will you organise your resources?

If you’re a start-up, this will require you to be clear about what type of legal structure you want to be and whether or not you think there may be value in registering your organisation as a charity.

This is also the point to consider your staffing model, organisational structure, legal and other legislative compliance issues, partnership and stakeholder management and a range of environmental and trade issues including:

• Health & safety
• Environmental impact
• Qualifications & skills
• Relevant legislation
• Security
• Insurance
• Terms and conditions of supply
• Waste disposal
• Contract management

At this stage you may have that line from a Coldplay song replaying over and over in your head – ‘nobody said it was easy, nobody said it would be so hard’. But the good news is, if you’ve got this far you’re nearly there!

Step eight: balancing your portfolio

Finally, you can now look at your for-purpose business model portfolio as a total package. To check that you have a financially and socially balanced portfolio we suggest you use the for-purpose impact and profitability map.

This map allows you to identify where your products/services sit on a graph that measures profitability and social impact. It’s an enhanced version of what was once called the mission/money matrix. it can be used repeatedly to check that your portfolio of activities are maximising both impact and profit.

You can see how the mapping process works on page 41 of the workbook.

Putting your for-purpose business model on the page

Now that all eight questions have been answered and the workbook tools applied, you can bring it all together with your ‘business model on a page’. It looks like this:

What to do next

The tools provided here offer a guide to developing a viable for-purpose business model, to help executive teams wanting to build a purpose-driven business.

The original motivation for creating this workbook arose from the bigger question of how to create a more sustainable and fairer economy – one where profit is an enabler of social impact, rather than profit being an end in itself. For-purpose and social enterprise business models are one way to step towards that reality.

Building a fairer and more just world will take all of us. Changing our economic system is a result of work that is greater than the sum of its parts. No one business, industry, or sector can do it on their own. It’s a mosaic, and all the pieces of the mosaic are crucial (with no gaps, and no overlapping pieces).

So, the question to answer is what piece of the mosaic of a fairer world will you build?

Designing a for-purpose business model is never finished. It requires constant monitoring, review and tweaking as the environment and markets change. For-purpose business models are inherently tricky to design well, particularly striking the right balance between social impact and profitability.

But therein lies the immensely rewarding opportunity: to create business models that not only balance the books, but effectively build a fairer and more just world.

For all of us.

Get your copy of the for-purpose business model workbook.

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So what’s the next step in making for-purpose business simply “business as usual”? We have to go to the heart of strategy and understand business model design.

In this four part blog series, we unpack the what and how of for-purpose and social enterprise business models, taking the lessons from our new internationally recognised for-purpose business model workbook.

In part one of the series we explored the need to build and strengthen for-purpose businesses. In part two we cover how to design your strategic architecture with your impact model and strategy all on one page. Get your copy of the workbook.

The eight steps in for-purpose business model design

Every for-purpose business leader should be able to answer the eight core questions relating to the eight steps in for-purpose business model design:

1. What social impact will you create for which beneficiaries (what’s your theory of change, what’s your corporate strategy, and how do they link)?
2. Who are your customers and what do they want?
3. What products and services will you offer?
4. Who are your collaborators and what are the market dynamics?
5. What is your for-purpose business type/s?
6. How will you finance the model and design your pricing?
7. How will you organise your resources and design your operating model?
8. Is your portfolio streamlined and balanced?

 Let’s start by exploring step one – your impact model.

A changed theory of change

The tool we have developed in this step combines a traditional theory of change with traditional corporate strategy – leading to one “strategic architecture” for the business.

First up, what’s a theory of change?

The theory of change tool originated in the discipline of theoretical and applied development in the evaluation field in the 1950s. It was the 1955 US-based Aspen Institute’s Roundtable on Community Change that led to the publication of New Approaches to Evaluating Comprehensive Community Initiatives. In that book, Caroline Weiss popularised the term “theory of change” as a way to describe the set of assumptions that explain both the mini-steps that lead to a long-term goal and the connections between program activities and outcomes that occur at each step of the way.

Fast forward 65 years or so, and the use of a theory of change is common, especially in the international development context, the broader for-purpose sector and more recently the impact investing sector.

A theory of change is essential for the for-purpose sector because it forces you to articulate your hypothesis of how your activity will lead to the social impact that you want to achieve. This is the key area where a for-purpose business model differs from a corporate business model.

A corporate business model has three elements:

• The product/service offered to customers (value proposition).
• The way the company is organised to deliver this product and service to its customers (operational model).
• The revenue model to generate a profit (value capture mechanism).

For-purpose business models have a fundamentally different starting point to their corporate business model cousins. Rather than a focus on the customer to generate profit and maximise value for the business owners, they have a clear intentionality around a social purpose for a beneficiary (people and planet).

The intent (or purpose) of a for-purpose business model must be social/environmental impact, and have identified beneficiaries. “Beneficiary” is a broad term referring to who or what you want to impact. That could include the environment, and it could be businesses (B2B) as well as individuals (B2C).

A theory of change is the anchor for a for-purpose business model. The importance of a clear theory of change can’t be underestimated. It should become the key strategic framework for the organisation, and guide all decision-making across the business. It must be organisation-wide, rather than having separate theories of change for separate products or services.

When it’s well operationalised, your theory of change keeps your business focused on your vision and provides a safeguard against mission drift.

Why our theory of change tool is different

1. Directly integrating vision and mission

Often a theory of change is developed alongside the mission and vision and is articulated in a different way. A whole range of new words are used, which may or may not be a similar way to express what’s already in your vision and mission. This is a mistake. The mission and vision should be fundamental to the model. If the impact you’re aiming for isn’t what’s written in your vision statement, and your mission isn’t designed to directly influence the impact areas that need to change to realise your vision, something doesn’t add up. At best, you’ll be creating tangents to your vision and mission that confuse your team and make it hard to prioritise. At worst, you’ll be directing your resources away from your ultimate vision.

2. Directly integrating (and informing) organisational strategy

Too often we’ve seen a theory of change designed in isolation of business strategy. Theory of change “purists” will say that it’s important that the theory of change is stand-alone. In this situation, the strategic plan and theory of change become separate documents that don’t always speak to each other. This again causes confusion amongst staff and difficulty prioritising (what’s driving decisions, the theory of change, or the strategy?).

3. Building the theory of change from the top down

We’ve often seen attempts to develop a theory of change from the bottom up (particularly in existing for-purpose businesses that already have a range of activities in place). Similarly, we’ve seen attempts to develop a theory of change where it’s created from the top down, but existing activities are simply retrofitted into the model. This leads to missed opportunities to focus on the activities with the highest impact.

What we need is a ‘strategic architecture’ (combining theory of change and traditional corporate strategy frameworks)

To solve the problems of integrating theory of change and strategy, we’ve created a template that combines them – a strategic architecture.

It involves six steps:

• Step one – vision: What problem are you solving and what will the world look like when you’re done?
• Step two – impact areas: What changes will have occurred in the world as a result of your unique work?
• Step three – mission: How will you generate the change identified in your impact areas? What unique role do you play?
• Step four – outcomes: What needs to happen through delivery of your mission, and what changes will beneficiaries experience through your work?
• Step five – outputs (strategic goals): What are your organisational strategic goals (that will generate the outcomes you identified)?
• Step six – activities: What are the most important activities you will deliver under each strategic goal?

Note the activities here may change as your work through development of your business model, and may also change over time.

Once the strategic architecture is completed it provides an overview of the “purpose” in your for-purpose business model, and how to get there.

Tip: You’ll need to revisit your strategic architecture as you work through your business model to check back on your activities and outputs.

If you’re ready to get started, get your copy of the for-purpose business model workbook.

The post For-purpose business models part two: creating your strategic architecture appeared first on The Dragonfly Collective.

So, after seven years in the Europe (based in London, when the UK was still part of Europe) and a year back in Australia, what have we learnt that can point to opportunities for the for-purpose sector in Australia (and the rest of the world)? (Note by ‘for-purpose’ we mean to collect the numerous labels used to define social enterprise, not-for-profits, cooperatives and purpose-driven organisations across the charity and business sector – phew).

With our passion to grow the for-purpose sector framing our view of the world, we see four opportunities:

1. End (or expose) hubris and ego
2. Replace noise with substance
3. Be realistic about impact investment as a source of new money
4. Balance the for-purpose challenge: mission and money

Opportunity #1 – end (or expose) hubris and ego

Donald Trump (remember him?) gave the world a fabulous lesson in hubris and ego. The outcome is he is no longer the President of the United States.

Boris Johnson is another clown of hubris and ego. Under his leadership the English have self-sabotaged their future through Brexit, for a world vastly less diverse and creative than they will enjoy on their own.

It should be no surprise if hubris and ego can be so potently on display by political ‘leaders’ that we find it in the for-purpose sector.

Jim Collins in his widely read analysis of the corporate world, How the Mighty Fall, identifies the first stage of decline as hubris born of success (although it appears we can also have hubris even without any authentic success). He writes “stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success replaces penetrating understanding and insight, decline will very likely follow. Those who overestimate their own merit and capabilities — have succumbed to hubris”.

Both in the UK and back here in Australia there is plenty of opportunity for individuals and the sector to end hubris and ego as drivers in establishing either their own career or that of the sector.

As UK social entrepreneur David Floyd writes in his fabulous blog, Beanbags and Bullshit: “there are some problems with the current state of social enterprise. One is that in the necessary battle to get social enterprise noticed at all, advocates of social enterprise have too easily slipped into suggesting that it offers the solution to all the problems in the world ever. Whether or not this is potentially true, it’s definitely not true yet. Not least because the sector is currently very small.”

And he is writing that about the UK where, compared to Australia, the for-purpose sector is enormous.

A possible wakeup call to us all might best be summed up in a statement by an Australian government official responding to a market survey on the sector in 2020: “many so called social entrepreneurs appear to be more interested in social media than social impact”. Even more painful to read is the observation by Tim Smit, the well-known social entrepreneur and co-founder of UK eco-attraction the Eden Project: “I have met more incompetents in the world of social enterprise than I have met anywhere else”.

Learning #1: individually and collectively, we need to pause and ask what’s driving our actions. Is it making a name for ourselves or our sector, or is it an ambition to build a fairer world? A little humility goes a long way.

Opportunity #2 – replace noise with substance

In 2015 Social Enterprise UK (SEUK) announced its global positioning in its annual report: “leading the world in social enterprise”. This bold assertion certainly generated a lot of noise.

When we were in Tanzania in 2013 we visited a fabulous social enterprise that combined recycling and catering to offer decent work for local people in Arusha. By bringing together able-bodied people with less able-bodied people, they created jobs, amazing glass work, great food and a profit. They had never heard of SEUK.

Today SEUK proclaim on their website: “we are the leading global authority on social enterprise”. Not at all unlike the English in general, many of whom continue to consider they lead the world through the British empire.

But this noise lacks substance.

In 2015, we were working with a very small charity in the north of London that wanted to be accredited as a social enterprise. This was on the basis that people with learning disabilities made candles that were sold at Christmas. We paid $75 on their behalf and applied for SEUK accreditation. We were intrigued to see if the organisation ‘leading the world in social enterprise’ would conduct any due diligence to accredit this small charity. Within less than a week we received a sticker – ‘accredited social enterprise’ – and found ourselves part of that leading social enterprise global authority. However clearly the organisation that had been accredited was not a social enterprise. But it did want to join the noise.

It is unfortunate in life, that along with hubris, comes a lot of noise.

The great opportunity for social enterprise is to recognise that substance can overcome noise. Australia’s social enterprise certification framework developed by Social Traders is a good example. And there are many fabulous examples of social enterprises with real substance all around the world. Caritas Europa for example. They don’t make a lot of noise. But their work on the social economy, their European wide impact and the focus they have on the integrity of their work more than makes up for the lack of noise.

Learning #2: we have the opportunity to ensure our work has substance. Any ‘noise’ we are hoping to generate will follow. It is rare however, for substance to follow noise.

Opportunity #3 – be realistic about impact investment as a source of new money

A lot of effort is currently going into the emerging social investment sector. And it’s no surprise that the UK’s Big Society Capital – established during the reign of David Cameron as PM in 2011 – is regularly referenced in Australia as an outstanding example to follow.

Since 2011, impact investing has grown by leaps and bounds in the UK to the point where at a ‘debate’ we attended on the ups and downs of the impact investment market, one gentleman from a social impact fund made an impassioned attack on what he called ‘free money’. It apparently was a blight on society perpetrated by out-of-date and left-wing ideology. Free money, or philanthropy as some might call it, was the enemy of debt finance for the social sector. ‘Debt finance’ was rebranded as ‘impact investment’.

Whatever you may think of that debate, the reality is that impact investment opportunities will be largely irrelevant to the majority of social enterprises and for-purpose organisations in this country.

According to the November 2020 survey of the for-purpose sector from the Centre for Social Impact, 47% of social enterprises have between 1-4 employees, 29% have between 5-19 employees, 19% have 20-199 employees. Only 5% have over 200 employees. Out of these four categories, who do you reckon impact investing will target? Who do you think will most likely be ‘investment ready’?

Unless you can handle an investment loan between $500k and $1 million and be able to repay it at a rate very similar to that of your local bank, then impact investing will be very, very elusive.

There are real lessons to be learnt from the UK that suggest impact investment may not be the golden nugget that solves social challenges in the way it often promotes itself.

In a paper from the World Economic Forum focused on the 6 things holding back the social enterprise sector across the world, we find this: “in the social sector, investors come to a social entrepreneur and say: ‘we love what you have built, but here are our priorities that must be included in your business execution’. Social entrepreneurs are then tasked with bending their models to serve the needs of the funding community over the needs of those it is their mission to serve. This misalignment is distracting to the scaling efforts of social enterprise and does not allow the entrepreneur to direct growth in the most efficient and effective manner to meet social needs . . . In addition, there are persistent doubts about whether an enterprise that must deliver significant returns can be free to pursue and prioritise social change.”

Learning #3: let’s be realistic about impact investing. Let’s work tirelessly to ensure that investment, ‘free money’, and the good old ‘a hand up not hand out’ approach ensures that small and emerging for-purpose organisations, especially those start-ups being run by minority social entrepreneurs, get a fair go when it comes to accessing sources of ‘new money’. 

#4 – balance the for-purpose challenge: mission and money

Ever get a sense that there is a fearful focus on money across the for-purpose sector? Ever get a sense that the more the for-purpose sector grows, the more it appears to attract people from other sectors – like the big consultancies, corporates and banks, especially at the Board level – who are focused on finance with little or no exposure to for-purpose mission?

We all know that a Finance & Audit Committee has the responsibility of assisting the Board to fulfil their corporate governance and oversight responsibilities in relation to financial reporting, internal control structures, risk management and external audit functions. Finance and Audit Committees are a crucial function in organisations large and small across all sectors to assist in guaranteeing financial health.

But in the for-purpose sector, there’s a whole other (arguably more fundamental) driver of organisational success: social impact. So, what about a committee in for-purpose organisations with at least equal standing to a Finance & Audit Committee called a Mission Audit Committee?

The global corporation Danone provides a good example of how crucial this can be.

Danone become the first listed company to adopt the ‘Entreprise à Mission’ model created by French law in 2019. This embedded the legal ‘entreprise à mission’ (in English – ‘company in mission’) framework within its articles of association. It included a new governance arrangement to oversee the progress of its environmental, social and societal goals. The significance of the ‘mission audit committee’ at Danone is that it constitutionally enshrined its mission. This safeguarded the company from recent shareholder activism (focused on the money and advocating for a change in the company’s approach to ‘doing business for good’) that attacked and removed the CEO, Emmanuel Faber. But this activism has not been able to derail the company’s environmental and social mission because it was enshrined as a legal constitutional requirement.

What can we learn from this European experience?

As more and more of the for-purpose sector is influenced by sectors outside its experience and focus, it can and should robustly scrutinise and hold to account its mission performance as well as its financial performance. This is more than just an endless set of statistics rolled out to prove numerical ‘impact’, like another spreadsheet.

A Mission Audit Committee with a strong representation of ‘practitioners’ (those with real life experience of delivering services that address the real challenges of inequality and environmental decline), will ensure mission and social impact is measured and achieved. A complementary Finance and Audit Committee will ensure that the organisation remains financially viable. Both are fundamental, but for some reason, parts of the for-purpose sector have adopted the for-profit mantra of: money first, mission when we can afford it.

Learning #4: a Mission Audit Committee that includes social impact practitioners, can provide a great balance to a Finance & Audit Committee and avoid mission drift.

Four opportunities no more?

There are many other opportunities that we can explore including what good governance is in the for-purpose sector, how we can combine individual outcomes with systemic change to achieve collective impact, and how networks can be used to integrate not disintegrate. And many more.

The moment we figure we have no more to learn is the moment we need to go back to the first opportunity – end hubris and ego and try some humility and lifelong learning.

The post Seven years in Europe, four opportunities for the for-purpose sector appeared first on The Dragonfly Collective.

The charity in London and its local duplicates were all competing for participants in their programmes and all competing for the same ever-dwindling pot of money. My suggestion that this charity should collaborate with other charities doing the same thing was met with disbelief and hostility. And yet collaboration is exactly what’s needed.

You only have to look as far as the UK charity register for the proof. The UK has 166,854 registered charities. 82% of these are categorised as either micro or small – 47% with an annual income of less than £10,000. All of them, large or small, compete for the same charity pound.

Meanwhile, poverty in the UK is trending downwards. More than 14 million people, including 4.5 million children, live below the poverty line in the UK. The war on poverty continues, while charities compete with each other to end it.

Despite lots of activity by lots of charities, poverty remains stable. It has not gone away and does not even appear to be in retreat.

Meanwhile, others in other parts of the world are Winning the war on poverty, not through a disintegrated, fragmented competitive strategy, but with a multisector comprehensive approach called ‘collective impact’.

In September, we published two articles in Pro Bono Australia under the broad heading of What can Collective Impact Offerbased on our research in the UK. Collective impact is a framework for ‘collective practice’ that moves beyond traditional collaboration. And it works.

As David Brooks writes in the New York Times, according to recently released data, between 2015 and 2017, Canada reduced its official poverty rate by at least 20%. Roughly 825,000 Canadians were lifted out of poverty in those years, giving the country its lowest poverty rate in history.

How did Canada do it?

Brooks notes that while the Canadian economy has been decent over recent years, it has not been robust enough to explain these outcomes. Instead, one major factor is that Canadians have organised their communities differently. They used the collective impact methodology to fight poverty.

The collective impact approach stands in stark contrast to how Brooks describes the usual route to poverty alleviation in America: everything is fragmented, with a bevy of public and private programs doing their own thing. In one town there may be four food pantries, which don’t really know one another well. The people working in these programs have their heads down, because it’s exhausting enough just to do their own work.

This is compounded by the common model of one-donor-funding-one-program. Different programs compete for funds. They justify their existence using randomised controlled experiments, in which researchers try to pinpoint one input that led to one positive output. The foundation heads, city officials and social entrepreneurs go to a bunch of conferences, but these conferences don’t have much to do with one another.

Every day, they give away the power they could have used if they did mutually reinforcing work together to change the whole system. What Brooks describes is detailed in the recent Economist essay Poverty In America. Sound familiar, whether you are in the US, the UK or Australia?

Brooks notes that ‘in Canada it’s not like that’. Why? As Brooks writes:

‘About 15 years ago, a disparate group of Canadians realised that a problem as complex as poverty could be addressed only through a multisector comprehensive approach. They realised that poverty was not going to be reduced by some innovation — some cool, new program nobody thought of before. It was going to be addressed through better systems that were mutually supporting and able to enact change on a population level.’

So they began building city-wide and community-wide structures. They started 15 years ago with just six cities, but now they have 72 regional networks covering 344 towns. They begin by gathering, say, 100 people from a single community. A quarter have lived with poverty; the rest are from business, non-profits and government.

They spend a year learning about poverty in their area, talking with the community. They launch a different kind of conversation. First, they don’t want better poor; they want fewer poor. That is to say, their focus is not on how do we give poor people food so they don’t starve. It is how do we move people out of poverty. Second, they up their ambitions. How do we eradicate poverty altogether? Third, they broaden their vision. What does a vibrant community look like in which everybody’s basic needs are met?

After a year they come up with a town plan. Each town’s poverty is different. Each town’s assets are different. So each town’s plan is different.

The town plans feature a lot of collaborative activity. A food pantry might turn itself into a job training centre by allowing the people who are fed do the actual work. The pantry might connect with local businesses that change their hiring practices so that high school degrees are not required. Businesses might pledge to raise their minimum wage.

The plans involve a lot of policy changes on the town and provincial levels — improved day care, redesigned transit systems, better workforce development systems. The process of learning and planning and adapting never ends.

A leader in the approach, The Tamarack Institute pioneered a lot of this work. They emphasise that the crucial thing these community-wide collective impact structures need is attitude change.

‘In the beginning, it’s as if everybody is swimming in polluted water. People are sluggish, fearful, isolated, looking out only for themselves. But when people start working together across sectors around a common agenda, it’s like cleaning the water. Communities realise they can do more for the poor. The poor realise they can do more for themselves. New power has been created, a new sense of agency’.

Collective impact in Canada is a real-life experience of where theory or thought leadership meets practice and brings transformational change.  The challenge is to get people and organisations to work together, not against each other. Poverty is the real challenge, but so is distrust, polarisation, competition and personal ego amongst those wanting to end poverty.

There has to be learning from the Canadian experience. We could all do with a dose of collective impact. Not for our own health, but the health of those whose daily existence is entrenched systemic poverty.

The post Collective impact – what can we learn from Canada? appeared first on The Dragonfly Collective.

I recently read a short article on why kids should learn philosophy and immediately thought the same about economics – but not for kids – but for all the grown ups currently working feverishly to do good and change the world through socially innovative entrepreneurial enterprises.

In fact it occurred to me that there was a business opportunity or gap in the market as they say, to have a whole semester or two added on economics to all MBA and equivalent courses that now exist for social entrepreneurs.

By now you’re yawning because as Richard Denis recalls in his article in The Monthly “I remember my first lesson in economics like it was yesterday. I’d never heard a bigger bunch of crap in my life. It made no sense. The assumptions were flawed. The examples were ridiculous and the conclusions worse.”

And that’s about where we leave economics – back in high school.

Not that we don’t hear a lot about ‘the economy’. But economics – no thanks!

Let’s just get on and do it! Economics has nothing to do with changing the world. The solution lies with new business models to challenge and solve social problems. Poverty and inequality – all solved with scaling up, volumes, price point, marketing, distribution points, strategic planning, supply chains, market segmentation and financial modeling, and more financial modeling.

In the meantime while we all learn about ‘good’ business (or is it ‘business for good’?) the economy runs on, adjusted from time to time by the invisible hand of the ‘market’.

And we know as much as we need to know about ‘the economy’ because everyday we are educated about ‘the economy’ by politicians and media to such an extent that we know all we need to about economics. Right?

Richard Denis calls this constant everyday education “econospeak” noting that “the primary purpose of the econospeak that fills our airwaves, most of which is complete nonsense, is to keep ordinary people out of the big debates about tax, fairness, climate change and the provision of essential services. Econospeak is a great way to limit the options on our democratic menu. Would you like a small tax cut and a small cut in services or a big tax cut and a big cut in services? What? You want to spend more money in health and education? You must be mad. Just imagine how “the markets” would react to such a suggestion.”

What’s really startling is that while we have all been learning about ‘good’ business to solve social challenges, we’ve taken our daily dose of econospeak and swallowed it hook, line and balanced budget. As Denis notes “the whole strategy has worked a treat for the past few decades”.

Swallowing econospeak allows us to live with myths like, it is the lifestyle of the poor that threaten the economy, or, that tax concessions to the super rich will create more jobs, or, that the great financial crisis was caused by governments spending recklessly on public services, and that business above all else is how all our problems will be solved. Ignorance produced by econospeak is a powerful tool – after all, how can you criticize economic policy when you don’t understand economics?

Perhaps that’s where education is needed.

What if all of us who want to change the world for the better took some time to educate ourselves beyond econospeak so we had some tools to use when we critically consider the economy we are part of? What if every aspiring social entrepreneur had to complete a year of study in economics before studying business tools? What if this education allowed us all to understand why even the best intentions to change the world informed by econospeak, actually just perpetuate the very challenges we want to solve?

So where to begin? Here’s a sample of some really good economic thinking – and if you don’t want to read the whole book, look for articles that discuss the thoughts of the authors – even Wikipedia is better than gulping down headfuls of econospeak. So have a look at:

John Maynard Keynes, The General Theory of Employment Interest and Money

Ha-Joon Chang, Economics: The User’s Guide

Joseph Stiglitz, The Great Divide

Thomas Picketty, Capital in the Twenty-First Century

Anthony Atkinson, Inequality: What can be done?

And after some reading, consider afresh Richard Denis’ final words: “you don’t need to be an economist to call out crap when you hear it. But unless people start calling it out and stop worrying about “what the markets think”, then one of the richest countries in the world, living at the richest point in world history, might continue to believe that we “can’t afford” to invest in a better health or education system . . . Economics doesn’t tell us that we need to cut taxes for the rich or cause climate change if we really want to help the poor. And “the markets” don’t tell us that either. Those are the sentiments of some wealthy people, and some politicians who represent them. But they say it in econospeak because it sounds so ridiculous in plain English.”

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Disruptive Dragonfly Ed 05

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