Social Entrepreneurs: An Oxymoron in Name Only?

by Ken Caplan

What’s in a name?

Over the past few years, rather belatedly compared to other sectors, the water and sanitation sector has begun using the phrase “social entrepreneurs”.  The term however is far from new – according to Wikipedia, it was first coined back in the 1960s.  The essence of the concept is that entrepreneurial principles are applied to (re)solve social (or environmental) problems. 

The term came up recently on two television programmes here in the UK – The Apprentice and Dragon’s Den.  The first is a programme aimed at whittling down a group of self-described “entrepreneurs” to join a major corporation or win an investment in their business idea.  Similarly, Dragon’s Den sees a range of individuals or small businesses pitching for investment in their idea, product or business from a handful of “powerful” investors.  Unsurprisingly, as both focus on the financial bottom line (of making a return on an investment), it is easy to see how for some the term “social enterprise” can represent an oxymoron, as was directly stated on both programmes.  Maybe the term hasn’t quite caught on in the actual business world then?  Enterprise is after all usually equated with business, which requires profits to thrive.  If someone is described as “enterprising”, though, it can either mean that they take the initiative to solve problems or that they are good at making money from whatever venture they get involved in.

Social enterprises have grown up most notably around micro-credit but also around healthcare, the organic food movement, and a range of other sectors.  These are “social” in the sense that they provide a value that contributes to society.  They still require a “profit” to sustain themselves, to incentivise or reward those involved, or to expand (although the social nature of the initiative suggests that margins or return on the investment is presumably not meant to be very high).  

Although perhaps not labelling it as such, in various ways BPD has been exploring "social entrepreneurship", particularly in the sanitation sector, for a few years now.  For example, at present we are working with WSUP (Water and Sanitation for the Urban Poor) to understand how community managed service delivery can apply more business-like principles (to ensure their sustainability) or how local private sector management can be more poverty-focused by incorporating elements of community management.  Our work in this area is ongoing, but we will keep blog readers posted on how our thinking evolves...

Why Sanitation Should be Envious of Funeral Parlours – the Challenge of the ‘Missing Middle’ ...

by David Schaub-Jones

Last week’s post suggested that a lot of the buzz around sanitation right now is linked to issue of sanitation entrepreneurs (itself partly due to the craze for all things labelled ‘social entrepreneur’).  But it also asked how many of those businesses involved in sanitation in developing countries could truly be considered entrepreneurs?  All of which set me to thinking about the ‘missing middle’ ....

The ‘missing middle’

A session on small-scale finance at Stockholm first introduced me to the concept of the ‘missing middle’. What was meant by this is that there is a dearth of meso-finance (between $5000 and $500 000) available to the water and sanitation sector – i.e. medium sized amounts of money.

So if you need more than a small microfinance loans, but less than a large government, donor or commercial loan or grants then you struggle. (Click the link for a slide on this).

I suspect that this situation is even more pronounced for sanitation, with very few making this sort of money accessible to sanitation providers.

For sanitation, this led me to also question how many sanitation businesses are of the medium-size anyway – and would be looking for this money to begin with? 

In other words – how many are medium-sized ‘entrepreneurs’ and how many are really just small, one or two person businesses that won’t ever grow beyond that?

How important is the broker?

The other ‘missing middle’ for me was not about finance per se, but about the important brokering role that must take place if sanitation entrepreneurship is to ever really take off at the scale many of us hope for.

The problem is not that the sanitation business lacks glamour (a situation that has hardly slowed the growth of funeral parlours or pest eradicators). The problem is that the sanitation business lacks predictability, simplicity and rigour (at least in the eyes of bankers, small business consultants and others we are hoping take more of an interest).

To take this metaphor further - you don’t need to explain to a bank what a funeral parlour does. The business is easily understood and financial projections simple to apply. For now, this level of comforting familiarity eludes the sanitation sector.

We’re not yet where we need to be – i.e. boring and predictable.

So while the "Sanitation, everyone's Business" tune (last week’s hit single) may be zooming up the charts, there remains a need for people and organisations to act as a broker.  In developing country contexts, they help overcome the challenge of the ‘missing middle’ by extending one arm to the legion of private businesses active in sanitation and the other to the donors, bankers, venture capitalists and others that are keen to bring their finance and expertise to bear.

Let us worry later about whether people are looking to make money out of the ‘bottom of the pyramid’, to reach the poorest of the poor, or both.  First let us make the sanitation business boring, predictable and ‘simple’!

BPD, along with other pioneers, is trying to fill this ‘missing middle’. The role of broker, facilitator and mentor is hard and sometimes thankless work. But hopefully it will be worth it in the end.

After all, wouldn’t “Sanitation, everyone’s Business” be so much more satisfying as a platinum-selling album than a one-off chart topper?!

Sanitation 'Entrepreneurs' – or Just Minding their own Business?

by David Schaub-Jones
 

Sanitation zooms up the charts

If the water and sanitation sector had a ‘hit parade’ (if you’re my age and ever watched the BBC, think ‘Top of the Pops’) then the song “Sanitation, everyone’s Business” would be zooming up the charts. Hell, it would easily be in the top ten by now. 

We have just come back from Stockholm Water Week, where the whirl of discussion around all things water, sanitation, hygiene (and now, climate) was intense as ever. Not so long ago, when BPD ran a session on sanitation it was one of a measly two sessions on the topic all week. This year we, along with a few friends, ran a session on ‘sanitation entrepreneurs’ and a hundred and fifty people packed into a small room (meant for ninety) just so they could experience ‘sanitation speed dating’! See our facebook profile for some unusual photos.

A few happy trends are pushing the ‘sanitation entrepreneurs’ tune on its heady climb up the charts. One is that sanitation has itself improved its profile, thanks partly to a concerted push from activists to ‘get it on the map’ (while having the Gates Foundation weigh into the issue has certainly not hurt).

 

The business of sanitation vs social entrepreneurship

Another is the popularity of anything that can be labelled ‘social entrepreneurship’. Here sanitation has two advantages. As with water, there is lots of informal private activity on the ground. Yet compared to water, sanitation is politically much less contested. This means that no-one is (yet?) making a fuss about sanitation providers ‘profiteering from the poor’. A second advantage, if you can call it that, is that sanitation is so firmly in the ‘public goods’ camp that just about anyone taking a private sector approach can add the tagline ‘social’ to their activities and get away with it (HT Sophie Tremolet).

Which brings me to my point. Just how much sanitation entrepreneurship is there out there anyway? As I said, there is a lot of private business involvement in sanitation, particularly in developing countries where much of it is informal. But how much of this can be considered truly entrepreneurial, never mind qualify for the seemingly hallowed tag of 'social entrepreneurship'?

BPD (or is that just me?) may be as guilty as anyone for the boosterism associated with the topic. Yet a couple of sessions in Stockholm – BPD’s on sanitation entrepreneurs and another on small scale finance – brought home to me just how far we may have to go. 

More on this, the 'missing middle' next week .....

PS these are not meant as rhetorical questions - please weigh in! 

Team Talk - Partnerships Vs Sports

by Ken Caplan

We’ve done some thinking recently about working in teams. Not a lot, but just enough to make us pause for thought. It seems there is discussion in all the leadership and management books about the importance of teams. In fact, much of BPD’s work is related to working in teams – partnerships after all are about finding ways of working that rely on “horizontal accountability” and “appreciating the contributions of all”. These two concepts are inextricably linked – creating an environment where there are no hierarchies and there is clear recognition that goals cannot be achieved without everyone’s contribution. On the other hand, some may say that hierarchies create greater clarity, and some contributions are always deemed more important than others (particularly by the financiers). 

“Team working” in partnerships (at least for the delivery of water and sanitation for the poor) is notoriously difficult. Both the constraints and the variables are too numerous. In recent BPD team discussions, we quickly came to the conclusion that the only place we’d really seen teams genuinely work for any length of time was in sports. After all, in sports, there is a common and immediate goal (to beat the opposing team). In partnerships the targets may be held in common but the goals (and their implications) are not always understood in the same way. In sports, the rules are clear and the roles of each player from the third baseman to the goalie are understood. In partnerships, this clarity is often missing on both counts. In sports, there is usually a referee or umpire. In partnerships, we watch each other to make sure we are each contributing what we committed to providing, but there are any number of risks to blowing the whistle on our partners. In sports, there is usually a clear time frame – 90 minutes, 7 innings or 4 quarters – after which you know who won (or at least who played the better game). Partnerships may have clear windows of opportunity – like between election cycles or in the dry season – but getting everything done within this period usually proves impossible. One thing in common with sports though, is that there is always a coach, a quarterback, a pitcher or whoever calling the shots – so maybe there isn’t such equality after all?

There is an interesting book called Impro by Nick Johnstone, which teaches actors how to act. Much of the guidance is about getting actors to understand the “status transactions” that occur in the scenes they are playing. In any situation, the drama coach is trying to get the actors to understand where each character fits in the scene – is he or she high status or low status? Or high relative to one character but low relative to another character? Or even more confusingly is he or she high status but needing to raise the status of those around him or her? Or low status but keen to puff himself up to seem higher? Confused yet?

The point is that team or partnership building is a complicated business. As with acting, it usually involves understanding “status transactions” that involve competition between players. This manifests itself in how each partner positions himself or herself vis-à-vis both his presumed but also desired status in the relationship, and these can change over time. Even within teams we are constantly repositioning ourselves depending on each new set of circumstances that arises. 

Over the years, our guidance for how to make partnerships work has seemingly become more and more sophisticated, but in fact, it usually still relates to the old faithful inter-related skills of empathy, a sense of fair play, an appreciation of what each player brings to the table, moves that are fit for purpose etc… Maybe even these can be boiled down to one skill – listening. Somehow you can’t do the other things without it.

Paralysis by Analysis - Does Thinking Global Really Help?

by Ken Caplan

Over the past year, a wide range of people have been encouraging us at BPD to “blog” – to put some of our ideas down in a space that allows us all to explore, to play, to provoke. Certainly we in the water and sanitation sector do too little of all three. Exploration means admitting we do not have the answers. Playing means discounting the seriousness of the sustainability challenges we are facing. Provoking is not something that is done in polite society (at least not generally on an individual level among and between colleagues, friends or peers). So this new blog is meant to be a space to share things we are thinking about. Exploring allows us to get away with not having the answers. We learn a lot from play. And a bit of provocation might just keep us more honest. So here goes…

Much of the talk in the water and sanitation sector these days is about scale – trying to get our heads around the scale of the problems we face and of the contributions we are making both to the problem and the solutions. The related scale of climate change and global warming is something most of us can’t really comprehend. Our small efforts in the UK to convert to energy-saving light bulbs and turn off the taps when brushing our teeth seem rather insignificant somehow. This leaves the messengers feeling frustrated that they are not getting through and a vast number of us –perversely - positively disincentivised to change our behaviour, uncertain that our contribution makes a difference. 

I was recently asked to facilitate a meeting that brought together civil society partners from various countries to revisit the impact of a governance programme halfway through its funding cycle. This wise and experienced group were struggling with how best to learn together and share their experience. Part of the challenge was to find ways of overcoming the seemingly huge differences in the contexts in which they are operating. There is a bigger problem at hand though. While the conversation was going on, I couldn’t help but think that we have done ourselves a disservice in some ways by constantly reiterating just how enormous the water and sanitation challenge is. The numbers and implications are certainly staggering and incomprehensible to those of us who have had the very basic services of running water and access to toilets in virtually every aspect of our lives since birth – at home, at work, on public transportation, in big towns and small.

Yes, somehow - unbelievably - we still need to convince the wider world – donors and funders, policymakers and decision-makers, friends and “competitors” from other development sectors – that water and sanitation are critical to human development. With clear parallels to the climate science discussions, I can’t help wondering whether this shouting to the outside world has had an impact on us within the sector. I have often been struck of late by how colleagues from across the developing world, though justifiably proud of their achievements, are reluctant to draw out their learning for wider audiences – thinking perhaps that it wasn’t of sufficient magnitude to live up to the enormous needs, that it wasn’t ground-breaking, fully formed, easily transferable, a magic bullet, or the holy grail. 

Are the pressures to find the answers so great that we are losing the art of iterative thinking and learning? While the poor are desperate for services, they may recognise better than anyone that small steps can make a huge difference in people’s lives. I was reminded at this meeting in India that learning comes from the ground up – by doing, exploring, playing, provoking. It then gets shaped, reshaped, discounted or exaggerated as it makes its way up the system – sometimes for the better, sometimes for the worse. Whilst we should still be encouraged to think big and think bold, we need to keep sight of the pressures this puts on us to big-up or bold-up, which may in fact immobilise most of us when we come to articulate our learning. In a fast-moving world where big ideas only take hold now and then, we need the perspective to maintain those smaller conversations that encourage the little “Aha” moments and the everyday reflections that might ultimately make the most difference.