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Richard Branson on Social Enterprise


July 27, 2012

Doug Hadden, VP Products

Richard Branson brings his entrepreneurial enthusiasm to “social responsibility” in Screw Business as Usual and accompanying web site and #sbau twitter hash tag.

Branson proposes a new ethic to capitalism where the private sector can augment charities and the public sector to address complex social issues. Branson suggests:

Companies have a wonderful opportunity to reinvent their charitable giving to look at how they can help kick-start and pilot some of these new models. Using the best bits of governments, business and the social sector with new entrepreneurial approaches is a really exciting area of opportunity.

This is sometimes called “social enterprises” – not to be confused with “social businesses” that use social media as part of the business model. Social enterprises, like FreeBalance, focus on “wicked problems”. (For FreeBalance, it’s global good governance.) Although it is true that social/customer-centric is an ideal business model for social enterprises because it provides the appropriate feedback loop for customer innovation.

The CSR Meme

This book is indicative of the maturing of Corporate Social Responsibility (CSR) to something more profound. As Branson writes:

It should no longer be just about typical ‘corporate social responsibility’ (or that horrible acronym CSR) where the ‘responsibility’ bit is usually the realm of a small team buried in a basement office – now it should be about every single person in a business taking responsibility to make a difference in everything they do, at work and in their personal lives.

It’s high time to get sustainability into the “C-Suite” as a fundamental business model. Branson knows that the “CSR” acronym has lost meaning. We may remember this book and Howard Shultz’s Onward as milestones in the maturing of CSR thoughts by coming from respected and successful business people. (Yes, both book are self-promoting, but this might convince many business leaders to head on the sustainability business path.)

There’s no question that “the business of business is business” mantra is losing credibility.

Branson weighs in on this:

One of the more devastating theories of the 1970s was that no matter what it took to achieve it, the primary purpose of business was to maximise value for its shareholders.  This principle has led to a variety of social ills where businesses discard employees (at the drop of a hat), pollute our air and waters, or create shot-term gains that are unsustainable. It is important for people in business to recognise that long-term shareholder value is more likely to be created by companies that value their employees, act as good environmental stewards, and think long term in general.

I believe that we are seeing a maturity is business responsibility as shown in the diagram from thinking that the purpose of “profit” is to make a sustainable business to where sustainability is needed to ensure that the business is sustainable. The important takeaway from Branson is that environmental and financial sustainability is good business because it sustains the business. And, that profit can drive innovation to augment the efforts of non-profits and the public sector.

CSR Cynics

This book is not going to convince the CSR cynics who view responsibility as a marketing ploy or as a cost centre that reduces profit. These cynics do not see the transformational benefits for businesses to consider sustainability as a business model. Screw Business as Usual is a bit too enthusiastic for the serious curmudgeon. The book is filled with too many exciting anecdotes – albeit, lots of anecdotes. Branson gushes. He name drops. This won’t help the CSR deniers to see the errors of their ways.

But, it’s going to help practitioners to justify social innovation.

Screw Business as Usual is not a “how to” guide. It’s high time for us to update our guide from a few years ago given recent research. It’s not hard to agree with the Amazon reviewer, who wanted more.

How to Become a for-Profit Social Enterprise (FOPSE)

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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