Tightrope Walkers Understanding the Values of Social Enterprise Leaders

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Tightrope WalkersUnderstanding the Values of
Social Enterprise Leaders
5th National Gathering of Social Entrepreneurs
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Introduction
- 10 years experience in social enterprises -
Founder/Director of SERVE Enterprises - Adjunct
Professor of Nonprofit Management - Doctor of
Management degree - Social enterprise research -
Assistant Professor of Business
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Overview
- Importance of social enterprise leaders - Lack
of information about these leaders - Belief that
they are unique in some way - Importance of
values - Research comparing leaders values -
Conclusions from the research - Recommendations
for practice
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Importance of Leaders
- Organizational Effectiveness - Donations -
Investments
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Importance of Leaders
Every venture, like every new service or program,
must have a champion in order to
succeed. Edward Skloot Nonprofit World 1987
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Importance of Leaders
Having the right manager in place is the central
ingredient for the success of the
venture. Flannery Deiglmeier REDF 1999
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Importance of Leaders
Another area in which experts and practitioners
agree is that the venture must have a
champion. Massarsky Beinhacker Yale -
Goldman Sachs Partnership for Nonprofit
Ventures The Nonprofit Quarterly Fall 2002
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Importance of Leaders
What is the single-most important thing most
grantmakers would look for in a social enterprise
proposal? The most common trait Ive heard
funders point to as they choose nonprofit
partners is leadership. Grantmakers tend to
invest in people . . . Ive heard several funders
assert that they would much rather fund a Class
B idea led by a Class A leader than the other
way around. Kathleen Enright Executive
Director, Grantmakers for Effective
Organizations Social Enterprise Alliance On-Line
Newsletter Winter 2003
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Importance of Leaders
If you had a nickel for every financier who said,
I dont invest in products I invest in people,
you wouldnt need to raise money to fund your
business. . . The point is that the people,
especially the key managers in your company, are
of great interest to potential investors,
partners and employees. Mark Hendricks Writer,
Entrepreneur Magazine Business Plans Made
Easy 1999
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Lack of Information
- Our understanding of the field tends to be
weak. Jed Emerson - Social entrepreneurship is
one of the most misunderstood phrases in the
nonprofit sector today. Everybody, it seems, has
a different definition of what it means. Boschee
McClurg
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Lack of Information
- Few studies provide basic census of social
enterprises - Massarsky Beinhacker -
Community Wealth Ventures - Boschee
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Lack of Information
Our knowledge of social entrepreneurial leaders
is inadequate . . . No large sample studies exist
which can be used for generalizations and
comparison. G. Prabhu 1999
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Unique Leaders
- Unique organizations - Unique challenges -
Unique values
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Unique Leaders
- Unique challenges - Organizational
resistance - Societal resistance - Integration
of social and financial goals values -
Creating cultural change
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Unique Leaders
Mutant managers integrate the skills of . . .
businesspeople with the social conscience and
values of the nonprofit world in an equal and
complementary way. Joanna Messing Enterprise
Development Director, NESsT 1999
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Unique Leaders
Ambidextrous entrepreneurs . . . It takes a
special person to succeed as a commercial
entrepreneur. Even fewer can combine commercial
entrepreneurship with a focus on meeting
charitable needs. Zimmerman Dart 2000
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Unique Leaders
What is the single most significant challenge to
social enterprise development today? 30 Lack
of funding 22 Competing management
priorities 17 Lack of internal business
expertise Enterprising Voice (QuikPoll) November
19, 2003
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Importance of Values
- Values Leadership - Values Social
Enterprises - Values Social Enterprise
Leaders
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Importance of Values
- Values Leadership - Leader follower
behavior - Organizational values -
Organizational culture - Leadership style -
Leadership organizational effectiveness -
Employee selection
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The primary determinant of a leaders success or
failure is not a lack of know-how. Instead, the
key variables are the leaders beliefs and
attitudes. James OToole Leading change The
argument for values-based leadership

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Importance of Values
- Values Social Enterprise Values and
ideologies are core issues in social
entrepreneurial organizations. G.
Prabhu 1999
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Importance of Values
- Values Social Enterprise Leadership Social
and economic entrepreneurs are essentially
distinguished by their ideologies, which guide
the choice of mission, means and ends. G.
Prabhu 1999
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Importance of Values
The chief dangers involve value convergence of
the nonprofit toward for-profit values . . .
Commercialism increases the resources available
to nonprofits but poses the danger of changing
managerial values . . . Estelle
James Society 2003
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Importance of Values
Do we find a value and behavioral convergence
between nonprofit and for-profit managers, and is
this convergence greater in industries where the
lines between the two are more blurred . . .
These are all-important researchable issues . . .
Careful empirical research can help to point us
in the right direction. Estelle
James Society 2003
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Research Questions
- What are the values of social enterprise
leaders? - Are their values different from those
of traditional nonprofit and business
leaders? - Which values are unique? - Is there a
pattern in those unique values?
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A social enterprise is a nonprofit organization
that generates earned income to support its
social purpose
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Study Participants
- Nonprofit organization - Earned income
venture - Leadership position - United States and
Canada
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Demographic Characteristics
- 70 men (Table 4) - Relatively even age
distribution - Most had masters degrees -
Experience clustered at both ends - 50 CEOs -
Values were not affected by/related to
demographic factors
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Organizational Characteristics
- 28 0 - 999,999 (Table 5) - 28 1mil -
4,999,999 - 44 5mil - Relatively even
distribution for of employees - Most were in
the human services - Predominately older
organizations - Values were not affected
by/related to organizational factors
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Organizational Characteristics
- Significant similarities to other studies -
Massarsky Beinhacker - Boschee - Community
Wealth Ventures
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Schwartz Values Survey
A value is - a belief - pertaining to desirable
end states or modes of conduct - that transcends
specific situations - guides selection or
evaluation of behavior, people, and events - and
is ordered by importance relative to other values
to form a system of value priorities
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Schwartz Values Survey
- Universal values - 44 countries - Every
inhabited continent - More than 25,000 people -
Translated into native languages
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Schwartz Values Survey
- 56 values (tables 2a, 2b, 3) - 10 value types -
4 value clusters - 2 polarized value dimensions
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Conclusions
- Differences between business and social
enterprise leaders were greatest in number and
strength - Differences between nonprofit and
social enterprise leaders were moderate in number
and strength - Differences between for-profit
social purpose leaders and social enterprise
leaders were low in number and strength
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Primary Conclusion
- Social enterprise leaders have unique values
that integrate the values of leaders from both
nonprofit and business sectors
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Primary Conclusion
- Social enterprise leaders are tightrope walkers
balanced precariously over the chasm between
the nonprofit and for-profit sectors.
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Nonprofit
Self-transcendence Openness to change
Social Enterprise
Balancing elements of both sectors
Business
Self-Enhancement Conservatism
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With regard to leadership . . . The central
challenge is recruiting and retaining key
personnel, as well as providing ongoing
training/professional development for staff
currently in place. While necessary for any
successful enterprise, this issue is critical for
organizations . . . That seek to break with the
mold of traditional management and pursue value
creation that is more than simply financial or
socially defined. There are many solid,
traditional business managers and there are
numerous talented nonprofit managers. What is
lacking are people fully capable of effectively
pursuing the blended value proposition . . . Jed
Emerson The Blended Value Map October 2003
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Recommendations
- Selection - Business leaders do not have
congruent values - Nonprofit leaders do not have
congruent values
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Recommendations
- Foundations - Government agencies - Nonprofit
boards of directors - Nonprofit
managers/leaders - Compare values profile to
organizational values - Administer SVS to
leadership candidates - Compare their responses
to the value profile
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Recommendations
- Training - Formal explanation of values -
Informal reinforcement of values - Business
skills - Motivation - Focus on money and
meaning - Focus on challenge and change
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Secondary Conclusions
- Leaders of hybrid organizations have similar
values - Nonprofit enterprise ventures -
For-profit social purpose companies -
Incorporation status does not seem to influence
leaders values
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Recommendations
- The definition of social enterprise should
include both nonprofit enterprise ventures and
for-profit social purpose companies -
Incorporation decisions should be made based on
strategic considerations - Public policy should
begin to recognize the possibility of
integrating the sectors instead of reinforcing a
dichotomized perspective
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The 21st century will be the century of the
social sector organization. The leadership,
competence, and management of the social sector
will thus largely determine the values, the
vision, the cohesion, and the performance of the
21st century society. Peter Drucker 1999 Annual
Report Drucker Foundation

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The skills of required of 21st century managers
must be a blend of sound financial abilities
married with good management talent grounded in a
vision of the organization that understands its
role in creating social and environmental value
components. Cultivating and recruiting leaders
able to manage within the perceived tensions of
these factors is a significant challenge for the
field as a whole. Jed Emerson The Blended Value
Map October 2003
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Questions ? ? ?
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Dr. David Rendall Vice-President Shepherds
Ministries SERVE Enterprises 1805 15th
Avenue Union Grove, WI 53182 [phone]
x350 davidr_at_serveonline.org www.serveonline.org ww
w.shepherdsministries.org