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Why We Should Do Better to See Social Entrepreneurship As a Spectrum - Bonar Institute for Purposeful Leadership

As events were unfolding at the Capitol in Washington on January 6 and in the subsequent hours when technology giants like Twitter, Facebook, and Amazon decided to kick certain users off their platforms based on how users leveraged the platforms, I kept wondering how much longer the business world could continue to pretend that the sole objective of a corporation is to produce a return to its investors.

It is impossible to deny the social impact of technology platforms like Twitter or Facebook today. The last decade has shown that what platforms incentivize – number of followers, likes, shares – can amplify toxic social dynamics through an unintended cascade of consequences. When product design decisions influence the psyche of a nation, one must arrive at the conclusion that technology companies are much more than just technology companies. Then what are they?

If companies mainly pursuing financial performance goals are recognized to have an impact on society, then why continue to define social enterprise so narrowly? There is no one standard definition of what constitutes a social enterprise. The definitions proposed often speak to the pursuit of solving a social or environmental problem with a specific business structure (not-for-profit, philanthropic, cooperative).

The impact I have seen of such definitions in the business world is often one of exclusion. Because most for-profit businesses easily fall out of the current definitions, the business world can continue ignoring the concept of social entrepreneurship. 

Yet, it is hard to ignore that the act of conducting business is a social action at its core. Business is built on the recognition of a need, relationship and trust, teamwork, creativity, and use of natural resources (directly or indirectly). Every business creates an impact beyond its own realm of activities. No one can deny the impact of a business on the lives of its employees (or those of subcontractors), consumers, investors, and in the natural world. 

We would do better to start seeing social entrepreneurship as a spectrum rather than an idealistic or narrow state. In the context where social entrepreneurship is a range of possibilities, each individual business occupies a specific position on the spectrum. The position on the spectrum is a point in time and what matters most is the direction and pace of change. It isn’t just important for society and the environment. It is becoming increasingly important for future business growth.

There has been a rise in the field of responsible investing in recent decades and the trend is expected to continue. Access to capital for growth will increasingly be tied to an environmental, social, and governance (ESG) score (See John Barker’s article, Leadership’s ESG Imperative and Practical Suggestions for Addressing It, July 6, 2020). And there will be a point when a “do no harm” approach – specifically as it relates to environmental sustainability – will not be enough. Humanity will shortly need to concern itself with restoring and creating positive changes rather than maintaining the status quo. 

Perhaps the three most important questions business leaders can ask themselves right now are:

  1. What is the difference we want to make in this world?
  2. What is the difference we are making in the world, right now – for better or worse? 
  3. What do we need to do to continue making a positive difference in this world? 

These are deeply strategic questions that need to be considered, debated, and decided upon at the board level and the executive table. Operational plans must be developed and then executed at all levels to succeed. These processes often require a shift in mindset from rationalization and coping to synthesis and vision. It is through a collective rise in the level of consciousness and objective thinking that a business creates more positive outcomes for all its stakeholders and fully participates in the betterment of humanity.

The Bonar Institute is a boutique professional leadership firm. We specialize in providing customized, nimble, and high-touch solutions that help organizations transition from transactional to purposeful leadership. Our Associates have deep domain expertise in developing self-aware, confident, flexible, and socially responsible leaders and teams that excel in navigating complex and disruptive change.

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