Bigger is “meh”. Sustainable is sexy. – Maria Kim, The Cara Program

I’ve been thinking a lot about the power of “big”, and how that has bombarded me over the decades – the big hair of my teen years, the big envy of the houses on the other side of the tracks, and the more recent iterations of big through “mega deals” and “super size” and “the most dramatic rose ceremony EVER”. And I realize, with increasing clarity that bigger isn’t always better. In fact, bigger – without a plan to stay bigger – is sometimes just a bust.

In the interest of full disclosure, I’m writing today’s blog from the heart of Seattle – on the perimeter of Pike Place Market, where artisanal business is the norm (in fact, it’s required – no chains are allowed), and where micro (as in enterprise) is sexy. This place – this philosophy, this ecosystem even – is a vibrant metaphor for not just what social enterprise is, but what social enterprise could be – small (and in some cases artisanal) businesses with a big, fat, complex social mission.

I think it’s no coincidence that this is where I was moved to put pen to paper, because it inspires a clean re-framing of current expectations on social enterprise. Let’s convert today’s expectation, to tomorrow’s recognition.  Here’s what I mean:

Social enterprise is a business that’s doing social good. 

As was teed up in a recent REDF convening, the term “social enterprise” is amorphous and can mean different things to different people. And since we all share the niche of being social enterprises under the umbrella of workforce development, we have an even larger challenge to confront.  In our case, social enterprise is a business that’s producing a good or service – the delivery of which builds skills and employability in the process (an even higher bar to achieve).

As social enterprises, we are in a class (and a set of expectations) unto ourselves.

We must recognize that we are small businesses with the compounded stresses of a double bottom line – not just profitability, but also promise-ability – giving adults affected by poverty the opportunity for long-term employment.

Mission drives market.

Small businesses should only be created to address market needs.  Small businesses created exclusively to build skills of its employees, but not to provide value to the market, simply cannot survive.

All growth is good growth.

Sustainable growth is good growth.  Everything else puts your business at risk.

Economies of scale are linear. 

We don’t just produce goods or services, we develop people; and those people reach their pivot point to their next step at an unpredictable cadence.  So our economies of scale are therefore a bit lumpier than our private sector competition.

My hope is that as we look in the mirror and recognize who we are – small businesses with the added complexity of not just one, but two, bottom lines (the social bottom line often achieved at the expense of the business bottom line), then we will better subject ourselves to the rigor and reality of traditional small business.

We can then embrace stronger decision making – perhaps following this arc:
1. Ideate your idea.
2. Test it to develop proof of concept.
3. Incubate it.
4. Make a decision to build or not build it based on incubation results.
5. Keep trucking until you achieve sustainability.

This framework seems clean and in some cases kind of “duh”; but the reality is our industry is often buoyed by the optimism of passionate socially-driven leadership, and the power of belief (“a great idea, leveraging people in need to build skills while they bring that idea to market, must work”). And so our industry is flooded with many businesses that skip right from step 1 to step 4 in the rubric above. (At The Cara Program, we only have the “duh” wisdom to put such a rubric in place because we’ve skinned our knees a few times trying to accelerate the process before its due time.)

Small business is tough. Small business with a mission to get its best staff employed elsewhere is even tougher. Marginal cost calculations are not overtly easy to calculate – because we are not just managing inventory of product, or streamlining delivery of service, we are managing the development of people and responding to the ebb and flow demand of private sector employment. Compound all of this with the fact that operational efficiency is sometimes achieved at the expense of mission, and you begin to understand how social enterprise for jobs is – on the spectrum of difficulty – perhaps the most difficult small business archetype of all.

So let’s talk about it. Let’s respond to an active and recurring invitation to talk about our ugly, to lift up our failures in this work, to draw into question our sustainability (or lack thereof). We believe that this is what will – in the end – make this work sustainable, not just for the businesses, but for the missions of lifting individuals up through employment, and helping them pivot to self-sufficiency.

Indeed, bigger is “meh”. Sustainability is sexy.

– Maria Kim left the insurance industry after 13 years, where she ran a $400m technology division, and joined The Cara Program in 2005 – a workforce development and leadership development organization helping men and women affected by homelessness and poverty to secure and sustain quality employment.  Maria serves on the boards of directors for EPIC Academy and Chicago Women in Philanthropy. She was a fellow for Leadership Greater Chicago’s Class of 2008, a 2012 American Marshall Memorial Fellow and a 2013 TEDxMidwest Emerging Leader.  Maria received her MBA through the Executive MBA Program of the University of Chicago Booth School of Business.

This is part of REDF’s Accelerating Social Enterprise Growth blog series

  • Great post Maria! I would add to the list of truisms/challenges – Management team makeup: “sustainability” hasn’t been reached until the social enterprise management team is primarily comprised of individuals who at an earlier point were participants in our programs.

  • Maria Kim

    How awesome that our first comment is from a fellow Chicagoan. Great to virtually see you again Eric ;). Yours is a cool take on the issue. Some folks might have a different view, because they see their social enterprise as more a gateway to a permanent career in the private sector, as opposed to a place to “stay” over the long term. I guess we’re kind of a mixture of both. Former participants comprise 54% of our permanent staff/ leadership.

    • Samantha Kim Morris

      Hi Maria, I am another Chicagoan. How is social enterprise different from a non-profit? How do you think that employees of social enterprise, non-profit & for-profit should be compensated?

      • Maria Kim

        Samantha, thanks so much for your post. Would love to connect locally as time permits. Couple quick answers to your questions: “social enterprise” is often an umbrella term used for everything from businesses with a social good aim, to non-profits who choose to run businesses as part of its mission delivery. In our case, our social enterprises are limited liability corporations whose aims are to drive revenue for the organization, while also providing job opportunities and skill development for the most difficult to employ. On the question of compensation, that is difficult for me to answer. In the case of businesses, compensation is proportionate to what the talent supply demands in the market; in the case of social enterprises – you might have two labor pools, the pool to manage and grow the business (permanent employees), and the labor for the day-to-day work (transitional employees). These two pools demand different rates of pay. Hope that helps. Happy to discuss further locally >>> feel free to ping me at mkim@thecaraprogram.org

  • chrisvconley

    Hey Maria! There should be no apologies from a social enterprise to private sector business. Social enterprises attempt to achieve more under greater constraints than private sector businesses. Further, many contemporary concepts in business like scale, efficiency, and low costs are proving to be unsound, unstable, and unsustainable. We are seeing the ill effects of the pinnacle of these concepts taught to millions through MBA programs. Indeed, sustainable is not only sexy, it’s the future.

    • Maria Kim

      Chris, thanks for your thoughtful feedback. Sounds like you’re talking about a revolution my friend :). Thanks for contributing and for all the good work you do not only with workforce.io but your other innovations in social purpose.

  • Xavier Ramey

    Great post Maria! I’d love to hear your thoughts on how we should start benchmarking progress (if its not too soon in the nascent social enterprise industry) comparatively. For instance, in the for profit world, new company profitability is often benchmarked to similar businesses within the same industry…and perhaps location/community. How would we do this for social enterprise. I ask because underneath the discord of how to define, evaluate and scale social enterprise, is a desire to…as you noted…compare apples to apples like they do in single-bottom line businesses. Do we go with logic model/grant measurement terminology? Or is there a traditional biz verbiage that would/should apply for evaluating social impact? And Chris, GREAT point about the terms “scale, efficiency, and low costs”!!!

    • Maria Kim

      hey Xavier, thanks for the great questions & feedback. my gut – though obviously i’m one wee voice in this space, so we should crowdsource our wisdom here – is that we shouldn’t use grant management terminology to evaluate efficacy of social enterprise, but we should look at things like sroi, net margin, net income and mission impact. thankfully our friends at REDF (you should meet them the next time they’re in Chicago) are helping to move this needle forward, starting first with the very basic question of establishing a clearly defined singular definition for what is social enterprise. once we do that, then let’s tackle the larger conversation of how to measure efficacy. stay tuned, but please follow REDF too for great leadership in this area. signed, a REDF groupie in the midwest