Charting the Elements
Bell and Mason have provided a methodology to analyse the elements involved in successfully launching a private venture. This is also valuable as a tool for social ventures, if other elements such as communities of benefit, social networks, and the formation of the venture’s culture are taken into account.
As in Silicon Valley, many environmental ventures start with technology, or rather with the absence of a particular material or process. It may be a question of developing dry cleaning methods which don’t use chlorine, or a textile process that does not pollute. Similarly there are social ventures that involve material innovations such as new software systems for example, or disability aids.
But many social and environmental ventures are primarily concerned with social technology. Their innovations are in the economic and social ways in which services are produced and distributed. The introduction of personal health coaches on the NHS for example is not a material technology. There is a well established profession of private health coaches. The innovation is extending their remit to those with chronic disease as an alternative to more conventional forms of health care.
In such cases the diagnostic tool for social ventures will start not from a technology or product, but from the user or ‘community of benefit’ as it is sometimes called. The user is an active participant in the project, not a consumer to be ‘sold to’. Often, as in health care, it is a question of finding an alternative process or treatment for a particular person rather than developing a process that is ‘marketed’ widely. A new method is then diffused through organisational and social networks rather than being patented and marketed by the innovator.
There are in short additional axes and different starting points for social and environmental ventures to those used to monitor a Silicon Valley venture. This is illustrated in diagram 2. Here we have merged the Bell-Mason axes of technology and manufacturing with the product or service (axis 2 in diagram 2), and highlight instead the ‘community of benefit’ (axis 1). This is the pole of orientation for so many social ventures – for social co-ops employing those with disabilities for example, or for innovations in birthing and child care. The community of benefit may be co-designers, co-producers or (in the fair trade case) material suppliers20.
Next to this we have singled out the supply chain (axis 3), to have a more prominent role than in the Bell-Mason diagnostic. Not only may the supply chain be the focus of the venture (as with organic and local food for example) but the supply chain must reflect the values of the venture, and, for so many personal services, must be trusted. In many of the new support services a wide range of trusted specialist suppliers comprise the USC (the ‘unique service characteristic’) of the service. Their identification and management is the principal innovation.
Diagram 2. Elements for a diagnostic of new social ventures
We have also included infrastructure and logistics (axis 4) since they relate not only to the supply of the goods of the service, but to their accessibility and to the social interactions that surround them. Small schools, cottage hospitals, local post offices, farmers’ markets and village halls all internalise the environmental and social costs of transport and recognise the barriers to access that the centralisation of service points entail. Equally many social and environmental ventures are aimed at more productive use of existing infrastructures – the squatters movement for example, or Landshare, or the out of hours use of school buildings.
We discuss social marketing, financing and business plans separately. Here we identify four other critical axes for social ventures. The first is the principle of extensive social networks (axis 6). These networks are the basis of financial and other forms of support and advice, of volunteer labour and of ‘friends in the market’. How to form and sustain these networks is one of the critical issues for successful social venturing.
Second is the importance of looking at the people at the heart of the project, not just at the CEO and the core team, but at a much more extensive group comprising those who contribute time and know-how voluntarily (axis 7). It is one of the characteristics of social projects that they attract support of this kind. How to organise and resource it is one of the key arts of social venturing.
Third, there is the axis of governance (no. 8) and establishing an effective structure of control and support that reflects the purposes of the organisation. In companies limited by guarantee the formal power is with the members, who play a similar role to shareholders, and appoint the Board. This is the formal position. Making it real and effective is another matter and has a whole set of issues when it is a social rather than an economic goal which is the primary driver.
Fourth there is information and formation (axis 9). Bell-Mason’s diagnostic was developed for information technology ventures in the late 1980s and early 1990s, prior to the age of the world wide web, and strikingly the issue of information and communications does not have its own axis. Yet the issue is as important as finance because social ventures are by their nature information intensive. Their distinctiveness is often not in the appearance of their product or service, but in its provenance, in the way it is produced, and in the social and environmental issues it addresses. It is about the story and the social connections made through the development of that story.
If one part of the venture then is the chronicling of the story, another is about means of capturing progress (so-called management information systems) to enable the management of all parts of the venture and track its progress. A third is about ensuring there is a system of two-way communications with the wider network, and a fourth a means to stand back and reflect.
These points are further explored in the methods that follow. Here we want to emphasise the value of a diagnostic like that developed by Gordon Bell and Heidi Mason, one that is tailored to the characteristic of the specific venture. We could have suggested double the number of axes, but we favour restricting the number to Bell-Mason’s 12 for reasons of practicality.
Bell and Mason take half a day and use 1,000 standard questions along their chosen axes to complete the diagnosis, and feed the results in to expert system software that evaluates the answers based on more than 700 rules and relationships. This then generates a mapping like that shown in the diagram above. There is to our knowledge no comparable diagnostic for social ventures – this would be a useful tool to develop. But in the meantime the axes and the mapping – if adapted along the lines we suggest – do provide a helpful way of preparing and monitoring a new venture.
Axes apart, Bell-Mason highlight four stages on any of the chosen axes that are similar to those that we have found useful: the original concept and its development and trialling as a product or service (three stages we have discussed in a separate volume in this series) and the wider launch which is the subject in the present volume. Bell-Mason work towards what they consider a ‘steady state’, in other words the successful commercialisation of the idea. But in contrast to the launch of a mass commodity or service, we see the launch period of a social venture as a further period of prototyping, with the product idea and business model subject to regular revision and adjustment as its use widens. For social ventures there is rarely a steady state, rather the shaping and reshaping of a cloud.
The value of thinking about the stages is that they raise distinct issues of finance. In Bell-Mason’s model (Diagram 3) Stage 1 and 2 are those dealing with the initial development of the idea and are often the hardest to fund. This is certainly the case for social ventures. It might be to explore the concept of making a fair trade shoe – a complex product of 70+ parts and a global industry. Who would finance such a speculative venture, and the follow up of possible leads? Such an initial exploration could throw up some interesting avenues to explore – fair trade rubber for example, or other ethical footwear projects venturing along similar paths (the ‘seed’ in the Bell-Mason diagram).
Diagram 3: Bell-Mason model
If the avenue proves fruitful there is the product to develop and test, and the supply chain to secure, each requiring larger sums of finance. Finally there is the stage of scaling up for a launch, identifying markets and particularly first users – the first user is often so critical because it allows the venture to show its concept in practice. There are other subsequent stages that we discuss under finance.
What Bell and Mason have done is to map financial needs onto the progress along each of the axes. This allows all those involved in growing and financing the venture to have some perspective on the relative significance of each element of growth. In the words of Bell and Mason, “Falling short on financial goals can be okay in the early stages of a venture, but missing product development milestones is not. In the later stages financial goals become more important. At that point, the venture has to show that it not only has a product but it also has a business. If more than three concepts still need proving the company is engaged in research not product development.” A social venture would add its axes to this – but the general point still holds.
20. In the case of Divine, it took five years for the union of small cocoa farmers in the Ashanti region of Ghana to form and develop an effective trading capacity on the basis of which a brand could be centred and launched. In many fields that involve marginal producers, fair trade is slow trade.