We must discuss all types of social enterprise failure
The Guardian, by Andreana Drencheva
In the past few weeks many people have called for open and more frequent discussions on the topic of failure in the social enterprise sector. As someone who studies how social enterprises come to be, adapt, grow, scale and sometimes even fail, I believe that such discussions are essential for the progress of the movement and for the success of each individual entrepreneur and enterprise. However, despite the rapid growth of the social enterprise sector, we still struggle to find the right words when talking about failure and success.
Our obsession with social entrepreneurs as the heroes of the modern age who solve complex problems by being courageous and imaginative, and the stigmatisation of their failures doesn’t serve us well. It discourages many potential social entrepreneurs from even trying to develop and pursue their ideas and many established entrepreneurs from discussing their problems, seeking help and even closing down their enterprise when it is obvious that it is not working.
We need to talk more about failure in the social enterprise sector, but we need to shift the discussion in a slightly different direction. On the one hand, we need to move away from discussions about social entrepreneurs’ failures to social enterprises’ failures. On the other hand, we need to start paying more attention to the "small" failures in day-to-day activities and learn from them as they often prevent the "large" failures that become the focal point of our conversations.
If social enterprises are businesses that aim to create social value, then the organisation itself is just one of the tools for solving the particular social problem. If one of the tools doesn’t work, we can try another one until we find what works. But this can only happen if we can learn from the failure of the previous tools.
Some social enterprises fail because of poor governance, but many fail because the product or service they offer isn’t valuable or isn’t valued yet. In this sense, social entrepreneurs don’t fail, only the enterprises they set up might fail to remain sustainable or pursue their mission. However, even the ventures don’t fail in the ultimate sense. They serve as a learning tool for the social entrepreneur, the team and the larger market. Failed social enterprises teach us what works, what doesn’t work, and how to differentiate between the two. Failed social enterprises get us a step closer to finding the solution that works and shouldn’t be used as a reason to stigmatise the social entrepreneurs behind those ventures.
One of the Secret Social Entrepreneurs noted that social enterprise is an activity that is constantly changing, evolving, adapting and growing. This dynamism and the numerous uncertainties that surround social enterprises require constant learning that comes from trial and error. This trial and error approach can be applied on a large scale whereby we can identify which organisational structures, forms and strategies work within the market. Or apply it in the everyday activities of social enterprises in making decisions about new initiatives, partnerships and tactics.
Entrepreneurship is a process of continuous stream of successes and failures, and what we learn from failures in daily operations and decisions is as important as what we learn from the large-scale failures that we focus on in public discussions. While large-scale failures help us learn what works for the market, small-scale failures help us learn how to manage, evolve and grow social enterprises day in, day out.
As the social enterprise sector grows and social enterprises face more challenges while scaling in size and impact, entrepreneurial learning and open and frequent discussions about failure in the sector will become more essential. It’s up to us to make these discussions productive by changing the discourse.
We need to move away from stigmatising individual social entrepreneurs for the failure of their ventures and start discussing failure of all shapes, forms and sizes. More importantly, we need to create a pluralistic notion of success and failure whereby "failure" doesn’t simply mean "not succeeding", but involves a range of failures, including "not succeeding at this particular task at this particular moment with these particular resources and skills".