Pragmatism in the management of their business operations resonated strongly, when I had the chance to hear from entrepreneurs of three social enterprises in the past months: Mr. Richardo Chua of Adrenalin Group, Mr. Benny Se Teo of Eighteen Chefs, and Mr. Zhihan Lee of BagoSphere. With strong business models – in events management, food and beverage, as well as training and development respectively – it is apparent that they understand the importance of maintaining financial bottom-lines, and these three social entrepreneurs also know the challenges faced by those in their industries. Furthermore they appear to be cognisant that the Singaporean consumer is equally pragmatic, and will not necessarily pay premiums on products and services from social enterprises.
After all, “the Social Enterprise Association was set up in 2009 after a third of social enterprises in a funding scheme failed, [and the] ComCare Enterprise Fund revealed in 2014 that only half of its funded firms [were sustained] beyond three years in operations”. These three aforementioned narratives of comparative success can therefore be contrasted with their struggling counterparts. The story of dining establishment Laksania – for instance – is well-documented, and despite its financial woes it has continued to benefit from disbursements and mentorship schemes. Most have few doubts that continued reliance on the government is not sustainable, and companies cannot expect to count on goodwill or charity too.
Once the social entrepreneur ensures that the endeavour is in the black, more attention can then be paid to social impact. Social enterprises balance both economic and social value, yet creating the latter is often difficult.
Performance measurement and management (PMM) has emerged in recent years, to help social enterprises and non-profits keep track of their outcomes through data and analysis. Economic value can be determined through financial statements, and the actual figures can be compared against budgeted or forecasted numbers. PMM seeks to do the same, by encouraging organisations to decide on a few indicators – the amounts of money channelled to causes, the percentage of beneficiaries hired, or the individuals who graduate or gain employment after a programme – before they are measured and managed.
PMM can also be made more rigorous if these organisations take into consideration counterfactuals. In other words, would employees or beneficiaries of that organisation be better off, had they not worked for or participated in corresponding initiatives. Nailing down the specifics is tricky, but quantitative analyses in this regard can be meaningful for the future. It should be impressed upon aspiring social entrepreneurs that they should possess the business nous to keep their undertakings afloat, before focusing on these thereafter.