Sunday, May 18, 2014

Business Rainbow

Once upon a time we lived in a world where there was a knight in shining armor for every damsel in distress.   Until we discovered that some damsels preferred damsels, and some knights preferred dresses, and the very idea of damsel and knight are really just points on a continuum.   And we’re learning that this is ok.

Our LBGT friends understood long before the rest of us that the world is not simple, not binary, not digital.  It’s wonderful shades of every imaginable color including hues we can not see but perhaps hear with our hearts.  And science keeps collecting the proof:
  • In a Brazilian cave there is an insect who’s female wears the penis in the family.  
  • It is the male seahorse who is man enough to do the work of incubating eggs in his brood pouch.
  • All clown fish are born male.  The largest turns female and rules the school.  When she dies the next biggest fish switches gender becoming head honcha.

Once upon a time business was limited to sole proprietorships.  Then came partnerships, limited partnerships, limited liability companies, corporations (S and C), nonprofits, ESOPs, co-ops, and now social enterprise companies.  Like our concept of family, we’re learning that the free market can mean many things to different people.  Each business type having it’s place, it’s role and it’s due respect.  Business too need not be black and white.   While once upon a time it was understood that the only business of business was to make a profit for owners.  Today’s entrepreneurs feel freer to design a business around what is meaningful and important to them.  And for a growing group of social entrepreneurs, profits are not enough;  profits are a means to a more important end - solving some social or environmental problem.  But just because they are not driven by money doesn’t make them any less serious and it doesn’t make their businesses any less viable, scalable, or legitimate.

I remember awhile ago being told that someone I knew was transgender.   “I knew something was off,”  was my flippant response.  In reflection I realize how dismissive and disrespectful my statement was.  It was said in the same way that I’ve heard traditional business folk talk about social enterprise - as if it’s “off” in some amusing or disturbing way.   But it’s not.  It’s a reasonable, natural business approach, a response to the world we find ourselves in.  

And it isn’t going away.   Social enterprise is here to stay.  It is a hybrid, it’s out of the closet.  So say it clear and say it loud -  We’re social enterprise and we’re proud!

Sunday, May 11, 2014

Connecticut passes America's most comprehensive Social Enterprise Legislation!

At 7 minutes to midnight on the last day of the Connecticut's legislative session, a law passed giving you the right to run business whose primary aim is to solve a social or environmental problem.   And just as the passing of civil rights did not an equal society make, this law in and of itself will not transform our business landscape, but it's an important milestone in the movement toward embracing a different way of doing business.

It took a village to get here. We started with the desire to make CT a hub of social enterprise and realized that to get there we need this legislation. It's important for three reasons:  It enables impact investors  to find and screen companies they want to invest in - businesses that can provide both social and financial returns.  In addition, social entrepreneurs can now take on investors without fear of being sued for considering social impact at the expense of maximizing financial returns to those shareholders.   And lastly, the bill also legitimizes the concept of social enterprise.  While it's possible to establish a social enterprise without legislation (I did), it's expensive, time consuming, and seems fringy.  We've been acculturated to think that the only legitimate purpose of a business is to make money.  And while this isn't really so, and has not always been the case, today that idea is so pervasive as to be unquestioned.  But for a social enterpreneur profitability is a means to an end, rather than the end itself.  It's the idea of eating to live rather than living to eat.    Now we have a law that acknowledges that saving the planet (or some small corner of it) is a legitimate raison d'etre for business.  The law makes the concept more mainstream - Main Street.

Four years isn't such a long time to get legislation passed when you learn that it took more than 50 years for women to get the vote.  It takes time.  Ghandi described the phases of a movement: first they ignore you, then they laugh, then they fight, then you win. In that first year we didn't have a clue, and figured as soon as we explained the idea behind social enterprise everyone would leap on board and we'd be done. We raised little interest or attention - we were largely ignored.  Later, when we were given audience it was sometimes offered witha generous serving of condescention; they thought the idea was naive, patted us on our well-meaning heads and sent us on our way.  They laughed.  But we didn't go away.  That's when we met concerns that maybe social enterprise was code for something more sinister.  You'll note the similarity between social enterprise, socialist, and socialism! The fight was on.  We still didn't give up.  We became more educated and better organized; we got strategic, we enslisted support and we moved the ball forward.  We educated anyone who would listen, won over some opponents who fought us because they misunderstood what we were about, and explained that there's nothing more free market than being open to other goals. The third year proved to be the charm.  We had familiarity, momentum, and lots of support on our side.  We pressed hard and we brought it home. We, and by extension, all of us, won.

And in doing so Connecticut can boast having the most comprehensive social enterprise legislation in the country.  Because only in Connecticut can you, if all of your shareholders agree, lock in your status as a social enteprise, protecting in perpetuity its status as a social enterprise.  For a business owner that wants to leave a legacy in a company that will always have at it's core the purpose of making our world a better place, Connecticut has it!  

We did it!  In terms of our overall goal of making Connecticut a hub of social enteprise this is of course only the begining.  This law is an important, foundational cornerstone in the social enteprise movement and our goal to create a vibrant social enterprise community here in our state.  With this law in place, Connecitcut can encourage and demonstrate the transformative power of the free market when it is harnessed to impact.  With this law Connecticut is open for social enterprise business.

It was a high five moment, one to celebrate.   

The legislation passed!  I wish it sounded more grand.  A marathon is run.  A mountain scaled.  A victory  won.  And our bill passed - sounds more like gas or a gallstone.  There should be a more triumphal word.  But whatever - it is a relief!

The bill passed.  The movement goes on :>)