Social enterprise management skills

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Social enterprise management skills


New skills needed for staff in social enterprises

Social enterprises play an important role in society. Their distinguishing feature is that they trade to support their social objectives rather than for personal gain. In so doing, they provide much-needed goods and services, often where the private sector has chosen not to. Social enterprises provide health and care services, recycling services, new and recycled goods, transport, community facilities, renewable energy, construction services, housing and access to broadband telecommunications. This is often combined with providing on-the-job training in a supportive environment for disadvantaged people, including people who have a disability or are long-term unemployed.

Despite this, or perhaps because they eschew a "get rich quick" mentality, social enterprises tend to suffer from low prestige. Yet working in them is not easy; it demands flexibility and multiple skills. Incentives and career paths are sometimes limited, or perceived as such. Social and financial aims may clash, as may volunteer and paid employee mentalities. There may be fears that pay and conditions in the public or private sectors might be undermined by "unfair competition" from more result-oriented social economy working methods. As if this was not enough, they predominantly offer employment to people who have not gained formal qualifications.

As businesses, they must be well managed if they are to survive. The specific nature of social enterprises means that they need specific new skills and qualifications in the following areas:

  • Working in a social enterprise is not solely a matter of gaining a material reward. In personnel or human resource management, social enterprises therefore depend to a far greater extent on the motivation of their workers. Techniques of participative management are required to maintain this. These depend on the involvement of people in deciding the content of jobs and in improving results, rather than simply carrying them out as instructed. This relies on a keen appreciation of what it means to work in a team, and a commitment to a process of collective problem resolution and decision-making. Positions of responsibility may be held in rotation over longer or shorter periods, and jobs may be shared. Working hours may be negotiated flexibly. To increase job quality, people may carry out a number of different roles in parallel or in succession. Strategic decisions will generally be reached through a process of consultation of all stakeholders. Feedback on achievements and results is to the general meeting of members, as well as to stakeholders more broadly.
  • The success of social enterprises depends on keeping up good links with a number of different stakeholders. There is a need to manage their social capita, which is made up of levels of trust, reciprocity, norms of behaviour, a sense of belonging and networks. This not only involves workers but suppliers, final users, clients in both the public and private sectors and the community generally.
  • Social enterprises do not rely on conventional, anonymous marketing techniques. Instead they focus on social marketing based on proximity, personal contact and trust.
  • Finance is often a combination of private finance, public funding and voluntary contributions of money or time. Managing this mix also requires specific skills.
  • Finally, social enterprises have multiple bottom lines, that is to say multiple objectives - social and environmental as well as financial. They strive not only to ensure their continuity by making an operating surplus, but also to produce outputs which are not simple to translate into monetary terms (for instance in terms of the improved social welfare of their members, their customers and the local community). Methods of attributing monetary values to the costs and benefits of social enterprise are continually being improved (for instance their activity may reduce public spending on unemployment benefit, social security, health and policing services). Evaluating whether to support social enterprises and monitoring their performance requires special reporting, monitoring and evaluation techniques that take account of the social as well as the economic objectives.

Recognising informal learning and validationg qualifications

Over the years, the European Social Fund and education and training programmes such as FORCE and Leonardo da Vinci have supported many projects, which have built the skills of social enterprise managers. The start of a more strategic approach was signalled in the mid-1990s, when the European Commission supported a pilot project to establish a Third Sector Training Network (REEN). This held a number of European conferences and summer schools and published a directory of 140 providers, but in the absence of permanent funding was wound up after several years. Provision remains fragmented and there are few accepted standards.

The European Commission's main policy thrusts in this area are:

  • The Strategy for Lifelong Learning produced in 2001, which is based on two key ideas: firstly, that nowadays learning has to take place throughout one's life rather than being concentrated in the ages between 6 and 19. Secondly, that it is important to encourage and recognise much of the informal learning that takes place at work and outside the formal education or training system (learning must be life wide as well as life long); and
  • The Initiative on Vocational Education and Training (commonly known as the Bruges-Copenhagen process), a 31-country initiative whose aim is to build a transparent and visible European framework that allows credit transfers between countries (now possible in higher education), common quality references for training and teacher training.

The link between learning and mobility, and the imperative towards inclusion, are set out in the Copenhagen Declaration [1] of 30 November 2002 as follows: "Strategies for lifelong learning and mobility are essential to promote employability, active citizenship, social inclusion and personal development. Developing a knowledge-based Europe and ensuring that the European labour market is open to all is a major challenge to the vocational educational and training systems in Europe and to all actors involved. The same is true of the need for these systems to continuously adapt to new developments and changing demands of society."

As a result of this Declaration, work focuses on five concrete outputs:

  • A single framework for transparency of competences and qualifications. The intention is to bring together into a single user friendly and more visible format the various existing transparency instruments, for example the European CV, the certificate supplements and diploma supplements, the Europass-Training and the national reference points, possibly using the Europass brand.
  • A system of credit transfer similar to the European Credit Transfer System in higher education.
  • Common quality criteria and principles.
  • Common principles for the validation of non-formal and informal learning.
  • Lifelong guidance. The aim is to strengthen the European dimension of information guidance and counselling services, enabling citizens to have improved access to lifelong learning.

Training in social enterprise management would benefit from this harmonisation process. There are already a number of management qualifications, at various levels, specially designed for enterprises with social objectives. In its Communication on the promotion of co-operative societies in Europe [2], the Commission points out that "several examples exist of specific modules for co-operative management training (including distance learning) and even of dedicated university courses for co-operative entrepreneurs. Unfortunately, most such initiatives remain isolated and these could usefully be networked across Europe." It undertakes to "take the necessary steps to ensure that programmes for education, training, lifelong learning and e-learning should facilitate the participation of co-operatives"'. (1)

EQUAL: helping to deliver comprehensive training and education

The training being piloted by EQUAL generally falls into one of five categories, with many Development Partnerships (DPs) working on more than one:

  • Management training to improve the performance of social enterprises
  • Graduate and post-graduate education
  • Vocational training (mostly in the care sector)
  • Pre-vocational training and animation
  • Training in support services

A number of widely varying approaches may be mentioned.

Transnational delivery of a common curriculum

The partners in one transnational co-operative agreement are piloting an 18-month university-level qualification, the European Certificate in Community Enterprise (ECCE) (2). While delivery is divided among the six participating countries (ES, FR, IT, RO, SE, UK), the course is validated by the University of East London. It develops a common understanding of the social economy, creates "communities of practice" to improve skills, and creates a new professional profile, the "community enterprise agent". Thirty students started the course, and six have dropped out. The progress of the work in EQUAL so far shows that wide variations in practices of social enterprise development in different countries still allow useful lessons to be learnt. The partnership approach described above has been a strong success factor in learning the right things and in enabling the work to be further developed into a feasible European model for social enterprise support practice.

A strong focus on empowerment

Self-managed enterprises such as co-operatives are by their nature empowering, as all members have to take the responsibility of running the business. The process of group working and decision-making can be an important socialising and therapeutic tool. EQUAL has for example found ways to successfully reintegrate ex-drug addicts and education dropouts into the labour market through theoretical/practical courses in starting a social enterprise (3)

The EQUAL experience shows that some people, disadvantaged in the labour market, such as for example ex-drug addicts, have the potential to keep professional jobs, but, having dropped out of formal education, lack the formal qualifications to gain such a job. By boosting confidence, building skills and offering ways into work for people with low qualifications, social enterprises play an important role in integrating disadvantaged people into the labour market.

In Germany, the innova partnership has successfully piloted training courses that empower unemployed people by making them the boss of their own co-operative enterprise.

Professionalising the fast-growing care sector

By carrying out training in skills used in the care sector, EQUAL work is testing integrated approaches to simultaneously improve the supply of high-quality care, integrate disadvantaged individuals into the workforce, and reduce the extent of informal work. The need for elderly care is growing fast: for example, in the Land of Baden-W├╝rttemberg alone there are 34,000 people working in institutional care and a further 12,000 in mobile care. Demographic change means that this figure will grow by 25% by 2010 (4)

Creating new professions to aid social enterprise development

EQUAL has supported the development of new formal occupational standards both for managers inside social enterprises and for those advising them externally. The standard for social enterprise managers [3] is structured around three areas of competence: improving relationships with stakeholders, working with a board of directors, and monitoring the social performance of the enterprise. The standard for business advisers [4] covers four main areas: knowledge and understanding of key areas, identifying opportunities to start social enterprises, helping to start social enterprises and helping social enterprises to survive in the long-term.

The Welfare Integrato e Imprenditorialità DP in northwest Italy, with 24 partners, has developed and tested on-line training courses leading to a masters' degree in social business administration. The training is developing a new profession, the "intermediary of confidence", with the following skills profile:

  • mapping the outsourcing policy of profit-making enterprises
  • mapping the social economy offer
  • arranging meetings between public authorities, private enterprises and social enterprises
  • developing corporate social responsibility policies
  • developing innovative ideas

The qualification is accredited by the economics faculty of Padua University for the year 2005/6. The delivery of the course is scheduled so as to facilitate the participation of working managers. EQUAL has also shown that the tensions that arise within our changing societies require the exercise of new social roles. For instance in some areas young people from immigrant communities may find it difficult to find a suitable job. Their experience of facing, and possibly resolving, such difficulties can be turned into an asset, by training them to help other people facing similar problems. Training people to carry out new professions such as intercultural mediator or social economy coach not only helps them to integrate into society, but also makes them catalysts for the integration of those they advise.

Policy recommendations

Social enterprises produce goods and services and provide employment in a supportive environment. They constitute an alternative business model, which makes business attractive to a wider range of people than conventional models do. They have a valuable contribution to make in promoting inclusion, local development and neighbourhood renewal. They face the risks that commerce is prey to, and so require professional management if they are to prosper. Moreover, their multiple stakeholders and objectives mean that managing them is a complex balancing act, which demands a broader range of skills than much conventional management. There is therefore a need for better-targeted and widely available training in social enterprise management.

In several Member States, EQUAL is working on various pieces of the jigsaw of training that is needed, and the pieces are beginning to fit together. But a higher level of mutual knowledge and interchange among training providers would help to raise standards everywhere, thus leading to more, and more successful, social enterprises. One way to stimulate such a mutually beneficial exchange might be to facilitate the establishment of a European network of social enterprise training providers.

A new professional qualification in social enterprise management, which recognises the specific skills needed, would raise the profile of the sector and thus improve labour market transparency and job quality. To aid labour mobility, this should be agreed at European level. Such a qualification should be made widely available, and there is interest in several EU countries in a common graduate-level qualification in social enterprise management. A first step towards creating such a qualification would be to bring together the necessary critical mass of centres providing such training, so that they could work out the best ways of collaborating. The great potential for synergy might, for instance, be brought out by establishing a European network of centres of excellence in social enterprise management.

As well as the level of general management skills, there are skills issues specifically related to the field of personal care. Professional standards are needed to guarantee service levels to clients, to provide accountability to funders, and to offer stable career paths to workers. Transnationally accepted professional qualifications also promote cross-border labour mobility. Their establishment in the care sector will make it easier for care workers (in both EU and third countries) to take up posts in other countries as part in the formal economy, while reducing the temptation to work illicitly.


[1] Communication on the promotion of co-operative societies in Europe, COM(2004) 18, 23 Feb 04, page 7

[2] ECCO - European Community Co-operative Observatory (TCA 397), led by the Thames Gateway DP, see

[3] The Swedish DP partner in TCA 397 (EFF - Empowerment for the Future) has four partners: Basta Arbetskooperativ (an 80-strong co-operative of ex-drug addicts), a voluntary organisation, an insurance company and the University of Lund. -

[4] The Dritt-Sektor-Qualifizierung in der Altenhilfe DP is a coalition of the main welfare organisations. It aims to improve personnel development, raise job quality, and create jobs in elderly care. An index of its value is that it has grown from 17 to 30 partners.