The Four Components of Social Entrepreneurship by Paul Light

assumptions about social entrepreneurship fall into four broad components:

• Entrepreneurs


• Ideas


• Opportunities


• Organizations.

These four components not only help organization the rapidly growing literatures on business entrepreneurship, they clarify the search for strategies that might help entrepreneurs develop and launch better ideas, discover opportunities, and create more creative organizations.
There is plenty of evidence that social entrepreneurship involves more than an entrepreneur and a pattern-breaking idea. The only problem, if it is a problem at all is that the field as a whole has yet to decide which components matter most, or how individual dispositions vary with organizational context.

Entrepreneurs
Entrepreneurs are the first component of social entrepreneurship, and can be found in every definition I have read. However, some definitions give entrepreneurs greater prominence than others. Although Drayton argues that there is no entrepreneur without a powerful, system-changing idea that seeks widespread impact, there is no chance of success without the talent, creativity, and entrepreneurial intent of the individual. As he wrote in 2005, “these people are compelled to change the whole society. From childhood, an entrepreneur intuitively seeks out an area of interest, for example, health, and then begins the long search for an idea that will be his or her vehicle for leaving a scratch on history.”

This focus on entrepreneurs inevitably leads the search for traits and characteristics that might these gifted individuals from the rest of society. According to Drayton, “entrepreneurs are easy to spot long before they have made their mark. They are married to their vision—and will stick with it for decades if needed. They are equally focused on the ‘how to’ questions. They ask themselves: How do I get from here to my goal fifteen years from now? How do the pieces fit together? How do I solve this and the next problem?” Thus does the “democratic revolution” occur.

Drayton’s entrepreneurs also show deeper qualities:

What qualities define an effective social entrepreneur? First, the person must be creative in both goal setting and problem solving. Second—and this is the toughest screen—is entrepreneurial quality. This is not leadership, or the ability to administer, or the ability to get things done. The driving force here is the fact that such a person is emotionally, deeply committed to making change throughout the whole of society. Once one understands that this commitment itself is the driving force, then everything else follows. The final quality essential to success as a social entrepreneur is ethical fiber. People will not make significant changes in their lives if they do not trust the person asking them to do so.

Ideas are the second component of social entrepreneurship, and are also found in all of the definitions I have collected. Comparing business and social entrepreneurship in 2007, Martin and Osberg argued that the critical difference between the two is the “value proposition.” Unlike business entrepreneurs who focus on serving markets that can afford a new product or serve, social entrepreneurs seek no profit for their investors or themselves:

Instead, the social entrepreneur aims for value in the form of large-scale, transformational benefit that accrues either to a significant segment of society or to society at large. Unlike the entrepreneurial value proposition that assumes a market that can pay for innovation, and may even provide substantial upside for investors, the social entrepreneur’s value proposition targets an under,, neglected, or highly disadvantaged population that lacks the financial means or political clout to achieve the transformational benefits on their own.

Entrepreneurs clearly play a significant role in transformational change, but only when they are absolutely committed to the idea. Indeed, writing in 2003, Martin warned the social benefit sector to avoid “heroic leadership trap.” “Take-charge leadership misapplied not only fails to inspire and engage, it produces passivity and alienation.

And this is true not only in the for-profit and government sectors. When nonprofit leaders assume ‘heroic’ responsibility for making critical choices, when their reaction to problems is to go it alone, work harder, and do more—with no collaboration or sharing of leadership—their ‘heroism’ is often their undoing.”

Opportunities are the third component of social entrepreneurship, and were at the center of most, but not all of the definitions I reviewed over the past two years. Viewed as a moment of possibility, opportunities are sometimes taken as a Peter Pan phenomenon—that is, if you believe you can fly, you will fly.

Writing in 1998, Dees offered a very difference view. Like Drayton, Dees reserved a significant role for the entrepreneur as the starting point of change. However, Dees also argued that a powerful vision is not enough to create disequilibrium. Opportunities must be identified and exploited. Indeed, entrepreneurs are defined in part by their ability to recognize and “relentlessly” pursue new opportunities. “Where others see problems, social entrepreneurs see opportunity,” he wrote. “They are not simply driven by the perception of a social need or by their compassion. Rather they have a vision of how to achieve improvement and they are determined to make their vision work. They are persistent.”

Opportunities also provide resources and the potential for collaboration, which leads to Dees’ notion that social entrepreneurs work around the obstacles embedded in an opportunity.

Social entrepreneurs do not let their own limited resources keep them from pursuing their visions. They are skilled at doing more with less and at attracting resources from others. They use scarce resources efficiently, and they leverage their limited resources by drawing in partners and collaborating with others. They explore all resource options, from pure philanthropy to the commercial methods of the business sector. They are not bound by sector norms or traditions. They develop resource strategies that are likely to support and reinforce their social missions. They take calculated risks and manage the downside, so as to reduce the harm that will result from failure. They understand the risk tolerances of their stakeholders and use this to spread the risk to those who are better prepared to accept it.

For Dees, social value is always the ultimate goal. It is why social entrepreneurs pursue opportunities in the first place, learn and adapt as they proceed, and act boldly without regard to resources. And it is why they are called to action in the first place. Nevertheless, they could not act without the ability to recognize opportunity when it arises.

Organizations are the fourth component of social entrepreneurship, but were often an afterthought in the definitions I read. Indeed, many definitions focused on organization and management as adversaries of change.

Jane Wei-Skillern, James E. Austin, and Howard Stevenson took a neutral stance about organizations and social entrepreneurship in 2005. Writing about the opportunity, people, capital, and context involved in creating social value, the three authors noted the importance of organizational alignment in achieving results:

Remaining attuned to how contextual changes can affect the opportunity and the human- and financial-resource environment causing the need for realignment is a critical skill for the social entrepreneur. Furthermore, practitioners should remain cognizant of a unique characteristic of the operating context, namely, that the societal demand for social-value creation is enormous. This creates a plethora of opportunities for social entrepreneurs and a concomitant ever-present temptation to address more and more of them.

Although organizations impose clear operating constraints, they also provide essential capacity. As Wei-Skillern and her colleagues continued, the challenge is to determine how much the organization can achieve with limited resources: “Seeking to address a very broad set of issues with very limited human and financial resources may actually result in low social impact because the organization’s resources are spread too thin.” Simply put, organizations cannot be ignored as a component of successful social entrepreneurship and a potential source of failure.

Wei-Skillern and her coauthors clearly understood the point—their 19 page article in Entrepreneurship Theory and Practice used the word “organization” or “organizations” 127 times, and the words “entrepreneur” or “entrepreneurs” 109.

As we shall see, these four components do not drift aimlessly through what Dees accurately described in 2008 as the ecosystem of social entrepreneurship. Rather, they come together on occasion to create a strategy for change.

Some strategies emphasize the entrepreneur’s dispositions and traits, while others focus on the context created by organization, and still others emphasis ideas and opportunities as central ingredients that are shaped and noticed by entrepreneurs and organizations.

As we shall also see, the key to success may be in assembling the four components together to take advantage of a specific opportunity, develop a particular idea, use an entrepreneur’s special skills, or focus energy within an organization.

As such, creating social entrepreneurship may be very much like solving a jigsaw puzzle. Some will start at the corners, others at the center, and still others with a color. But it is unlikely that the puzzle can be solved without some combination of all approaches, especially as the number of pieces increase.

Source: http://www.socialedge.org/blogs/let-there-be-light

by: Micka Santisteban