Exploring: Social entrepreneurs and failure  In recent years, open discussions about failure in social entrepreneurship have been actively encouraged. In the current framing of failure, it is often presented as a learning opportunity, a chance to grow and develop, yet the difficulties and personal costs for social entrepreneurs are less frequently discussed. In the first of UnLtd’s Explore papers, we identify some of the issues that social entrepreneurs face when it comes to failure and ways that we can provide better support. This provocative exploration of a taboo subject will be useful for aspiring, new and established social entrepreneurs as well as support agencies, including funders looking to further develop the ecosystem of support for entrepreneurs.  

Introduction Methodology and purpose The social entrepreneurial world has been candid enough to discuss failure in recent yearsi. Entrepreneurs have even been urged to celebrate their failuresii. Discussions and events for sharing failure stories recognise that experiencing failure is an inevitable part of trying to solve social problems. The consequence is that social entrepreneurs must deal with a continuous stream of highs and lows. Within this current framing, failure is often presented as a learning opportunity; a chance to grow and develop. Yet the difficulties and personal costs for social entrepreneurs are less commonly discussed. With the emphasis on celebration, the recognition that a lack of success is not always a good thing appears absent from current discussions. One of the challenges we face as supporters of social entrepreneurs is that we don’t always understand what failure looks or feels like for social entrepreneurs and the people they work with. If discussions about failure are always focused on celebrating success then it can be tricky to uncover the difficulties and personal costs involved. Consequently, supporters are unable to work out how best to support social entrepreneurs. To explore some of these issues we facilitated a workshop for 28 social entrepreneurs and social entrepreneur supporters at the social entrepreneurship festival, Marmalade, in 2015iii. Failure is a sensitive subject and we are grateful to those who shared their views and experiences in confidence. This paper highlights different experiences and dynamics of failure raised in the group discussion and reveals some of the under reported concerns associated with it. The paper concludes with a section of practical suggestions for both social entrepreneurs and support organisations to help us better embrace failure.

The thorny issue of failure: what failure is and is not In this section, we present the different perspectives on failure that emerged from our conversations with social entrepreneurs. Workshop participants were asked about the various meanings of failure and how it is talked about, with an emphasis on understanding the costs and difficulties entrepreneurs face. We also draw on our experience of supporting social entrepreneurs to complement the insights that arose.  Failure as an end: the closure of a social venture        The closure of a business is the most obvious kind of venture failure. Statistics vary widely, but, in a recent UK report, only 50% of small businesses survived their first five yearsiv. For social ventures specificallyv, our survey data shows that 88% of social ventures supported by UnLtd are still running after one yearvi. Data from UnLtd Award Winners suggests a wide range of reasons why social ventures close. These include:

•   changing personal circumstances •   external factors such as partnerships dissolving •   the cost of living.

However, one of the most common reasons given is that the aim of the venture was achieved. In these cases, closure of the venture was not a failure, but a success. Social entrepreneurs in the workshop similarly recognised that whilst the closure of a social venture could be an example of failure, it could also hide a more complex story.  Failure as under-performance: a social venture not meeting their business indicators  Beyond survival, business performance indicators can be considered as a measure of success. As noted in our 2010 research, turnover, scale and survivability are used as a proxy measure to indicate successvii. For many social entrepreneurs running their social venture is a balancing act between income generation and impact generation. When a social venture performs less well against business indicators, it might be because they have been sacrificing some profit to deliver more social impact. Conversely, prioritizing income generation, referred to by social entrepreneurs in our workshop as ‘mission drift’, was seen as selling out and failing. Traditional signs of success, such as high turnover, established scale and resilience can mask underlying organisational failings.  

Failure as a step on the path to success: a learning opportunity for the social entrepreneur  The idea of early-stage failure as a step on the path to success is prevalent and one that was widely discussed by the social entrepreneurs in the workshop. They spoke of failure as ‘going back, but stepping on a higher step’ and as ‘an opportunity to try again having learned something’. Over a third of the social entrepreneurs agreed that ‘failure’ could mean ‘a time to re-launch’ with one social entrepreneur joking that ‘It’s OK as long as there’s a 2:1 ratio, two projects succeed for every one that fails’. However, this perspective raised concern amongst some social entrepreneurs at the workshop who told us that failure in the early experimentation stage is not necessarily a synonym for a learning opportunity. Instead, it can threaten leadership, confidence, risk- taking and the creativity of social entrepreneurs. They spoke of failure as ‘wasted time and resources’ and, even, as ‘emotionally falling apart’.  Context is everything  As these three different perspectives highlight, the meaning of failure is subjective and therefore, the operating context and the people involved are crucial to how we understand it. Workshop participants emphasised how short-term, planned experiments are very different from ambitious projects that fail because the people, processes and resources were mismatched.  

“Sometimes you’re seeking failure, like you need to know if you need to kill a venture quickly or not so you might push yourself to see.”

- Social entrepreneur, 2015 Planned experiments or pilot projects resulting in failure, while difficult in the short term, can give new information and direction to future work. In contrast, when failure occurs in other circumstances, such as the result of a simple mistake or poor decisions based on incomplete information, the consequences can be extensive and can affect the lives of whole communities.

“The ramifications of failure are effectively very widespread. The kind of stakeholders it could impact include suppliers, shareholders, the wider

community that employs people and so on. The kind of things that can come up are a loss of confidence in the management of the organisation, why failure

wasn’t spotted earlier, loss of confidence in systems, cultural insecurity, lack of trust in the brand and long-term growth”.

- Social entrepreneur, 2015  In such instances, the notion of failure as a step on the path to success is inadequate as it does not take into account the reality of the consequences and cost of the failure beyond that of the individual social entrepreneur.

Embracing failure, despite the pain  The context for failure is crucial to how we understand it and it is not always possible, or even desirable, to convert the implications of failure into lessons for the future. In this section, we explore the difficult issues and different experiences of failure highlighted by social entrepreneurs.

The Challenges of Failure  Social entrepreneurs are encouraged not to fear failure, to fail fast and cheaply, and to think about incorporating lessons from failure into strategic planning processesviii. As Karl Belizaire suggested in his TedX Bristol talk on ‘failing forward’, taking the next step as a social entrepreneur means learning as much from mistakes as quickly as possibleix. Our workshop participants told us that this is painful, but possible in the early stages of a venture, especially when decisions need to be made quickly. Such learning and reflection requires time and space for iteration, where risks can be carefully managed. At the same time, many social entrepreneurs mentioned that costs of failure can be high; even small failures could result in feelings of letting others down. Contemporary initiatives encouraging entrepreneurs to ‘admit failure’ were described as ‘trendy’ and in conflict with the typical entrepreneurial mindset that ‘failure is not an option’. They shared stories of ‘sadness for hopes and dreams unfulfilled’ as well as frustration about wasted time and resources, even in the early stages.   “I can’t take the risks that would lead to failure because I don’t quite believe all

this talk about failure being something positive is real.” - Social entrepreneur, 2015

In the short term, viewing failure as a learning opportunity was seen to be difficult in the face of financial losses.  “It is easier to be positive about the loss of time; with the financial, there’s not a

lot of positives you can get out of it.” - Social entrepreneur, 2015

 

The value of knowing how to respond to negative feedback during the early stages of a project was particularly emphasised.

“Often at the beginning of an initiative we get quite a lot of negative feedback because things haven’t really got going yet, it hasn’t had chance to really have

an impact. So, it can actually be really tough for the people working on it because they are receiving a lot of critical feedback, a lot of negative feedback,

and you kind of want them to ignore that and just carry on because they’re going to get through that stage.”

- Social entrepreneur, 2015

Bad news and negative feedback, both often part of the ‘failure’ process, are also hard to take in the immediate aftermath of a failure. It takes time to analyse failures and it is difficult for people who are responsible for being a champion for their organisation and for delivering social value, to focus on flaws and weaknesses.  “I think a lot of it depends on who you’re getting feedback from and why they’re

giving it to you.” - Social entrepreneur, 2015

Seeking out critical feedback depends on high levels of trust and finding the right moment for the conversation. Social entrepreneurs emphasised that they rarely find the time and space to process their experience of failure with others. In the best cases, honest and transparent discussion of organisational difficulties came about by asking colleagues (insiders) and consultants (outsiders) to act as critical friends.  The need for support  Our conversations with social entrepreneurs suggest that failure only leads to learning if the social entrepreneur is supported and in a trusting relationship. Furthermore, learning may take time to emerge, even if the social entrepreneur is supported to take the time to reflect. Such support to systematically reflect on failure is needed in order to protect risk taking capacity and creativity, especially when social entrepreneurs are developing their business models.

Why is it so difficult to talk about failure?  When the costs of failure are considered, the fact that it is a topic that is so difficult to talk about is perhaps not surprising. When we asked workshop participants whether they talked about failure, the most common response was ‘privately yes, publicly no’. In this section, we provide an overview of the reasons, highlighted by social entrepreneurs, of why failure is such a difficult topic to talk about.

Fear of judgement and reputational damage  In the workshop, social pressures and stigmatisation were highlighted as the main reasons why social entrepreneurs are reluctant to talk about failure. They expressed fear of being judged negatively by others and spoke of their concerns about the negative impact on their reputations. Discussing failure could lead to a ‘loss of face’ and the social entrepreneurs acknowledged that their reluctance to talk about failure was related to their sense of pride.  

“Most of us believe that we can’t be wrong!” - Social entrepreneur, 2015

On a practical level, social entrepreneurs felt that it was important to ‘preserve enough ego to persevere, which could be challenging in frank discussions about failure.  

“Talking about failure can shake your resolve in your mission and ability” - Social entrepreneur, 2015

 Fear of judgement was seen to be compounded by issues of blame, shame and guilt, particularly when social entrepreneurs were unsure how to learn from the failure or it wasn’t easy to understand exactly what went wrong.

Fear of business consequences  Concerns about failure being damaging to organisational reputation was a recurring theme in our discussions, especially because it might limit future opportunities for partnerships and funding.  

“There’s the integrity issue, how much can you get reinvestment.” - Social entrepreneur, 2015

 The loss of a positive story could put the whole organisational identity into question and be a threat to the fundamental theory of change.

“If something is a global failure, it’s not only money you lose but trust.” - Social entrepreneur, 2015

 Workshop participants also acknowledged that failure can affect the morale of staff and create tensions within an organisation. Knowing how to deal with such tensions can be difficult. Talking about failure with others tends to happen in informal settings, but it is difficult to create a shared organisational understanding of failure when only family members or close colleagues are part of the conversation.  However, public opportunities to share lessons from failure were viewed with scepticism because they draw attention away from understanding the issues for the organisation or team.  The emphasis on celebrating failure excludes negative experiences  The culture of the internet, full of positive messages like ‘never give up’, was thought to be an unhelpful pressure and ‘astoundingly bad advice’. Social entrepreneurs told us that the need to be positive about failure focused responsibility on the individual even when they were feeling discouraged and bruised by the experience.  

“The difficulty of being trendy about it is that it just makes me feel so crap… it becomes about me and my own response to it.”

- Social entrepreneur, 2015  

Conversely, resolutely pursuing success with the idea that ‘failure is not an option’ can make it difficult to take responsibility for things that go wrong, to develop a ‘plan B or C’ and communicate that in an effective way.  Failure is both personal and public  Workshop participants recognised that the biggest challenge to shared reflection and learning from failure is being able to allow others to judge their performance and potential. Planning openly and honestly for potential failure was seen as a risky thing to do because sharing an ‘escape plan’ puts doubts into the minds of investors.  

“Personally you need an escape plan but you need to be able to craft a believable story that what you’re proposing can be done.”

- Social entrepreneur, 2015

Conclusions: Moving forward on failure  From our conversations with a range of people active in the social enterprise sector it is clear that the context for failure is crucial to how we understand it. In the words of Harvard University Professor Amy Edmondson, “not all failures are created equal”x. While failure can present opportunities for future personal growth, learning and success, social entrepreneurs can experience a range of negative emotions at the time. At present, the difficult issues associated with failure in social entrepreneurship are too often overlooked, leaving social entrepreneurs feeling isolated, which prevents that sought after learning from occuring.  The need for critical discussion not just celebration  Moving on after failure involves talking about it in all of its depth. We need to move away from focusing only on the positive aspects in public and the negatives in private. Reinventing failure as a positive story might be part of the solution, but when seen sceptically as ‘spin’, it does not encourage analysis of the more painful and complex experiences. The fact that we are now starting to have critical discussion of the costs of failure in social entrepreneurship demonstrates that progress has been made. However, failure is an ongoing issue that social entrepreneurs and the people that support social entrepreneurs need to better understand.  How can we handle it more effectively?  A range of responses are needed which reflect the fact that failure is both personal and public and that it is context-specific; responses that are both emotionally and practically supportive.  Social entrepreneurs want time and support to process some of the consequences of failure. Opening up a new conversation helps build confidence to understand the stigma and pain of failure in social entrepreneurship as well as the creativity and opportunity for learning. Ongoing open, honest and sensitive discussions about this are needed. Developing a shared language about possible and actual failure can also help to develop a blame-free culture for social entrepreneurs..  

Practical suggestions for social entrepreneurs •   Include the identification and mitigation of everyday small failures as part of

your regular project reviews.

•   Add the personal costs of failure into risk and contingency planning; identify what support is available if things go wrong (including from funding agencies).

•   If you have a team, find new ways to encourage honest and open discussions about workplace stress.

•   Seek to establish a culture of ‘We failed’ not ‘You failed’ to avoid a culture of blame and avoidance.

•   Seek out other entrepreneurs who share experiences, costs and opportunities of failure.

•   Give yourself and your stakeholders time and space to process, reflect and learn from failure.

•   Build in processes that will enable you to receive and act on feedback from your clients and/or beneficiaries.

 Practical suggestions for support organisations •   Understand that failure is both personal and public – both emotional and

practical responses are needed.

•   Facilitate the creation of safe spaces through peer-mentoring and learning groups – this could be more effective than encouraging entrepreneurs to ‘celebrate’ failure.

•   Work with start-up social entrepreneurs to understand the differences between prototyping, piloting and establishing new projects, and identify what the risks of failure are at each stage and ways that these risks could be mitigated.

•   Integrate self-care and wellbeing into the support offered to social entrepreneurs.

•   Offer or signpost social entrepreneurs to specialist support from counsellors, change managers, risk and recovery experts before crisis looms.

•   Track ‘lessons learned’ across support programmes and share stories of success and failure.

feugiat  vitae  erat.  Pellentesque  varius  felis  ac  gravida  volutpat.  Phasellus  vulputate  ena    

Authors: Roxanne Persaud, Jami Dixon and Katie Thorlby Acknowledgements: Failure is a sensitive subject and we are grateful to all participants for sharing their views and experiences. We’d also like to thank Adele Grison, Flynn Butterworth, Stephen Miller and Hannah Stranger-Jones for their time and insightful comments that helped shaped this paper. Date: August 2017

i See for example: http://www.theguardian.com/social-enterprise-network/2013/feb/11/failure-social-enterprise http://www.theguardian.com/social-enterprise-network/2013/mar/18/discuss-failure-social-enterprise-sector

ii https://www.fastcompany.com/3038446/innovation-agents/failure-has-never-been-more-successful

iii Marmalade is the fringe conference for the Skoll World Forum for Social Entrepreneurship. https://attending.io/events/counting-the-cost-of-failure iv Growing Pains: How the UK became a nation of “micropreneurs”. Available at:

https://www.rsagroup.com/media/1737/growing-pains-how-the-uk-became-a-nation-of.pdf v The term social venture includes both projects and organisations run by social entrepreneurs. vi Data from UnLtd Award Winners collected through End of Award and Year End Survey, correct up

to February 2016 (n=1930). vii Realising Success, 2010. UnLtd Research Findings Paper 2 https://unltd.org.uk/wp-

content/uploads/2012/11/Findings-Paper-2-Realising-Success-2010.pdf viii For example, https://www.bloomberg.com/news/articles/2007-06-24/fail-fast-fail-cheap ix Fail forward: Karl Belizaire at TEDxBristol https://youtu.be/37dBJUMQMP4 x Edmondson, Amy. "Strategies for learning from failure." Harvard Business Review (April 2011)