qbl the quadruple bottom line jim mcloughlin university of brighton
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QBL The Quadruple Bottom Line Jim McLoughlin University of BrightonTRANSCRIPT
ByJim McLoughlin, Jaime Kaminski, Babak Sodagar
Cubist Research & Consultancy Group,Social Enterprise & Socio- Economic Impact Research
The Business School, University of Brighton
Applying the SIMPLE method of impact measurement{SIMPLE = Social Impact for Local Economies}
Making the invisible visible conference, University of Brighton, December 2010
The Quadruple Bottom Line (4BL) and holistic perspectives on sustainability – lessons from the social enterprise sector regarding values,
strategies & social impact measurement
Introduction Social Enterprises in context Research objectives and methodology The SIMPLE Measurement model & the Quadruple
Bottom Line (4BL) Case example of applying the methodology Linking micro impact measurement to macro measures
and sustainable systems. Warnings re measurement & some conclusions
“…businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.”
Office of the Third Sector, 6th March 2007
Pearce, J. (2003) Social enterprise in any town, Calouste Gulkenkian
Foundation: London
First SystemPrivate
Profit oriented
Second SystemPublic service
Planned provision
Third SystemSelf Help, Mutual, Social purpose
UK Government’s vision:“To Promote dynamic and sustainable social enterprises, contributing to a
stronger economy and fairer society. This is critical to the successful economic and social regeneration of many communities.”Cabinet Office & HM Treasury(2006)The future role of the third sector in social and economic regeneration: interim report,, HMSO (December 2006)
Social enterprise is an idea “whose time has come.” Support for an “aggressive growth strategy” in the sector.Byrne,L (2009a) Cabinet Office Minister, Voice 09 Conference, February 2009
“ SEs are well placed to provide a blueprint for the kind of ethical and sustainable businesses that will help build a new, more balanced economy” Liam Byrne (2009b), Cabinet Office Minister, Social Enterprise Summit , May 12th, 2009
“Social enterprise is at the heart of a deep and serious reform of public services as part of the Big Society agenda”.
David Cameron, Prime Minister, as quoted in www.socialenterpriselive.com 18th May 2010.
Social enterprises could form part of a “business revolution” where social enterprises “become the business model of the future blending profit and social benefit.”Clark, M. (2009) The Social Entrepreneur Revolution: doing good by making money, making money by doing good, Marshall Cavendish
Key challenges How to build capabilities in the sector to compete effectively?How to measure impact robustly, credibly and cost effectively?
“While many third sector organisations have a powerful story to tell, the social and environmental value of the impact is often underplayed. As we face tough economic times, It is now more important than ever that we allow for better recognition of those who create social and environmental value”
Byrne, L (2009c) Cabinet Office Minister, Social Enterprise Summit , May 12th, 2009
“Whilst it is possible to measure the amount ofmoney that social enterprises generate … it is far more difficult to measure the wider civic or social impact that social enterprises have and the benefit gained (financial or otherwise) by a community.”
Haugh, H. (2006) A research agenda for Social Entrepreneurship. SocialEnterprise Journal (1),1-12.
To develop an impact measurement model and methodology for Social Enterprises
Exploring linkages between micro impact measurement and macro measures & systemic change – moving to more sustainable societies
Specific Considerations of the SIMPLE project:
To design and implement a social impact training programme for social enterprises
Practitioner focused Build social enterprise management capabilities and contribute to
improved performance of social enterprise
Action Research Approach
◦ Problem centred, client centred and action oriented(Lewin, K. (1946) Bryman, A. and Bell, E. (2007), Argyris, C., (1985)
◦ Reflective and experiential learning review processes (Kolb, D.A. 1984)
Case Study Method
Over 60 social enterprise cases
Applied SIMPLE (Social Impact for Local Economies) Model
◦ A strategic approach to impact measurement (McLoughlin et al, 2009)
◦ Develop tailored impact measures
Scope It
Map It
Track It
Tell ItEmbed ItEmbed It
The SIMPLE Model: a 5 step approach
McLoughlin,J. Kaminski,J, Sodagar,B et al (2008,2009)
SE impact contextMacro environment
Funding, policy, legal, social, technology context
Local environmentLocal demographic, political, funding,
competition, infrastructure, social needs, user / client influence
Organisational contextOwnership, governance, scale, location,
product / service offer Management decision makingStrategic direction, Operations, HRM &
organisational culture, Financial, Marketing, Technology strategy, Networks,
alliances & partnerships
SE mission, values, vision and objectives
Who is it serving?Who should it serve?Priorities regarding
impacts
SE stakeholdersWho has a direct interest?
Who has the power to influence change?What priorities and impacts are desired?
Financial (+/-)
Mac
roM
icro
The social
enterprise
External drivers
Internal drivers
Mission-led drivers
Financial (+/-)
Economic (+/-)
Economic (+/-)
Social (+/-)
Social (+/-)
Environmental (+/-)
Environmental (+/-)
Outputs Outcomes Metrics Impact
MAP IT TELL ITTRACK IT
Activities \
\
\
\
\
\
Stakeholder drivers
The SIMPLE Model and the Quadruple Bottom Line (4BL): deep version
Scope It
EMBED IT
Process change
Process change
Process change
Process change
McLoughlin,J. Kaminski,J, Sodagar,B et al (2008,2009)
The SIMPLE Impact Model &The quadruple bottom line (4BL) - Summary version
EMBED IT
Process change
Process change
Process change
Process change
SCOPE IT MAP IT TRACK IT TELL IT
External Drivers
Stakeholders
Internal Drivers
Mission/Values Drivers
Activities
Financial
Social
Environmental
Economic
Financial
Social
Environmental
Economic
Source: McLoughlin, Kaminski, Sodagar, et al (2009)
Outputs Outcomes Metrics Impacts
Key characteristics
All are Social Enterprises – but different legal forms
All are Social mission driven - different points of focus
(EG: lending to financially (and often socially) excluded, local community development, local economic regeneration, social enterprise lending, Entrepreneurship).
Different business models but nearly all UK CDFIs dependent on public sector subsidies or external grant funding
All share “lender of last resort” role –mainstream banks reject (people, businesses and areas excluded)
Target markets – 3 main Enterprise lending (often with training/mentoring support) Social Enterprises Personal Lending
“I think some of it (banking) is socially useless activity,”
The financial sector had “swollen beyond its socially useful size” and seemed to make excessively large profits.
(Lord Turner, UK Financial Services Authority chairman, Prospect magazine, August 2009)
MAP IT: Capitalise Business Services
Three of the 4BL prioritised for measurement in this SE
CBS: Emerging Impact Measures – A Blended value approach
Social Financial
Economic
CBS Measures
• Businesses created• Businesses safeguarded• Jobs created• Jobs safeguarded• Business survival rates
Turnover created (Gross/ Net)Turnover safeguardedBenefits SavedSocial Return on LendingRecycling of loans
• Socio- economic profile of beneficiaries– gender, IMD, age, ethnicity, area etc
• Business skills development• Personal development & confidence• Social capital & connectivity• Entrepreneurship and business acumen• Financial inclusion• Stories/reflections
• Sustainability ratios:•Operating costs•Operational Self Sufficiency•Loan fund Self Sufficiency
• Loan portfolio performance indicators:•Portfolio growth•Portfolio at Risk•Write off rates
The SIMPLE Model & 4BL as a Strategic Sustainability Management tool
– Measure It to Improve ItEMBED IT
Process change
Process change
Process change
Process change
SCOPE IT MAP IT TRACK IT TELL IT
External Drivers
Stakeholders
Internal Drivers
Mission/Values Drivers
Activities
Financial
Social
Environmental
Economic
Financial
Social
Environmental
Economic
Strategic ReviewSource: McLoughlin, Kaminski, Sodagar, et al (2009)
Outputs Outcomes Metrics Impacts
“Once the credit crisis is firmly consigned to corporate history, not only will it have sent some mighty business names to the wall, it will also have been responsible for fundamentally changing the way the business world operates”
“One such example may be in the way that corporate value is determined; will financial measures still be used in isolation as the measure of business value? This approach will soon be challenged”
(Rodger Hill, Head of Financial Management Advisory at KPMG in the U.K.,http://www.kpmg.com/Global/en/Pages/default.aspx , accessed Oct 4th, 2010 ,
What about the system’s ethical assumptions? Moral Crisis: Neo-liberalism casino capitalism - Now “
bankrupt” philosophyBut its vision has gone unchallenged:
“The unhindered, rationally calculated, pursuit of self interest in free, competitive markets was not just economically efficient but morally right.”
Real culprit in this crisis “Hyper-individualistic, materialistic hedonism of the entire culture”
Deep change needed – economic, constitutional & new moral culture.
Prof. Marquand, D (2009) The moral economy can’t be righted until we accept our own culpability, Guardian, May 27, 2009.
GDP Unconstrained
Growth Social Sustainable
Product
Profit maximisation Social Impact MaxMin Environ. Damage
Shareholder value Stakeholder Value
Social EnterpriseBusiness Models
Profits before principles Principles before profits
Conventional Business Models
MACRO
MICRO
Systems
Business Strategies
Enabling all people …to satisfy theirbasic needs and enjoy a better quality of life, withoutcompromising the quality of life of future generations.
Securing the future (2005), HMG Cabinet Office, TSO
“There’s a battle outside and it is ragin’, It’ll soon shake your windows and rattle your walls. For the times they are a-changin’ ( Bob Dylan , January 1964)
‘
“I did something that challenged the banking world. Conventional banks look for the rich; we look for the absolutely poor. All people are entrepreneurs, but many don't have the opportunity to find that out.”Muhammad Yunus Grameen Bank
The Chinese MEANING OF CRISIS –“be aware of the danger-but recognize
the opportunity”
Pearce, J. (2003) Social enterprise in any to Calouste Gulkenkian Foundation: Londo
First SystemPrivate
Profit oriented
Second SystemPublic service
Planned provision
Third System-Social Economy
Mutual, Social & Environmental Purpose
Scope to Grow the Social Economy?
Monetisation
Financial Social
SROI
Economic Environmental
picture ref: http://www.carnoc.com/
SROL
"We will find neither national purpose nor personal satisfaction in a mere continuation of economic progress, in an endless amassing of worldly goods. We cannot measure national spirit by the Dow Jones Average, nor national achievement by the Gross National Product. For the Gross National Product includes air pollution, and ambulances to clear our highways from carnage. It counts special locks for our doors and jails for the people who break them. The Gross National Product includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missles and nuclear warheads.... It includes... the broadcasting of television programs which glorify violence to sell goods to our children. "And if the Gross National Product includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry, or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials... the Gross National Product measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile, and it can tell us everything about America -- except whether we are proud to be Americans."
Sen. Robert F. Kennedy on March 18, 1968, speech at the University of Kansas
• Argyris, C., Putnam, R. and Smith, M. (1985) Action Science: concepts, methods and skills for research and intervention, San Francisco: Jossey-Bass.
• Bryman, A. and Bell, E. (2007) Business Research methods, Oxford: Oxford University Press.• Byrne,L (2009a) Cabinet Office Minister, Speech ( press release), Voice 09 Conference, February 2009• Byrne,L ( 2009b) Cabinet Office Minister, Social Enterprise Summit Press release, Cabinet Office, May 12th, 2009• Byrne, L (2009c) Social Enterprise Summit Press release, Cabinet Office , May 12th, 2009• Cabinet Office & HM Treasury,(2006) The future role of the third sector in social and economic regeneration: interim
report, Cabinet Office & HM Treasury, HMSO (December)• Clark, M. (2009) The Social Entrepreneur Revolution: doing good by making money, making money by doing good,
Marshall Cavendish• Coffey, P. (2006) Social Impact Measurement: Methodology Assessment, Initiation Report for the SIMPLE project,
SEL/University of Brighton: Brighton.• Haugh, H. (2006) A research agenda for Social Entrepreneurship. Social Enterprise Journal (1),1-12.• Lewin, K. (1946) Action research and minority problems. J Soc. Issues 2(4), 34-46.• Lewin, K. (1947) “Group Decision and Social Change." In T. H. Newcomb and E. L, Hartley (eds.), Readings in Social
Psychology. New York: Henry Holt.• Maxwell,O (2007), Social Enterprise in Brighton and Hove: A profile of the sector with implications for future support and
development, Brighton and Hove Business Community Partnership, In collaboration with the University of Brighton,• Marquand, D (2009) The moral economy can’t be righted until we accept our own culpability, Guardian, May 27, 2009.• McLoughlin,J.,Kaminski,J, Sodagar,B,Khan,S,Harris R and Arnaudo,G. Mc Brearty,S.(2008) Measuring the Impact of
Social Enterprise:a Holistic Modeling Approach, Social Enterprise Research Conference, SERC) Proceedings, London, June.
• McLoughlin,J.,Kaminski,J, Sodagar,B,Khan,S,Harris R and Arnaudo,G. Mc Brearty,S.(2009)A Strategic Approach to Social Impact Measurement of Social Enterprises: The SIMPLE Methodology, Social Enterprise Journal , submitted May 2009)
• Pearce, J. (2003) Social enterprise in any town, Calouste Gulkenkian Foundation: London
http://www.youtube.com/watch?v=77IdKFqXbUY
Sen. Robert F. Kennedy on March 18, 1968, speech at the University of Kansas on the presidential campaign trail
Assassinated less than 3 months later in California.