In the early stages of any entrepreneurial venture, social or otherwise, it is the energy and drive of the single entrepreneur (or sometimes a duo, a la Google) which keeps the “show on the road”. Her (or his) passion, drive, connections, persuasive powers etc. are what enable the venture to get through the impossibly difficult early days.
In social entrepreneurship this is even more the case. As there is often no equity upside, the financial incentive is essentially non-existent. Moreover, the social nature of the organisation gives the enterprise the element of a “crusade”. In this regard the CEO/Founder’s vision is the lifeblood of the enterprise—the source of strength on which others often draw.
Yet frequently this strength becomes a source of weakness, especially as the organisation matures. So impassioned is the leader by the mission, so violently consumed by this personal passion, they stifle innovation, debate, staff development and, inevitably, the enterprise’s future. Such dysfunctionality is often the rule, in the dozens of social enterprises I have observed over the past decade. For example:
- The success of one consumer-oriented social enterprise is deeply threatened by a CEO who seems unable to yield control; threatening the company’s development and its access to capital.
- A technology oriented social business failed partly due to the CEO’s need for control and his/her refusal listen to staff, advisors and shareholders.
- An environmental firm loses key staff on a regular basis because the CEO is unwilling to be challenged.
…sadly, I could go on and on.
It is not always thus. I sit on the Board of a company, where the CEO/Founder, an unusually secure individual, regularly raises the issue of succession and team development in order to secure sustainability.
- How can social enterprises benefit from the drive of the entrepreneur without sacrificing their futures?
- What role can the Board play in these situations?
- How can good governance be achieved when there are no external shareholders with power? This is a serious problem where the CEO retains control in order to “protect the ‘mission’ of the organisation”. Frequently this power is used to protect his/her position.
- Can external stakeholders have a role in helping to address and resolve these problematic circumstances?
- How can credit be shared in a world where success is often personalised by the media?
First published in The Social Edge in July 2009.