Tag Archives: buying social

Exploding The 4 Social Enterprise Myths

Social enterprises require a LOT of extra procurement work and handholding. So it’s totally fine to avoid them…right?

We love busting the most common myths in procurement.

And there’s no myth more satisfying to bust than one that can benefit everyone.

There’s a lot of misinformation going around about the pros and cons of social enterprises. So we decided to find out the actual facts from an expert.

We spoke to Mark Daniels, Head of Market & Sector Development -Social Traders and asked him to clarify a few of the most common misconceptions about social enterprises.

What is a social enterprise?

Social enterprises (SEs) are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.

Using the power of the marketplace to solve the most pressing societal problems, SEs are commercially viable businesses existing to benefit the public and the community, rather than shareholders and owners.

Social Traders, Australia’s leading SE development organisation, define a SE by the following three factors:

  1. They are driven by a public or community cause, be it social, environmental, cultural or economic
  2. They derive most of their income from trade, not donations or grants
  3. They use the majority (at least 50 per cent) of their profits to work towards their social mission

We asked Mark Daniels, Head of Market & Sector Development at Social Traders, to bust some of the most common myths associated with SEs.

Myth 1: SEs are less capable

The idea that SEs are limited in terms of capability are generally not founded, explains Mark.

“But many are limited in terms of scale. There are very few SEs that can be a major tier 1 supplier, which is mostly what procurement teams are looking for.”

Procurement teams, instead, “have to become more creative and look to tiers 2 and 3 to buy from or work with organisations like ours to work out new and different ways to buy from them.”

Another option is to encourage tier one suppliers to buy from tier 2 SEs.

Myth 2: SEs are a risky business

“To date, we haven’t seen any examples where SE have failed during contracts,” asserts Mark.

“Delivery is comparable to private sector suppliers.”

Myth 3: SEs are expensive

“Just like any other supplier; some [SEs] can be expensive, or the same, or cheaper.”

“We run a SE audit of any new buyer members. Coca Cola Amatil, for example, was spending over one million dollars on SEs and didn’t even know it!”

“There are 20,000 SEs turning over 3 per cent of the Australian economy. They’re already winning work without preferential treatment!”

“In some cases corporates do assist SEs with capacity building. This might involve paying more now but they know that in three to four years they’ll achieve scale and prices will drop.”

Myth 4: SEs require a lot of handholding

A lot of the time, SEs won’t require any more support than their private counterparts. “Coca Cola discovered that they had four or five SEs that didn’t require any hand-holding – they simply won the tender processes.”

On some occasions, however, “procurement may realise that these suppliers need help.”

“Social Traders has shifted to invest heavily in capability building for SEs. Some SEs need help to transition from a $1m to a $5m business. That’s the sort of assistance we’re giving – strategic support, accessing capital and so forth.”

“We’re also seeing things like 90-day payment terms being an issue.” Which is something procurement teams can work to change.

“The industry is starting to change the way they do payment terms – Broadspectrum, for example, has moved to 14 day payment terms for SEs and indigenous businesses.

“Suddenly more suppliers can work with Broadspectrum.”

Social enterprise policy

As we explored in last week’s blog , countries around the world are taking different approaches to improving their supplier diversity.

Buying from SEs is a great way to start.

In Australia, the opportunity around SEs came off the back of indigenous procurement proactive policies, which set targets and created social procurement systems in government to enable targets to be met.

“Level Crossing Removal Authority requires that 3 per cent of the supply chain must be indigenous-owned or SE businesses, or SE.

This has been quite powerful in changing behaviour in the infrastructure industry. We will see hopefully something to the tune of $300 million spent with SE or indigenous businesses.”

“France, Germany, Austria have requirement that around 6 per cent of your workforce and supply chain have to be people with disabilities. If that isn’t the case you have to pay a higher tax rate.”

“That tax was used to create more SEs to help people with disability. It’s an impressive policy.”

About Social Traders 

Social Traders is an Australian organisation that works to put social enterprise into business and government supply chains. They do this in order to create employment for the most disadvantaged by increasing the trading activity of social enterprises and to create new value streams for buyers.

It emerged over time was that there was a new marketplace starting to establish, which was corporate and government buyers interested in delivering social value through their procurement processes.

Social traders enable more organisations to buy from SEs, certifying them to give buyers the assurance that they aren’t being deceived. Because, as soon as social enterprise becomes a competitive advantage in a tender process, people will claim they are when they’re not

The impact of Social Traders work is impressive. In 2017 they enabled approximately $20 million in deals, which translated roughly to 300 jobs for disadvantaged people.

Their target in 2021 is $105 million in deals, creating 1500 jobs.

“We can see a market where hundreds of millions will be going to SEs every year.”

This can start to make a real dent in the unemployment of disadvantaged people.  Social procurement is a real lever for addressing social inequality.

Procure with Purpose – Join the movement

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Enrol here to join the Procure with Purpose group and gain instant access to our exclusive online events.

Buying Social, Expressing Yourself Online and Other Procurement Challenges…

Does it pay to buy social? Can I build greater trust online? And how do I prepare my team for AI developments? We answer some of the questions and challenges on the minds of procurement leaders…

Olga Savina/Shutterstock.com

The Procurious London CPO Roundtable was sponsored by Basware

How do you evolve your organisation from the mindset of  “we’re not doing anything bad” to actually “doing something good” ?

What happens when people who don’t know what they’re talking about start talking online, what does that mean for society’s leaders?

With the development of RPA and AI, are we all out of a job, and when?!

How should organisations go about developing existing talent to prepare them for leadership roles?

These are just some the questions we answered at last week’s  Procurious CPO London Roundtable, sponsored by BaswareWant to know the answers? Look no further…

The Buy Social Corporate Challenge

Charlie Wigglesworth, Deputy CEO – Social Enterprise UK (SEUK) gave a fascinating insight to the great work social enterprises are doing across the UK.

SEUK was established in 2002 as the national body for social enterprise. Now, with over 1200 members they strive to support social enterprises and develop the evidence base to showcase their benefits, as well as influencing policy and political agendas within UK government.

Social enterprises sit comfortably in between a charity and a private sector company. They have a clear social mission and  look to make profits to further that social mission – they are “businesses which trade for a social purpose.” 

“Businesses and governments can support social enterprise in lots of ways but the best way to do good is to buy from them,” explains Charlie.

They are much more likely to be better represented or minority led or based in the most deprived areas. They are more likely to employ people that wouldn’t have work otherwise had work or give money where people wouldn’t otherwise have had it.

Supporting these companies is good for your business because they are likely to be cheaper, more innovative and doing so gives corporations the opportunity to overlap and integrate CSR with normal business, rather than have it exist as a separate entity.

Buying social doesn’t cost more money or change the procurement process  but it has significant strategic and ongoing value for communities and your business.

Of course, as Charlie admits, it can seem hard to make changes and switch your mentality from “not doing anything bad” to “doing something good”. Charlie’s advice is to “find opportunities locally- they may seem tiny but there can be significant opportunities. Look at where you can do things directly.”

SEUK is working with a number of businesses for The Buy Social Corporate Challenge with the challenge to achieve $1 billion of procurement spend with social enterprises by 2020. Follow their progress here.   

The Conversation Century

Elizabeth Linder, Founder and CEO of The Conversational Century joined Youtube in 2007 and often thinks back to that year, a significant time for Youtube, in order to understand the social media space.

It was an exciting and life-changing time for skilled amateurs. A time that had millions of people singing in their bedrooms or racking  up millions of video views for a commentary on something they would never otherwise have been considered an expert in. Youtube ultimately offered them the opportunity to be heard.

Elizabeth is a strong believer that the internet is the best place to build trust. “The people” ( i.e. you and me) have already got this all figured out. But the reason so many people still believe the internet is destroying trust is that our leaders are still so far from getting it right! We simply don’t have leaders at a political level that have invested in a voice on social media.

Some key things to remember when trying to start conversations online:

  • Most leaders fear that they have to move at an increased pace because of today’s internet culture. You don’t. Go at your own pace but keep people informed as you do it. It’s ok to communicate to people that “the discussions are still in progress” or “we don’t have information on this yet” so long as you’re communicating something!
  • Believe in the power of primary sources because the public certainly do. Hearing directly from the source rather than a paper adds a lot of value to your communication. If you’ve ever been quoted in an article, blog or feature you’ll know the producer of that piece never quite gets to the meat of what you were trying to say because you don’t own the conversation or drive the discussion – they do!
  • Embracing in the hacker culture, i.e. making it up as you go along, is key. EU politicians, for example, only see social media as a tool for outbound communications and not for their inbound policy making. Hacker culture dictates that they need to consider the latter.

Elizabeth’s take away advice on owning the social media space? “Be yourself online and talk to people in a way that lets them in but not in a way so casual that you’re treating them like family.”

RPA and AI – Are We All Out of A Job?

Where are we at in terms of Robotic Process Automation (RPA) and Artificial Intelligence (AI) ?  Paul Clayton, Head of New Service Development, Basware outlined the current threats and challenges.

RPA essentially replicates things that aren’t easily automated; the things a human would do. Its skills lie in coding systems and inserting data. The downside to RPA is that there is no intelligence or decision making process, which means it can go very wrong!

There are four levels to AI:

  • Level 1:  This is the simplest form of AI and is quite prevalent today.  It’s reactive and rule-based with no memory or recollection and decides what to do based on a set of rules.
  • Level 2:  Limited, but not long-term, memory with decisions based on recent experience. It will react to data from the things it sees.
  • Level 3:  These are computers that learn and have memory. They  can re-formulate their view on the world so they can make decisions and remember actions. Whilst there are Level 3 computers out there, other than C3P0 (!),  it hasn’t been applied in procurement except in the areas of fraud and risk management.
  • Level 4:  This, fortunately, does not exist…yet! These are machines that are self aware and can form their own view on anything, redevelop their own software and change their behaviour entirely.

Levels 1 and 2 cover most of the repetitive tasks in procurement and finance. Not before long, 90 per cent of the people in this sphere wont be required.

So yes, as Paul admits, the jobs we have today won’t be here tomorrow and people won’t have careers in the way that we currently define “a career”. But the workforce coming in today is used to their environment changing every 30 seconds,  they already expect instantaneous change and they’re able to adapt quickly to something different.

Barclays’ leadership development process

Jonathan Harvey – Global Head of Talent & Culture, Barclays PLC, gave us a high level overview of Barclays leadership development framework and how it compares or contrasts with other leading companies.

When Jonathan joined Barclays two years ago he was tasked with assessing whether Barclays were doing enough to embed a common set of values and to measure their progress in embedding them.

He evaluated how they were developing existing talent in preparation for leadership roles and eventually established a set of criteria for potential leaders at Barclays. This criteria demands they live by Barclays’ values and inspire others to live by them and that they have leadership critical experience such as experience managing more than 1000 people, across different geographies and through different business cycles.

The most successful leaders of organisations will be those who can think the most adaptively and creatively, and that comes down to experience!

Procurious are hosting CPO roundtables on 30th May, 19th September and 14th November. If you’re a CPO and would like to attend one of our roundtables in person please contact Olga Luscombe via [email protected] to request an invitation.