How Social Entrepreneurs Can Rethink Trade-Offs by Melanie Goldmintz, Tara Hadler

Social enterprises operate in an area, which are neither traditional business nor traditional not-for-profit; therefore exposure to critics from both sides of this spectrum is inevitable for social enterprises. Profit and Purpose demands often lead social enterprises into conflicts that create hassles to act and bring ethical dilemmas for leaders. Rather than compromising with conflict using “either/or” mentality, successful social entrepreneur can balance both using “both/and” mentality. Then, they create strategies to embrace the tension rather than resolve it by typical deeds in four areas: Performing, Organizing, Learning, and Belonging.

 Regarding Performing, social enterprises should reflect both Profit and Purpose concerns altogether. Smart social entrepreneurs are aware of risks of focusing on sole concern, which lead to financial collapse if only focusing on expanding the mission, otherwise losing sight of mission would happen unless the concern on financial increasing is sufficiently attended. In term of Organizing, researches have pointed out that among social mission focused, business focused, pluralist (focus on both), and generalist (focus on neither); social enterprises should hire generalists, who do not have bias for business or social concern provided that this approach mitigates the potential for conflicting values and tensions between staff, increases team cohesiveness, and improves overall financial performance. In addition, hiring a few pluralists, who can effectively navigate conflicts that surface between employees with opposing commitments, is also a should to strengthen corporate culture. Social enterprises should build effective Learning capacity with access to training and opportunities for promotion. Although limited in funding, social enterprise should properly recognize and merit contribution of its employees. Digital Divide Data, a work integration social enterprise, found that one solution was providing employees with access to loans rather than grants to support their professional development. Besides, employees are encouraged to learn a social impact metrics training course to know how organization can measure its success and also apply in later performance evaluation for promotion. In relation to Belonging matter, social enterprise should hold multiple identities to get in harmony with shareholders, employees and its social mission. Knowing when to do which is also a good way to balance these multiple identities as there are times when they’ll have to emphasize social mission and other times they’ll have to emphasize financial objectives.



How Social Entrepreneurs Can Rethink Trade-Offs