Peter Holbrook On The Underpinnings Of Effective Social Enterprise Ecosystems & Social Entrepreneurs

Peter Holbrook became CEO of Social Enterprise UK in January 2010. Social Enterprise UK is the national trade body for social enterprise and represents a wide range of social enterprises, regional and national support networks and other related organisations. SEUK works to promote social enterprise as a model for changing both business and society.

SEUK inform the policy agenda, continue to influence the political agenda, promote the benefits of social enterprise through the media, campaigns and events, and undertake research to expand the social enterprise evidence base.

Peter has established, developed and supported hundreds of diverse social enterprises over his career. He has advised government taskforces in the UK and overseas and chaired the Social Enterprise World Forum, the global network of social businesses until 2015.

Peter has previously worked for Oxfam, Greenpeace and various disability charities. He has experience of working in overseas development, community development and public health. Peter started his career with Marks and Spencer PLC and also spent several years with Body Shop International

He was appointed a CBE in 2015.

Peter unpacks the social enterprise ecosystem, providing strong insights into both the UK and global sector. He discusses shifts in the market, common reasons that social entrepreneurs fail and other lessons learnt to create positive social impact.

Highlights from the interview (listen to the podcast for full details)

[Tom Allen] - Could you please share a bit about your background and what led you to work in the social enterprise sector? [2:35]

[Peter Holbrook] - Yeah, sure. Like, I guess, everyone when you think about a career, when you think about getting a job, a lot of people end up working in the private sector for someone else. And, I did that.

I worked for some large British companies. British companies that I think had some sort of social commitment. Both of those companies at different stages, ended up going to full IPO. Becoming full International PLC's. I saw that as the ownership structures changed hands, that some of the values that had been inherent by the founders kind of dissipated, and quite quickly. That didn't sit well with me and I decided I wanted to have a more purposeful career, so I moved in to the voluntary sector to work for a couple of charities.

My reflection there, I'm sure that they've changed, was that they were very socially committed, but they didn't necessarily enable a spirit of enterprise and entrepreneurship to flourish.

So, back in about 2000, I went and started my own initiative, which in effect was a charity. But, I wanted to bring some of those commercial skills to bear for a variety of reasons. Partly because funding is difficult to navigate and acquire. I ended up running businesses that were principally socially focused, and working with people with learning disabilities, young people coming out of prison. A lot off people from diverse backgrounds that for whatever reason had many, many challenges in terms of escaping poverty and accessing good quality jobs.

I did that for a few years and someone tapped me on the shoulder and said, "what this is, is a social enterprise and you're a social entrepreneur." They were kind of new terms to me. As my company grew and grew and we diversified into different business areas, we got a bit of good publicity, press interest, political interest and then did become aware of social enterprise, social entrepreneurship. Then, seven or eight years ago someone came to me and said, "how about running Social Enterprise, the UK National body and being an advocate for the whole sector?" So, I transferred Sunlight into a charitable structure to protect its integrity as much as I could and took up the helm at SEUK.

What projects have you and the team at Social Enterprise UK recently been working on? [5:12]

We have a network of, I think, just incredibly dynamic, inspiring businesses. Far better than I ever achieved when I was setting mine up. It's an incredible privilege to work with these businesses. What we see is this very dynamic energy, a huge number of micro businesses starting up with a social purpose and inherent social mission. The reason they exist is to make a positive difference in the world. So, at Social Enterprise UK, we spend all our time really trying to build markets and find customers for these businesses because that's the best way we think that we can help them.

We work across the public sector and across government to try and ensure that they are creating an environment where those business can be commissioned directly by government or by other parts of the state apparatus; government, local counsels, parts of our national health service. Also, with large corporates trying to get corporates to understand the power of social enterprise and get them in their supply chains and value chains.

Then, thirdly, reach out to consumers and say that every time you spend money, you're casting a vote for the certain world you want to live in.

Trying to get consumers to understand the difference they can make by the purchases and the choices they make as consumers.

So, last night, the reason I'm looking tired is we had a press launch for one of our flagship events, which is called Social Saturday. We had the press and some of our social enterprise members talking to the press about their stories, about the way their businesses are structured, the way their businesses work, in order to make a big social impact. That's one of our big campaigns. That's very much focused on consumers.

The day before yesterday, we had a whole day in Parliament talking to politicians. Our all party Parliamentary group held in the Palace of Westminster talking to politicians about the changes politicians can make to make social enterprise an easier career choice and fulfil a bigger role in the economy.

Then, earlier still this week, we were hosting a number of big corporations, International PLCs and exploring with their procurement teams about how they can integrate social businesses into their value chains. We run another flagship campaign called the Buy Social Corporate Challenge. We've got about 15 companies, that are huge, that have made a commitment to spend a billion pounds with our members over the next three years.

How have you seen the social enterprise sector transform and change over the last five years or so? Where do you see it heading? [7:52]

Well, there's been a lot of challenges for the UK economy over the last five, six, seven, eight, nine, ten years. That's meant the social enterprises used to fulfil a big role, and they still do in the delivery of services to the public. But, those markets have become very difficult for everybody.

So, what we've seen is this huge, huge shift, really, from social enterprises focusing on how they can deliver better services to the public.

Whatever services that may be, whether that's to the community of people with disabilities, or to people that are coming out of prison, or people that have found barriers to get jobs and training.

A massive shift to products that are going in to highly contested competitive markets and selling consumer focused products.

So, everything from soap to bottled water, to handbags, to socks. I mean, you name it. There are social enterprises in just about every industry. More recently in the last five years or so, we've seen a massive, massive growth in things like community energy schemes, where communities are getting together, raising their own money, and organising their own installation of photovoltaics on community buildings, on schools, on colleges and generating their own power supplies as a way of dealing with climate change on a very local basis. Also, reducing the cost of energy for communities, for schools, for community institutions. So, there's been some really dynamic shifts taking place in all sorts of different markets.

You mentioned a little bit before about spending a day in the Parliament. What do you believe that other nations can learn from the UK government's approach to social enterprise? [9:35]

First of all, I think there's something social enterprises can learn from what's happening in the UK. That's about getting organised and being ambitious about what you can achieve when you engage with government and try and create policy shifts.

In the UK a couple of things have happened more recently over the last five years.

One would be the Social Value Act, which puts a mandatory obligation on anyone spending public money, to do so with consideration for the social and environmental impact that those spending decisions have. Traditionally, all over the world, when governments spend money they do so on the basis of they will buy whatever is cheapest as long as some level of quality exists. Ultimately, it's a competition around price.

What we've done here in the UK with the Social Value Act, is to shift that and say we need to think about whole value. We need to think about the quality of work for people working within the businesses that are delivering public contracts. We need to think about the environmental impact. We need to think about training apprenticeships for young people, inclusion, the diversity of work forces, pay ratios, the tax status of those companies delivering government contracts.

We've built a compelling argument that when governments spend money, (and around the world they spend about a third of all money in circulation, this is a big, big deal), that they have to do so thinking about the wider consequences of who they spend money with and how those contracts are delivered.

The other area that I think has been really interesting is social enterprises, because of their very nature, sometimes struggle to access the right forms of capital to allow them to grow and expand.

The development of quite a dynamic social investment market here in the UK, is something else that's been quite catalytic in helping social enterprises to grow and expand.

That money has come partly from private sources, but it's also come from a government initiative, which was pioneered and thought through in around 2008 and came to pass around 2012. That's called Big Society Capital and I'm privileged to be on the board of Big Society Trust, which oversees that institution. That provides wholesale capital to social investors who then pass that money on to social enterprises and charities to grow and expand.

everything that we've achieved in the UK in the last 15 years is about understanding the ecosystem; the whole system that needs to be in place to really, really propel and capitalise the growth of social business.

Interestingly enough, when I've asked other interviewees on Impact Boom, a lot of them have pointed towards the UK as a leader in the social enterprise space. So, if I were to put that question to you Peter, beyond the UK, what countries do you believe are really leading the charge when it comes to social innovation? What are they doing that countries such as Australia or other countries around the world could use and adopt? [12:38]

I think we can be overindulged around social innovation. In the UK, we've made a lot of progress. We've had about 15 or 20 years of constant policy initiative that have supported the growth and development of social enterprises. Against that backdrop, we've got growing poverty, growing homelessness, growing inequality. We've got health and social care crisis. Our education system is in crisis. The prospects for young people in this country are not as good as they should be. So, although, we can be carried away, flying the flag and saying, "haven't we done well", we have to recognise the context. And, that context is not entirely positive.

Other countries that are really kind of smashing it at the moment; you'll note that the UK is formed of four countries that form the Untied Kingdom. Scotland has its own government.

Scotland, for the last five, six, seven years, has been really, really driving the growth of social enterprise in a way that makes me, based in London, in England, quite envious.

They've got a 10 year social enterprise strategy, they believe in social enterprise as an economic model, not just as a handy way to deliver services to the public sometimes on a more cost efficient basis. They believe in building a socially enterprising economy. Scotland is smashing it at the moment.

We've also seen some great initiatives emerge in places like South Korea. Asia, both South Asia and East Asia is really, really beginning to adopt a whole host of pro-social enterprise policies. In South Korea, they have a government institution called the Social Enterprise Promotion Agency. The Korean government have put some really, really significant investment into building the social enterprise ecosystem there. Very much community driven. We've seen similar initiative happen in places like Sri Lanka. Bangladesh has a rich proud history in building social enterprises at scale, so there's some great big social enterprises in Bangladesh right now. Brac is one of the largest department stores in Bangladesh and it's a social enterprise. We've seen in Italy, a long proud heritage of social cooperatives. In Spain, Mondragon in the Basque country of Spain, have been doing some incredible work at a very difficult economic period. So, what we really see is not necessarily countries forging ahead, we certainly see some cities forging ahead. We see some parts of the social enterprise community really driving progress. So, this is often happening at a grass roots level as much as it's happening at a nationwide or country level.

Detroit in the United States is experiencing terrible hardship. Community activists have taken the notion of social enterprise and have started really building Detroit from the bottom up using social enterprise models. There are hotspots from Oakland, Detroit, Melbourne is a good place.

It's not necessarily associated with what's happening at national government. It's about community activists understanding the power of enterprise to create long term sustainable change and not just win political rights, but take economic power to fuel social justice.

You can see some great innovations happening in just about every part of the world right now.

You've seen a lot of social entrepreneurs grow and expand in your time and obviously been part of a lot of those as well, Peter. What do you believe that the fundamental ingredients a budding social entrepreneur needs to get out there and launch something that makes an impact? [16:36]

All of my knowledge and experience is enthusiasm, passion, a handle on the finances, these are all critical things.

But, fundamentally, the two things that you've got to get right is price and quality. Because, people will not buy your product, however socially inspiring they might be, if your quality is rubbish or you're just way too expensive. You need to have a competitive offer.

Social enterprises that fail, fall in to the trap of thinking that whilst they're smashing it in terms of social innovation or having great stories about transforming lives, they don't have a compelling price and quality proposition.

Get the price and the quality right, then the value add, the competitive advantage comes in the social narrative that can be built around those products and services.

Peter, what inspiring products or initiatives have you come across recently, perhaps locally. You've just mentioned a whole range of really interesting initiatives internationally. But, locally, which ones have you seen, which have really created some great positive social change? [17:45]

I referenced the growth of community energy schemes. I think that has an opportunity to be replicated right across the world.

Communities have been crowd funding their own money through issues like community shares. So, raising quite substantial sums of capital but not by going to an investor or an institution, but by collectively coming together and putting in small amounts of money, raising the capital, and then greening their communities with heat pumps, photovoltaics, wind turbines up in Scotland. Actually taking back control of the energy infrastructure and building sustainability, resilience, like with jobs, apprenticeships. Becoming masters of their own destiny. I think that is genuinely something that could happen on a global scale. I think that's very, very inspiring.

We're seeing lots and lots of millennials that are coming from a whole range of academic interests and disciplines; from pharmaceutical and engineering and going, "You know what. I don't believe that business can any longer be done in the way that it previously has."

So, we're seeing some very dynamic, highly skilled social entrepreneurs emerge in just about every industry. Whether it's pharmaceuticals, whether it's engineering, whether it's health, medicine, just saying, "you know what, I'm gonna start a business, but I'm gonna start it and structure it in a fundamentally different way. I want to do well, but I want to do well in such a way that everyone else benefits too." I think that's what is really empowering my energy at the moment.

There's been a lot of growth in consumer facing products.

As I've said, every day items that you buy and take for granted, they're often actually having a negative impact on our world, being kind of reimagined. You'll probably be familiar with Daniel Flynn in Australia. I met him when he was 19 or something. I just wish I could've achieved half of what he's already achieved. There are so many individual inspiring stories.

I think we're beginning to see people that are really, really tech savvy become very disruptive and think about how technology can really transform people's lives.

I met a company that's run by people that are deaf actually. They've developed a really portable way of taking sign language with them. So when they go in to a shop, or a GP practise, or a doctor's appointment, rather than have an interpreter with them, they can just take a tablet and have their own community sign for them and communicate much more effectively with people who don't have sign language as a first or second language.

It's hard to pick where the energy and dynamism is coming from because I really see it... it's happening. This is a quiet revolution, Tom.

To finish off, Peter. What books would you recommend to our listeners? [21:09]

Well, I'm very fortunate in my global travels to have made some incredible friends around the world. I have to share an email that I actually received about 3 o'clock this morning. I'm just so inspired by this man. I've had the fortune of travelling around the world with him on several occasions and I'm really proud to call him a friend. Muhammad Yunus, Nobel Peace Prize Winner has just published a new book. [Peter explains more about Yunus and his books.]

The ask that I would have is be informed about the economic structural changes, the system changes we need to create. Read up on issues like inequality, the causes of poverty, power, politics, wealth distribution, tax systems.

Understand the scale of the problem that we are facing and set about not only creating social enterprise products which can create a degree of change, but as social entrepreneurs and social enterprise leaders, we have responsibility to fix the system and not just develop new products.

[Peter talks about his excitement to visit Melbourne and the Social Enterprise World Forum in Christchurch, NZ. He also invites us all to attend the SEWF next year in Edinburgh.]