Jim Mullan On Starting, Running & Leading Social Enterprises That Make Strong Impact

Jim Mullan was appointed the Chief Executive Officer of SecondBite in May 2016. Prior to this role, he was working in the UK as the Chief Executive Officer of The Big Issue, the world’s most widely circulated street newspaper. Before that, he was the Founding General Manager of KibbleWorks, a Scottish social enterprise that provides care and education to young people in need.

Mr Mullan trained in youth work and his career spans community education, economic development, light engineering, social care and print media. He has lectured in social enterprise, entrepreneurship and corporate governance at Glasgow Caledonian University, Heriot Watt University and the University of the West of Scotland, and provided specialist contributions outlining the impact of social enterprise on the economy for both Scottish and UK Governments. Mr Mullan was awarded a distinguished talent visa by the Australian Government in recognition of his work internationally in the field of social enterprise.

Jim shares strong insights into the challenges and opportunities of running and leading successful social enterprises, while sharing his views of the social enterprise sector in both the UK and Australia.

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 working in the social enterprise and not for profit sectors?

[Jim Mullan] - I am the son of a train driver and a civil servant. I came from a working class background in Glasgow. In our household there were two religions. There was Roman Catholicism and there was trade unionism and these two things were completely interchangeable. I grew up in one of the poorest parts of my home city and when I was growing up, my real heroes were youth workers and social workers who provided out of school opportunities for young people to participate in recreational activities, but also to begin to help these young people form a view of the world and began to consider elements around their personal development beyond just playing soccer or pool or table tennis.

They gave their time enthusiastically and they also gave it in a way that recognised that lots of the kids that they were dealing with came from very, very difficult circumstances and they helped to build, for want of a better description, aspiration, and paint a picture of a world beyond the housing estates that we lived in and paint that picture of a world that we could engage with. They provided, I think in lots of cases for the young people they dealt with, hope where none existed.

And frankly, having participated in that process and having watched these guys at work, there was never anything else that I wanted to do than to follow in that path. I trained in youth work and started working in my home area, but I pressed out into a landscape that was rapidly being changed by Margaret Thatcher's conservative administration, who had decided that the economy of the UK needed to change wholesale and that our industrial past wasn't going to be our future. The reality of those decisions were that in hindsight they were probably correct. However, they didn't have to be implemented with the level of brutality that they were.

And so as I pressed out into this area, wanting to work with young people and help them to develop and grow, what became crystal clear immediately to me was that the opportunity for future employment was narrowing for this entire group.

And therefore we had to begin to become engaged in a process which was, at the time, completely new and completely revolutionary, but which now is described as the building of an intermediate labour market model. And so my youth work background had to very quickly evolve into what is also now known as community asset development, where effectively, we begged, borrowed, and stole every facility that we could possibly find, cobbled together some trades people and some money and put young people to work, generating work experience and real skills that they could then take to a shrinking labour market.

That was my rapid trajectory into what was at that time was described as community business and is now described as social enterprise. So, that's the kind of potted history of how I came to engage with this work, my commitment to it and where the commitment comes from.

It's a really fascinating journey, Jim. I'm curious to hear about how that led to you work as CEO at SecondBite, what you're doing in the organisation at the moment and the sort of impact that you're creating each year. Because I imagine that that extensive experience has really helped you to take this organisation to another level.

I think I've benefitted from a career that had that early grounding in social business and then had a renaissance in Scotland, round about the turn of the century with the work at Kibble. We were crystal clear that our organisation was established with a social mission, but we recognised that if it didn’t operate as a business, then it wasn't going to be sustainable. The balancing of those two elements was key. Then through a subsequent role at The Big Issue where we had one of the the UK's best-known social businesses, it didn't need to be reorganised, it just needed to be refocused. This has meant that I've developed a pretty entrepreneurial view around what the possibility is for the entire, not for profit sector, but probably social enterprise specifically. When I arrived, SecondBite had a lot of very good relationships, both in terms of the corporate sector and in terms of the philanthropic sector, but they were a bit underdeveloped and the organisation had grown rapidly because it had started out as a very Melbourne-centric local organisation and then had picked up Coles as a national partner and suddenly exploded into this national organisation.

The growth and development around the way the organisation was built was pretty organic and pretty unstructured. As a result there was a kind of formalising process that needed to take place within the organisation, but there was also that entrepreneurial piece about, ‘we have a number of great relationships here but they're really underdeveloped. Let's begin to have a conversation with our partners about what the economic and social benefit is for both organisations building that out.’

This consequently lead to our relationship with Coles becoming much, much more extensive, [and] is operating on a basis that both organisations understand what the cost benefits are, what the social outcomes are, what the environmental outcomes are, but also what the economic impacts are. So we built the social enterprise triple bottom line thesis into the way that our traditional not for profit works and what that's done, is that's given us a language which we can now use with all of our corporate partners, and a language that they understand absolutely both in terms of their anticipated CSR outcomes, but also frankly at a transactional level where they really do understand what the economic value is of building partnerships.

I think that's how it's manifested itself across SecondBite. The other thing that we've done, I think incredibly successfully, is because of that focus, we now have a productive output, which has seen our organisation's output grow by over 90% in the last three years. Our costs have only grown about 44% but it’s an accelerating pattern. In the last financial year, our costs have grown by 8%, but our output has grown by 40% and we are tracking on the basis of an emerging sustainability proposition. We can't sell the food we collect, we can't generate income from that. There is no point in charging for it. The economic situation of the people and organisations we support mean that they can't participate economically in the normal food retail system. There's no sense in us excluding people by levying a charge. We've got to deliver our service free of charge.

Our proposition hinges upon what really resonates with our philanthropic supporters. I think we drive better value per dollar output than certainly anyone else in our sector, and I would argue, the vast majority of organisations across the country. At this moment, our metric is that if a dollar comes into our organisation, we produce an equivalent amount of food for five and a half meals. I do this trick at public presentations where I'm talking about the organisation and then I put my hand in my pocket and I pull out a dollar and I asked the assembled audience, "How many meals can they produce from this dollar?" And they all look at me as if I'm daft. Then I tell them that we produce the equivalent of five and a half meals for every dollar that comes into the organisation. And we do it over 100,000 times a day, every day, every year.

It's huge impact. That's something to be really proud of as an organisation, Jim. So I imagine running organisations of this size and scale bring along many challenges. So tell us about some of the challenges that you've come up against in leading organisations like this, Jim, and how you've navigated your way around them.

It’s always the people.

I think as a sector, our world attracts both staff and volunteers whose commitment is heartfelt. They are motivated to become involved in the work because they genuinely want to, either as a career, or in their own time, make a difference in the life of others. That can generate a mindset, which can be a challenge when you're trying to run your organisation in the most business-like fashion that you can.

It creates a tension there, and I think that a lot the challenges that people in my kind of role face, stem from that, or flow out from that.

We are not in the business of refusing help and we are not in the business of discouraging people from participating, but they need to understand that a few facts of life that can often be a challenge for them and one is, (it's a phrase I first heard at The Social Enterprise Alliance of America many years ago), "You can't help poor people if you're poor yourself."

Therefore, the management of your resources and your organisation and your focus on your sustainability and your viability has to be absolute, it has to be total. I'm not making a case here for the kind of archetypal view of a hard nose, private sector operator. But I think if you reposition where your heart sits, you begin to then recognise the realities that confront you and it's the communication of that message, which is also always the challenge for them.

I mean frankly Tom, the workforce in the not for profit sector and certainly a large part of the volunteer cohort work in the not for profit sector could teach Gandhi about passive resistance. So you need to be completely tuned to the notion that if you're not constantly in that communication space, if you're not constantly leading the line on what our purpose is, why we're doing it, but what the realities of managing through that process looks like, you can have difficulties.

The other thing that all of us face is, scaling up comes with all of its own challenges. The step out of an organisational culture or an organisational headspace, which believes that you're just a small organisation doing very nice work in a very limited area and what it takes to move yourself out from that and achieve a much broader impact across a much more challenging geography. And trust me, of all of the geographies I've ever worked in, Australia is the most challenging by some distance, and I use distance advisedly. To make that change, often means that there are people who can come on the journey with you, but there are also people who probably can't and that can lead to long hours of soul searching, difficult conversations. Staying true to the purpose, and staying fixed to the mission is the only sanity instrument you can bring to this process, that you completely understand that the challenges you face and the difficulties you face and the interpersonal challenges that come with that, are all in pursuit of a much bigger mission.

I think those are the kinds of things that all leaders of all organisations toil with all the time. I've never met anyone in this kind of role who finds any of this stuff easy. I think we all find it, on a very personal level, very challenging.

These things happen and you move on, but I've never been able to develop the kind of hard skin that allows me to make any of these decisions easily. Particularly with respect to the work force.

There's some really interesting observations there, Jim. In this experience that you have, both in the UK and Australia, how have you then seen the social enterprise sector transform and change over the last five years or so? I'd love to hear your insights on what you believe the key differences are between the UK and Australia.

I'm really old school when it comes to this. I've always struggled with the broadening of the social enterprise family to incorporate for purpose for-profit organisations. I've been guided by the great Jim Fruchterman from Benetech in the United States, who at one of the World Forums said, "If you've got a really brilliant idea, that is a great business, and it's transformative, and you want to have a social impact, then it might be actually smarter just for you to set up that private enterprise and then decide what you're going to do with the profits.” Because people understand that clarity. I think I've always been a bit concerned about the erosion at the margins. My personal view is that social enterprises, at their heart, should be geared to that constant tension and constant balance of income and mission and that all of the income that's generated, all of the margin that's generated is reinvested totally in the mission.

I think that, in terms of our own hygiene process and our own, for want of a better description, environmental process of recycling, I think we recycle profits for more good and that has always been my view. That is a view that is becoming less prevalent now as this becomes a much broader church, and I understand why some of that work is going on.

In terms of difference between Australia and the UK there is /was a broadening of the church, that had nothing to do with profit, that Australia missed.

I think interestingly one of the opportunities that Australia really missed, that the UK and in particular, Scotland, really picked up on, was that we recognised that every major not for profit provider of government services in the UK and in Scotland, are absolutely entitled to describe themselves as social enterprises, because effectively they have a trading contract which has a social output and whatever margin is generated from that, is reinvested in the purpose.

When I think that what that did in Scotland and in UK, we had housing associations, multi-million pound turnover organisations who immediately identified with the badge, [They] were immediately drawn towards being part of that. That broader group of organisations had a crystallisation, if you want, of an updated description of what they were about, and that helped create the mass and scale round what at the time was quite a nascent idea. My impression of what happened here was that, social enterprise in Australia, when it was first touted, was painted as something which was new and shiny and different and I think there was a real miss there in terms of a broadening and an inclusiveness which could have brought with it some of the really big players. Because let's be perfectly frank, we still talk about Salvos and we still talk about Vinnies and we still talk about all of these types of organisations as charities, when in fact, the bulk of their income, and their ongoing sustainability, comes from a traded position with government.

They are a major providers of services to government, and therefore by any definition, that trading is what generates the social mission and underpins the economics of the organisation. So that felt like a presentational challenge that I don't think Australia's ever really overcome, but which has become absolutely part of the landscape in the UK. If you look at the breadth of organisations in terms of membership for Social Enterprise UK or Social Enterprise Scotland, or any of the network organisations in Scotland, you'll see this incredibly broad church, which is not reflected in Australia.

I think there was a bit of naivety around that and I think there was an idea ownership which wanted to paint something that was bright and shiny and new, whereas if it had been presented differently, you would have found that structurally and in terms of participation, I think the whole idea would have got off the ground much more quickly in Australia. If that definition and view had been more widely expounded and more widely delivered to a broad range of organisations, who knows?

You would have had the network and so that's been missing. I suppose the second piece is, it still feels like, in terms of thought, that is there is just that lag. I'm very impressed with the way that the organisations like Social Traders have begun to work in procurement. I think it's clearly an avenue that has a lot of opportunity around it. But in the UK and in Scotland, they've moved past procurement. They are now in commissioning, and it's in the design of services that you can be most effective in terms of broadening social enterprise participation, because with the best will in the world, having a procurement process, which may or may not have a weighted social element in the tendering for services, will still, generally, favour the professional and commercial players as they are very, very well aware of how to balance tender bids to win and to make sure that they get the lion's share. Many commercial companies frankly find participation from a broader network of social enterprises or not for profit organisations, nothing more than a distraction.

I think for government, in terms of policy, and in terms of how you could begin to build this out particularly in Australia, I think it's service commissioning, because I think if you build in social outcomes in as part of the service design process, then at that point there is a much higher likelihood of participation from a wider range of organisations in the provision of government services.

Some really interesting insights and perspectives there, Jim. So coming back to the social entrepreneurs themselves (or the aspiring ones), what advice would you give to them to really help them take their idea or early stage social enterprise and create the maximum positive impact possible?

I think in this particular conversation there's a challenge. The modern approach to this kind of discussion, and you see it in entrepreneurship generally, is you have the exception that proves the rule.

We have all of these superstar entrepreneurs who talk about their epiphany, this moment of enlightenment when all just fell into place, they knew what they were going to do and off they went And everything after that was was rosy. My experience of this is that it's more like coastal erosion. The tide just washes back in and you just keep washing in and washing in and washing in until you get it right.

And so if someone was asking me about what it's going to take to bring something to life, build it to scale, and ensure that whilst you're building scale, you're not diluting impact, the only adequate description I could find is it's going to feel like attrition.

You're just going to have to be more determined than anybody else. You're going to have to consider that this is something that you are not prepared to give up on. You will be relentless, you will be tireless. You will be completely focused.

And if you can capture that, those are the attributes that are going to take you through the process. It is very, very rare that there is that Road to Damascus moment when suddenly the enlightenment comes. It won't feel like that for most of us. I think the other thing I would say is, (and I think it's an undervalued proposition with respect to social innovation), I am a firm believer that necessity is the mother of invention. I think that, (and it's happening in your part of the world from what I can see), communities responding to services being withdrawn are often the best generators of thriving social businesses.

This also then leads communities and individuals to ask themselves a really important question, and the really important question they wind up with is, "What else? If I can do that, what else can I do?" and that expansive piece around, ‘we have a commitment to our town, our home, our geography, our land,’ whatever it happens to be. The private enterprise providers of service are withdrawing because some actuarial decision somewhere has meant that they are not going to invest in this location… ‘But we still need the services, so we need to recreate them ourselves.’

And what I'm seeing in regional Queensland is a lot of that kind of activity, and where it takes me, is the Highlands and Islands of Scotland, where local populations have done exactly the same thing. They run the ferry service, they run the petrol station, they run the pub, they run the post office, they run all of these things and these are often the most powerful drivers of social innovation generally.

But I think that we have an incorrect fixation on invention and novelty instead of understanding that very often, adaptation and re-engineering are the processes that will more often lead to success.

I think those attitudinal elements and that capacity to scan your environment understand where the gaps are and what the solutions are to fill them is the talent. Often, it's not about inventing something new. It's taking something that already existed and doing it either with greater social benefit or in a way that's better organised.

Some wonderful insights there, Jim. So to finish off then, what books or resources would you recommend to our listeners?

I would recommend, if anyone wants some insight into a practitioner's experience and development, that they should read Begging for Change by Robert Egger, the man who established DC Central Kitchens and LA Kitchens.

Robert has a singular view on lots of these matters, but he has a wisdom and talent around the way that this stuff, the theories, the concepts and the practise is articulated. From a practitioner's perspective, I think Begging for Change is an interesting read, but in terms of encouraging and provoking our thoughts, The Moral Limits of Markets by Michael Sandel is a beautiful work. It is a truly considered view about what the limitations are on the capitalist system. It's the prevailing system. It's the one that we've all got to work under.

I think that we should understand the limitations that come with that and Michael's thesis around this is with respect to the capitalist system being a pretty good diviner and divider of resources in a commercial sense, but that the system doesn't have the cascading effect with respect to civic importance or social impact, that it sometimes claims. It also has a tendency to be usurped. So, in terms of practise and in terms of, a kind of overarching view of the prevailing system that the vast majority of us work within, Robert Egger and Michael Sandel have interesting things to say.