The toughest hurdle to scale your social enterprise probably will not be finding investment funds. Execute on a sound business model, and the right investors will be persuaded. Landing the talent you will need to scale successfully, on the other hand, will be much more difficult and complicated.
“Recruiting talent to a social enterprise”—it sounds straightforward, but that phrase fools us into thinking that we know the business category, and the kind of experience and skills needed. In practice, “social enterprises” are distinct hybrids that blend a for-profit operation and a nonprofit mission. Only a small group of individuals have navigated those tricky waters. Therefore, early-stage executive teams will have to judge how readily candidates will be able to make skill transitions and pivot to meet unforeseen challenges.
The majority of candidates that social entrepreneurs will evaluate to staff their fledgling businesses will fall into one of three camps: 1) the nonprofit veteran who is inspired to move out of the charity world but still pursue a higher mission; 2) the conventional corporate veteran who is mid-career and disappointed with the paucity of meaning in the daily grind of business activity; or 3) recent university graduates enamored with the possibility of generating sustainable businesses to address serious social problems.
Nonprofit veterans typically will have the most difficult transition. That is not necessarily due to their lack of expertise in financial operations; nonprofits are quite familiar with the demand to operate with one eye toward the budget. Driving transactions and generating new sales channels is probably less-familiar territory. The nonprofit operating manual relies on communicating a story of need to a fragmented client base and fishing the pond for the right fish who will take the bait. “Awareness of the cause” is perceived as a virtuous achievement—broadcast it, and they will come. Sure, brand is important to the emerging social enterprise, but nothing speaks success like purchase orders. Frankly, it is difficult to move nonprofit veterans beyond their love for the anecdote, a product mention from main stage at an industry convention, or a gushing email from a satisfied customer.
The conventional corporate veteran provides a wholly different challenge. Social enterprises set a steep course up the mountain to success. They likely are defining a new market niche, while having the audacity to believe that they can be financially profitable and demonstrate effective social impact. Underestimate the uniqueness of these conditions to your peril. The business model, market alliances, and positioning of the product or service likely will shift—perhaps even quarterly. The corporate veteran is not accustomed to such fluidity. It feels more like chaos than an adventure. That sense of displacement is magnified by the enterprise's commitment to a double bottom line. The corporate veteran admires the social mission and honors its economic success, but usually struggles to traverse the mental wall that separates the two.
Truthfully, just about every social enterprise will turn to a younger staff to some degree. The budget line available for salaries will lead a start up in this direction, but equally significant is the fact that recent university graduates possess the technical and media skills that a social enterprise needs. The most important reason of all, however, is that it is much easier to hardwire strategy and skills into an open, inquiring mind than it is to teach an old dog new tricks. Nowhere in business is this lesson more true than in the world of social enterprise. Learning to “speak” hybrid and “act” hybrid comes with immersion. Think of it as the children of first-generation immigrants. They do not identify themselves as coming from an old world or a new world, but the world of their own making.
Common sense might suggest that a mixture of a pioneer-oriented, younger staff along with a more grizzled, experienced staff would provide the ideal solution for the social enterprise. Finding the right veteran who can fit in is vital—undervalue wisdom and gravitas at your own risk—but it is really tough to do. Decision making in the social enterprise culture tends toward a meritocracy of ideas and practicality—“what works now.” I have had more than one experienced executive confess to me that they could not respect the opinion of a mid-twenties director in our agency. Higher degrees, lengthy resumes, and impressive titles matter little in a pioneer culture. A special veteran loves the dynamism of learning anew every day, while most ego-bruised veterans self-select and leave.
The best advice I have for founders of a social enterprise start up: Establish a learning culture. Attract individuals who value their own talent growth and get excited about new insights. At my agency, we ask ourselves, “Are we smarter this month than we were a month ago?” If that answer is a “not really” for a string of months, red flags are waving.