(Illustration by Adam McCauley)
In 2011, Paul Tracey became an embedded researcher at Keystone, a hybrid social enterprise in Thetford, a rural town in the East of England. Keystone earns revenue by operating several enterprises, including a café, a conference center, a bicycle recycling business, and a retail business that sells locally produced fruit and vegetables. With that revenue, the organization supports programs that serve vulnerable people in its community. Neil Stott, a former graduate student of Tracey’s, was chief executive of Keystone and had invited Tracey to observe how its staff members handled the competing demands of conducting both nonprofit and forprofit operations.
But soon after his arrival, Tracey discovered that there were deep tensions between native-born members of the local community and recent migrants from Eastern and Southern Europe. Those tensions, moreover, were affecting life inside Keystone. “It became obvious that the really interesting thing about the case wasn’t how [people at Keystone] balance social and financial innovation,” says Tracey, professor of innovation and organization at the University of Cambridge Judge Business School. “It was really, ‘How did they manage this major crisis?’”
Between 2004 and 2010, the United Kingdom admitted 1.4 million migrants, and many of them arrived from other countries in the European Union. Thetford, in particular, received an influx of migrants from countries such as Poland and Portugal. These newcomers spoke little or no English, and few of them knew how to navigate the UK housing, employment, and welfare systems. “It seemed natural and normal that [Keystone] would set up a program to help,” Tracey says. In 2005, the organization launched Mobile Europeans Taking Action (META), a program that offers employment training, courses to help migrants learn English, and other services.
The existence of META caused a backlash from native UK residents who disapproved of Keystone’s support for non-UK nationals and who worried that the program would attract more migrants to Thetford. Before long, the negative stigma that attached to migrants transferred to Keystone. “META probably accounts for about 7 percent of what we do, but 90 percent of the publicity we get,” Stott told Tracey in an interview.
From April to December 2011, Tracey observed developments at Keystone while working there three days a week in the role of “acting director of social innovation.” He and his coauthor, Nelson Phillips, professor at Imperial College London and acting dean of the Imperial College Business School, also conducted 70 interviews with Keystone employees and with local community members. They gathered qualitative data from those interviews and from other sources that included board meeting minutes, company correspondence, and newspaper reports. Then they coded those data according to themes that reflected both the challenge of stigmatization (“Staff marginalized by parts of established community”) and the way that Stott and his colleagues responded to that challenge (“Keystone should be proud of or celebrate its achievements”).
According to Tracey and Phillips, the transfer of stigma from the migrants to Keystone led to a crisis of identity in the organization. Some employees sympathized with frustrated community members who criticized the META program and blamed their superiors for affiliating with migrant groups.
But Stott and other Keystone leaders, instead of reversing course, ramped up their commitment to META. They concluded that supporting people in need was such an essential part of their mission that they could not discontinue the program. By engaging in what the researchers call “identity work,” Stott and his team reframed the problem and embraced the stigma that came with helping migrants. “It wasn’t something to be ashamed of,” Tracey says. “Actually, it was something to be proud of.” A handful of employees quit the organization, but most employees stayed on board.
Phillips notes that the problem of stigma poses a special challenge to an organization like Keystone. “If you are a traditional company, if there’s a particular activity that is causing this kind of trouble, you just stop doing it,” he says. “But if it’s core to your mission as a social enterprise, it’s not easy to stop doing it.”
Marya Besharov, another scholar who studies missiondriven hybrid organizations, praises the approach taken by Keystone leaders. “They clarified how [META] was core to their purpose and to the interests of the community as a whole,” says Besharov, associate professor of organizational behavior at the Cornell University School of Industrial and Labor Relations. “As a result, Keystone benefited from increased cohesion among employees and greater resources and attention from stakeholders.”
When an organization develops a program that involves groups or activities that might carry stigma, Besharov says, its leaders should pay close attention to the question of purpose: Is the program central to the mission and values of the organization? If so, she argues, those leaders “may very reasonably conclude that the risks involved are risks worth taking.
Paul Tracey and Nelson Phillips, “Managing the Consequences of Organizational Stigmatization: Identity Work in a Social Enterprise,” Academy of Management Journal, 59, 2016.
Read more stories by Corey Binns.