Social Enterprise in a world of risk
Social enterprises are no different from other business models with a need to manage effectively operational and strategic risks. Frequently, for social enterprises, the customer relationship is often more complex than traditional customer supplier relationships. In many social enterprise contracts, the purchaser and consumer of a service are not the same person, which makes the transactional, service relationships and the associated range of business risks more complex and greater in number. As a direct result, robust risk management and risk assessment tools become essential for protecting the social enterprise.
The fundamental questions all business must repeatedly ask themselves, are just a relevant for social enterprises:
- what the enterprise may lose or suffer because of an event taking place,
- the likelihood that the event could materialise - the probability
- and the consequences of the event occurring - the impact.
These are the fundamentals of any good risk management system and must be supported through regular objective review; valid impact assessment measurement and monitored mitigation interventions – just like any effective business.
So what are the risks on the top of the current Social Enterprise agenda?
Well, Brexit is somewhere at the top of that list, but in common with the rest of society and undoubtedly our economists and politicians, no one has any clear view of what the real impact will be. The only effective risk mitigation, excluding relocation outside of the UK, appears to be persistent operational scanning, maintaining structural and strategic adaptability. No way to run a business; but perhaps that is just where we are.
Linked to Brexit is the possibility of a diminishing migrant workforce and the assertion of almost full employment, with unemployment in Northern Ireland identified at circa 3.3% (June 2018). However, the greater risk, with its own opportunity, must be our unprecedented levels of economic inactivity, which is currently circa 30% in the Belfast area. Not intervening to engage this growing population in productive and rewarding work, may be one of the most serious social and economic risks we face at present.
The lack of any political agreement and a functioning Assembly and Executive has blocked the pipeline of policy and investment interventions with a detrimental effect on both social and commercial business growth opportunities. Perhaps a greater risk to social enterprise is the potential in economic austerity for the Public Sector to ‘in-house’ services driven by a protectionist agenda, less focussed on best social and economic value – something we have experienced.
In the policy and investment vacuum we are experiencing the potential for a hard Brexit, we run the risk of a new phase of austerity or indeed ‘Brex-sterity’, which could bring a social and economic tsunami of service demand with no additional resources/investment to meet the spiralling need.
This is just a few of the significant risks we all face and there are quite a few more that could be listed. I can’t propose a ‘silver bullet’ solution other that within all threats we can find opportunity and through the process of identifying risk ‘events’ assessing their ‘probability’ and ‘impact’ we can manage our risk and find growth. Darwin got it right; the attribute that assures longevity is ADAPABILITY.