The Social Enterprise Conflict: Working for change within the system

The Social Enterprise Conflict: Working for change within the system

January 15, 2013  |  Articles, Featured

On a chilly night, I am checking out at Walmart after having found a power strip I need for my bedroom. It’s only $9.99 for a power strip, a 1-to-3 outlet adapter, and an extension cable. I find my way to the register with the fewest people and glace around at the impulse buy offerings — the usual celebrity magazines, chocolates, and batteries. Something catches my eye. It’s a tubular shaped gum container with a bunch of bold text on it. It says “This tube of ‘save the earth’ gum plants one fruit tree back into the earth.”

As a connoisseur of all things cause-marketing related, I knew I had to buy this. It’s Project 7′s gum, a product that combats deforestation with a sugarless and minty-fresh aftertaste. I grabbed a bottle and checked-out. The inherent conflict of the situation did not hit me until I left the store, as I was holding my “save the earth” gum in an “add to the landfill” Walmart plastic bag.

And here’s where we are at with social enterprise. Upstarts like Project 7, even with its great mission and product-based approach to philanthropy, must act within the confines of the traditional market and its ills in order to reach a broad enough audience that the economics work out. This is a conflict that gets to the root of the social enterprise movement, and to the question of where we want to see business go from here.

THE (SOCIAL) PURPOSE OF BUSINESS

The Harvard Business Review recently published a blog post titled “Conscious Capitalism” Is Not An Oxymoron. The post was co-authored by two big-shots in the space: Whole Foods CEO John Mackey and Conscious Capitalism co-founder Raj Sisodia.

In the post, the authors promote “conscious capitalism” as a way of thinking about capitalism and business that better reflects where we are in the human journey. Not only do they argue that conscious businesses are beneficial to a company’s culture, they claim that conscious businesses offer lasting value that has been significantly outperforming traditional businesses in financial terms while creating other benefits for society.

Sisodia has talked about these concepts in a TEDx talk in New England. He goes further than the HBR post and argues that business, at it’s social core, is ethical, noble and heroic. Ethical because it is voluntary, noble because it has allowed a living standard above subsistence levels, and heroic because it has lifted a large chunk of the planet out of poverty. See the full talk below:

While the inner optimist in me loves the idea that we should, as a society, be able to evolve business to a higher level of conscientiousness, the realist in me sees the plastic bag with my sustainable gum and is forced to consider the contrary viewpoint.

THE REMEDY AS PART OF THE DISEASE

A while back, I wrote an article about a great critique against conscious capitalism by philospher and cultural critic Slavoj Žižek. Here’s the video of his presentation:

Žižek claims that by allowing corporations and consumers the ability to buy their redemption from social issues through conscious capitalism, we are merely prolonging the disease, rather than curing the system which allows it to continue. Although I argued against his points in my article, there are certainly issues with trying to relieve social problems through market means — the plastic bag was certainly a reminder that the system is sometimes directly in contention with the cause.

The conflict between profit and mission is one that promoters of cause capitalism think will eventually evolve into a synergistic relationship, while cynics like Žižek claim to be an intractable cause of friction that will hinder progress. So, which one is it going to be? I think that will be up to us, the consumers.

THE POWER OF A PURCHASE

What attracts many social entrepreneurs to a for-profit model is scalability and sustainability. When I worked briefly at TOMS, I saw just how powerful the market and consumerism could be, first hand. In the short time I was with the company, they had ramped up from thousands of donated shoes, to hundreds of thousands.

However, the one with the most power in this model is the consumer. As much as marketing campaigns try to take credit, most movements are fueled by organic, cultural underpinnings. Social business and conscious capitalism will only go so far as you and I are willing to open our wallets, and therein lies the rub. I am someone who is adamant that we should not be vilifying the traditional corporate behemoths, but rather encourage them to change. Companies like Walmart and Chevron have already taken the message to heart and are starting to incorporate social missions into their strategies. However, they are being shamefully outpaced by the backyard social entrepreneur and companies like Project 7 are forced to play by the business rules of the big boys, while waiting for them to mature in the social sphere.

Companies like Project 7 are forced to play by the business rules of the big boys, while waiting for them to mature in the social sphere.

How much of this conflict will consumers tolerate? How long are they willing to wait for the system to catch up? At some point, someone is going to consider this pack of Project 7 “save the earth” gum but be so put off by the environmentally irresponsible practices of Walmart that he/she does not make the choice to buy. At that point, the movement has lost its momentum, and the power of a purchase is deflated.

The world of social enterprise can intellectually ruminate about the nature of business and the consciousness of the consumer as much as it wants, but if it does not start to shift the conversation towards tangible, consumer-facing changes at the systemic level and at all points of the purchasing process, in a few years, “conscious capitalism” may just be a long-forgotten phrase.

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