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Innovation for wellbeing – how social enterprises can develop creative alternatives to conventional services

by FERGUS LYON

Sustainable prosperity is based on a vision of society where people can live well within environmental limits. This requires an understanding of the alternative organisational forms that can deliver wellbeing. In the UK, community health and wellbeing services are experiencing pressures of increasing need and resource constraints, but a new publication in Research Policy by researchers in the Centre for Enterprise and Economic Development Research (CEEDR) in Middlesex University Business School shows how social enterprises can develop innovative responses to help address the challenges faced. This is also a focus of work within CUSP and our forthcoming workshop for social enterprises.

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The findings of the Research Policy paper show that these alternative enterprises have a core social mission to address the health and wellbeing needs of individuals and communities by combining enterprise with public service and winning government contracts. Any surplus generated is put back into the service or, for cooperatives, shared with the staff and users who are owners.

An in-depth analysis of the innovative activity of eight of these social enterprises found that creativity emerges when there is sharing and experimentation with the different approaches and practices – or ‘logics’ – of the public, private and civil society sectors. This includes, for instance, a shift to a more co-productive model which empowers front-line staff and service users to be more involved in the re-design and delivery of wellbeing services.

Although the co-existence of different logics can give rise to tensions and conflict, given the different perspectives involved, the study identifies a number of examples of how managers, staff, service users and other stakeholders have been able to work together for constructive ends. The study shows how dialogue and a more fluid interplay between logics can be supported by: appropriate leadership; a culture that empowers staff and user communities; financial support for innovation; knowledge sharing; and collaboration with service delivery partners and other key stakeholders. The difficult issue of whether to share or protect useful knowledge in a more competitive context is the focus of a new tool and workshops that we are developing to help social enterprises navigate their way through these tricky waters.

Our research explores how these innovative organisations operate at the overlapping boundaries of civil society, private business and the public sector. We refer to this as the combining of multiple logics. This sets particular challenges for organisations looking to find innovative solutions related to wellbeing, social inclusion and sustainability.

The analysis in the paper sets out a framework of how social enterprises can encourage innovation that combines the different objectives and logics. This focuses on three areas within firms and three types of relationships with other organisations.

Fig. 1. The interplay of logics in social innovation

Firstly, as we look within social enterprises, leaders create a culture of innovation though their vision, team building and the empowerment of staff. We found that leaders need to ‘give permission’ to staff to try new things and experiment. For example, some organisations had introduced self-managed teams which enabled staff to be more responsive to the needs of service users and to make quicker clinical and service delivery decisions than is often the case under the more rigid hierarchical structures of the public sector.

Secondly, the interplay of logics is found in financial management with the organisations combining the logic of civil society (delivering benefits to the community) with the logic of markets (generating a surplus).

Thirdly, the interplay of logics is found in the strategies for deciding if a social enterprise shares knowledge or protects this from being used by others. This is a real conundrum for social enterprises. The civil society logic suggests that all ideas should be shared to maximise the social impact. But at the same time, some social enterprises were worried that private sector competitors would take their ideas and then try to outcompete them when bidding for government contracts.

When we look at the three key external relationships, we also find the combination of social, market and public sector logics. Firstly, in relationships with funders or public service commissioners, social enterprises have to combine the public sector logic of these funders, the civil society logic or community impact as well as the commercial logic of showing financial savings and ‘value for money’. This was found to be an area of major tensions for social enterprises.

Secondly, relationships with service users also shaped innovations with the social enterprises showing alternative ways of engaging and focusing on a ‘co-productive’ model and allowing service users to be involved in design of their own services. For the social enterprises, this is underpinned by the civil society logic of community engagement, but it combines a logic of the market with a shift adjusting services to improve the customer experience.

Finally there are relationships with other delivery organisations in the public, private and civil society sectors. In each of these relationships, social enterprises need to understand the dominant logics and values of partners and find ways of working together.

Innovation is never easy, but the study shows how some individuals, who may be at different levels in an organisation, have a particular ability to work collaboratively and to combine different logics in order to develop new approaches. Leaders of social enterprises (and of other service delivery organisations in the public and private sectors) can nurture this capability.  Funders – public service commissioners in particular – also have a crucial role to play in supporting innovation that contributes to social value when they find it. However, it is up to the social enterprise community itself to find ways of sharing this most precious of resources through mentoring and encouraging future innovators.

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