Редакция журнала «Позитивные изменения»
Позитивные изменения. Том 2, № 3 (2022). Positive changes. Volume 2, Issue 3 (2022)
Еще одним важным аспектом, который отражает стабильность деятельности организаций, касается сохранения численности персонала. В большинстве организаций (в 85 %) численность персонала либо осталась прежней, либо даже выросла. В лучшей позиции по сохранению численности персонала оказались организации, которые работают на «гибридном» или преимущественно внешнем финансировании («некоммерческие» организации).
В целом, можно отметить, что картина среди тех, кто участвовал в опросе, очень позитивная. Социальным предпринимателям удалось сохранить свои позиции по большинству критически важных факторов, а некоторым даже улучшить показатели. Однако, конечно, необходимо сказать об ограничении исследования, относящемуся к «эффекту выжившего», иными словами, в опросе приняли участие преимущественно те организации, которые пережили кризисный период и продолжили свою деятельность. Но, несмотря на это ограничение, конечно, важным является вопрос о том, какие стратегии использовали те социальные предприниматели, которым удалось справиться с вызовами турбулентного периода.
В рамках исследования были выделены три направления стратегий, объединяющих набор конкретных стратегических действий:
• Стратегии повышения эффективности (улучшение существующих продуктов; повышение профессиональных компетенций команды; сохранение и защита позиций, которые организация занимала до начала пандемии; оптимизация бизнес-процессов; оптимизация структуры затрат; улучшение способов доставки товаров/услуг);
• Стратегии роста (создание совершенно новых продуктов; выход на новые сегменты благополучателей; разработка новой формальной стратегии развития организации; выход на новые сегменты покупателей продукции; создание клиентских сервисов; поиск дополнительных источников дохода; создание новых способов доставки продуктов; экспансия в новые города и регионы; запуск онлайн-продаж; запуск новых цифровых продуктов; приобретение новых активов; запуск цифровых версий существующих продуктов);
• Развитие взаимодействия со стейкхолдерами (привлечение новых партнеров; расширение команды; привлечение некоммерческого финансирования; объединение с другими социальными предпринимателями; привлечение новых поставщиков; взаимодействие с органами государственной власти; привлечение инвестиций).
Согласно результатам исследования, наиболее востребованные и успешные стратегии социальных предпринимателей в пандемию были направлены на повышение эффективности, особенно – улучшение существующих продуктов, повышение профессиональных компетенций команды, оптимизация бизнес-процессов. В меньшей степени были востребованы стратегии роста и взаимодействия со стейкхолдерами. Однако среди стратегий роста популярными были: создание совершенно новых продуктов; выход на новые сегменты благополучателей; разработка новой формальной стратегии развития организации; выход на новые сегменты покупателей продукции. Среди стратегий, направленных на выстраивание взаимодействия со стейкхолдерами, особо востребованы: привлечение новых партнеров; расширение команды; объединение с другими социальными предпринимателями (См. рисунок 2).
* Из общего числа опрошенных.
Рисунок 2. Стратегии социальных предпринимателей в период пандемии
Так, можно сделать вывод о том, что, несмотря на высокий уровень неопределенности, изменчивости и непредсказуемости внешней среды, вызванной пандемией COVID-19, социальные предприниматели смогли адаптироваться, использовать вызовы как «окно возможностей» – не только собраться, чтобы оптимизировать бизнес-процессы, затраты в сложное время, но и разработать новые продукты, способы доставки, выстроить новые партнерские отношения. Конечно, представителям сектора еще есть, куда развиваться в применении наиболее эффективных стратегий, обсуждаемых выше, но уже можно с уверенностью сказать, что, несмотря на специфику деятельности таких организаций, прежде всего, связанную с необходимостью соблюдать баланс между созданием социальной и экономической ценности, они способны успешно выживать и развиваться в непростом VUCA-мире. Возможно, объяснение этому кроется не только в сильном предпринимательском духе, который им присущ, но и в высоком уровне ответственности перед благополучателями.
P. S. Пока вы читали эту статью, VUCA-мир еще больше приблизился к состоянию BANI: B (Brittle) – хрупкий, А (Anxious) – тревожный, N (Nonlinear) – нелинейный, I (Incomprehensible) – непостижимый. Это значит, что инструменты управления организациями вновь требуют переосмысления в соответствии с новыми реалиями[44].
СПИСОК ИСТОЧНИКОВ
1. Арай, Ю., Бурмистрова, Т. (2014) Специфика бизнес-моделей в социальном предпринимательстве. Российский журнал менеджмента, Том 12, № 4, c. 55–78. СПб: Издательство Санкт-Петербургского государственного университета.
2. Макграф Р. (2011) Все ли в порядке с вашей бизнес-моделью? Harvard Business Review. Режим доступа: https://hbr-russia.ru/management/strategiya/a10869/ (дата доступа: 15.09.2022).
3. Бильман, Э., Уолен, Дж., Рэм, Н., Джиб, Э. (2014) За природу – всем миром». Harvard Business Review. Режим доступа: https://hbr-russia.ru/marketing/marketingovaya-strategiya/a13686 (дата доступа: 15.09.2022).
4. Джордан, Д. (2018) Уроки гибкости: что общего у бизнеса и балета». Harvard Business Review. Режим доступа: https://hbr-russia.ru/biznes-i-obshchestvo/fenomeny/829619 (дата доступа: 15.09.2022).
5. Якобидес, М. (2020) Сила экосистемы. Harvard Business Review. Режим доступа: https://hbr-russia.ru/management/strategiya/821978 (дата доступа: 15.09.2022).
6. Drucker, P. (2006) Managing in Turbulent Times. Harper.
Stability in the Unstable: How Social Enterprises Survive and Adapt in the VUCA World
Yulia Aray
DOI 10.55140/2782–5817–2022–2–3–70–81
Social enterprises are rightfully considered a quintessential example of organizations with a high level of social impact. The founders of these projects are striving to create sustainable financial models and strike a balance between social mission and commercial performance. How do social entrepreneurs manage to live and work in a world where fast-paced change has become the norm? What innovations and strategies help them get through the tough times?
Yulia Aray
PhD, Associate Professor, Academic Director for Master in Management Program, Graduate School of Management, St. Petersburg State University
NEW OPPORTUNITIES FOR SOCIAL ENTREPRENEURS
Social entrepreneurship has enormous potential for development in today’s Russia. On the one hand, the state, the business and the public are gradually realizing the promise of this type of entrepreneurship for the implementation of systemic social change. On the other hand, more and more ambitious, enterprising, responsible people appear who want to change the situation, the usual way of doing things, and who are ready to do business “with a meaning.” Social entrepreneurs use new approaches, develop innovative and often “breakthrough” solutions in areas where unmet needs and demands exist.
As a reminder, “the peculiarity of social entrepreneurship is that it is aimed primarily at achieving the main mission, organizational goal associated with addressing a particular social problem; creating financial sustainability in this case is a necessary means to achieving this goal.” (Aray, Burmistrova, 2014)
Social entrepreneurship emerges in areas where the state or the traditional businesses simply cannot cope with social problems; this is why, strangely enough, instability, crises, deterioration of social and economic situation create new expectations and demands for social entrepreneurship. Thus, new opportunities are opening up for social entrepreneurs, which they are able to transform into sustainable business models that work for the benefit of the society. However, these organizations are known to operate in low-margin, unstable areas, so the success of any project, especially in a highly volatile business environment inherent to our time, depends on the social entrepreneurs’ skills to maneuver, adjust, be flexible, build partnerships and effectively manage resources. And it is not about adding some tools and management approaches, but about a change in the mental model of organizational management in the field of social entrepreneurship, which should ultimately improve resilience of such organizations.
THE VUCA WORLD – THE ORGANIZATIONAL HABITAT OF TODAY
As the great management guru Peter Drucker used to say: “Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes – it should be postponed as long as possible. But in a period of upheaval, such as the one we are living in, change is the norm.” (Drucker, 2006).
Indeed, we live in a world where rapid change experienced in all areas of life, from stock quotes, new technological solutions, changing fashion trends, etc., has become the norm. At the same time, change is often non-linear, unpredictable in nature, which complicates prediction of the course of events, long-term planning, and creates additional risks for all participants in the socioeconomic system.
VUCA is an acronym that is often used to describe today’s business environment. It is characterized by:
V (Volatility): changes occur all the time. The world is becoming more unstable every day, with big and small changes becoming increasingly unpredictable, more dramatic, and happening faster.
U (Uncertainty): the lack of predictability, the probability of unexpected events occurring makes predicting the future difficult, and sometimes impossible.
C (Complexity): more and more factors have to be considered when making decisions, it is difficult to establish causal relationships.
A (Ambiguity): the ambiguity of the information received, the possibility of misinterpretation leads to a lack of understanding of how to act in the market.
Today’s managers are forced to work in an environment where uncertainty is becoming the norm, the number of uncertainty factors is increasing, and their intensity and direction of impact is becoming unpredictable. In addition, events known as “Black Swans”[45], which can dramatically change the course of history, are happening more and more often. This environment makes planning horizons even shorter, and decision-making more ambiguous and complex.
ORGANIZATIONAL SURVIVAL STRATEGIES IN THE VUCA WORLD
The desire to survive is the goal of every organism on Earth. Like all living things, organizations are born, develop, and die, and regardless of their form and mission, they also all have the ultimate goal of surviving in a world full of volatility, uncertainty, complexity, and ambiguity (in other words, the VUCA world).
Features of the environment associated with the characteristics of VUCA determine the companies’ behavior today, as well as the strategies, approaches and management tools that are becoming the most demanded in terms of efficiency and applicability. Among the many modern, relevant management approaches that managers are guided by in a rapidly changing environment and which are highly relevant to social entrepreneurs, I would like to pay special attention to four:
• The need for constant review and adaptation of the organization’s business model;
• Building partnerships with a wide range of stakeholders;
• Strengthening individual and organizational abilities related to agility and adaptability;
• Developing cooperation within ecosystems. The tools demanded by organizations to survive in the VUCA world are also relevant to organizations with a high level of social impact – social enterprises. Let us consider each one of these approaches in terms of applicability to social entrepreneurship.
1. THE NEED FOR CONSTANT REVIEW AND ADAPTATION OF THE ORGANIZATION’S BUSINESS MODEL
Transformation and changes in business models in modern organizations are sometimes routine, requiring constant and close attention from the management. Columbia Business School professor Rita McGrath examines how strategies “behave” under conditions of extreme uncertainty and constant change. She told the Harvard Business Review editor about ways to recognize the impending crisis and outmaneuver the competition. Rita notes that the general interest in new business models is due, first of all, to the increasing speed of everything. “Product life cycles and design cycles are getting shorter. When the pace of change gets faster, people realize that they need to look for the next big thing. The second issue is interindustry competition. Competition is coming from unexpected places. Who could have anticipated that the iPad’s success would put all kinds of display devices? And the third trend is disruptions from business models that offer better customer experiences instead of simply products.” (McGrath, 2011).
The business models of organizations today are subjected to serious changes due to the factors mentioned above – sometimes the changes are merely incremental, and sometimes they are radical, which involves abandoning existing products, sales channels, etc. In this case, we are talking about a traditional business.
In social entrepreneurship this approach is extremely relevant due to the fact that the external environment is also subject to strong, unpredictable and intense change, and the business models themselves usually have a complex architecture. Reviewing and evaluating the current business model of social enterprises, identifying weaknesses and growth points should be an integral part of ongoing work for these organizations. However, it is necessary to note a number of features that are peculiar to social entrepreneurship and cause specific changes in the business models of social enterprises, on which they can make a special emphasis:
• the need for social enterprises to achieve a “double effect” – the performance of social enterprises should always be evaluated from the perspective of achieving economic results and social impact, so the transformation of business models should follow this principle, otherwise such organizations may face the threat of “mission erosion” or loss of sustainability;
• the possibility of engaging mixed resources – the “hybrid” nature of social entrepreneurship (possessing the properties and features inherent in both the commercial and non-profit sectors) defines the unique opportunities that are available to social enterprises. For example, access to a wide range of resources available to both sectors – grants, donations, loan funds, etc. (subject, of course, to the availability of the necessary organizational and legal forms). Such capabilities allow social entrepreneurs to develop more complex, integrated business models;
• participation of a wide range of stakeholders – the presence of stakeholders in social enterprises, on the one hand, creates the need to take into account the interests of all parties in changing and transforming the business model, and on the other hand, helps to implement the emerging opportunities with their participation.
2. BUILDING PARTNERSHIPS WITH A WIDE RANGE OF STAKEHOLDERS
Increasingly important in the business world are the concepts of “collaboration”, “cooperation”, and “cooptation” – approaches that help organizations cope with uncertainty and change. These approaches are particularly important in areas where collective effort is required to achieve results, such as sustainable development. The authors of the Harvard Business Review article “The Collaboration Imperative” note that “we are seeing both a growing awareness of the critical need for improved collaboration” to achieve sustainable development and address the most urgent problems faced by the humankind” and “the emergence of innovative models that create value for companies and drive systemic change. Optimal collaborations focus on both business processes and outcomes. They start with a small group of key organizations, link self-interest to shared interest, encourage productive competition, and, above all, build and maintain trust.” (Billman et al., 2014).
In social entrepreneurship, the business relying on the development of partnerships is an extremely important goal, because the specifics of the tasks solved by social entrepreneurs – their scope, scale, and depth – determine the need to develop cooperation with a number of organizations to achieve common goals and results, creating social good. The features of social entrepreneurship, which characterize the specifics of building partnerships, include the following:
• the use of cross-sectoral opportunities – creating public goods, filling the existing gaps of the market and the state are at the intersection of the interests of a number of actors in different sectors (public, commercial, and non-profit);
• going beyond competition – the creation of a public good implies going beyond such limits;
• strengthening the synergies – developing partnerships in social entrepreneurship leads to a tremendous increase in synergies by combining resources and competencies.
3. STRENGTHENING INDIVIDUAL AND ORGANIZATIONAL ABILITIES RELATED TO AGILITY AND ADAPTABILITY
Adaptability and agility are becoming the cornerstone properties for organizations that want to survive in the long term. In “Lessons in Agility from a Dancer Turned Professor” published in Harvard Business Review, author Jennifer Jordan draws an analogy between the qualities required of a ballet dancer and the modern manager of an organization. “Agility” has become a hugely popular management buzzword. But what does it really mean? My first introduction to the concept came long before I studied management, let alone talked about it with executives in the classroom. My first exposure to agile was in the ballet studio, when I was studying to be a dancer. All young dancers aspire to agility – to be up there with the leaping Baryshnikovs, the twirling Kents, and the gliding Nureyevs. But now, far from the ballet studio, I see many of the characteristics that are required in ballet transferring to the executive suite: core strength, ability to change focus quickly, extreme flexibility and range of motion, and knowing where you want to go.” (Jordan, 2018).
In social entrepreneurship, the need to apply methods of agility, adaptability is associated with a number of features inherent in the organizations operating in this area:
• being close to the consumer, social entrepreneurs can adapt their products, services, business models to the expectations and needs of customers more accurately and in a more timely manner;
• idea of the desired result – the “theory of change”, which is the basis of every organization in the field of social entrepreneurship, determines the development vector of the organization, assumed to lead to the positive result, and thus sets the amplitude of change;
• the ability to “be big while staying small” – the social entrepreneurs’ ability to create systemic, large-scale social change, while remaining micro and small in size, determines the great potential of social enterprises to set the vector of impact beyond organizational boundaries.
4. DEVELOPING COOPERATION WITHIN ECOSYSTEMS
Developing cooperation within ecosystems is becoming increasingly important in the business world. At times, competition in the marketplace is often not so much about a variety of value propositions as it is about finding new ways to cooperate and collaborate. As the authors of “In the Ecosystem Economy, What’s Your Strategy?” note, “In many contexts, the firm is no longer an independent strategic actor. Its success depends on collaboration with other forms in a designed ecosystem spanning multiple sectors.” The main reason is the growing influence of ecosystems associated with “three big structural changes in our economy: … an unprecedented rollback of regulations protecting forms, a blurring of the separation between products and services, and technology that is revolutionizing how forms can serve their customers.” The author says, “an ecosystem-focused framework needs to answer five questions: Can you help other forms create value? What role should you play? What should the terms for participation be? Can your organization adapt? How many ecosystems should you manage?” (Jacobides, 2019).
Social enterprises are usually active participants in ecosystems, which increases their resilience in turbulent times, creates the conditions for creating systemic change, and opens up opportunities related to access to necessary resources and competencies. The peculiarities of social enterprises in terms of the development of cooperation within ecosystems are primarily related to the following facts:
• social enterprises are highly dependent on elements of the ecosystem – this, on the one hand, creates a number of constraints, but on the other hand, the mutual dependence within the ecosystem strengthens the connections, makes them special and hard to reproduce;
• the ability to be part of multiple ecosystems increases the “penetration” of social entrepreneurs’ solutions to different levels of public good creation, enhances the uniqueness of the solutions and business models created by social enterprises.
To summarize, I would like to emphasize that the effective tools used today by traditional business organizations are not just relevant for social entrepreneurship, but should be widely demanded and applicable in this area due to the specifics and characteristics of the organizations described above.
RESULTS OF A STUDY OF THE BEHAVIOR OF ORGANIZATIONS WITH A HIGH LEVEL OF SOCIAL IMPACT IN THE VUCA ENVIRONMENT
Undoubtedly, the COVID-19 pandemic has become a major challenge not only for the society, but also for organizations and states. Pandemic times are associated with uncertainty, unpredictability of the onset and development of events, and the scale of their impact on all areas of social and economic life of people. Both businesses and nonprofit organizations found themselves in a new paradigm, where decisions about further development had to be made quickly, coherently within the team, without knowing the consequences and the probability of occurrence of anticipated events.
The Impact Hub Moscow Social Innovation Support Center, together with scientists from the Graduate School of Management at St. Petersburg State University and the University of Massachusetts, conducted a study, “Social Entrepreneurship in the Age of the Pandemic,” from June 2020 to January 2021. The goal of the study was to identify the changes that occurred in the sector during the COVID-19 pandemic. The researchers paid special attention to innovations and strategies that helped organizations survive the crisis.
The majority of Russian social enterprises participating in the study were small businesses (12 %) and microbusinesses (82 %). The overall age of the companies was 5–6 years – when the pandemic started, they were in the development and growth stages.
Social enterprises of all organizational and legal forms took part in the study. All respondent organizations were divided into three types, depending on the main method of income generation: “commercial,” “non-profit,” and “hybrid” organizations. Most of the revenue of “commercial” organizations came from the sale of their goods and services, while “non-profit” organizations derive most of their income from external funding sources (such as grants, donations). Finally, “hybrid” companies combine income from the sale of goods and services with donations and grants.
The study “Social Entrepreneurship in the Age of the Pandemic” helped experts identify several key trends indicating that many social entrepreneurs had not only been able to withstand these difficult times, but also to turn the challenges of the environment into opportunities for their organizations. Thus, during the pandemic, 74 % of “commercial” and 61 % of “hybrid” companies managed not only to maintain but also increase their sales revenues.
Figure 1. Geographic coverage of social enterprises(%)
The pandemic impacted the geographic expansion of organizations, as reported by 50 % of the respondents. The majority of respondents said their growth was influenced by the online work format (78 % of the respondents of those who answered “yes” to the question – “Has your business experienced a geographic expansion?”) (See Figure 1).
The pandemic generally increased the number of innovations being introduced. 53 % of the social entrepreneurs presented products that were groundbreaking for their companies and for the market as a whole.
Another important aspect that reflects the stability of organizations relates to maintaining the number of employees. In most organizations (85 %) the number of staff either remained the same or even increased. Organizations that operate on “hybrid” or predominantly external funding (“non-profit” organizations) were in the best position to retain headcount.
Overall, it can be noted that the overall picture among those who participated in the survey is quite positive. Social entrepreneurs have been able to maintain their positions on most critical factors, and some have even improved their performance. However, it is also necessary to mention the limitation of the study related to the “survivor effect”; in other words, the survey involved mainly those organizations that survived the crisis period and continued their activities. But despite this limitation, the important question, of course, is what strategies were used by those social entrepreneurs who had been able to cope with the challenges of a turbulent period.
The study highlighted three types of strategies, each packing a set of specific strategic actions:
• Strategies to improve efficiency (improving existing products; improving the professional competencies of the team; maintaining and protecting the positions achieved before the pandemic; optimizing business processes; optimizing the cost structure; improving the way goods/services are delivered);
• Growth strategies (creating brand new products; reaching new beneficiary segments; developing a new formal development strategy for the organization; entering new product customer segments; creating customer services; locating additional revenue sources; creating new ways to deliver products; expanding into new cities and regions; launching online sales; launching new digital products; acquiring new assets; launching digital versions of existing products);
• Development of interaction with stakeholders (attracting new partners; expanding the team; attracting non-profit funding; association with other social entrepreneurs; attracting new suppliers; interaction with public authorities; attracting investment).
According to the study, the most popular and successful strategies of social entrepreneurs in the pandemic were aimed at improving efficiency, namely: improving existing products, improving the professional competencies of the team; optimizing business processes. Growth strategies and interaction with stakeholders were also in demand, albeit to a lesser degree. The most popular directions among the growth strategies, however, were: creating brand new products; reaching new beneficiary segments; developing a new formal development strategy for the organization; and reaching new product customer segments. Among the strategies aimed at building interaction with stakeholders, particularly demanded ones included: attracting new partners; expanding the team; and teaming up with other social entrepreneurs (See Figure 2).
Thus, we can conclude that despite the high level of uncertainty, variability and unpredictable environment caused by the COVID-19 pandemic, social entrepreneurs have been able to adapt, to turn challenges into opportunities – not only to get together to optimize business processes and costs in difficult times, but also to develop new products, delivery methods, build new partnerships. Of course, the sector representatives still have room to develop the application of the most effective strategies discussed above, but we can already say with certainty that, despite the specifics of such organizations, primarily related to the need to balance the creation of social and economic value, they can successfully survive and develop in the challenging VUCA world. This phenomenon can likely be explained not only by their strong entrepreneurial spirit but also by their responsibility to their beneficiaries.
* Of the total number of respondents.
Figure 2. Social Entrepreneurs’ Strategies during the Pandemic
P. S. While you were reading this article, the VUCA world has moved even closer to the state of BANI: B (Brittle), A (Anxious), N (Nonlinear), I (Incomprehensible). This means that the organizational management tools once again need to be rethought to match the new realities[46].
REFERENCES
1. Aray, Y., Burmistrova, T. (2014) Specifics of business models in social entrepreneurship. Russian Journal of Management, Vol. 12, No. 4, p. 55–78. St. Petersburg: St. Petersburg State University Press. (In Russian).
2. McGrath, R. (2011) When Your Business Model Is in Trouble. Harvard Business Review. Retrieved from: https://hbr.org/2011/01/when-your-business-model-is-in-trouble (accessed: 15.09.2022).
3. Billman, E., Whalen, J., Nidumolu, R., Ellison, J. (2014) The Collaboration Imperative. Harvard Business Review. Retrieved from: https://hbr.org/2014/04/the-collaboration-imperative-2 (accessed: 15.09.2022).
4. Jordan, J. (2018) Lessons in Agility from a Dancer Turned Professor. Harvard Business Review. Retrieved from: https://hbr.org/2020/04/lessons-in-agility-from-a-dancer-turned-professor (accessed: 15.09.2022).
5. Jacobides, M. (2019) In the Ecosystem Economy, What’s Your Strategy? Harvard Business Review. Retrieved from: https://hbr.org/2019/09/in-the-ecosystem-economy-whats-your-strategy (accessed: 15.09.2022).
6. Drucker, P. (2006) Managing in Turbulent Times. Harper.
