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May 20, 2015

Lessons from outside the Classroom: 3 Key Learnings about Social Enterprise from OSU Fisher MBA Candidates

I am delighted this week to welcome guest bloggers Anna Klatt, Erika Meschkat, and Tally Wolff, MBA candidates at OSU’s Fisher College of Business.  Eager to put new business skills into practice for positive social impact,  they partnered with Star House, a homeless youth drop-in center in Columbus, Ohio, to explore the feasibility of its forming a social enterprise.

In this blog post, they reflect on three lessons they learned from their their experience.

When we learned Star House was moving to a new facility that would include a 6,000 sq ft warehouse, we saw an opportunity. Over three months, we got to know Star House’s staff, mission and strategic plan, met with some of the youth they serve, and explored a market opportunity to provide teens with not only income, but also a path to a lucrative career. During this time we learned things that would not have been possible in a classroom. We have chosen our biggest lessons to share with you.

  1.  Be creative in how you get to know the population you hope to serve. 

Since none of us had any experience working in youth homelessness, it was crucial for us to begin to explore their realities, barriers, needs and dreams. A focus group activity we designed with the expertise of OSU design research professor Liz Sanders helped us glean some of this information in a creative and interactive way.

Instead of probing questions, the co-designed activity utilized posters and sticky notes. Asking the youth to place the notes (both blank and pre-filled) around a target with the word “me” in the middle to signify importance, we gained insight on their perspectives of the world and their relationships. Items on the sticky notes included things such as housing, food, security, family, and safety and those comfortable with sharing presented to the group. This activity yielded insights we may not have gleaned from a survey or by asking questions directly.

  1.  Build a partner network. Leverage it to fill in the gaps in your own knowledge or skill base.

We knew traditional research would not get us all the information we needed. Therefore, we built a first iteration of a partner network including Liz Sanders, Judith Tansky (OSU professor and social enterprise networker), and John Rush (social entrepreneur and founder of Clean Turn).  John helped us in identifying market opportunities for a social enterprise and connected us to Ken Granville, an Electrical Estimator for Turner Construction, who then helped us with market and industry analysis.  Lastly, Patrick Westerlund of the Tony Wells Foundation provided consultation on legal structure and funding mechanisms.  This group also served as a feedback mechanism to ensure our assumptions, ideas, and end product were sound.

  1.   Identify a champion.

Prior to embarking on the feasibility study, we discovered that often one of the biggest reasons nonprofits fail in starting a social enterprise is lack of a distinct champion.  Furthermore, there is often a lack of recognition that the social enterprise is a new business venture that cannot draw upon the same resources of the nonprofit. The further we got into the design of the social enterprise the more crucial this insight became. The industry would be completely new to Star House and would require a different set of core competencies in addition to those needed to operate a homeless youth drop-in center. The identification of a champion who can reinforce this is a non-negotiable requirement, and imperative if Star House is to be successful in launching and running a social enterprise.

Much like a typical entrepreneurial endeavor, it is critical for a social entrepreneur to understand the value their effort brings. Nowhere has the economic inevitability to make trade-offs been more apparent than in our exploration of a social enterprise. Unlike a traditional for-profit venture, a social enterprise has to account for many potential beneficiaries of the operation.

Defining each beneficiary and understanding their process to capture value was core to each of the take-aways noted above. Not only is it important to learn as much as you can about the population you hope to serve directly, it is equally important to define each beneficiary (that includes any nonprofit stakeholders and potential customers as well as your mission-oriented population) in order to form a partner network and to identify one or more champions.

After the value and the beneficiaries have been articulated, the project team must attempt to anticipate all the steps in the process they will need to confront in order to capture value from the social enterprise. Anticipating these steps is where the  challenges of implementation surface and  the front-end work needed to craft a solid, entrepreneurial business plan begins.

Anna Klatt:
Erika Meschkat:
Tally Wolff:

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Social enterprise (n.): an organization that applies commercial strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for shareholders. Social enterprises can be structure as a for-profit or non-profit and may take a number of legal forms, including but not limited to co-operative, benefit corporation, low-profit limited liability company (L3C), LLC, or a subsidiary of an existing company.
The Center for Social Enterprise Development (CSED) was founded in June 2014 and received its 501(c)(3) designation in November 2014. The mission of the Center for Social Enterprise Development is to provide information, training, mentoring, and support to enable charitable organizations to develop new business activities that show strong promise of producing new sources of revenues to support and advance their charitable mission. CSED programs are open to all interested individuals and organizations who are dedicated to producing social impact from commercial activities primarily in the Central Ohio region.