Tag Archives: social need

Are we really creating ‘value’ and how do we know?

I attended two events recently and both got me thinking about the question in the title of this blog.

One was a seminar led by Stephen Osborne which examined the ‘value’ created by public services.  The other was the Social Audit Network (SAN) Annual Gathering.

Stephen Osborne is an esteemed and well-regarded academic at the University of Edinburgh Business School and has written extensively on public services.  He was speaking at Glasgow Caledonian University and three things struck me about his talk and the subsequent discussion.

The first was that delivering services in response to public needs requires a quite different approach from running a business that sells products. Apparently, legislation states that public sector organisations have a duty to respond to ‘need’ in the population. Some discharge this by delivering services, others commission or buy the services from others.

The key point is that the public sector must address ‘need’ which is evidenced in the population rather than creating demand for a service or product. In any case, the delivery of the service should use a ‘different business logic’ which is dependent on the co-operation and trust of citizens.  This working together and collusion is about adding value and positive change for citizens – in terms of meeting the needs, improving people’s quality of life, creating capacity within the community and generally making a better society.

The second was that public service delivery has fundamentally different values and a different end-game in comparison to running an enterprise.   The delivery can use business management methods to improve internal systems, but it is essentially quite a different animal with a different set of values.  This possibly has implications for social and community enterprises that also address social needs – they may need to look at their values as well as their financial bottom line.

The third relates to the discussion following the presentation, where there was a debate on accountability and the need to track, measure and report on whether or not the public service delivery was actually achieving its goals.  The verbal exchanges recognised that tangible and often measurable indicators can be used to explain what has been delivered and to what effect, however, the less tangible, outcomes in terms of happiness, confidence and self-esteem are harder to account for.

Osbourne said that these highly important factors require a more investigative approach and one that often is inevitably more time-consuming and more expensive.  It is interesting, in passing, that many local authorities have not re-instated previously abolished national performance measures – mainly due to cost.  There would seem to be an opportunity to set local and meaningful targets on ‘social impact’ which is happening in Salford and reportedly across Greater Manchester as part of the devolution agreement.

The SAN Gathering was held in Liverpool on 20th October and was in two parts.

The morning looked at the basis of social accounting and audit and a number of case studies were presented which examined things that had worked well and others that were more of a challenge.  There appeared to be a general consensus that regular reporting on the change that happens as a result of what a social or community enterprise does, is a good thing.

The afternoon concentrated on how we can believe what is contained in social reports.

An increasing number of annual social reports are being written by a wide range of organisations – from the small community-based enterprises running lunch clubs to the mega-corporate bodies providing a range of social services – both often under contract to, or at least working alongside, the public sector.  With more and more organisations being contracted to deliver services for citizens in our society – how do we know they are doing a good job?

Looking at unsubstantiated and unverified social reports makes me concerned that self-reporting as advocated by approaches such as social accounting, may descend into purely marketing exercises.  There must be some kind of ‘audit’ of social reporting to ensure faith in, and the rounded integrity of, social reports.

Over many years SAN has worked with social, voluntary and community organisations in developing a ‘social audit process’ where qualified SAN social auditors chair a Panel meeting which is a learning and supportive process as well as providing rigorous and robust scrutiny of an organisation’s social report.

The afternoon session at the Gathering also considered standards for audit processes and in particular, the forthcoming BSI standards for social value assessment reports were mentioned.  This has to be welcomed as a way of ensuring that social organisations are not pedalling ‘fake news’.

A nagging concern, however, is that standards will be created by umbrella bodies without the active involvement of organisations on the ground – things will be done to people and grassroots organisations rather than with them.  In applying national standards across the board, there is a significant danger of turning the ‘social audit’ into yet another tick-box compliance exercise, especially if it is controlled by a national standards institute.

In conclusion, I want to tie these two events together as in my mind there would appear to be common threads.

  • ‘Value’ for society is being created, but as a society, we need to be able to track it and in doing so, we need to see the degree of value created and how to improve on it, thus being as effective as possible.
  • Self-reporting is the only practical way of tracking change created by the expanding plethora of different organisations that soon will be delivering all sorts of public services – either off their own bat or on contract to the public sector.
  • We, the public, need to have faith in the social reports and one way of creating this is to insist on some form of ‘social audit’.
  • Standards have to be established for the ‘social audit’ to ensure a procedural uniformity – but those standards should not be created in a vacuum but in some form of co-creation with social and community organisations. Thus, ensuring that they are understandable, transparent and trustworthy – and perhaps there is an opportunity to recognise the context with local measures.

Finally, there would appear to be a considerable degree of consensus within the public and social sectors on the need for social reporting – not only of the tangible but also the intangible.

There is wide recognition that there has to be some form of check or audit to ensure that reality is reflected in the reporting.

My plea is that in setting social audit standards they are not too complicated but are understandable and accessible (in all its meanings).  Only that way will they become accepted and adopted by all.

Alan Kay – Social Audit Network (SAN) www.socialauditnetwork.org.uk

 

Advertisements

Social impact reporting and marketing: a hazy divide?

“Marketing is manipulation and deceit. It tries to turn people into something they aren’t – individuals focused solely on themselves, maximising their consumption of goods that they don’t need.” Noam Chomsky

It is a powerful quote from Chomsky and not one that I entirely agree with as I feel that businesses have to promote and sell their products in the competitive environment which is part of our prevailing economic system.

The whole idea of marketing reminds me of a time I was wisely told by a colleague that there is often a difference between what people say they are doing and what they are actually doing.  This brings me to the main thread running through this blog which is the relationship between ‘marketing’ and ‘social impact reporting’.

In some ways it comes back to why should social and community enterprises regularly report on their performance and their impact on people, the environment and on the society in which they exist.  They do not have to.  So why do they?

Often social enterprises will say they are doing it in order to market what they do and to be able promote and ‘sell’ what they can provide – ‘selling’ it to investors or funders and other stakeholders.  This is quite legitimate and to be applauded but I would argue should not be the sole reason to report on social impact.

The last few decades have shown a huge and pervading expansion and emphasis on ‘marketing’.  Entrepreneurs starting out or wanting to expand will come up with a ‘product’ and then spend an inordinate amount of time, resources and energy to try and sell that product in the market.  Arguably, organisations with a central social objective should by definition not need to spend as much on this, as they should be responding to a social need and through their activities provide for that need to those that benefit from their work.

The area where social impact reporting and marketing meets manifests itself in Corporate Social Responsibility (CRS) reporting.  It is admirable and to be encouraged that businesses report more holistically and include the positive impact that they are having on the environment, on people and on the wider culture.  But this is basically philanthropy.  Their core business, if you like, is to maximise profit for their owners or founders.  They also have wider impacts but they remain secondary to their core purpose.

Social enterprises, on the other hand should be reporting regularly on their core business with is positive social change.  Social enterprises should be assessed and judged on how well they are achieving their central purpose and the impact they are having.

Social impact reporting should not only be used for marketing but also to contribute to planning, to the management of the whole organisations, to review what has worked and what has not, to understanding priorities, to involve processes that listen to stakeholders, to understand costs and outcomes of differing strategies, and so on.  It is about reporting and accounting and not just a way of providing marketing information.

Social Accounting and Audit takes organisations through a process that asks for a regular review of the mission, values and objectives alongside an analysis of stakeholders (all those individuals and organisations that can affect an organisation and are affected by it).  It requires an ‘impact map’ identifying outputs and outcomes to emerge from the activities of an organisation.  This is followed by collection of quantitative and qualitative data that is brought together in an annual set of draft social accounts.  The social accounts should seek to accurately reflect the performance and impact of the organisation during the past year.  This ‘account’ then is subject to an independent audit and the revised draft becomes the social report.  The process runs parallel to the financial accounting and audit process.

A social report for social and community enterprises is about proving what your organisation has achieved – backing up the claims with evidence; improving as an organisation as inevitably decisions on the future will be based around hard facts; and finally, and this is of increasing importance, about being accountable to all stakeholders.

It is important to recognise that the audit checks the thoroughness and veracity of reporting and does not pass judgement.  The judgement about performance and impact is left to stakeholders and the report should be openly disclosed to them.  They then make a judgement about the organisation.

Some organisations going through regular social accounting and audit consider the final report as of huge importance.  I would argue that going through the process is equally important.

It would be a mistake to think of social impact reporting only in terms of how it can be used to market the organisation.

The quote from Chomsky at the start of this blog reflects the cynicism around marketing – claiming that it is only about businesses trying to persuading people to spend their money.

Social and community enterprises are more about responsibly and regularly reporting on how they have effected change that contributes to benefits for people and the wider society.   In social reporting what an organisation says it does should be as close as possible to what it actually does.

Telling people about what an organisation does is one thing; but doing this in order to sell more and more products and services is another…

…and never the twain should meet…

Alan Kay

Social Audit Network (SAN) www.socialauditnetwork.org.uk