Social enterprise as algorithm--Is Social Enterprise Sustainable?--I.B

Making sense of the confusion is an all but impossible task so long as we try to work within the most common analytical frameworks.  Words such as “change agents,” “social” and even “entrepreneurship” are so open to interpretation that any definition framed in such language borders on tautology.  Trying to distill a set of common characteristics from disparate ventures is an analytical strategy that is sure to result in a model  either too vague to be meaningful or too exclusionary to be accepted by a wide swath of practitioners.   Likewise, proceeding from the assumption that society is divided into discrete sectors—no matter how we try to position social enterprise as a mediating, intersecting or self-contained sector, the result is going to raise far more questions than it answers.  

A more productive starting point would be to ask how a single concept could coherently serve as a nexus for so many contradictory variants.  The goal of such an inquiry would not be to reduce social enterprise to a single definition or set of traits, but to rationalize the emergence of multiple  distinct variations of a single term.   
Complex systems theory provides a replicable model for explaining such a pattern:  namely, the potential for simple rules to give rise to complex forms.  Just as the rudimentary decision-making rules in ants can give rise to a diverse array of ordered nests—some flourishing, some failing—social enterprise could be thought of as a linguistic algorithm whose specific instantiations can differ widely depending on such variables as the user and the context.

From this perspective social enterprise is more than merely  a descriptive category – it  functions instead as a generative code.  The repeated expression of this algorithm across diverse environments produces an array of distinct yet self-similar values.  In this regard social enterprise is an organizational analog to the Koch curve or the Mandelbrot set; while the collective in the aggregate may seem irreducibly complex, each particular expression derives from applying the same programmatic rules.

Above: fractal branching illustrates the diverse forms of social enterprise

Although this may not be the traditional way of analyzing organizational form, complex systems modeling provides an invaluable tool for resolving otherwise intractable problems, most notably with respect to irreducible semantic complexity. Take, for instance, Wittgenstein’s paradigmatic example of the complexity of the concept of “chair,” which is susceptible both of seemingly clear expressions and borderline cases.  Rather than try to compile a list of similarities and outliers (e.g., “four legs and a seat except when it’s a beanbag”), we can now see a deeper logic beneath the vagueness and apparent contradiction, as a set of relatively simple weighted values—say, discrete form, primarily for sitting, less for resting prone—takes shape in a diverse array of forms.  Viewed as a whole, the array of elements in the category “chair” appears to defy reduction to an algorithmic analysis, yet this global complexity emerges from the recursive iteration of relatively simpler rules across space and time.

A similar dynamic is at work with social enterprise, except here the term functions both as a descriptor of the aggregate and the generative algorithm.  The operative rule is apparent in the phrase “social enterprise” itself, which combines a term linked to the business world with a term connoting connections outside the commercial realm.   

We can distill the operative rule into a single word:  hybrid.  In a nutshell, social enterprise combines values from two seemingly distinct conceptual domains.  Embedded within the “social” component is an array of values associated with behavior with an orientation beyond the market, state or self; likewise, the term “enterprise” links to values associated with business, commerce, purpose and corporate structure. 

Fused together, it is a deceptively simple mix with the potential to take shape in a wide range of forms.  Viewing these particular expressions at the macro-level can make the concept appear to be a vague and confusing mess, but each specific instance flows from the same impulse to hybridize, albeit shaped by discrete environmental influences.  Viewing the system as clusters of values that share discrete aspects of family resemblance, we can describe  each relatively stable aggregate of similar patterns as a linguistic attractor along the lines of dynamical systems construct of attractors discussed by Goldstein, Hazy, and Silberstang in the E:CO volume on social entrepreneurship (87).

In keeping with current usage, at least in the U.S., it is possible to map these attractors in relation to three primary values, although there is a fourth that the movement itself tends not to acknowledge.  Arguably the most expansive pattern is one that results from perceiving entrepreneurship primarily in terms of entrepreneurial innovation.  Whether an organization actually engages in commerce is beside the point; the key value is devising solutions to social problems that go beyond the limits of traditional philanthropy.  For example,  Ashoka, a leading force in the movement, defines social enterprise as disruptive innovation in resolving social problems, an expansive definition that encompasses groups from Planned Parenthood and Teach for America to Ethos Water and American Apparel.  

Another approach reflects a more commercial vision, equating entrepreneurship primarily with earned income.  From this perspective a social enterprise is a social business, distinct from mainstream charity in that it eschews grants and donations in favor of financial self-sustainability.  This too is capable of bridging the for-profit and nonprofit divide, both in the form of a hybrid charity/business corporate family (e.g., Greyston Bakery and the Greyston Foundation), charitable micro-financing of businesses in disadvantage areas (Grameen Bank; Kiva.org; Harlem’s Abyssinian Development Corporation) and commercial corporate social responsibility, such as Project Red or Starbucks’ fair trade coffee.

The third is somewhat more narrow, at least in terms of its relation to corporate law.  In this model, social enterprise is synonymous with nongovernmental nonprofit organizations, albeit groups that apply business practices and metrics to their work. Perhaps the most prominent example of this approach is venture philanthropy, which transforms the traditional rhetoric of giving into social investment; the Robin Hood Foundation, for instance, is a charity funded by leading hedge funds that uses its grants to promote rigorous standards for social ROI.

The above three patterns or categories encompass many of the individuals and groups that self-identify as social entrepreneurs, although the fact that there are any number of outliers and shades of difference is perfectly consistent with the fundamental underlying model; at base, social enterprise is not a specific category but an algorithm or generative code.   Some will use the language of a double or triple bottom line (the difference being that the triple bottom line breaks out environmental sustainability as a separate social purpose), others will eschew financial rhetoric altogether, but regardless of the specific individual differences each flows from the hybridization of social and entrepreneurial values, whatever each user may believe these to be.  

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