The business of the Big Society

February 14, 2011 by · 5 Comments
Filed under: Politics, Public policy 

When I was involved in politics there was nothing more frustrating than planning a big announcement only for it to be over-shadowed by events. The Big Society bods in Government must have felt this way when they realised that David Cameron’s speech to private sector leaders about their role in the Big Society was the same day – last December – as FIFA’s announcement on the 2018 World Cup.

Not surprisingly the event caused barely a ripple. Since then an account of businesses’ role has continued to be a gap in the Big Society script. The Prime minister again failed to say anything about business in either his Observer piece or – as far as I could see – his speech this morning .

As recent RSA speakers, Matthew Bishop and Michael Green say in today’s Times (no link – it’s behind the paywall) the ambition of the Prime Minister doesn’t seem to go much further than the banks making a small (by their standards) contribution to the reserves of the Big Society Bank.  Instead of focussing on volunteering and mutualism, Bishop and Green call for a much bigger role for the private sector in the delivery of public services, especially through payment by results mechanisms like the Social Impact Bond being piloted in Peterborough prison.

I am open-minded about what sector delivers public services and all in favour of payment by results.

[Although PBR systems must take into account inherent problems of cream skimming – taking on the clients most likely to succeed (endemic in welfare to work schemes) –  and threshold bunching – focussing on getting everyone to a particular target rather than maximising the distance each individual travels in improving their lives (as in secondary school’s obsession with 5 A-Cs).]

But whilst effective outsourcing might improve society, I’m not sure it’s really what is meant by the Big Society.
Instead, we should be thinking more deeply about how companies can tap into the hidden wealth which lies in their organisations and their relationships.  I’ve just read a very interesting piece in the Harvard Business Review by strategy gurus, Michael E Porter and Mark R Kramer. It is about the concept of shared value. In the piece Porter and Kramer seek to go beyond notions of corporate responsibility or balanced scorecards to explore the way corporations can and should combine competitive advantage with social good to achieve shared value. This, they argue, involves seizing three opportunities:  re-conceiving products and markets, redefining productivity in the value chain (which seems to involve less outsourcing and less screwing of suppliers), and enabling local cluster development.

Although this is all interesting stuff, I think Porter and Kramer underestimate the importance of behaviour change in their account of how companies can contribute to social progress. This is where a lot of hidden wealth lies. In particular, organisations need to be aiming for a sweet spot (or virtuous cycle or some other term I can’t think of right now) which combines their competitive edge with levering their brand and relationships for social good. The classic contemporary example of this is Nike which has used its brand capital to become a powerful advocate for fitness and sporting participation (something which then in turn increases its market).  This seems to me to be a fruitful way of approaching the question: what might a Big Society business do differently?

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