What traditional businesses can learn from social enterprise success

The key to long-term sustainability.

It’s an often-cited statistic in Australia that 60% of small businesses fail within the first three years of operation, and some experts have gone so far as to say success is the exception – not the rule.

Whichever way you look at it, there’s plenty of incentive to isolate the factors that lead to long-term business success, and what researchers find time and again is that a healthy profit alone cannot sustain an organisation.

In fact, if you want to find a truly sustainable business, look no further than social enterprises – businesses that aim to provide a social good while developing a self-sustaining income flow that doesn’t rely on government grants or public donations.

As an expert in strategic communication and sustainability principles in both the for-profit and not-for-profit sectors, Dr Mark Wickham from the Tasmanian School of Business and Economics has been investigating how the strategies used by social enterprises can be applied to more traditional, for-profit organisations.

“What I’m looking for in my research generally is what constitutes sustainable management as a principle,” says Dr Wickham.

His research has been focussed on conceptualising not-for-profit social enterprises, and identifying which sustainability characteristics can work in businesses where profit is the priority.

“Social enterprises, in their most pure form, are about sustainability. What we’re trying to do is find out what are the principals that underlie this, and how to transfer it to the for-profit firm,” says Dr Wickham.

“It’s about sustainability in action, and we want to drag it across to the for-profit sector and make it work. We want to change the thinking – you can still make a profit, but these other principles of sustainability need to be in play at the same time. Profits and sustainability aren’t mutually exclusive.”

As part of an ongoing research project, Dr Wickham has been working with different types of businesses to see how they communicate internally and to their external stakeholders about strategic decisions related to things like marketing, environmental responsibility, and human resources (HR).

The idea is to build a greater understanding between not-for-profits and for-profits, to facilitate the transfer of sustainability principles that ensure long-term success across both sectors.

The survival of non-traditional industries

Before joining the University of Tasmania in 2004 as a senior lecturer in social enterprise strategy, Dr Wickham worked as a manager for Coles supermarkets and as a sales representative with Cadbury Schweppes.

Having now crossed over into academia, he’s interested in the strategic management of non-traditional organisational forms such as social enterprises, and their polar opposite, the so-called sin industries.

While the motivation that defines social enterprises is to “just do good”, sin industries sit at the opposite end of the scale – they exist to feed the bad or unhelpful habits of their consumers, whether that’s alcohol, cigarettes, gambling, or weapons.

“They need to have sustainable principles in an industry which by its very nature is detrimental to society,” says Dr Wickham.

While sin industries have to figure out how to sustain themselves in a world where, at best, they’re considered a ‘necessary evil’, another form of non-traditional business – arts and culture – has its own challenges in terms of sustainability.

Dr Wickham has been investigating how cultural institutions can learn to compete through marketing and communications strategies to ensure they meet visitor expectations.

Dr Wickham’s internationally recognised expertise in sustainability theory and marketing carries over into his teaching at the University of Tasmania, where he’s taught strategic management at both undergraduate and MBA levels.

He says one of the best things about teaching is the fact that it forces you to meticulously track the movements of both academia and industry, to ensure that you’re imparting the most relevant advice to your students at all times.

“It keeps you sharp, because you have to review other people’s ideas and methods,” says Dr Wickham.

“I’m always looking at, have I got the best method? Or is someone else conceptualising it in anther way? It keeps you open to new things.”

Research that makes a difference