(1) Return on Investment. In order to do this properly, it's crucial to link to all possible outcomes of an investment to gauge the impact the investor cares about, and hopefully to understand the context well enough to parse out any environmental influences. For financial investments, we note financial return. For community investments or development-oriented investments, there are specific outcomes to note... and it gets complicated quickly.
Take a simple business situation where the question is what is more important: immediate cash flow or trusting interpersonal relationships? Assuming we identify that we need both, how much cash do you put into social capital building and how do you measure its financial value? This is "difficult" because it's impossible, without knowing a lot of related data.
(2) Risk Management. I suggest you examine using risk management as the primary way to value intangible assets. It may not be obvious what strong social relationships bring in financially, but it's certainly obvious what risks need to be mitigated. (And in thinking this through, a heuristic emerges that facilitates decisionmaking that is actually in alignment with value creation... but that's another post.)
Risk Management can be well understood by traditional investors and financially conservative people: you figure out the amount of financial risk, and then the probability -- often scenario based -- of that risk occuring. So if a risk is a $10 billion threat, and it has 0.001% chance of happening, mitigating that risk has a value of up to $100,000.
What's the risk of not having customers in the future? Of your marketing program not working? What's the financial risk of a severe flu season vs a minimized one?
The more complex questions, but the one that can be used to build alliances: what's the risk of an uneducated group of parents to the local hospital, and the risk of a population that doesn't manage their own health well for the schools?
After having conversations about what is maturing in this space and what is emergent, it seems that the big "buzz" is around: what about US? And by "us" I mean the United States.
Specifically, why are we focused on extreme environments internationally when there are extreme environments in the United States?
This question was first brought up on Social Edge forum in about May 2009. (Can't find the link; will update when I can.) But it has persisted and grown, and every conference makes it more obvious that there is a dearth of socially-oriented businesses incubated in a more survival-oriented culture by those very people who have few resources... that are represented.
Is it real? If so, is it a matter of patronizing attitudes that we're unwilling to face? Is it because of an international infrastructure that makes it easier to get funding for work in Uganda than East Oakland? Something else?
Or is it an artifact of disconnected communities, where the elite-educated go one way, and the grassroots grown innovators go another?
There's no denying there are entrenched problems in the extreme environments within the United States, but there's also no denying that there is massive innovation emerging here, also. However, those stories are not making the news in the way international work is.
Fundamentally, that article took issue with the mission of the social enterprise. I believe that "social enterprise" is a compromise term anyway, and what's important is linking what we do for a living with what we need to do as a species to survive. We're getting there; the economic models are developing, the finance is changing, but it's a big project.
You know, it's miserable to feel like you're working against your own, your family's and your community's best interest. And that should tell us something.
I'm adding a few references to my assertions.
Not to oversimplify, but it's pretty direct:
- in order to build products and services, we need developed intangible assets (knowledge, relationships, processes, physical and emotional health, creativity) [Note: see Baruch Lev's seminal work, and many others since then.] - a large amount of intangible asset creation and development happens in the community, transcending the boundaries of the firm, or even being initiated in the community at large by people who are unaffiliated with any firms. [see Anne Saxenian's study comparing HP/Silicon Valley with DEC/Boston area.] - therefore, when a company takes on its corporate social responsibility, it links back into the community and is able to develop pathways to assist faster development of intangible assets, gain knowledge of where they are and what affects them, and bring them into product/service-relevant activities when it's appropriate.
That's just strategic behavior. It can be done poorly -- there's such a thing as a poor strategy, or an inefficient one -- but that's how "edge" is built, that's how companies compete with each other.
I rarely say "go vote" but I will now: the social credit card links community activity with financial return. It is CRUCIAL to build bridges between fiscal and social responsibility.
In the immediate term this helps people who are social entrepreneurs monetize their lives.
This doesn't make the tie (yet) but it's intevitable down this path: adjustments in credit score for unpaid community volunteerism. One example that's particularly germane to intangible asset building and reviving the economy: parent participation (particularly parents who are *eager* to help, and particularly fathers) can vastly affect a child's educational engagement and outcomes. And would getting financial score improvements increase parent participation, particularly in lower socio-economic schools? You bet!
In many cases, simply bringing those parents back into the schools can also enable a tremendous amount of community outreach for health and wellbeing, and further education of the parents. It also builds relationships among people who, as adults are now trying to link their individual goals with their family goals and community - a fundamental community uplift mechanism and an incubator for local social entrepreneurial activity.
Today is last chance to vote in SoCap10's impact challenge - please vote for the Social Credit Card. http://bit.ly/bj0y10