Are small enterprises disadvantaged in Social Value? The jury is out on this one. In principle, absolutely not, but in practice it remains to be seen.
Why might small enterprises be disadvantaged? Mainly around capacity. Generally speaking, larger businesses have greater flexibility in their overhead. This allows them to contract specialist Social Value support, enabling the design and implementation of sophisticated Social Value responses.
Flexibility in overhead resource also allows capacity for additional social value activities. An organization employing more people in an overhead function (i.e. not directly involved in contract delivery) will have more flexibility to offer volunteering programmes and other use of staff time which offers ‘additional’ Social Value (i.e. doing things above and beyond contract delivery).
In this way, we can see that smaller organisations could perceive that Social Value is just for the bigger players. In fact, several of my SME clients have commented that they’re worried that their in-tender responses will fall short of those of larger competitors.
What advantage might a small enterprise have?
Smaller enterprises often don’t recognise that they have the edge on their larger competitors in a number of ways. In fact, larger companies are likely to rely on them through supply chain, to deliver many of their social value commitments. Smaller enterprises are;
Frequently located in the communities that social value policies are targeted towards, and have much greater knowledge of the local areas they work in. A key principle of Social Value is understanding what is important for local communities. Where larger companies might be shipping staff in and out of county, locally employed staff are likely to be involved with community projects and will know where projects can make a real difference.
Flexible and responsive. Most small businesses don’t have the constraining processes of large organisations. We’ve seen how through Covid, small businesses have shifted production to PPE and hand sanitizer at a speed that larger organisations can only dream about. Now apply that to creative thinking and innovation around Social Value. Don’t under-estimate your abilities.
Usually owner managed, more important in Social Value than most people realise. Organisations that are run by the people who created them are frequently much more values driven than larger, shareholder driven businesses. As result, you’ll probably find that you’ll already be delivering a great deal of informal Social Value. The trick is now to identify and manage this process more formally.
Finally, small businesses tend to have systems that see people as people, not numbers. Your HR processes might be quite informal, but you know each other well, and can quickly pick up when someone’s having a tough time – it’s not as easy to be anonymous in a small organisation. A huge part of Social Value is about inclusion and looking after people’s wellbeing, and small firms are really well placed to deliver this. Again, the key is in understanding and articulating what you already do.
What support do small enterprises need from Social Value procurers?
Commissioners of Social Value can recognise that many small enterprises don’t have specialist Social Value capacity. There’s unlikely to be great familiarity with the Social Value Model or Social Value indicators. Guidance needs to be given, clear scope and possibly even a document outlining expectations, giving practical examples of good practice being implemented.
Spend time thinking about the type of Social Value activities that are realistic for small businesses to deliver. There’s a fine line between prescribing and guiding but many small businesses have real misconceptions about what they will be executed to deliver. For instance, it’s not terribly helpful to use apprenticeships as an example – and these are used as an example over and over again. For short term, lower value contracts an apprenticeship is likely to be unfeasible for a small company, but work placements, particularly targeted at underrepresented groups are a great option.
Consider embedded vs additional Social Value actions and ensure that scoring reflects this. Where additional activity is included, try and ensure it is assessed as proportionate to the size of the organization responding to the opportunity, as well as proportionate to contract size and type. Value, not volume is what matters, and consider how suggested actions will create positive change in the communities being targeted.
This leads us to the issue of metrics. It is important that Social Value activity is measurable, but I (and other Social Value professionals) question the validity of reducing everything to a financial proxy? It seems a blunt tool, encourages a numbers game and runs the risk of failing to value the things that really matter to people. This takes me back to my initial observation that to develop both Social Value tender criteria, and Social Value solutions that really tackle social causality, does require an understanding of the social agenda by both commissioners and respondents.
In-contract support and collaboration is fundamental to ensure that Social Value is maximized throughout contract delivery, creating and enabling a culture where innovation is embraced, we share learning and develop systems which consider the why, not just monitoring the what.
I cannot overstate the importance of training, education and connectivity between commercial and third sector providers and it’s excellent to see corporate initiatives like the Infrastructure Strategic Alliance, All Together Cumbria and the nuclear PPP work of @Dianne Richardson and team, in addition to awareness raising from government by @Samantha Butler of Cabinet Office.
At the risk of being political with a small p, one of the best things government could do at this point is commission geographically and/or sector based training for organisations on the Social Value Model. Done at a thematic level this would not cause conflict with any commercial tendering processes and would result in a supply chain with much better understanding of the rationale underpinning Social Value. Providing businesses with the practical know-how to design and implement Social Value will enable them to increase their role in tackling inequality in society.
