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The Future of Social Enterprise

Posted August 22, 2008 9:18 AM by Ted Jackson

I first wrote about this topic in a blog post Is Consolidation the Answer - more thoughts. Since I made that post in June, some rather interesting comments have been posted on the Harvard discussion site.

The posts there have been very insightful. People have commented that it is very easy to grasp the ROI of a business because it is a common measure across companies. With financial outputs at the top of a for-profit strategy, success can be measured in a similar way, but in nonprofits, how do you compare progress against diabetes versus progress in after school programs? The other interesting post posited that progress in the social sector sometimes takes years and tens of years, rather than quarters in the for-profit world. While microfinance loans may be given out immediately, how long would it take to know if an economy is really being improved, and do "investors" have the patience for the timing of these long term results?

The discussion is great, and I think it shows the importance of using the Balanced Scorecard in the social sector. Organizations and donors/investors need an easy way to describe the strategy, and a measurable way to show progress against the strategy. While some goals will take years to make progress against, leading indicators should be able to let an organization know that they are at least heading in the right direction. I would be interested in your thoughts.