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Social enterprises (SEs) play an important role in addressing societal problems by generating social impact
(e.g. well-being, social wealth and cohesion, and ecology) through a market-based model. SEs achieve this
through a hybrid business model, trading-off financial and social value creation objectives. Despite their
significant societal benefits, many SEs struggle to scale-up due to their relatively costly operating model, a
consequence of ethical sourcing principles and/or production processes centering around the needs of
workers who are vulnerable or hard-to-employ. Traditional management techniques are not always
appropriate for SEs, as they do not consider the tensions between financial and social value creation
objectives of SEs. Our project examined how continuous improvement, and in particular the philosophy and
tools of Lean could be harnessed to improve SEs competitiveness.
The project consisted of two phases. First, interviews and focus groups were conducted with multiple SEs to
identify factors hindering SEs and linking these to Lean philosophy and tools that could be used to address
them. Second, action research was conducted in cooperation with Elliz in Company to adapt lean tools to the
specific characteristics of SEs. We first examined how Hoshin Kanri (also known as policy deployment) could
be modified to incorporate organizational values, as SEs are values-driven organizations. This led to the
creation of a diamond-shaped Hoshin Kanri that helps SEs communicate their values in relation to their
objectives, actions and KPIs both internally and externally. We also examined how 5S (a foundational lean
tool for which the acronym stands for Sort, Set in order, Shine, Standardize, and Sustain the change) could
be implemented by SEs. We found that the implementation of 5S had benefits for SEs beyond productivity
improvement, increasing the self-efficacy of vulnerable employees. We conclude that lean tools can be
valuable for SEs, but only with the necessary adaptations.
Social enterprises (SEs) can play an important role in addressing societal problems. SEs are businesses whose primary objective is to generate social impact (e.g. well-being, social wealth and cohesion, and ecology) through a market-based model. SEs achieve this through a hybrid business model, trading-off financial and social value creation objectives. SEs typically face higher costs, for example because of ethical sourcing principles and/or production processes centering around the needs of workers who are vulnerable or hard-to-employ. This results in SEs’ struggling to scale-up due to their relatively costly operating model.
Traditional management techniques are not always appropriate, as they do not take into account the tensions between financial and social value creation objectives of SEs. Our project examines how continuous improvement, and in particular the philosophy and tools of Lean can be harnessed to improve SEs competitiveness. Lean organizations share many values with SEs, such as respect for people, suggesting a good fit between the values and principles of Lean and those of SEs.
The consortium for this project is a cooperation between the research groups Improving Business and New Marketing of the Center of Expertise Well-Being Economy and New Entrepreneurship and the minor Continuous Improvement of AVANS Hogeschool, and the SME companies Elliz in Company and Ons Label.
The project consists of two phases, an exploratory phase during which the question “in what ways can the philosophy and tools of Lean be used by Social Enterprises?” will be addressed. Interviews and focus groups will be conducted with multiple SEs (not only partners). Participant observation will be conducted by the students of the minor Continuous Improvement at the partner SEs. During the second phase, the implementation of the identified principles and tools will be operationalized through a roadmap. Action research will be conducted in cooperation with the partner SEs.