Description
During this detailed data around social entrepreneurship awards toolkit.
SOCIAL
ENTREPRENEURSHIP
AWARDS TOOLKIT
STAGE #2: PROJECT CONCEPT & DESIGN
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Stage 2: Project Concept and Design
Theme 1: Personal Considerations for Entrepreneur
WHAT ARE THE
IMPLICATIONS ON MY LIFE?
To become a successful
entrepreneur requires total
commitment and focus on your
project. Though this should not
be to the total exclusion of other
facets of your life, it does imply that
you may have to sacri?ce or reduce
your involvement in hobbies and
leisure activities and potentially
your family life. Remember that
this is true of entrepreneurship
generally, and not con?ned to the
world of social enterprise.
In the early stages of an enterprise
there is always a struggle with
resources. For instance, having
enough funds, having enough time
and having the skills and expertise
to do what you have to do. Often it
falls on the founder or the founding
team to provide all the resources.
Finance
Until you secure adequate funding
you will have to fund your ?edgling
enterprise. This could mean that
for quite a number of months you
may have to fund all the activities
required to start up the enterprise,
market its activities as well as the
cost of trying to secure the funding.
Remember too that whilst you
are devoting your time to your
enterprise, you may not be in a
position to retain paid employment
and therefore sacri?ce potential
earnings until such time as the
enterprise can aford to start paying
you. Even when this happens it
may be some time before the
enterprise can aford to pay you the
equivalent of paid employment with
an established employer.
You may be in a position to invest
a sum of money yourself – which
means that if you are thinking of
starting an enterprise, you need to
be setting some money aside for
the time that you decide to launch
the business. You certainly will need
to ensure that you do not have any
other heavy ?nancial commitments
at the same time as the lack of
earnings in the initial phase may
damage your ability to repay loans
or mortgages.
You may want to seek the initial
funding from other sources known
to you. Many start-ups are funded
by friends and families. Take care
in approaching these sources
of funding, as long-standing
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relationships can end up being
soured if your enterprise does
not work out and you are unable
to repay any money borrowed.
You will need to be very sure that
you are prepared to strain these
relationships and are able to
enthuse these potential supporters
to your cause.
Time
Managing an enterprise requires
you to be available to its needs
24/7. You may ?nd that you are
thinking about the enterprise and
its challenges all of the time. You
will be exploring every opportunity
to ascertain whether it could
bene?t your enterprise. Every
existing and new contact will be
told about the enterprise in the
hope of eliciting support. You will
be on the phone to contacts and
supporters. You will be building
networks of contacts. You will be
attending events that might give
you access to ?nancial and other
support and investment.
New enterprises are often talked
about as being the founder’s
‘baby’ – that’s because it can be as
demanding as a new child in terms
of both time and emotion.
Social Life
Consider how all this will impact on
your life, especially the non-work
areas of your life. Often it is those
around you that will resent the fact
that you no longer have as much
time for them as you used to. You
may ?nd that you are increasingly
isolated and seeing more of
people that are work related but
not necessarily people you would
want to socialise with under other
circumstances. You need to ensure
that you make a commitment to
keep up your social life and leisure
activities and ensure you have time
for your family. You will need the
social and family networks as the
demands of the enterprise increase.
Health
Long hours and continuous stress
are pre-requisites of running an
enterprise. Missing meals, unhealthy
food, irregular meals and lack of
exercise are common features in
an entrepreneur’s life. Add to this
the stress and strain of managing
?nances and people can lead to a
potentially unhealthy situation.
You need to be determined to
ensure that you do what is required
to break your work routines and
maintain as much of a healthy life
style as possible. You must ensure
that you maintain a balanced work/
life existence. This is even more so
when you have a team working with
you. You owe it to the others that
they have a balanced life and that
you are healthy and available to
support them and the business.
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Personal development
Though you will be focused on your
enterprise you need to ensure that
you do not cut yourself of from
new developments that are going
on around you. Ignoring changes
in technology, ?nance, funding,
political activity, society trends,
and law and tax issues could have
adverse efects on you and your
enterprise.
Try to keep yourself abreast of
changes. Join networks, go to
seminars and conferences, join
the various enterprise social
networks that exist that will keep
you informed, e.g. UnLtd World,
LinkedIn, etc. Subscribe to trade
journals and web sites.
You should also consider your own
development both in the technical
skills required for your enterprise
and the soft skills that will allow you
to manage yourself and your team
better.
Stage 2: Project Concept and Design
Theme 2: Social Model
DEFINING THE PROBLEM
AND YOUR SOLUTION
Introduction
As your plans emerge from initial
ideas and thinking towards a more
complete project concept and
potentially on to a fully operational
enterprise, you will increasingly
need to think about your social
model. Your social model forms
an essential component of your
business model and helps link your
mission (‘what we do’) to your
vision (‘why we do it’):
This framework forms your entire business model; in this theme of the
toolkit, we will be focusing on the development of the Social Model
component. Vision, Mission, Strategy and the link into your operations is
discussed in the Business Model theme of this toolkit.
The social model is the key element that diferentiates a social enterprise
from a commercial business. Although many social entrepreneurs recognise
the importance of their social model, many fail successfully to de?ne and
articulate its key components. Due to the signi?cance and challenges of
this topic, this section goes into some detail compared to other themes
within this toolkit. Throughout this theme, we will refer to a single case
study, Social Enterprise D, an organisation that provides advice, information
and support to refugees and migrants in city ‘y’. This hypothetical
organisation is used to illustrate some of the key processes and thinking
required when developing your social model.
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The ‘social change model’ is a useful framework for understanding
and communicating your social model. The framework separates an
organisation’s social model into three core components:
- The theory of the problem: The problem (social, environmental)
that you are setting out to solve / alleviate.
- The theory of change: The solution theory (your strategy) to
addressing the problem de?ned above.
- The theory of action: The key interventions (your actions/
operations), which will enable the organisation to deliver the theory
of change solution.
The diagram below illustrates the fundamental role of your social model in
bridging the gap between your organisation’s vision and mission.
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It is never too early to start
thinking about the nature of your
social model. It is likely to be a
continuously evolving concept – as
you learn more about the problem
and the efectiveness of your
interventions, you may discover
new, more robust strategies and
actions for addressing the root
causes of the problem.
The very fact that you have chosen
the social enterprise model for your
project / organisation suggests
that you have already identi?ed a
problem which you believe you can
solve. The purpose of this section
is to take a closer look at both the
initial ‘problem’ idea (theory of
the problem) and your proposed
strategy for solving this problem
(theory of change). The translation
of your solution / strategy into a set
of interventions is discussed in the
next section of this Social Model
theme of the toolkit.
The function of business planning
is related to designing and
documenting your social model;
however, full business planning
will de?ne both the social model
and the business model, then
do a deep dive into much more
detailed aspects of operations,
governance, ?nance, organisational
development, etc. – that is, pretty
much every other theme covered
in this toolkit. Business planning
is considered under the Business
Model theme of this toolkit.
De?ning the theory of the problem
You are likely already to have
an idea for solving a particular
social or environmental problem.
However, before launching into
designing your solution, it’s worth
thinking about the nature of the
problem in some detail. If you can
successfully de?ne the problem you
are setting out to solve (ideally in
one statement), it is far more likely
that you will be able to develop
a robust strategy for solving it.
Furthermore, if you are serious
about making your organisation
work, you are going to have to ?nd
a way of communicating the nature
of the problem to a variety of
stakeholders, in a clear, simple and
accessible way.
In this next section we will
introduce a logical process for
de?ning the problem you are
setting out to solve; the theory of
the problem. This process is driven
by three core elements of the
problem de?nition:
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The diagram below demonstrates the role of these three elements in
de?ning the theory of the problem your organisation is looking to solve:
Note: ‘De?ning your theory of the problem’ is based on Shrestha & Appanah’s ‘Innovative Problem Solving Guide’
(2008), accessed March 2010:http://ysei.org/node/88
Theory of the problem - current and goal states
The ?rst step in this process is to de?ne the current situation and the goal
state for the problem you are seeking to address. The example below
illustrates the current and goal states as de?ned by Social Enterprise ‘D’,
- What is the current situation (or state) of the problem you have
identi?ed?
- What is the context behind this problem?
- What is the end, goal state or condition that would result if the
problem was solved?
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an organisation seeking to provide advice, information and support to
refugees and migrants in city ‘y’:
Remember, determining these diferent ‘states’ will require a close
understanding of both the current problem and the desired state. This will
require you to have a detailed understanding of the context of the problem
by completing a robust environmental analysis (see next section). With
this in mind, you will often ?nd that you may need to re-examine your
de?nition of the current and goal states once you have completed your
environmental analysis (the context).
Theory of the problem - the context
Now that you have de?ned the problem and what the world would look
like if the problem was removed, the next step is to develop a deeper
understanding of the situation through an environmental analysis – i.e. the
context. When assessing the context behind the problem you are trying to
solve, you should be aiming to answer the following questions:
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The most challenging, yet ultimately vital element of this analysis is
identifying the root causes of the problem. These causes will become
the foundation of your theory of change and your theory of action. The
PEST analysis is a useful way of assessing the root causes of the problem
you have identi?ed, providing a framework for assessing the potential
Political, Economic, Social and Technological causes of a problem. For
some problems, it may also be worth examining the potential Legal and
Environmental causes - i.e. PEST(LE). When completing the PEST(LE)
analysis, it might be worth referring to your stakeholder analysis to identify
some of the key groups that might in?uence the problem you have
identi?ed.
- Who is experiencing this problem and what are their typical
experiences?
- Identify the target population
- Where appropriate, segment the target population into a
number of separate groups
- Try and identify the typical experiences of the target
population / segments
- Identify trends or future expected changes that may change
the situation (for better or worse)
- What is the scale of the problem?
- How big is the target population (ideally broken down by
the separate groups outlined above)
- Is the problem growing / is the target population growing?
- Why does this problem exist?
- Understanding the root causes of the problem (see below)
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In many cases, the root causes of problems identi?ed with your PEST(LE)
analysis can be split into two categories:
Theory of the problem - example
The diagram below sets out a high level summary of key elements of Social
Enterprise D’s (an organisation aiming to provide support to refugees and
migrants in city ‘y’) theory of the problem:
- Individual causes- a lack of speci?c individual interventions (e.g.
‘lack of support around employment issues for migrants)
- Systemic causes- large scale systemic causes which efect the
population as a whole (e.g. ‘wide spread discrimination towards
migrant workers’)
- Number of refugees
- Number of Migrants
- Growth Rates (%)
Individual Cases
- Language barriers with local services
- Lack of understanding of rights
- Unable to access entitlements
- No way of getting integrated into local community activities
- Unable to access employment opportunities
Systematic Causes
- Discrimination by employers / local community
- Refugees / migrants are not currently ‘politically signi?cant’
- Refugees
- Migrants
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During Social Enterprise D’s analysis of the context behind the problem, it
was established that the key ‘root causes’ of the problem were as follows:
- Individual causes:
- Difculties for migrant and refuges in understanding and
accessing their rights and entitlements around:
- Employment and bene?ts § Healthcare
- Social care
- Immigration
- Limited support to help migrants and refugees integrate
into the local community through local clubs, groups and
community activities.
- Systemic causes:
- Discrimination by employers
- Discrimination in the local community
Taking these root causes into consideration, Social Enterprise D has created
the following de?nition of the ‘theory of the problem’ it will aim to address,
combining the identi?ed current state, goal state and problem context:
Many migrants and refugees in city ‘Y’ don’t understand their right and
entitlements to services, receive limited support in helping them integrate
into local activities, and are discriminated by employers and their local
community. These factors to social exclusion and social polarisation, making
it very difcult for migrant workers and refugees to become integrated into
the community.
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Theory of change
Now that you have clearly de?ned the problem you are aiming to address
(theory of the problem), the next stage is to develop your strategy for
addressing this problem (theory of change). Your strategy for solving
this problem, your theory of change, needs to de?ne the building blocks
required to bring about your long term goal (goal state).
The purpose of the ‘theory of change’ process is to help you develop
a robust solution strategy built around the root causes of the problem
you are setting out to address. It should be structured around three key
elements:
Using the context of the problem outlined in the previous section (theory
of the problem), you should aim to de?ne and map the ‘cause and efect’
links that connect your high level interventions to your outcomes, and your
outcomes to the alleviation of the problem(s) experienced by your target
population.
The example overleaf illustrates the pathway of change for Social
Enterprise ‘D’ which provides advice, information and support to refugees
and migrants in a city Y. The theory of change outlines both the current
- Interventions: the high level initiatives or activities that bring about
outcomes
- Outcomes: the results generated by the interventions
- Assumptions: explaining the connections between the interventions
and the outcomes.
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state and goal state of the de?ned problem, then illustrates the key
interventions (in red) that social enterprise D can make to change the
outcomes (in green) and achieve the overall goal state.
This example, as with any theory of change, would also require clear
documentation of the assumptions made within this solution theory- the
connections between the interventions and the outcomes. Where possible,
evidence should be provided to justify these examples; from research,
personal experience or experiences from a similar organisation. For
example, why would ‘support provided to migrants and refugees around
employment and civic rights’ generate: 1) More opportunity for migrants
and refugees to access the local employment market. 2) Make migrants and
refugees more politically active?
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Stage 2: Project Concept and Design
Theme 4: Business Model
SETTING YOUR VISION,
MISSION AND VALUES
Introduction to Vision and Mission
statements
Social entrepreneurs take an
interesting idea and run with it
because they are driven, ambitious
and want to make some sort of
lasting social impact. They have a
dream that they want to achieve
and a plan for how to achieve it.
The dream is the vision; the plan is
the mission.
The vision statement of your
project or organisation will
invariably be carried over from
your personal vision, although it is
likely to evolve as you develop the
project’s concept and design. The
vision statement articulates the
long term goal that the project
or organisation aims to realise. It
should be inspiring and aspire to
an environment where, if realised,
would mean that the project /
organisation could wind down and
cease operating, re?ecting a job
well done.
For social enterprises that support
a marginalised or minority group,
the vision might be about ensuring
all people in that group enjoy their
full rights and participation in
society; an organisation that ofers
alternative energy technology
may have a vision of a sustainably
fuelled planet.
The vision statement will serve as
your one-line hook to engage with
all of your stakeholders – staf,
partners, customers, bene?ciaries,
funders / investors and regulatory
and statutory agencies.
By contrast, your mission statement
is a clear and simple summary of
what you do and why you do it.
It is much more focused on giving
a brief insight into the internal
workings and objectives of your
project. For the social enterprise
supporting a marginalised group,
the mission might be about ofering
advice and information services
and providing training to statutory
service providers so that individuals
understand and access their rights
more fully. The green technology
project might have a mission to
ofer energy companies sustainable
technology products and services
at prices that are competitive to
traditional sources of energy.
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A couple of practical points are worth pointing out:
- It is easy to mix vision and mission statements up. Your early vision
statements may be focused too closely on the actual project you
have in mind, and may be much closer to mission statements.
Starting with your ?rst pass at a vision statement, keep asking
yourself why achieving this vision is important - see whether you
can work further up the ladder to start articulating at the highest
levels your aspirations for change. For example, it might be worth
thinking about the larger, systemic changes that could happen way
down the road if your project was replicated across the country or
your customer base grew exponentially.
- Don’t get too obsessed with perfecting your vision and mission
statements. They are notoriously tricky to nail down, with long
deliberations over exact wording, syntax and structure. And the
more people involved, the trickier it will be! Think of your vision and
mission statements as on-going works in progress. Indeed, as your
business model develops and is re?ned, there may often be a need
to change them, in particular your mission statement.
Values
Social enterprises, as with most charities and a growing number of
commercial organisations, will often have a set of values that act as guiding
principles around how a project or organisation will operate. Values will
often have an ethical or moral foundation; others who join the project or
organisation will be expected to support and uphold these values.
Some values may be ‘generic’ in nature, for example:
- Adhering to ethical trading standards and practices
- Minimising impact on the environment
- Non-discrimination in all areas of engagement and operation
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Whilst others may be more speci?c to your particular project or area of
focus, for example:
Thinking about your own value system, and how they should translate to
your project, is a useful step at this design stage. These values will help you
identify and develop relationships with future stakeholders later on. Unlike
your vision and mission statements, your initial values set is unlikely to
change very much as you proceed; but as you develop your project further
and learn more about the environment in which you operate, you may well
augment it with additional values.
- Ofering employment opportunities where possible to the target
group the project aims to support
- Sourcing certain raw materials from a particular group of local
producers to promote local employment
Stage 2: Project Concept and Design
Theme 5: Organisation, Operations and Infrastructure
STRATEGIES FOR OPERATING
ON A SHOESTRING
This theme in the toolkit looks
inside your project or organisation
to consider how its internal
workings are best organised to
achieve your objectives. The main
introduction to the various aspects
of your internal organisation,
operations and infrastructure can
be found at the next stage of the
lifecycle, Set Up and Start Up.
During the project design stage,
however, we will focus on ways in
which you can build a functional,
operating organisation at the very
earliest stages, when access to cash
and therefore the ability to buy-in
resources and expertise, is limited.
Securing start-up funding
Although this topic is discussed
elsewhere in this toolkit, it is
important to recognise here that
securing initial, external funding
for your idea is the most common
way to helping you realise an
operational organisation. By
external, we mean money that is
not your own. Notwithstanding
the advice set out below, most
new ventures will require some
form of initial capital. For social
entrepreneurs, this may come
from a variety of sources such as
supportive family and friends, an
awards program such as the HEFCE
Social Entrepreneurship Awards,
or socially-minded angel investors.
Your funding network is going to be
a critical component of your social
enterprise from the beginning and
will remain so until such time as
your organisation becomes fully
self-sustaining. So start building
those funding connections early;
see for some guidance on how to
kick this of.
A supportive network and supply
chain
Building a successful social
enterprise, like any other business
or operation, will often rely on
the networks at your disposal.
Networks can help in many ways
across your business – securing
funding/investment, building
partnerships, winning new
customers, etc. Networks can also
be a valuable source of know-
how for enabling you to build an
efective and afordable operating
model. Whilst your project may
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be unique, the challenge of
turning your idea into operational
reality is one that others will have
already faced. Seek out networks
and forums that will enable you
to engage with others who can
signpost you to cost efective
solutions to your operational needs
or tell you about strategies they’ve
adopted to overcome similar
challenges.
As well as building your networks
to help you develop your operating
model, it is also worth thinking
your choices in relation to your
key inputs into the organisation
(i.e. your suppliers). As with any
organisation, you are likely to
form an element (for many social
enterprises, the ?nal element)
of a bigger supply chain. It may
be that your social mission and
objectives may be of interest to
some potential suppliers who may
ofer you improved terms compared
to their commercial customers. For
example, if your project idea aims
to deliver social bene?ts at a local
level, then local suppliers may be
attracted to partner with you in
order to help deliver some bene?ts
to their community. At a bigger
scale, your social mission may be
aligned with a larger supplier’s CSR
program; they may be willing to
ofer you preferred rates in order to
support your operation.
Interns and volunteers
An intern is someone who will
work for you for a ?xed period
of time in return for little or no
?nancial compensation, in order
to help them build their skills and
experience. Whilst interns are
often students or recent graduates
seeking to develop their CVs,
volunteers can come from all walks
of life and will often work more
informally, with no ?xed duration
of work. The volunteer’s motivation
to work with you will usually be
related to your Vision, Mission and
Values.
Volunteers and interns can be
a valuable source of afordable
resource, especially at the early
stages of building your organisation
and operations. They are often seen
working within new or early stage
social enterprises. Once again,
securing interns and volunteers
will be driven by your success at
building an efective network and
tapping into the forums where you
can engage with likely candidates.
Setting up a university- based
social enterprise puts you in the
enviable position of having a ‘ready-
made’ pool of potential interns
and volunteers, i.e. the student
body. Be careful not to under-
estimate the difculty in building
an efective internship or volunteer
arrangement.
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Here are a few tips:
- De?ne the role and the outputs of the role as clearly as possible.
An intern will be with you for a short period; a volunteer will not
be able to invest limitless time. So both will require a discrete (and
manageable) set of tasks to deliver.
- View both internships and volunteer relationships as a two-way
process. That is, think about what you will ofer them in return for
their work and efort. For the intern, this will be about skills and
experience, for the volunteer it will be reward of doing something
good in an area that interests them. The more speci?cally you can
articulate the bene?ts, the more likely you are to ?nd the intern or
volunteer you really need.
- From a number of perspectives, view the take-on of interns and
volunteers as similar to taking on staf; that is, you will need to
make them aware of your social model, your business model and
how their work ?ts into the larger whole. They may need some
induction and almost certainly they will need a fair amount of
Look at the Chartered Institute of Personnel and Development (CIPD) for
a suggested Internship Charter that can help you de?ne your internship
agreement more formally. Similarly, the Trades Union Congress has
published a Volunteer Charter that provides some useful guidelines in the
volunteer context.
A ?nal point is worth making here. The use of interns and volunteers can
confer legal rights for these personnel and legal obligations on the part of
the organisation, it is important to be aware of these.
Pro bono expertise
Another valuable source of knowledge and experience can come from
those who have many years of experience in a ?eld that is relevant to your
operations. Pro bono experts give their time to social enterprises for free
as a way of making a contribution to social change. Pro bono support
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is usually either ‘personal’ (e.g.
mentoring) or ‘technical’ in nature.
Technical pro-bono support will
often help you leverage experts in
speci?c area of your operation. For
example, you might get support
around your PR / marketing
strategy or how to build your
supply chain efectively. Again,
networking is the key channel for
securing pro bono support.
When using pro-bono experts, bear
in mind that often their time will
be limited and therefore precious.
It is much more likely that you will
be meeting once every few weeks
rather than daily. As such, this puts
great emphasis on preparing for
your meetings and being clear
about where you need advice and
assistance.
Look big externally – think lean
internally
In social enterprise, as with most
businesses, your success will
depend on how your customers
perceive you and your venture.
Looking professional from the
outset can help you get of to a
winning start; this can be done
without a huge amount of expense.
Business cards, a website and
standard correspondence materials
and templates are possible at
minimal cost. However, this
professionalism also applies to
the way in which you engage with
stakeholders and tell your story.
Being articulate about what your
project / organisation is about
and why it will be successful can
be excellent steps in making your
operation look like it is going places
and winning over your audience.
This links directly in to your vision,
mission and values and de?ning
your business model.
Whilst the external face of
your organisation should look
professional and successful, your
internal operations should be
governed by the need to get things
done as cheaply and efciently as
possible. The less cash outlay, the
better. Don’t fall into the trap of
thinking that you need a top of the
line laptop to celebrate the birth
of your new organisation when a
budget one would do!
As well as minimising expenditure,
the social entrepreneur should be
willing to be a jack-of-all-trades
at the outset. This means things
such as learning how to build a
decent website to save on the cost
of design and development. It also
means that, up to a certain extent,
you will need to get involved in
most aspects of operations, from
marketing your ofer right through
to managing your cash-?ow. View
this start up period as a time when
you will learn about the major
features and components of your
organisation. Later down the line,
when you may have recruited staf
to complete some of these roles,
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these early experiences will be
invaluable in helping you manage
and lead your growing organisation.
Cash-?ow is king
Many businesses, social enterprises
included, fail in the ?rst few years of
trading, not because the idea was
poor, but because the cash-?ow
position of the organisation was not
managed well and at some point it
literally ran out of money.
Financial management is addressed
in a separate theme of this toolkit.
However, it is important to include
the cash-?ow issue here under
strategies for operating on a tight
budget. It is highly recommended
that you actively manage your
?nancial position from the outset.
This means understanding how
you expect your ?nances to grow
in the future, but also tracking
how and when cash comes into
the organisation and leaves it over
time. The more tightly you track
your cash, the more likely you will
be able to anticipate cash-?ow
shortages in the future and plan for
them.
doc_321638457.pdf
During this detailed data around social entrepreneurship awards toolkit.
SOCIAL
ENTREPRENEURSHIP
AWARDS TOOLKIT
STAGE #2: PROJECT CONCEPT & DESIGN
13 13
Find Out More
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Stage 2: Project Concept and Design
Theme 1: Personal Considerations for Entrepreneur
WHAT ARE THE
IMPLICATIONS ON MY LIFE?
To become a successful
entrepreneur requires total
commitment and focus on your
project. Though this should not
be to the total exclusion of other
facets of your life, it does imply that
you may have to sacri?ce or reduce
your involvement in hobbies and
leisure activities and potentially
your family life. Remember that
this is true of entrepreneurship
generally, and not con?ned to the
world of social enterprise.
In the early stages of an enterprise
there is always a struggle with
resources. For instance, having
enough funds, having enough time
and having the skills and expertise
to do what you have to do. Often it
falls on the founder or the founding
team to provide all the resources.
Finance
Until you secure adequate funding
you will have to fund your ?edgling
enterprise. This could mean that
for quite a number of months you
may have to fund all the activities
required to start up the enterprise,
market its activities as well as the
cost of trying to secure the funding.
Remember too that whilst you
are devoting your time to your
enterprise, you may not be in a
position to retain paid employment
and therefore sacri?ce potential
earnings until such time as the
enterprise can aford to start paying
you. Even when this happens it
may be some time before the
enterprise can aford to pay you the
equivalent of paid employment with
an established employer.
You may be in a position to invest
a sum of money yourself – which
means that if you are thinking of
starting an enterprise, you need to
be setting some money aside for
the time that you decide to launch
the business. You certainly will need
to ensure that you do not have any
other heavy ?nancial commitments
at the same time as the lack of
earnings in the initial phase may
damage your ability to repay loans
or mortgages.
You may want to seek the initial
funding from other sources known
to you. Many start-ups are funded
by friends and families. Take care
in approaching these sources
of funding, as long-standing
14
relationships can end up being
soured if your enterprise does
not work out and you are unable
to repay any money borrowed.
You will need to be very sure that
you are prepared to strain these
relationships and are able to
enthuse these potential supporters
to your cause.
Time
Managing an enterprise requires
you to be available to its needs
24/7. You may ?nd that you are
thinking about the enterprise and
its challenges all of the time. You
will be exploring every opportunity
to ascertain whether it could
bene?t your enterprise. Every
existing and new contact will be
told about the enterprise in the
hope of eliciting support. You will
be on the phone to contacts and
supporters. You will be building
networks of contacts. You will be
attending events that might give
you access to ?nancial and other
support and investment.
New enterprises are often talked
about as being the founder’s
‘baby’ – that’s because it can be as
demanding as a new child in terms
of both time and emotion.
Social Life
Consider how all this will impact on
your life, especially the non-work
areas of your life. Often it is those
around you that will resent the fact
that you no longer have as much
time for them as you used to. You
may ?nd that you are increasingly
isolated and seeing more of
people that are work related but
not necessarily people you would
want to socialise with under other
circumstances. You need to ensure
that you make a commitment to
keep up your social life and leisure
activities and ensure you have time
for your family. You will need the
social and family networks as the
demands of the enterprise increase.
Health
Long hours and continuous stress
are pre-requisites of running an
enterprise. Missing meals, unhealthy
food, irregular meals and lack of
exercise are common features in
an entrepreneur’s life. Add to this
the stress and strain of managing
?nances and people can lead to a
potentially unhealthy situation.
You need to be determined to
ensure that you do what is required
to break your work routines and
maintain as much of a healthy life
style as possible. You must ensure
that you maintain a balanced work/
life existence. This is even more so
when you have a team working with
you. You owe it to the others that
they have a balanced life and that
you are healthy and available to
support them and the business.
15 15
Personal development
Though you will be focused on your
enterprise you need to ensure that
you do not cut yourself of from
new developments that are going
on around you. Ignoring changes
in technology, ?nance, funding,
political activity, society trends,
and law and tax issues could have
adverse efects on you and your
enterprise.
Try to keep yourself abreast of
changes. Join networks, go to
seminars and conferences, join
the various enterprise social
networks that exist that will keep
you informed, e.g. UnLtd World,
LinkedIn, etc. Subscribe to trade
journals and web sites.
You should also consider your own
development both in the technical
skills required for your enterprise
and the soft skills that will allow you
to manage yourself and your team
better.
Stage 2: Project Concept and Design
Theme 2: Social Model
DEFINING THE PROBLEM
AND YOUR SOLUTION
Introduction
As your plans emerge from initial
ideas and thinking towards a more
complete project concept and
potentially on to a fully operational
enterprise, you will increasingly
need to think about your social
model. Your social model forms
an essential component of your
business model and helps link your
mission (‘what we do’) to your
vision (‘why we do it’):
This framework forms your entire business model; in this theme of the
toolkit, we will be focusing on the development of the Social Model
component. Vision, Mission, Strategy and the link into your operations is
discussed in the Business Model theme of this toolkit.
The social model is the key element that diferentiates a social enterprise
from a commercial business. Although many social entrepreneurs recognise
the importance of their social model, many fail successfully to de?ne and
articulate its key components. Due to the signi?cance and challenges of
this topic, this section goes into some detail compared to other themes
within this toolkit. Throughout this theme, we will refer to a single case
study, Social Enterprise D, an organisation that provides advice, information
and support to refugees and migrants in city ‘y’. This hypothetical
organisation is used to illustrate some of the key processes and thinking
required when developing your social model.
17 17
The ‘social change model’ is a useful framework for understanding
and communicating your social model. The framework separates an
organisation’s social model into three core components:
- The theory of the problem: The problem (social, environmental)
that you are setting out to solve / alleviate.
- The theory of change: The solution theory (your strategy) to
addressing the problem de?ned above.
- The theory of action: The key interventions (your actions/
operations), which will enable the organisation to deliver the theory
of change solution.
The diagram below illustrates the fundamental role of your social model in
bridging the gap between your organisation’s vision and mission.
18
It is never too early to start
thinking about the nature of your
social model. It is likely to be a
continuously evolving concept – as
you learn more about the problem
and the efectiveness of your
interventions, you may discover
new, more robust strategies and
actions for addressing the root
causes of the problem.
The very fact that you have chosen
the social enterprise model for your
project / organisation suggests
that you have already identi?ed a
problem which you believe you can
solve. The purpose of this section
is to take a closer look at both the
initial ‘problem’ idea (theory of
the problem) and your proposed
strategy for solving this problem
(theory of change). The translation
of your solution / strategy into a set
of interventions is discussed in the
next section of this Social Model
theme of the toolkit.
The function of business planning
is related to designing and
documenting your social model;
however, full business planning
will de?ne both the social model
and the business model, then
do a deep dive into much more
detailed aspects of operations,
governance, ?nance, organisational
development, etc. – that is, pretty
much every other theme covered
in this toolkit. Business planning
is considered under the Business
Model theme of this toolkit.
De?ning the theory of the problem
You are likely already to have
an idea for solving a particular
social or environmental problem.
However, before launching into
designing your solution, it’s worth
thinking about the nature of the
problem in some detail. If you can
successfully de?ne the problem you
are setting out to solve (ideally in
one statement), it is far more likely
that you will be able to develop
a robust strategy for solving it.
Furthermore, if you are serious
about making your organisation
work, you are going to have to ?nd
a way of communicating the nature
of the problem to a variety of
stakeholders, in a clear, simple and
accessible way.
In this next section we will
introduce a logical process for
de?ning the problem you are
setting out to solve; the theory of
the problem. This process is driven
by three core elements of the
problem de?nition:
19 19
The diagram below demonstrates the role of these three elements in
de?ning the theory of the problem your organisation is looking to solve:
Note: ‘De?ning your theory of the problem’ is based on Shrestha & Appanah’s ‘Innovative Problem Solving Guide’
(2008), accessed March 2010:http://ysei.org/node/88
Theory of the problem - current and goal states
The ?rst step in this process is to de?ne the current situation and the goal
state for the problem you are seeking to address. The example below
illustrates the current and goal states as de?ned by Social Enterprise ‘D’,
- What is the current situation (or state) of the problem you have
identi?ed?
- What is the context behind this problem?
- What is the end, goal state or condition that would result if the
problem was solved?
20
an organisation seeking to provide advice, information and support to
refugees and migrants in city ‘y’:
Remember, determining these diferent ‘states’ will require a close
understanding of both the current problem and the desired state. This will
require you to have a detailed understanding of the context of the problem
by completing a robust environmental analysis (see next section). With
this in mind, you will often ?nd that you may need to re-examine your
de?nition of the current and goal states once you have completed your
environmental analysis (the context).
Theory of the problem - the context
Now that you have de?ned the problem and what the world would look
like if the problem was removed, the next step is to develop a deeper
understanding of the situation through an environmental analysis – i.e. the
context. When assessing the context behind the problem you are trying to
solve, you should be aiming to answer the following questions:
21 21
The most challenging, yet ultimately vital element of this analysis is
identifying the root causes of the problem. These causes will become
the foundation of your theory of change and your theory of action. The
PEST analysis is a useful way of assessing the root causes of the problem
you have identi?ed, providing a framework for assessing the potential
Political, Economic, Social and Technological causes of a problem. For
some problems, it may also be worth examining the potential Legal and
Environmental causes - i.e. PEST(LE). When completing the PEST(LE)
analysis, it might be worth referring to your stakeholder analysis to identify
some of the key groups that might in?uence the problem you have
identi?ed.
- Who is experiencing this problem and what are their typical
experiences?
- Identify the target population
- Where appropriate, segment the target population into a
number of separate groups
- Try and identify the typical experiences of the target
population / segments
- Identify trends or future expected changes that may change
the situation (for better or worse)
- What is the scale of the problem?
- How big is the target population (ideally broken down by
the separate groups outlined above)
- Is the problem growing / is the target population growing?
- Why does this problem exist?
- Understanding the root causes of the problem (see below)
22
In many cases, the root causes of problems identi?ed with your PEST(LE)
analysis can be split into two categories:
Theory of the problem - example
The diagram below sets out a high level summary of key elements of Social
Enterprise D’s (an organisation aiming to provide support to refugees and
migrants in city ‘y’) theory of the problem:
- Individual causes- a lack of speci?c individual interventions (e.g.
‘lack of support around employment issues for migrants)
- Systemic causes- large scale systemic causes which efect the
population as a whole (e.g. ‘wide spread discrimination towards
migrant workers’)
- Number of refugees
- Number of Migrants
- Growth Rates (%)
Individual Cases
- Language barriers with local services
- Lack of understanding of rights
- Unable to access entitlements
- No way of getting integrated into local community activities
- Unable to access employment opportunities
Systematic Causes
- Discrimination by employers / local community
- Refugees / migrants are not currently ‘politically signi?cant’
- Refugees
- Migrants
23 23
During Social Enterprise D’s analysis of the context behind the problem, it
was established that the key ‘root causes’ of the problem were as follows:
- Individual causes:
- Difculties for migrant and refuges in understanding and
accessing their rights and entitlements around:
- Employment and bene?ts § Healthcare
- Social care
- Immigration
- Limited support to help migrants and refugees integrate
into the local community through local clubs, groups and
community activities.
- Systemic causes:
- Discrimination by employers
- Discrimination in the local community
Taking these root causes into consideration, Social Enterprise D has created
the following de?nition of the ‘theory of the problem’ it will aim to address,
combining the identi?ed current state, goal state and problem context:
Many migrants and refugees in city ‘Y’ don’t understand their right and
entitlements to services, receive limited support in helping them integrate
into local activities, and are discriminated by employers and their local
community. These factors to social exclusion and social polarisation, making
it very difcult for migrant workers and refugees to become integrated into
the community.
24
Theory of change
Now that you have clearly de?ned the problem you are aiming to address
(theory of the problem), the next stage is to develop your strategy for
addressing this problem (theory of change). Your strategy for solving
this problem, your theory of change, needs to de?ne the building blocks
required to bring about your long term goal (goal state).
The purpose of the ‘theory of change’ process is to help you develop
a robust solution strategy built around the root causes of the problem
you are setting out to address. It should be structured around three key
elements:
Using the context of the problem outlined in the previous section (theory
of the problem), you should aim to de?ne and map the ‘cause and efect’
links that connect your high level interventions to your outcomes, and your
outcomes to the alleviation of the problem(s) experienced by your target
population.
The example overleaf illustrates the pathway of change for Social
Enterprise ‘D’ which provides advice, information and support to refugees
and migrants in a city Y. The theory of change outlines both the current
- Interventions: the high level initiatives or activities that bring about
outcomes
- Outcomes: the results generated by the interventions
- Assumptions: explaining the connections between the interventions
and the outcomes.
25 25
state and goal state of the de?ned problem, then illustrates the key
interventions (in red) that social enterprise D can make to change the
outcomes (in green) and achieve the overall goal state.
This example, as with any theory of change, would also require clear
documentation of the assumptions made within this solution theory- the
connections between the interventions and the outcomes. Where possible,
evidence should be provided to justify these examples; from research,
personal experience or experiences from a similar organisation. For
example, why would ‘support provided to migrants and refugees around
employment and civic rights’ generate: 1) More opportunity for migrants
and refugees to access the local employment market. 2) Make migrants and
refugees more politically active?
26
27 27
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Stage 2: Project Concept and Design
Theme 4: Business Model
SETTING YOUR VISION,
MISSION AND VALUES
Introduction to Vision and Mission
statements
Social entrepreneurs take an
interesting idea and run with it
because they are driven, ambitious
and want to make some sort of
lasting social impact. They have a
dream that they want to achieve
and a plan for how to achieve it.
The dream is the vision; the plan is
the mission.
The vision statement of your
project or organisation will
invariably be carried over from
your personal vision, although it is
likely to evolve as you develop the
project’s concept and design. The
vision statement articulates the
long term goal that the project
or organisation aims to realise. It
should be inspiring and aspire to
an environment where, if realised,
would mean that the project /
organisation could wind down and
cease operating, re?ecting a job
well done.
For social enterprises that support
a marginalised or minority group,
the vision might be about ensuring
all people in that group enjoy their
full rights and participation in
society; an organisation that ofers
alternative energy technology
may have a vision of a sustainably
fuelled planet.
The vision statement will serve as
your one-line hook to engage with
all of your stakeholders – staf,
partners, customers, bene?ciaries,
funders / investors and regulatory
and statutory agencies.
By contrast, your mission statement
is a clear and simple summary of
what you do and why you do it.
It is much more focused on giving
a brief insight into the internal
workings and objectives of your
project. For the social enterprise
supporting a marginalised group,
the mission might be about ofering
advice and information services
and providing training to statutory
service providers so that individuals
understand and access their rights
more fully. The green technology
project might have a mission to
ofer energy companies sustainable
technology products and services
at prices that are competitive to
traditional sources of energy.
28
A couple of practical points are worth pointing out:
- It is easy to mix vision and mission statements up. Your early vision
statements may be focused too closely on the actual project you
have in mind, and may be much closer to mission statements.
Starting with your ?rst pass at a vision statement, keep asking
yourself why achieving this vision is important - see whether you
can work further up the ladder to start articulating at the highest
levels your aspirations for change. For example, it might be worth
thinking about the larger, systemic changes that could happen way
down the road if your project was replicated across the country or
your customer base grew exponentially.
- Don’t get too obsessed with perfecting your vision and mission
statements. They are notoriously tricky to nail down, with long
deliberations over exact wording, syntax and structure. And the
more people involved, the trickier it will be! Think of your vision and
mission statements as on-going works in progress. Indeed, as your
business model develops and is re?ned, there may often be a need
to change them, in particular your mission statement.
Values
Social enterprises, as with most charities and a growing number of
commercial organisations, will often have a set of values that act as guiding
principles around how a project or organisation will operate. Values will
often have an ethical or moral foundation; others who join the project or
organisation will be expected to support and uphold these values.
Some values may be ‘generic’ in nature, for example:
- Adhering to ethical trading standards and practices
- Minimising impact on the environment
- Non-discrimination in all areas of engagement and operation
29 29
Whilst others may be more speci?c to your particular project or area of
focus, for example:
Thinking about your own value system, and how they should translate to
your project, is a useful step at this design stage. These values will help you
identify and develop relationships with future stakeholders later on. Unlike
your vision and mission statements, your initial values set is unlikely to
change very much as you proceed; but as you develop your project further
and learn more about the environment in which you operate, you may well
augment it with additional values.
- Ofering employment opportunities where possible to the target
group the project aims to support
- Sourcing certain raw materials from a particular group of local
producers to promote local employment
Stage 2: Project Concept and Design
Theme 5: Organisation, Operations and Infrastructure
STRATEGIES FOR OPERATING
ON A SHOESTRING
This theme in the toolkit looks
inside your project or organisation
to consider how its internal
workings are best organised to
achieve your objectives. The main
introduction to the various aspects
of your internal organisation,
operations and infrastructure can
be found at the next stage of the
lifecycle, Set Up and Start Up.
During the project design stage,
however, we will focus on ways in
which you can build a functional,
operating organisation at the very
earliest stages, when access to cash
and therefore the ability to buy-in
resources and expertise, is limited.
Securing start-up funding
Although this topic is discussed
elsewhere in this toolkit, it is
important to recognise here that
securing initial, external funding
for your idea is the most common
way to helping you realise an
operational organisation. By
external, we mean money that is
not your own. Notwithstanding
the advice set out below, most
new ventures will require some
form of initial capital. For social
entrepreneurs, this may come
from a variety of sources such as
supportive family and friends, an
awards program such as the HEFCE
Social Entrepreneurship Awards,
or socially-minded angel investors.
Your funding network is going to be
a critical component of your social
enterprise from the beginning and
will remain so until such time as
your organisation becomes fully
self-sustaining. So start building
those funding connections early;
see for some guidance on how to
kick this of.
A supportive network and supply
chain
Building a successful social
enterprise, like any other business
or operation, will often rely on
the networks at your disposal.
Networks can help in many ways
across your business – securing
funding/investment, building
partnerships, winning new
customers, etc. Networks can also
be a valuable source of know-
how for enabling you to build an
efective and afordable operating
model. Whilst your project may
31 31
be unique, the challenge of
turning your idea into operational
reality is one that others will have
already faced. Seek out networks
and forums that will enable you
to engage with others who can
signpost you to cost efective
solutions to your operational needs
or tell you about strategies they’ve
adopted to overcome similar
challenges.
As well as building your networks
to help you develop your operating
model, it is also worth thinking
your choices in relation to your
key inputs into the organisation
(i.e. your suppliers). As with any
organisation, you are likely to
form an element (for many social
enterprises, the ?nal element)
of a bigger supply chain. It may
be that your social mission and
objectives may be of interest to
some potential suppliers who may
ofer you improved terms compared
to their commercial customers. For
example, if your project idea aims
to deliver social bene?ts at a local
level, then local suppliers may be
attracted to partner with you in
order to help deliver some bene?ts
to their community. At a bigger
scale, your social mission may be
aligned with a larger supplier’s CSR
program; they may be willing to
ofer you preferred rates in order to
support your operation.
Interns and volunteers
An intern is someone who will
work for you for a ?xed period
of time in return for little or no
?nancial compensation, in order
to help them build their skills and
experience. Whilst interns are
often students or recent graduates
seeking to develop their CVs,
volunteers can come from all walks
of life and will often work more
informally, with no ?xed duration
of work. The volunteer’s motivation
to work with you will usually be
related to your Vision, Mission and
Values.
Volunteers and interns can be
a valuable source of afordable
resource, especially at the early
stages of building your organisation
and operations. They are often seen
working within new or early stage
social enterprises. Once again,
securing interns and volunteers
will be driven by your success at
building an efective network and
tapping into the forums where you
can engage with likely candidates.
Setting up a university- based
social enterprise puts you in the
enviable position of having a ‘ready-
made’ pool of potential interns
and volunteers, i.e. the student
body. Be careful not to under-
estimate the difculty in building
an efective internship or volunteer
arrangement.
32
Here are a few tips:
- De?ne the role and the outputs of the role as clearly as possible.
An intern will be with you for a short period; a volunteer will not
be able to invest limitless time. So both will require a discrete (and
manageable) set of tasks to deliver.
- View both internships and volunteer relationships as a two-way
process. That is, think about what you will ofer them in return for
their work and efort. For the intern, this will be about skills and
experience, for the volunteer it will be reward of doing something
good in an area that interests them. The more speci?cally you can
articulate the bene?ts, the more likely you are to ?nd the intern or
volunteer you really need.
- From a number of perspectives, view the take-on of interns and
volunteers as similar to taking on staf; that is, you will need to
make them aware of your social model, your business model and
how their work ?ts into the larger whole. They may need some
induction and almost certainly they will need a fair amount of
Look at the Chartered Institute of Personnel and Development (CIPD) for
a suggested Internship Charter that can help you de?ne your internship
agreement more formally. Similarly, the Trades Union Congress has
published a Volunteer Charter that provides some useful guidelines in the
volunteer context.
A ?nal point is worth making here. The use of interns and volunteers can
confer legal rights for these personnel and legal obligations on the part of
the organisation, it is important to be aware of these.
Pro bono expertise
Another valuable source of knowledge and experience can come from
those who have many years of experience in a ?eld that is relevant to your
operations. Pro bono experts give their time to social enterprises for free
as a way of making a contribution to social change. Pro bono support
33 33
is usually either ‘personal’ (e.g.
mentoring) or ‘technical’ in nature.
Technical pro-bono support will
often help you leverage experts in
speci?c area of your operation. For
example, you might get support
around your PR / marketing
strategy or how to build your
supply chain efectively. Again,
networking is the key channel for
securing pro bono support.
When using pro-bono experts, bear
in mind that often their time will
be limited and therefore precious.
It is much more likely that you will
be meeting once every few weeks
rather than daily. As such, this puts
great emphasis on preparing for
your meetings and being clear
about where you need advice and
assistance.
Look big externally – think lean
internally
In social enterprise, as with most
businesses, your success will
depend on how your customers
perceive you and your venture.
Looking professional from the
outset can help you get of to a
winning start; this can be done
without a huge amount of expense.
Business cards, a website and
standard correspondence materials
and templates are possible at
minimal cost. However, this
professionalism also applies to
the way in which you engage with
stakeholders and tell your story.
Being articulate about what your
project / organisation is about
and why it will be successful can
be excellent steps in making your
operation look like it is going places
and winning over your audience.
This links directly in to your vision,
mission and values and de?ning
your business model.
Whilst the external face of
your organisation should look
professional and successful, your
internal operations should be
governed by the need to get things
done as cheaply and efciently as
possible. The less cash outlay, the
better. Don’t fall into the trap of
thinking that you need a top of the
line laptop to celebrate the birth
of your new organisation when a
budget one would do!
As well as minimising expenditure,
the social entrepreneur should be
willing to be a jack-of-all-trades
at the outset. This means things
such as learning how to build a
decent website to save on the cost
of design and development. It also
means that, up to a certain extent,
you will need to get involved in
most aspects of operations, from
marketing your ofer right through
to managing your cash-?ow. View
this start up period as a time when
you will learn about the major
features and components of your
organisation. Later down the line,
when you may have recruited staf
to complete some of these roles,
34
these early experiences will be
invaluable in helping you manage
and lead your growing organisation.
Cash-?ow is king
Many businesses, social enterprises
included, fail in the ?rst few years of
trading, not because the idea was
poor, but because the cash-?ow
position of the organisation was not
managed well and at some point it
literally ran out of money.
Financial management is addressed
in a separate theme of this toolkit.
However, it is important to include
the cash-?ow issue here under
strategies for operating on a tight
budget. It is highly recommended
that you actively manage your
?nancial position from the outset.
This means understanding how
you expect your ?nances to grow
in the future, but also tracking
how and when cash comes into
the organisation and leaves it over
time. The more tightly you track
your cash, the more likely you will
be able to anticipate cash-?ow
shortages in the future and plan for
them.
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