Putting the horse back before the cart: designing strategic social enterprises

In this commentary on a case study of Unjani Clinics, I argue that the weak state of current social entrepreneurship practice—marked by the widespread prevalence of internal organizational conflict and mission-drift—reflects the lack of application of basic strategic and organization design principles to this important area. As the Unjani case study demonstrates, when strategically conceived and creatively designed, social enterprises can not only achieve both their commercial and social missions, but do so in a way that is supermodular compared to the governance forms of which they are a hybrid. If many, if not most, social enterprises fail to meet that standard, it is not because the tools to manage conflicting objectives within hybrid organizations do not exist, but because the lack of market discipline leaves substantial room for inefficiency in such organizations, resulting in the proliferation of ill-conceived and poorly implemented social ventures.