Yesterday I held a webinar about the foundation of a gUG/gGmbH for the Verbund offener Werkstätten and all members and since most open workshops in Germany are organized as an association, I was asked to deal with the question of why I founded an actual company for social and environmental concerns and not an association (Verein).
And about his question I have thought about very intensively in the last weeks and I tried to put into words and also write down what was only a good feeling before.
So: why do I really want to be an entrepreneur and not work as a board member in an association? And even more: why do I feel called to stand up for entrepreneurs and to be a role model for other entrepreneurs in this respect?
Five points that are important to me:
Time on the board is limited. That is an obstacle to motivation.
In an association, board members are elected for a fixed term, which means that all the work you put in can only have a temporary effect. And that also means that you have to expect to be voted out again at some point.
This means that I can’t base my primary life plan on my work in the association, but need other life plans or options. I can’t put all my eggs in one basket and give it my all. As a result, not only my motivation suffers, but also the quality of my work.
But that’s what I want. I want to put all my eggs in one basket and give my all to. Only then will I have the feeling of being self-effective and of doing real creative work. I want to focus my work primarily on the customers and the social task and not on getting re-elected internally, which doesn’t mean that I don’t deal with the internal structures. On the contrary, that’s one of the things I spend a lot of time doing in my organization.
But not out of the pressure of being elected, but because I feel an obligation to the people I work with and the whole community that has been created is very important to me. And in the end, I have to deal with the feedback from my fellow campaigners or employees, and I want to do that. That’s how I personally get ahead.
I want to establish my own idea of a functioning organizational structure…
…and that is only possible if I have the final decision about what can and should work and how.
In every jobs as an employee, I have always had bad experiences with structures, hierarchy, leadership and paralyzing processes. That didn’t work for me, demotivated me until I quit again and again… first internally and then also officially.
And my realization from this is that even if my manager and also his manager had acted differently… none of this would have made any improvement.
The system is wrong, not the people in it. And the person who has the most power to influence and shape the system in which people perceive themselves positively and effectively is the entrepreneur or the business owner. And that’s where I see my role… To work on the system and the culture and actively ensure that the people involved can achieve their own goals.
So from day 1 of the founding until today, I have intensively studied the topic of self-organization and how it can work. My goal was and is that all structures and processes that are created enable the employees to make their own decisions and thus to have responsibility for the company themselves.
Other topics and questions I ask myself so constantly are: how does intrinsic motivation work in people? What does it take? How can teams work creatively, freely and effectively? Which processes do we need, do we have to write them down sometimes, and which problems should not be defined at all, because the problem is complex and has to be solved creatively? How do we integrate new employees without giving them culture shock? What digital tools do we use?
Sometimes I feel like I’ve made quite a few right decisions in this regard, and other days somehow nothing seems to work…. Either way, though, it’s the path I’m taking in shaping my business. That is what gives me real satisfaction in the end!
Enjoy entrepreneurial tasks and challenges
I love the entrepreneurial part of my job! That wasn’t always the case, as my parents are both in regular jobs as employees and I grew up with that mindset as well. Nevertheless, I have always felt – and this feeling has become stronger and stronger over the last few years – that I want to work for myself and my own goals, that I definitely have ideas and thoughts about some fundamental problems of this world that are worth listening to and, most importantly, worth implementing.
I believe that I have quite good abilities and also a strong will to solve problems….
..so why should I wait for others to do it? I can do it myself and I really enjoy it!
…everything that belongs to being an entrepreneur: absolute customer orientation, a great community of employees, developing a well-functioning organizational structure, which I have already talked about, etc.. I really wanted to try this out and develop myself further. In the process, not only is the vision of the company growing, but I am also growing myself.
Making a profit and focusing on the common good are absolutely compatible
Of course, it doesn’t matter whether I structure the company as an association or as a limited liability company. An association is not per se a construct that does better or more valuable work than a company. It does not even matter whether I have a recognized non-profit status from the tax office. I also know companies – normal for profit companies – that provide a huge social added value with what they do. They are simply not non-profit and cannot receive any donations. But that’s all and doesn’t change their purpose or mission at all.
So what I’m saying is that it all depends on the inner attitude of the company (and the entrpreneur), how it sees itself in relation to the outside world, what role it wants to play in society and for society, and not on the legal form.
Yes, and the non-profit status then makes it possible to receive donations, which makes the path towards self-financing much easier, because you can then reach a certain degree of professionalism more quickly with the donations and offer your customers or users more value more quickly.
The degree of self-funding is also a measure of how economically sound the organization is, whether it is a social enterprise or a for-profit company – see also Business Models of Social Organizations – and it would be a terrible idea for me to have a permanent funding gap and have to write so and so many funding applications every year. That would keep me from doing my actual work and I would feel like I going in circles. And of course, that dependency is a risk!
And the fact that a company can cover its own costs is for me not a question of whether it can do that, but more a question of how it can do that. For the most part, it’s a purely mental matter, in the sense that you simply have to keep trying things out and fine-tuning the concept until it works. According to Günter Faltin: “Mindset over money”. That’s a great book, I can highly recommend it.
I would exclude personnel costs for the time being, but in the final analysis, of course, they are part of it. Not the profits… those are not important. But that the people who put the main part of their time into it – that they can also live from it – that’s part of it for me. Because if they can’t make a living from it, they’ll have to look for another job in the long term, and then the company cannot have them as a resource.
And if they can’t be replaced, then that’s a real problem. That’s why profit is necessary for the entrepreneur to keep him in the organisation.
So for me, doing business, making a profit and at the same time caring about society, social or environmental problems are not mutually exclusive things. On the contrary, why should someone who cares about these problems and is able to make a living from it because of his concept or his own creativity… why shouldn’t he do that and live from it?
So and now comes an important point, why I think that social and societal problems have to be solved by entrepreneurs as well:
What is the value of social work?
Perhaps we can also ask ourselves why charitable and social work is largely ridiculed by other people – that is, by people who do not do charitable work. Perhaps it is because this work is largely unpaid or at least poorly paid. Then may be its not worth anything either?!
And perhaps: if there are more economically oriented companies that work for the common good AND whose entrepreneurs can make a living from it – because of the business model or concept they have developed – then first of all the reputation of such companies will rise. The work and the problems that are solved will get a completely different status.
And secondly, this will attract other social entrepreneurs or more people will think in the direction of social entrepreneurship, because they realize that they can make money with it AND do meaningful things for the world…. And there you go, we have a whole lot more people taking care of important problems instead of producing more stuff the world doesn’t need.
Conclusion:
Being an entrepreneur has very clear advantages for me. As an entrepreneur, you have a huge amount of personal creative freedom, you don’t have to do anything that others have come up with, but can implement your own vision and bring it to the world.
You can decide on everything yourself – provided you have given enough thought to this and that beforehand. But the entrepreneur basically has no limits in his own development and also in the shaping of his company and ultimately in the shaping of his environment.
Solving social problems and not doing it in the form of an association, but with the help of a non profit or a profit-oriented company, helps the entrepreneur to fully concentrate on this task and to live from it and it helps our world in the long run, because more work is done on the elimination of “real problems”.
