Premium-priced burger as a result of social innovation

What does a more-expensive-than-average cheese burger tell us about the main difference in social enterprise philosophy between Europe and Canada? Read on and find out!

It is very easy to tell what was my most memorable meal during the trip to Canada, where I was speaking at „Beyond measurement“ conference (by Social Impact Analysts Association), attending „Social Finance Forum 2014“ (by MaRS Centre for Impact Investing), and meeting exciting local change-makers like Centre for Social Innovation, Purpose Capital and Charity Intelligence.

So – I had my most memorable Canadian meal in Toronto at the restaurant called SIGNS. The story of finding out about the place was somewhat strange and funny, illustrating the way how globalised our world has become. At first, I was trying to find information about Toronto’s social enterprise restaurants from the database of Social Enterprise Canada. Unfortunately, its information was not complete and in parts already outdated. Then – October e-mail newsletter of Estonian Social Enterprise Network was released. Each month, our communication manager presents one inspiring social enterprise case from abroad. This time – as a coincidence – the story of the month was about a certain restaurant in a certain Canadian city. That´s how I found out about a social enterprise called SIGNS.

So what is the concept of the restaurant?

1. You arrive.
2. You find out that your waiter will be deaf (so no use in talking).
3. You get the menu.
4. You get a „dictionary“ of American Sign Language (ASL).
OLYMPUS DIGITAL CAMERA 5. You practice ASL (to be understood by your waiter when he / she will come to your table).
6. You get excited about the process.
7. You decide on the food and drinks.
8. You practice ASL some more.
9. You start to panic (and enjoy the challenge).
10. You practice ASL even some more.
11. You panic (and enjoy the challenge) even more.
12. The waiter comes.
13. You communicate with each other (successfully).
14. You get some training to improve your attempts at ASL.
15. You receive your food (surprise-surprise, it´s exactly the same that you tried to order using ASL). You get some more training to refine your ASL.
16. Then you eat and pay happily (while communicating in ASL).
17. Then you leave. You have had your highlight of the day. And – you are more open, more tolerant because you succeeded in communicating with another human being who initially seemed different.

Why does the concept illustrate the philosophical differences between North American and European approaches to social enterprise as well as social innovation? And what is that North American approach anyway?

The approach was kindly explained to me by Mr Norm Tasevski from Purpose Capital. The starting point is to generate some clearly defined positive social impact, of course. However, the wish to change the world usually makes conducting the business expensive than of your for-profit competitors´. For example, if you would like to provide deaf people with jobs, you have to invest into – among other expenditure – removing the communication barriers between the deaf and the hearing.

Here we have reached the exact point where European and North American approches start to differ. If a traditional European social enterpreneur finds a way to transform the umemployed into effective and happy workforce, he already considers his achievement to be a social innovation. If the solution is not competitive on the market, traditional European change-maker looks for public sector subsidies or applies for grants of foundations. He usually receives these, because the solution is still cheaper (and more empowering to the target group) than the state just paying social benefits to the people who would otherwise be confined to their homes.

However, in North America the social innovation quest lies in the question: „How do I provide the product or service with the same price as my competitors in the same industry, although my costs are higher due to my social mission (e.g the need to train the disabled)?“

So the social enterprise concept is complete only when two phases of social innovation (impact-generation solution + sustainable business model) have been finished. And – in North American case – the answer does not lie in public subsidies. It lies in the business model. The restaurant I just described is a perfect example.

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SIGNS does not apologise for employing the deaf and making it harder for clients to place the order. Vice versa, the very difficulties of placing the order are among the reasons why SIGNS attracts its clients. They transform communication difficulties into a game, an entertainment, an experience of opening one´s mind. People are used to paying for being entertained. Thus SIGNS can charge much more for its hamburger than Tim Hortons or McDonalds. Franky, there´s nothing entertaining about visiting Tim Horton (although you are grateful for free wifi).

On the one hand, I find North American approach essential. Relying much on public subsidies means that European social entrepreneurs frequently don´t develop truly business models that become financially truly sustainable. And – they are often afraid to transform themselves into succesful salespersons. There are even some social enterprises in Estonia that – although their costs are much higher than those of competitors´ – sell their products or services with the price that is even lower than the industry average. They just are too afraid to bill the customers fairly because they feel that their image or quality might not be attractive enough.

„We are a social enterprise and we employ disabled people, so we…“ /and a traditional European social entrepreneur lowers his eyes/

I´ll write more about the pros and cons of both approaches in the future. I just have to stress here and now that European approach has definitely some strong advantages (that can – in fact – frequently outweigh its flaws). Just one hint: reliance on subsidies means the need to have a dialogue with the public sector stakeholders. The results of such dialogues can lead to changes in systems (e.g in scaling the solution nationwide) much quicker than any commercially succesful social enterprise without any ties to state institutions can ever hope for.

 And – North American model can hinder scaling up social innovation. For example, I was not allowed to take photos of SIGNS´ menus that are written in ASL. The reason? Well, it´s their business secret.

As of now, only one question remains. How was the food? Well… the main course resembled more a high-quality pub than an „upper casual dining restaurant“ that SIGNS claims to be. Also, while the interior design is definitely stylish and „restaurant-ish“, the adverts placed on the tables / in the restrooms belong more to pubs trying desperately to sell that sponsored „drink of the month“. The dessert and Canadian wine were very good, though.

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All in all, I wish the leaders and staff of SIGNS the best of luck in striving towards the first part of their vision that is „to become one of the best restaurants in Canada“. The other parts it has definitely already achieved:

PS As the constructive feedback helps any social enterprise more than unlimited praise, one piece of advice from me. Please make the service less efficient!

On arrival, the concept of the restaurant was explained in kind of a hurry (although there were only a few clients besides me). Also, the waiter gave up far too easily when I was trying to ask about the location of the restroom, and called quickly for a colleague who was able to hear me.

Some more efficiency – and SIGNS would be in danger of resembling a tourist-oriented restaurant where the waitresses dress up like Medieval maidens. They look nice but you realise they have no heart (in the context of the job).

SIGNS should invest more serving time into building relationship with clients once they have entered the door. It would help to elevate the customer experience (and would, furthermore, enable to increase the price of the hamburger). Even more importantly – it will enable to achieve the social mission of SIGNS.

Then there would be no danger of becoming a „medieval restaurant“ of sign language – and SIGNS would remain an inspiring place where any guest experiences the expansion of one´s openness as a human being.

Thank you SIGNS for provoking those thoughts – and thanks to Norm for explaining the context!

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