Digital Divide Data (DDD) is a commercial enterprise doing
data-entry work for profit. It is also a social enterprise that trains
Cambodians to obtain better jobs than the ones they do for DDD. Is that a
contradiction? Maybe it is not fully contradictory but instead just a tension—one
that many social enterprises handle because they need to sustain themselves
commercially, not just do good work. We have long known that the dual purpose
of social enterprise is seen as a contradiction internally and can lead to
various problems and coping strategies, but we have not known much about the
long-term effects.
Now we know more, thanks to an article in Administrative Science Quarterly by Wendy Smith and Marya Besharov. They followed DDD for more
than ten years, seeing it as a great example of the effects of how such
contradictions are dealt with over a long time. It is a great example both
because DDD has coped with them well, while many other organizations break
apart or fail, and because it has faced a particularly difficult tension
between its commercial and social work, as the commercial work has slim margins
and some of the social activities can undermine it seriously.
What do we learn from DDD? As you might expect, the answer
to such contradictions has more than one part, but here I want to describe just
one: guardrails. Establishing guardrails is a way to set up the organization
that follows some old organization theory almost to the book, although the DDD
founders may not have been aware of it. In a hybrid organization like DDD,
whose commercial and social activities are both important, one of the many
possible solutions is to make sure that the organization holds strong advocates
of each one and is not set up to let one type of activity dominate. That setup results
in a battle for dominance between these advocates and between the coalitions
they can muster for support whenever a critical problem arises.
That sounds like a noisy and costly way to organize, and it
is. But its key feature is that the battles arise whenever one coalition sees
the organization as going too far in one direction and neglecting the other,
and the battles help to pull it back to the center. As long as the organization
can balance its activities, it is peaceful. That’s why competing advocates and
coalitions function as guardrails – they keep the organization from going off
track and favoring one mission over the other.
The reason this is important is that hiring advocates for
contradictory positions without giving priority to one looks like a way to
generate problems for the organization. There is not one overriding mission,
there is not a clear organizational identity, it is not possible to predict
when conflicts will start, and it is hard to predict how they will end. But all
these frightful sources of noise help stabilize the organization and resolve
the tension between its contradictory goals and activities.
