From 2002 to 2014 Phil Herrick was the CEO of Southern Phone, possibly the largest and most successful social enterprise in Australia with a turnover of just under $100 million.
Phil established the company and built it to become one of the top ten telecommunications companies in Australia.
All dividends are returned to the community and over $12 million has been returned so far.
Phil recently returned from an Australian Volunteers for International Development (AVID) social enterprise focused assignment in Vietnam with the Centre for Sustainable Development Studies (CSDS). We asked for his thoughts on developing a social enterprise.
Did you get a sense of the state of the social enterprise sector in Vietnam while you were on assignment? What would you say is its current state of development?
There are some very successful social enterprises in the tourism sector. One example is Sapa O’Chau where the community established the business and uses the profits for education and other social causes. There are other community based tourism ventures right across the country. The risk in these businesses is that the whole business chain has not been thought through – so a homestay may be established as a social enterprise but it fails because key elements such as a booking system or activities schedule is not properly worked out.
We have noticed that many of the organisations ABV works with that are starting social enterprises do not have previous experience in business. What would you say are the biggest challenges for such organisations?
Finding the entrepreneur is the key. At the heart of any successful business you’ll find a leader who has a dream and takes people on the journey to success – the “business owner”. A social enterprise needs an owner just as much as a for profit business. Lack of experience in business is not in itself a barrier as there are many sources of information and systems that can assist any business grow.
What can be the role of Australian volunteers in assisting local social enterprises in Asia and the Pacific (particularly those with little business experience)?
We can help put structure around their dreams and help test the ideas they have before launching them to market. This incudes research and market testing and the creation of a simple business model that the new social enterprise can use to predict revenues, expenses and that all-important cash flow.
What advice would you give to an Australian volunteer with business experience about to be placed with a social enterprise?
Take very slow steps at first. Listen, watch and try to understand the local culture before giving advice. Some elements of business are universal, such as setting a price that covers all costs and also gives a profit. Other elements are very specific to the local culture and this can include marketing and staffing. Above all, be aware that you are just there to advise and do not expect all your advice will be accepted because sometimes you’ll actually be off the mark. In fact it’s reassuring to see some ideas rejected because it means your host organisation is engaged and working with you towards the success you both want for the social enterprise.
What was the main advice that you gave to the social enterprise you worked with while on assignment?
Make sure you really want to do this. Growing a business within a non-government organisation can create major stress, both personal and within the organisation. The people trying to set up the social enterprise will always have their current tasks to cope with and they need to find the resources that will allow the organisation to grow without negative impacts on their current work.
Is there anything more you would like to say about the role Australian volunteers can play in building the capacities of social enterprises in South-East Asia and the Pacific?
It’s a special opportunity to be invited in and asked to help.
We just need to always ask ourselves if the plan we are proposing or the advice we are giving is going to fit comfortably into the local context. The host organisation will always appreciate the fact we are there to help them think through and test their ideas. I was very proud that Australia is taking an active role in helping to develop social enterprises in Vietnam.
Phil’s assignment with CSDS was developed by Australian Business Volunteers who are working in consortium with Scope Global, a delivery partner of the Australian Volunteers for International Development (AVID) program. The AVID program is an Australian Government initiative.