This is one of a 13-part series exploring Cooperation and Collaborative Business Model.
“If you want to go fast, go alone. If you want to go far, go together” – African Proverb
Are you looking for a way to work with others?
As part of our 13-part series on Professional Collaboration, we are going to look at 6 types of collaborative enterprise models over the next 6 articles. The topic of this article is Mutual Structures for Social Benefit (MSSB).
The term Mutual Structures for Social Benefit (MSSB) is a complicated term that Roman 3 Solutions uses to provide clarity between the different Collaborative Enterprise Models. We use it to describe the creation of a legal entity that is owned by its membership and typically is created as a tool to promote the public good. The concept of a Social Enterprise or Community Interest Corporation could fit here, but only if the business is created as a collaboration of entities. There are a number of similarities between an MSSB and a consortium. Both are legal entities created by a collaboration of organizations to deliver a service or product; however, the focus, ownership structure, mission, and benefit to members are quite different.
The main focus of an MSSB is to provide benefit to its membership, rather than increase the service options for the members to sell or to benefit from economies of scale. The main goal of the MSSB is to create resources or to deliver services to the members that they cannot obtain alone.
How do Mutual Structures for Social Benefit (MSSB) work?
There are two main models of MSSB that are in common use. The main distinction between an MSSB and other collaborative enterprise models is that the MSSB is typically focused on creating something of social benefit and their main customer base is their own membership.
MMSB Model 1: The Co-operative
Co-operatives are very common and have made a huge difference in small communities. They are often a staple of economic recovery and are created and owned by members. When being formed, they tend to have special legal structure and status. They commonly reinvest trading profits back into their communities and can have a very large membership. An example of this model would be Credit Unions. According to Investopedia:
“A credit union is a type of financial co-operative. Ranging in size from small, volunteer-only operations to large entities with thousands of participants, credit unions can be formed by large corporations, organizations and other entities for their employees and members. Credit institutions are created, owned and operated by their participants.”
“Credit unions follow a basic business model: Members pool their money — technically, they are buying shares in the cooperative — in order to be able to provide loans, demand deposit accounts, and other financial products and services to each other. Any income generated is used to fund projects and services that will benefit the community and interests of its members.”
To pull off this type of MSSB, the members need to have a clear vision of their requirements and what size and scope their Co-operative needs to be in order to be successful. Co-operatives can be complicated and expensive to start, and when they involve the pooling of money or valuable assets, they need to be managed with strict transparency and accountability. Managing a Co-operative effectively is a niche skill set. It requires one to manage the documentation and membership effectively and still be committed to the social benefit mission. This combination of skills can be challenging for recruitment.
MSSB Model 2: Member Service Organization
A Member Service Organization is an agency that is created by a group of organizations who are in need of a service or product but cannot find or afford it with their current resources. To fill this gap, the group of organizations creates a new entity to provide that service or create that product for the benefit of the group. This model can exist in the private sector when there is a gap in a market, but often any market gap is quickly filled by nimble businesses. The Member Service Organization model is much more common in the public sector, especially in the non-profit and municipal government sector, where services are limited, and resources are constrained. An example of Member Service Organizations is Municipal Corporations. Sometimes in rural areas, there are services, such as waste disposal, public transportation, or economic development, that are in great demand by the local governments in the region. These services are not profitable enough to attract the private sector and are too costly to manage by a single municipality, so a collection of municipalities can form a Municipal Corporation that they each invest in to provide the needed product or service to the member municipalities and their residents.
Like the Co-operative model to pull off this type of MSSC, the partners must have a clear vision of the needs and what the size and scope the Member Service Organization needs to have in order to be successful. There also needs to be a sense of valuing the bigger picture, rather than focusing on what the Member Service Organization is doing to serve each member individually. Understanding what successes can be attributed to the Member Service Organization and what successes the Member Service Organization has contributed to are important in understanding and measuring the key performance indicators.
When there is a gap in services designed to create a social benefit, there are some tried and tested collaborative models capable of forming a new entity to fill the void. The positive side of an MSSB is that they have the stability of being funded by a large group so they can focus their efforts on service delivery and truly creating a social benefit. The negative side is that they can be complex to create and are reliant on the financial support and ‘buy in’ from their membership. This can be a challenge in highly political environments or when they offer a controversial service or product. However, if the mission and social value are clear and the members are properly engaged and supported, these can be very powerful tools to facilitate change and improve the lives of the members they serve.
To learn more about Mutual Structure for Social Benefit (MSSB), contact our team at firstname.lastname@example.org
Roman 3 is an advising and solutions firm that specializes in inspiring progressive action, creating a culture of innovation, and assisting organizations in implementing transformative change. We help you build capacity, collaborate, be progressive, and grow to your full potential. For more information on our services and support check us out at www.roman3.ca