When is a social enterprise like a submarine?

From our founder, Katharine Hibbert

You might think that Dot Dot Dot – a social enterprise which gets empty buildings into use, and which never gets closer to the sea than our projects in Southend and Shoreham – has very little in common with the Royal Navy’s submarine service.  In fact, our process for decision-making was inspired by that used by submariners – and it serves us in our day-to-day work for the same reason it is useful to sailors operating 500m under water.

When a Royal Navy submarine is at sea, the crew make decisions based on three priorities, only moving to the second once the first is satisfied, and only moving on to the third once the second is achieved.  For submariners, these rules are: 

          1. Be safe 

          2. Remain undetected

          3. Achieve your mission 

This means that submariners don’t start trying to carry out the orders they have been given unless they are sure that they won’t be spotted while doing so, and preserving lives normally trumps staying hidden. 

Dot Dot Dot’s decision-making process is different in content but similar in structure.  When making decisions at all scales, we work through the following hierarchy, only moving on to the next step once the current one is satisfied.  In our case, the rules are: 

          1. Act ethically and with integrity 

          2. Be a sustainable business 

          3. Create positive social impact 

          4. Go above and beyond for our stakeholders 

          5. Grow 

This means that all forms of dishonesty and cruelty are ruled out, even if the behaviour is legal but morally dubious, and even if it helped the business and we would never get caught.   

After that, it’s important that we stay in business.  We cover our costs through the fees paid by our guardians not through grants, so we need to earn money to continue to do our work.  We make no apology for aiming to make a profit – being in the black opens up opportunities, makes us independent and gives us a margin for error.  We also have a responsibility to our team, the people we house and the property owners we work with to create a stable environment.  People rely on us for jobs and homes, and we play a key role in some huge regeneration projects, so we shouldn’t take big risks or make high-stakes gambles that could put this in jeopardy.   

But being a sustainable business isn’t enough on its own.  We’re proud of doing well, but we come to work to make a difference.  Once we’re confident that our risks are managed, we lean into the social impact aspects of our business model.  Fortunately for Dot Dot Dot, support for volunteering and communities is integral to what we do.  Simply by staying in business we prevent empty buildings from blighting neighbourhoods and we enable people to get involved in causes they care about.  But there is always more that can be done – and when we have the resources available, we look for ways that we can make volunteering and neighbourliness even easier and more appealing for guardians.  We also seek ways to improve standards in the property guardian sector and share what we have learned with other housing organisations and social enterprises. 

On top of that, once we’re happy that we’re working towards our vision of a society where people have the time and energy to give back to communities and causes they care about, we look to do a great job for the individuals and the specific organisations who work with us, and for the Dot Dot Dot team.  For example, we invest extra money in making the communal areas of our larger shared buildings welcoming, clean and comfortable so that guardians can enjoy them.  We tailor our service to the needs of each property owner we work with – this blog outlines how we’ve done this in Henley for South Oxford Housing Association.  And we try to provide a good working environment – for example, by encouraging team-members to make use of our flexitime scheme to ensure that they can get out and about during lockdown.   

Finally, we look to take on new work and grow – but only if we’re confident that all the other priorities are satisfied.  Growth is important to us – scale can support stability, and the more work we win, the more people we can house and the more volunteering we can support.  But growth which doesn’t support impact, which harms the service we offer to existing clients, or which puts our business sustainability at risk, is ruled out by these decision-making principles.  So all the proposals we provide to property owners are priced and specified in such a way that we can do a great job of the work from beginning to end, while creating significant impact, providing good homes, and avoiding putting staff under undue pressure.  If this means we lose out on some contracts, that’s a consequence we’re prepared to accept – we’re not here to get as big as possible at any cost. 

Why does this approach to decision-making work for Dot Dot Dot?

This decision-making process works for Dot Dot Dot for four key reasons: 

         1. It’s fast and frugal

Making decisions in a business with many moving parts and many different priorities can be challenging.  This is particularly the case for Dot Dot Dot, which – as a social enterprise – exists to create meaningful positive impact as well as to make a profit, so we have to navigate the trade-offs this creates.  These decisions are always difficult, but simple tools help.      

For example, we have always maintained high health and safety standards in the buildings we manage – even when this has caused us to lose money on projects because we underestimated the costs of doing so.  This is because we believe that asking people to live in buildings that aren’t up to appropriate standards is unethical, so when we have faced this situation we have preferred to harm the business rather than break rule one.   

On the other hand, during a period of financial pressure we deprioritised some bespoke social impact projects and didn’t hire to vacant positions which would have made life easier for the team as a whole – meaning we prioritised the sustainability of the business over creating extra social impact and going above and beyond for staff.  But we also shifted our priorities back once the period of pressure was over.   

Our decision-making process doesn’t spit out exact answers to what we should do – in the same way that the submariners’ rules of thumb doesn’t tell them how to remain undetected, just tells them to prioritise doing so.  But it does ensure that we’re thinking about the right things in the right order.  

        2. Simple rules help in the face of uncertainty

Academic work on optimal decision-making emphasises the importance of simple rules of thumb in situations of high uncertainty.  This is why submariners need clarity – once they’re in enemy waters and out of communication with home, they can’t know exactly what they’ll face or get instructions on how to react, so they need guidelines which will remain reliable whatever happens.   

Fortunately, the complexity we face at Dot Dot Dot is less threatening than this but we are operating in a competitive and shifting market affected by forces outside our control.  We could spend months trying to work out a five–year strategy which sets out exactly what we’re going to do in what order, but then a change in market conditions, a change of mind by a key client, or a global health crisis, could disrupt the whole thing. 

Under these circumstances, work by German psychologist Gerd Gigerenzer and others suggest that the best bet is to keep things simple.  Our decision-making hierarchy does that for us, alongside more detailed year-to-year planning.  If we have spare resources, we put them into enhancing our social impact, then improving life for our stakeholders, and then trying to get into new markets.  And if we don’t have spare resources, we double down on the basics until we are in a stronger position. 

        3. It allows delegated decision-making 

One of the great strengths of social enterprises is that people choose to work in them because they believe in the mission and support the values and culture.  This doesn’t mean that social enterprises shouldn’t try hard to pay decent salaries and provide pleasant offices, but it does mean that people are more likely to be aligned around shared goals and priorities, and less likely to be secretly pursuing their own agenda. 

In these circumstances, putting the tools in people’s hands so that they can autonomously prioritise their work means you can get more done, more quickly.  A simple approach makes this easier – if managers can be confident that colleagues are making decisions in line with an agreed process, they can be allowed to crack on with more independence, which makes work more satisfying as well as more efficient.  It also means that when team-members encounter new challenges at short notice, they are more likely to make the right call.   

        4. The worst-case scenario is not a catastrophe

Following these rules mean that our worst-case scenario is that if the business fails, at least but we’ve made every effort we could to avoid harming people or leaving them excessively out of pocket.  In our view, this is part of acting with integrity.   

In other words, our rules – like the submariners’ – support the ‘minimax’ decision-making approach described by Gigerenzer, where one aims to minimise the potential harm in a situation of maximum loss.  It’s the right approach for a business like ours, and it also makes for better sleep at night. 

Find out more about our core values, our commitment to providing good-quality housing to property guardians and raising standards in our industry.