September 23, 2014

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How Three Quiet, Seismic Shifts Are Changing the Social Enterprise and Social Innovation Landscape

In order to move beyond the prevailing culture of contest and create a more just and sustainable social order, we need to critically reexamine the concept of competition itself.

Davidwilcox

by David Wilcox

A year ago, I participated in the Social Innovation Summit (SIS12) that Landmark Ventures, working with the UN, curates so well.

It was the interactions – and lack thereof – at SIS12 that led to my article, Social Entrepreneurship and Social Innovation: Not the Same Thing, the second most read post on CSRwire’s Talkback in 2012.

A couple of weeks ago, CSRwire and Triple Pundit cohosted a Twitter Chat with Unilever Chief Sustainability Officer Gail Klintworth on the progress and challenges in shifting consumer mindsets through Unilever’s Sustainable Living Plan, which attracted over 200 engaged attendees and generated millions of impressions – besides becoming a worldwide trending topic for the day.

The attention paid to my article and the sheer strength of the people who showed up to discuss one company’s sustainability plans on a social media platform that few people had even heard of three years ago, suggests a convergence of trends that could lead to seismic changes as corporate, social innovation and sustainability circles engage.

“What is the largest social enterprise in the world?” Professor Marty Anderson asks his Babson class filled with bright young entrepreneurs. “What firm provides free services globally to rich and poor that enables learning and commerce?” 

The answer: Google. 

At first there is surprise and then it is obvious. That this social enterprise is highly profitable is a stellar example of the ability to make money at scale when solving global challenges.

While this article won’t go into how thoroughly Marty covers low-fixed cost scaling and a range of entrepreneurshipother innovations that Google deploys around the world, the fact that Google demands that employees spend one day a week working on future solutions outside their scope of work suggests there are a lot of “blue ocean” opportunities still available.

Trend 1: All Business Will Become “Social/Commercial”

There is a long list of social/commercial businesses — Wikipedia, Ebay, Baidu — and they represent the future of business. In the words of Unilever CEO Paul Polman:

“We are finding out quite rapidly that to be successful long term we have to ask: what do we actually give to society to make it better? We’ve made it clear to the organization that it’s our business model, starting from the top.”

Trend 2: Competition to Collaboration 

“In branding, claiming the against position means using a competitor’s dominant spend and mindshare to carve out an anti-space—the Un-cola for example. Social entrepreneurs are quintessential against positioners.“

This idea also expands to competition whose well known against position is collaboration. But can we speak of this as a new trend? 

At the 2013 Skoll World Forum on Social Entrepreneurship, I reconnected with Ron Schultz who was carrying his new book, Creating Good Work. I immediately handed him £20 so I could read it on the flight back.

The team at Second Muse who wrote Chapter 11 of Creating Good Work makes a compelling case for this “new trend,” something reflected in the comments of leaders at virtually every conference I attend. Here's an excerpt from the chapter:

The "culture of contest" that results from this is becoming increasingly maladaptive in an age of ever-increasing social and ecological interdependence. These maladaptive consequences can be seen in the growing disparities of wealth and poverty within and between most nation-states, and in the social conflict and instability that results. These consequences can also be seen in the mounting ecological crises that stem from a global race to liquidate the earth's ecological capital in the name of self-interested, short-term, material acquisition. And collaboration and alienationfinally, these consequences can be seen in the growing epidemic of alienation, depression, and anomy that characterize the most competitive societies today.

In order to move beyond the prevailing culture of contest and create a more just and sustainable social order, we need to critically reexamine the concept of competition itself. Competition, as the term is widely used today, tends to conflate two distinct sets of ideas that need to be disentangled. When people use the word "competition," they are often referring, simultaneously, to (a) the pursuit of excellence, innovation, and the establishment and productivity within a market system; and (b) the self-interested pursuit of mutually exclusive gains, with resultant winners and losers…

Once we disaggregate conventional notions of competition in this way, we can see that the most valuable aspects of "competition"- the pursuit of excellence, innovation, and productivity-are not contingent on self-interested behaviors, and they need not result in winners or losers. On the contrary, they assume their most mature form within a framework of cooperation and mutual gains-or a framework of collaboration.

This is a new framework for entrepreneurship. The broad diffusion of this reality that will take place over the next decade will create dramatic systemic change.

Trend 3: Unlocking the Entrepreneurial Human Spirit

At the World Health Care Congress, I had the privilege of moderating a panel on the rise of social business models in global healthcare featuring Nobel Prize innovator Mohammed Yunus and Kaiser Permanente CEO George Halvorson.

No one has done more to call on leaders to expand their vision of “Progress Out of Poverty” than Yunus. “Whenever I found a problem, I started a business to solve it,” he has said repeatedly. The $30 billion microfinance markets grew from that “I started a business to solve it” premise and the understanding that poor women are some of the world’s best entrepreneurs.

Grameen Bank started by lending $27 to 42 of these new entrepreneurs.

Now it goes into the villages of Bangladesh each week to imbue courage and skill and collect ripple effectpayments from 800 million borrowers and bank owners who hold $1.5 billion in entrepreneurial assets. Grameen Bank is well known, but social enterprise leaders everywhere are solving complex problems with broad populations by combining community leadership, technology, social marketing, silo busting, policy levers, movement building and partnerships often in ways that standard for-profit organizations have never considered.

Goonj in India is a great example of unlocking the entrepreneurial human spirit. As founder Anshu Gupta explained to a rapt audience of us at Babson, “Cloth for Work” unlocks the human spirit with dignity in three ways:

  1. It recognizes the talent and time of each individual and community by asking them to select and design solutions that they will create through hard work.
  2. Villagers are paid for their work in cloth and clothing, maintaining their dignity in the process.
  3. Goonj is a global voice for clothing including the taboo subject of sanitary pads, calling attention to the problem while encouraging replication of the Goonj model.

Microfinance has opened up entrepreneurship for a couple of billion who otherwise would be in the depths of poverty. Instead, their courage, skill and hard work have made them entrepreneurs. Goonj and multiple other models need to be scaled globally to add their unique impacts to the global economy. ReachScale works with partners like Babson to design an important next step: invite multiple stakeholders to design and build scaling engines that streamline growth commitments and reduce risks so portfolios of “most innovative” social enterprises can be scaled.

However, as conversations continue to indicate, many unique challenges and opportunities for engaging the entrepreneurial human spirit in the U.S. remain. Social innovators and entrepreneurs from New Orleans to Detroit and from Asheville to Cleveland, are hard at work to leverage these trends and overcome obstacles.

Several of these were addressed in Changing Business as Usual: 3 Questions for Non-profit and For-profit Innovation Leaders. I will address more in future columns.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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