That a leading business school is dedicating an entire student-run conference to the topic of responsible business is remarkable (HEC Paris will do the same soon in May, also in collaboration with Net Impact) but not an isolated phenomenon. In the past few years, several top business schools, such as Yale, Duke, Harvard, and Stanford, as well as pioneers such as the Presidio School of Management in San Francisco and the Bainbridge Graduate Institute in Washington State have begun to offer tailored programs to MBAs who want to marry traditional business skills with innovative approaches to solving social problems. Different from nonprofit curricula, which typically provide the fundamentals of fundraising and grant writing, these specific business school programs combine the finance and management training of a traditional MBA with electives that address topics such as venture capital and investing in emerging markets. But conferences like IESE's indicate that social entrepreneurship is not yet fully integrated into all business school curricula and that it still needs the extra limelight. As long as not all business is social business, business that is not social will still find a safe harbor.
Business and ethics have of course been intertwined since the days of the Greek polis. Adam Smith, the spiritual father of the homo oeconomicus, wrote a "Theory of Moral Sentiments" before he wrote "The Wealth of Nations." And yet, business that is good for society has always been in need of being extrapolated through catchy labels (business ethics, CSR, corporate citizenship, social innovation, social entrepreneurship, etc.), invariably heralded as the Next Big Thing and slowly moving up the food chain from a window-dressing PR tool to a truly integral strategy driver. Recently, Fast Company coined the new, chic term "Ethonomics" and even made it one of the key pillars of its relaunched web site:
"We live in a world that's resource-constrained but ingenuity-rich. So an upstart generation of entrepreneurs - and innovators within the world's biggest companies - are founding businesses that are good for the world as well as the bottom line. They are practicing social change through urban revitalization, sustainable agriculture, green IT, alternative energy and online community-powered investing. Any business that claims to be truly sustainable and innovative should be increasingly efficient with energy and natural resources, transparent and accountable, and good on balance for people and other living things. Ethonomics is a hybrid of technology, design, and social responsibility, and at Fast Company we believe it is the future of business."
In Barcelona, this young upstart generation of entrepreneurs and innovators shared its ideas, seeking advice from those who had been in the field for some years. For example from Kyle Zimmer, the president and co-founder of First Book:
"Whenever you hit a point at which you feel you have no idea what you're doing (and if you don't reach that point quickly, you're not moving fast enough), make a list with the ten most acclaimed experts able to answer your questions. And then call them one by one even if you have never met them or your list includes Bill Gates. It doesn't matter. Tell them your story and ask them for help. Some won't call you back. In fact, I can pride myself with not having been called back by some of the most accomplished people in the world. But you'd be surprised how many will."
Jessica Jackley Flannery, co-founder and chief marketing officer of micro-lending marketplace Kiva, was another one of the veterans present, and her talk made most of the MBA students in the audience beam. Social entrepreneurs are simpaticos, of course, and you'd be hard pressed to find a MBA student these days who would not want to be a social innovator. Wall Street fame is so yesterday. Flannery epitomized the case for a new 'meaning' and emphasized the power of storytelling: "If we all understood each other's stories, the world would be a better place." Stories create empathy, and empathy breeds the solidarity needed for taking action. In light of the dire economic situation in developed countries, Flannery half-jokingly said she wouldn't be surprised if a young entrepreneur in Uganda were soon to lend money to a job-less banker in Manhattan. Globalization in reverse. In any case, innovative banking such as Kiva's is no longer only focused on helping developing economies. New web-enabled finance 2.0 models and infrastructures attempt to overcome the financial crisis in the US.
Entrepreneurs and innovators may be much needed these days, but "how can you be doing good when we are not doing so well?" the conference asked. With almost 14% unemployment in Spain, it was brutally aware of the need to discuss the creation of "Sustainable Value in a Downturn." Aside from the assumption that recessions can hold tremendous opportunity for any entrepreneur (as Christopher Gergen and Gregg Vanourek point out), social entrepreneurs in particular seem to weather the current investment pullback rather well. The Skoll Foundation is currently conducting a survey, to be presented at the Skoll World Forum in March. Preliminary results indicate that most of the social entrepreneurs have been affected by the economic downturn in some way or other, but only 10% of the respondents say that they have been severely affected.
"A crisis is a terrible thing to waste," Paul Romer (now famously) said, and hopefully the current recession will not lead to a Great Depression but a "Great Disruption" (Paul Gilding) that requires us to build the foundation of our economy from the ground up. In his brilliant post on "How To Be a 21st Century Capitalist," Umar Haique writes that "Capital deepening is the foundation of next-generation value creation." By that he means "assets with intrinsic, durable, human value - not the lemons Wall Street was in the business of hawking. It is only by capitalizing the things we really value that the spark of value creation can be lit again." He predicts that "next-generation businesses will be built on next-generation assets:" "Yesterday's businesses were built on cash, factories, and IP - financial, physical, and intellectual capital. Next-generation businesses are built, instead, on human, social, natural, and cultural capital - to name just a few."
(Credit:
Zimbio)
Trendwatching gets it right (again): "Giving is the new taking, and sharing is the new giving." That's the key assertion in this month's trend briefing, which describes the characteristics of Generation G (for generosity) and offers eight ways for brands to join: from Tryvertising to Brand Butlers to Random Acts of Kindness (RAK).... Read more
(Credit:
David Reece)
A few months after Barack Obama’s historic election, and a couple of weeks after the release of Barry Libert’s and Rick Faulk’s book Obama Inc. (and, of course, Obama's inauguration), the first start-ups are popping up that directly apply some of the widely heralded business lessons emerging from the innovative campaign. The fact that most of these lessons lie in the marketing domain supports the view I’ve expressed earlier and on numerous occasions: 1) Marketing will (again) become the number one change agent in business, 2) when it follows the new rules of “marketing with meaning,” that is, marketing which (simply put) consistently creates added social value – not as an afterthought but a sine qua non. While marketing has always been the art of turning friends into customers and customers into friends, it is now the art of finding, befriending, and “activating” the like-minded for a common cause, for the common good, for profit. Marketing, as the “voice” of business, is THE interface in a time when interface is everything. Marketing is the software. And software drives the value of products.
A recent example of this kind of Obama Inc. start-up, San Francisco-based firm Virgance, was featured in the Economist this week, and the article indicates that social impact in an activism 2.0 world is shifting from a welcome side benefit to an integral component in the business models of Internet entrepreneurs. The new kids on the web have internalized the lessons from the Obama campaign, and now they want to make a difference, too – and money. The Economist describes Virgance’s model as “for-profit-activism.” Named after a plot device in Star Wars, the company aims to support social causes through a multi-pronged campaign platform that resembles the way Obama for America mobilized its supporters, and it typically consists of four core elements: a web-empowered volunteer network, a presence on Facebook, a team of paid bloggers to promote the campaigns, and YouTube viral videos. Among the first Virgance-supported campaigns are 1BOG (“one block off the grid” – aiming to convince homeowners to switch to solar energy), Carrotmobs (public contests that incentivize retailers to become green), and Lend Me Some Sugar (based on the Facebook application that gives users virtual sugar cubes for donations to a cause of their choice).
Virgance is not the first for-profit-do-gooder of course; there have been plenty of others whose business model combines bottom line thinking with social value: the Economist, for example, puts Virgance in a line with Project RED. But Virgance is more like Facebook Causes. It adopts the forces of “Here Comes Everybody” and builds its entire business on a social web platform, embracing the principles of open-source, mass collaboration, and transparency: “If a for-profit company did the type of work that non-profits often do, but did it more efficiently, would people trust it the same way they trust non-profits?” the Virgance web site describes the company’s ambitious mission. ”What if everything the company did was completely transparent? What if it was open source? If we can create this kind of company, and succeed, how many other companies would follow our example? Along the way, could we change the face of the business world itself?”
Does that language sound familiar? The Obamapreneurs are adept at turning their campaigns into movements. Clearly, the Obamanization of business – both in terms of substance and style – has arrived in reality, and we will see more Obama Inc.’s in 2009.
On February 27-28, IESE Business School will gather entrepreneurs, scientists, foundations, and corporations at its annual student-run Doing Good and Doing Well conference in Barcelona. It’ll be interesting to see how the Obama gem will make its way into the more old-school world of CSR (corporate social responsibility).
The conference wants to attract academics and professionals interested in learning and discussing ways in which user-centric and affordable technology can improve the world around us. It will bring together such far-ranging fields as social entrepreneurship, engineering, design, economics, development, and environmental studies in search of new opportunities for the private and voluntary sectors.
The organizers expect 300 attendees. Confirmed speakers include Bernard Amadei (Engineers Without Borders), Ken Banks (Kiwanja), Cameron Sinclair (Architecture for Humanity and Open Architecture Network), Denise DeLuca (Biomimicry Institute), Steve Glenn (LivingHomes), Erik Hersman (Afrigadget, White African, and Ushahidi), Paul Polak (International Development Enterprises and D-Rev), and others.
(Credit:
Fairtradesports)
Here's an innovative approach to facilitating social innovation: a "collaborative competition" leveraging sports.
Ashoka's Changemakers and Nike have partnered to open a worldwide search for projects that use the transformative power of sport to promote social change. Ashoka is a citizen-sector support system for social entrepreneurs. Changemakers is building the world's first global online "open source" community competing to surface the best social solutions, and then collaborating to refine, enrich, and implement those solutions.
Changemakers invited users worldwide to submit innovations to what it calls a "collaborative competition" -- an "interactive solicitation to identify and develop innovative, workable solutions to the world's most entrenched social problems." Competition entries were posted online and made available for anyone to view and collaborate with by providing new ideas, asking insightful questions, and providing connections to new resources. Pro bono crowdsourcing!
Out of 382 submissions, the finalists have now been chosen by a high-profile jury, including Nawal El Moutawakel, member of the International Olympic Committee; Joan Laporta, president of F.C. Barcelona; Ann Veneman, executive director of UNICEF; Mel Young, founder of the Homeless World Cup; Mark Parker, president & CEO of Nike, Inc.; and Sheila Johnson, businesswoman, philanthropist, and CARE ambassador.
The final winners, however, will be determined by you.
You have until March 3 to vote for your three favorite social projects.
Last weekend I spoke at the first University of Texas at Austin Sustainable Business Summit. It was an interesting and stimulating event that brought together a diverse group of speakers and audience members to think about different aspects of environmental sustainability, social responsibility, and business. It was put on by the McCombs School of Business and largely organized by students, who did a great job.
One of the first panels had to do with computers, waste reduction, and energy usage. It had a bit of tension to it as one of the panelists was from Dell, and another was an environmental activist who has been pressuring Dell for several years on energy reduction, take-back schemes, and overall sustainability issues. They handled it professionally, but you could tell there was some history there!
The other panelists were from IBM, which is working on low power CPUs for servers, and from a company called Verdiem, which makes software to centrally manage large, installed bases of PCs in corporate environments. Such installations use massive amounts of electricity for prolonged unnecessary periods (such as at night), creating part of the big draw of "phantom" or "vampire" energy. The software allows central control of shutting down unnecessary machines while still allowing maintenance upgrades.
There was discussion of options for renewable energy sources for large data centers, and in fact an article in Wednesday's USA Today illustrates the attention being paid to this issue:
Intel is now the largest corporate user of renewable energy in the USA, the Environmental Protection Agency said this week. The chip giant plans to purchase more than 1.3 million kilowatt hours in wind, solar and other types of green power each year. That's enough energy to power about 133,000 households.
Intel won't say how much extra the green power costs. But the company considers the purchase an "investment in the renewable energy market," spokesman Bill Calder says.
This article also highlights one of the other themes that came up in the panel: business will be an earlier large adopter of green technologies than consumers, because the business case is easier to make and corporations are more familiar with thinking about total cost of ownership rather than up-front costs, which dominate in a consumer retail world. Companies are comfortable with the concept of amortizing capital costs over several years and can easily roll that into their tax calculations. Consumers, not so much.
The other theme that came up was that so goes Europe, so goes the rest of the world. Europe, and in particular Scandinavia, is really driving the legislation on curbing energy, forcing take-back schemes, and in general prodding industry to be more responsible. (The U.S. laws are very weak in most regards in this area, California being a common exception.) But since manufacturers like Dell, Hewlett-Packard and IBM have global supply chains and distribution channels, it doesn't make economic sense to make different models for different markets. So they go with the high bar set by Europe and the U.S. benefits.
But this is just a cop-out on the part of U.S. government. In fact, according to one of the summit panelists, the U.S. is one of only three countries not to sign the Basel treaty on international hazardous waste trafficking (where toxic waste is just dumped on another country's shore). Who are the other two? Haiti and Afghanistan.
We should be matching the European legislation to show commitment and to avoid things falling through the cracks. If we match it (as opposed to creating slightly different rules as we do with car crash tests for example), it will make everything easier and do more to encourage sustainable practices.
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