Remarkable, Inspiring, Instructive, a Total “Wow”, March 25, 2008
I became very enthusiastic about the term “social entrepreneurship” when I made the transition from reading about collective intelligence and citizen wisdom councils and wealth of networks, to understanding that there was a form of energy I first encountered in How to Change the World: Social Entrepreneurs and the Power of New Ideas, Updated Edition.
This book is remarkable, all the more so for being the third in the series that started with Cannibals with Forks in 1997 that introduced the term “triple bottom line” (financial, social, environmental); and in 2001, The Chrysalis Economy: How Citizen CEOs and Corporations Can Fuse Values and Value Creation, anticipating the period of creative destruction coming from 2000-2030.
I like this book very much, in part because after 20 years of thinking of myself as a reformist beating his head against the idiot secret world, I now realize I am a social entrepreneur who has turned his back on secrets and is focused on creating public intelligence in the public interest.
The authors made me smile with their early explanation that most social entrepreneurs can be so unreasonable as to be called lunatic. This is precisely what happened to me when I published “E3i: Ethics, Ecology, Evolution, and Intelligence” in the Fall 1992 edition of the Whole Earth Review–for having the temerity to suggest that we should emphasize open sources of information instead of spying, and sharing instead of hoarding, I was told that Sandra Cruzman, the top woman at CIA at the time, said “this confirms Steele's place on the lunatic fringe.” So forgive me for this sidebar, but this book speaks to me in very personal as well as socially meaningful terms, it resonates with me, and I strongly recommend it to anyone who wants to think about ways of doing good while doing well enough.
I always look for whether authors are respecting those that came before or have made adjacent contributions, and on that score this book is completely satisfactory. It is also blessed by the authors' broad range of examples, carefully selected from what is clearly a universe they know better than anyone else.
Citing George Bernard Shaw, they explain early on that “unreasonable people” are seen so for their seeking to abandon outmoded thoughts, mindsets, or practices. Amen, brother!
This is not a feel-good book in intent, although it achieves that effect. It is a serious book that methodically reviews new business models, leadership styles, and thinking about value creation. It held my total attention over two evenings of reading.
The authors offer esteem to social entrepreneurs with the observation that corporations are noticing and hiring such individuals for three reasons:
1. They see the future sooner than the average cubicle resident
2. They help retain talent by making the business challenging
3. They bring love and fun into the office environment
The authors caution that social entrepreneurs fail more often than not, but they persist and ultimately find means of making a difference while making a living.
They suggest that immature markets are best explored by non-profits while noting that hybrids with blended values are the most interesting forms.
Page 5 is suitable for scaling up and framing for the office. The ten characteristics of social entrepreneurs (severely abbreviated here):
1. Shrug off ideology and discipline
2. Focus on practical solutions
4. Do social value creation and SHARE
5. Jump in without waiting for back-up
6. Have unwavering beliefs in innate capacity of others
7. Dogged determination
8. Passion for change
9. Have a great deal to teach change makers in other sectors
0. Healthy impatience (don't do well in bureaucracies)
They tell the reader that confusion is a normal circumstance for social entrepreneurs, whom they define as those that take “direct action that generates a paradigm shift” while attacking an “unsatisfactory equilibrium.”
They see a deep and lasting need for social entrepreneurs because coming decades will require unprecedented levels of system change (I add, and will have unprecedented and often unanticipated disasters, many turning into catastrophes for lack of planning, preparation, or responsiveness)
The authors tell us that the best of the charitable foundations are shifting from plain grant-making to sequential investments and deeper continuing relations with those being funded. At the same time they tell us that corporation and private equity firms are beginning to notice the value options in this space. [I think to myself, this is great, just at a time when corporations are also understanding green to gold, sustainable design, ecology of commerce, and true cost accounting.]
I am totally impressed with one page that describes how China has developed new green accounting methods and now realizes that environmentally-related work loss is no less than 10% of their newly-understood green Gross Domestic Product (GDP).
They provide a fine overview of new measures of merit including the double bottom line, the triple bottom line, the Social Return on Investment (SROI), and the “blended value proposition.”
On page 20 I see a quote worth posting: social entrepreneurs “bring together natural, social, human, intellectual, and cultural forms of capital.”
LEVERAGE is a key concept for these authors, and one I take very serioiusly as they describe how small investments can leverage indigenous capabilities (such as hard work from people who are poor but not stupid), philanthropic and other support, business partnerships, and income from previously untapped markets (at the Base of the Pyramid, like my Seattle friends they are clearly not comfortable with C. K. Prahalad's choice of title in The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks).
The middle section of the book discusses three models and examples of each:
1. The leveraged non-profit, which is hard to scale, dependent on hand-outs, focuses on public goods and being a change catalyst
2. The hybrid non-profit that combines non-profit and revenue generating activities, with a focus on outcome generation, empowering the people at the base, community-centric, focused on low cost long term, and on driving the market or pulling more traditional providers into the market.
3. The social business, which focuses on both social and financial returns, scales much more easily because it can assume both debt and equity. We learn that Whole Foods is an example, that it drove the organic market and leverages voluntary cooperation among many networks. Another example combines sustainable organic agriculture, rural employment of the uneducated but willing, price security for farmers, and transparent information.
I want to emphasize the latter: transparent information. I have been persuaded by numerous books on the wealth of knowledge as well as my own 30+ years as an intelligence professional that shared information and transparent decision support is a wealth creation process that scales fast and inexpensively.
The authors go on to discuss ten markets that lend themselves to social entrepreneurship, and I will list them with tiny examples–the book is absolutely a gem that merits buying a reading from end to end.
1. Demographic: condoms, aging, disadvantages
2. Financial: child knowledge of finances, simple technologies, helping poor self-organize for leverage
3. Nutritiional: duck rice, food bank, food waste elevated to tasty and nutritious near zero cost consumables
4. Resources: energy, energy, energy (I would add water, and throw a respectful salute the the George Mason University professor born in Bangladesh who created a virtually free means of removing arsenic from water using a combination of charcoal and steel filings (from the ships torn apart there, see The Outlaw Sea : A World of Freedom, Chaos, and Crime
5. Environment: educatae, plant trees
6. Health: high volume low cost (or free), cateract cures, telephone centers to help poor remotely
7. Gender (best ROI ever is on educating women, see A Half Penny on the Federal Dollar: The Future of Development Aid)
8. Educational: end rote learning, cross-pollinate, barefoot college that trains doctors and engineers narrowly and without years of credentialing (my own idea is call centers to education “one cell call at a time,” I would love to see India do this sooner than later)
9. Digital: embrace and empower poor as citizens
0. Security: redefine as jobs for everyone rather than high-end military
The last third of the book covers
1. helping those at the base of the pyramid with access (e.g. curing neglected diseases); price (slash to 10%); and quality (e.g. $100 laptops).
2. Democratizing technology (four clusters: basic building blocks, motorcycles and free neutral air in and out of disaster zones; media and media technology; and genetics and biology.
3. Changing the rules of the game (search for my “New Rules for the New Craft of Intelligence” free on the Internet). They emphasize transparency; accountability; certification; land reform; emission trading; and value & valuation.
4. Scaling solutions, with examples covering true costs, clean toilets for tens of millions, and General Electric's commitment to 17 clean technoloogies, sustainability attracting the best and the brightest of the social entrepreneurs.
5. Lessons for leaders (below does not do the section justice–buy the book and read the whole thing):
– Focus on scalable entrepreneurial solutions
– Tackle apparently insolvable problems
– Be prepared to fail–but learn from failures
– Experiment with new business models
– Close the pay gap
– Join forces
– Seed tomorrow's markets
– Fuel growing expectations
– Help democratize technology
– Work to change the system
– Figure out how to scale and replicate
– Within reason, cultivate the art of being unreasonable
I put the book down extremely pleased with the content and the presentation. This is a very serious book for serious people, not just social entrepreneurs, but Second and Third World policy makers, bankers, investors, international and non-governmental leaders, and so on.
As I see it, social networks and collaboration among what I call the “ten tribes” (government, military, law enforcement, academia, business, media, non-governmental, labor, religion, and civil society) are in their very infancy. The Internet has not been matched by easily available information sharing and decision support tools (DARPA STRONG ANGEL and TOOZL is a start), and governments persist is wasting tens of billions waging war and stealing secrets, instead of waging peace and nurturing open sources of information in 183 languages.
This book continued the inspiration that I have been getting from others, and here I list a few others including the first book from Earth Intelligence Network (free at the website):