Getting good to grow

“Where you live shouldn’t determine whether you live.” With that simple statement Nancy G. Brinker, CEO of Susan G. Komen for the Cure, focused attention on the non-communicable disease burden the big four (cardiovascular and chronic respiratory disease along with cancer and diabetes, commonly referred to as NCDs) place on countries and citizens as the UN convened for the second time around global health issues.

UN Opening Week, among other things, presents an opportunity for a myriad of initiatives and global challenges to take the stage. And while frustrating politics from the General Assembly can be discouraging, there are also moments of hope. Despite the difficult challenges facing the world due to the NCD epidemic, the week’s events could also be viewed through the lens of confidence flowing from the progress that has been made with HIV, tuberculosis and malaria over the last decade. Further positivity flows from infrastructure and platforms supporting that progress.

An example of such a platform is the U.S. Global Health Initiative. Their mission is clear: “The U.S. will promote country ownership and align our investments with country-owned plans, including improved coordination across U.S. agencies and with other donors, with the aim of making programs sustainable.”

The Global Health Council along with Management Sciences for Health (MSH), one of USAID’s significant partners, convened a session called “Tackling NCDs: How Can Existing Platforms be Leveraged?” to showcase leaders from USAID, NGOs (Path and psi), corporations (Medtronic and Novo Nordisk), universities and others to discuss possible pathways to multi-disease platform capabilities.

How would the jockeying for position affect each organization’s advocacy? For the most part it did not. Leaders from each cause seemed to get this was an opportunity to lift all boats and avoided putting their own concerns ahead of the overall effort.

This cooperation also may have been driven by the recognition that in the current global crisis, no amount of leadership will result in a new global fund for NCDs. Flowing from this reality, a second theme emerged: countries, NGOs, companies and innovators of all stripes will need coordinated and aggressive innovation, behavior change, policy commitments and funding to minimize loss of life and costs. Without all of the above, the world will face significant trade-offs, especially in low-income countries.

Many of the challenges were openly discussed. The list below is only a partial one. If you have others, feel free to add them in the comment section below.

Spend now or pay later

“The World Health Organization identified strategies to prevent and treat cancer, heart disease and lung disease that would cost $11.4 billion a year to implement in low- and middle- income countries, the UN agency said in a separate report today. Without action, those nations could suffer $7 trillion in losses, the World Economic Forum and Harvard study said.”
—Businessweek

These are the diseases that break the bank. Left unchecked, these diseases have the capacity to devour the benefits of economic gain. According to Dr. Margaret Chan, WHO Director General, treatment of diabetes in some countries already consumes as much as 15% of the national health care budget.

Government intervention or lifestyle freedom?

According to Her Royal Highness Dina Mired, “In poor countries a lifestyle choice will instead become a life sentence.”

Why must this responsibility fall on heads of state? According to Dr. Chan, the problem is too big and too broadly based to be addressed by any single government ministry.

The rise of these diseases is being driven by powerful, borderless forces that affect everyone—in particular rapid urbanization and a globalization of unhealthy lifestyles. These trends require top-level attention to command protective policies across all sectors of government.

For example, full implementation of the WHO Framework Convention on Tobacco Control could bring the single biggest blow to heart disease, cancer, diabetes and respiratory disease.

“I call on heads of state and heads of government to stand rock-hard against the despicable efforts of the tobacco industry to subvert this treaty,” said Chan. “Increases in tobacco taxes and prices are the most effective measure. They not only protect health. They bring in considerable revenue. The same is true for taxes on alcohol.”

Corporations as partners, innovators or pariahs?

Whether Dr. Chan’s comment above could – and should – also be applied to the food and beverage industries was central to the debate which lead the UN to unanimously adopt a 13-page document on Prevention and Control of Non-communicable Diseases. More of the behavior change innovation in this fight must come from corporate leadership and through offering healthier products to all populations. Changes in both behavior and products will require companies to be more open in sourcing ideas, products, marketing innovations and business models. Continued partner recognition will depend to a great extent on corporate success in these reinvention efforts.

A commitment to know the truth

As Dr. Chan, HRH Dina Mired, Dr. Jonathan Quick and many others pointed out, meeting these challenges requires coordinated and aggressive collaboration, innovation and policy to envision positive outcomes and bring them to pass.

As important as this set of meetings are in launching and enabling that effort, their greater importance may lie in an increased obsession to understand how bad things really are today and communicating that reality to and with the government, NGO, corporate and social enterprise leaders who must respond.

A lesson for what is needed can be learned from a contagious disease containment success story. William Foege, author of House on Fire and leading expert in the eradication of smallpox, spoke at the International Conference on Global Health recently. Foege embodies the self-effacing and yet tenacious approach needed to deal with complex global problems. Referring to his long battle to eliminate smallpox, his advice is wise counsel for any and all health initiatives: “You have to be able to consistently envision the end result while aggressively seeking the actual data, no matter how bad it is.”

From his book, House on Fire:

“One had to be an optimist with a feel for numbers to be ecstatic at the same time that Bihar had over 5,000 known smallpox outbreaks and had just reported over 11,600 new cases of smallpox in a single week.”

While small pox spreads like fire, country after country has been lulled into inaction by the “slow-motion disaster” represented by the big four’s building cumulative impact. Unhealthy lifestyles that fuel these diseases are spreading with stunning speed and sweep.

During several meetings last week, the case was made that new efforts in primary care and research are needed for early detection and lifestyle education. Sir Peter Gluckman, Chief Science Advisor for New Zealand and Programme Director for Growth, Development and Metabolism at the Singapore Institute of Clinical Sciences brought research to the table emphasizing the importance of early interventions—particularly for pregnant women and their newborns. The Singapore Institute’s advances in understanding the propensities of different Asian populations around NCDs is also an important example of knowing the risks.

Communicating the non-communicable

Ten years ago the UN convened its focus on HIV. It was a critical juncture for garnering support and moving forward in a cohesive way and resulted in a global fund and a 10-fold increase in funding to tackle HIV, tuberculosis and malaria. Of those three diseases, only AIDS was a killer in the developed world at the time.

NCDs are different. The big four are indiscriminant killers globally. And while drugs play a critical part in every circumstance, their role with the big four can be deceptive. Drugs that reduce blood pressure, lower cholesterol and improve glucose metabolism only bring a progressive problem under control: they do not return a person to full health. Unfortunately the big four are lifestyle choices before they are diseases. New approaches must be taken regarding prevention, policy, harmful behaviour, corporate malfeasance and government failure.

Action requires more than advocacy. Some next steps are straightforward. Dr. Chan spoke powerfully about increasing taxes and the price of tobacco and alcohol, and methods for reducing salt intake. Low-cost regimens for cardiovascular disease, cancer screening, drug therapy and vaccination against hepatitis B were also brought forward.

As each organization seeks funding and directs its investments into innovation, platform development, education, behaviour change and policy prescriptions, better mechanisms are needed to find the best ideas and scale them. As an advocate for social innovation, I would argue the other players – NGOs, corporations and governments – need to be much more aggressive in seeking ideas from outside their silos and in moving resources so that research, idea testing and data collection are accomplished as part of integrated programs.

In the “How Can Existing Platforms be Leveraged?” session mentioned earlier, there were examples of this type of integrated capacity building. One is MSH and the Gates Foundation’s efforts in Tanzania to enhance how informal village drug sellers support community health workers and provide safe prescriptions for some diseases. Healthpoint Services in Punjab, India is building clean water and village clinics that provide telemedicine, diagnostics and generics at base of the pyramid prices. They plan to start offering chronic disease packages next year, which can be subscribed to and the costs shared between individuals, insurers and governments. Most importantly, both these sustainable efforts will improve early detection and lower the overall cost.

Many more examples are needed. The success of these approaches will depend greatly on funds flowing to the most innovative participants no matter their size and then scaling the successes to achieve more innovative and sustainable models and systems.

Note: This article first appeared on CSRWire.

One advantage of actively attending conferences is the opportunity to hear brilliant people argue their ideas, and often those ideas run counter to the conventional thinking. These leaders – in their thinking and doing – help us see how we can work together to do both.

In the spirit of the proverbial summer reading list, here are two books I recommend for bringing some of that nonconventional thinking to a beach or pool near you.

House on Fire: The Fight to Eradicate Smallpox, by William Foege.

“I don’t know much but when there is a house on fire in our village; we don’t poor water on all the houses.”

This simple statement was made by a village leader in India at a pivotal point in adoption of an innovative containment program for smallpox. Rather than trying to vaccinate everyone, this program used targeting of just six percent of the population to eradicate smallpox.

Author Mark Rosenberg wrote about William Foege, “The eradication of a disease has long been the holy grail of global health and Bill Foege found it: more than any other person, he was responsible for the eradication of smallpox from the face of the earth. This is a story told by a remarkably humble man, about the extraordinary coalition that he helped to build, and the most impressive global health accomplishment the world has ever seen.”

Listening to William Foege speak at the International Conference on Global Health recently, I was struck by his self-effacing tenacity. In response to the classic “what did you learn?” query, he responded with this wise advice: “You have to be able to consistently envision the end result while aggressively seeking the actual data, no matter how bad it is.”

From House on Fire: “One had to be an optimist with a feel for numbers to be ecstatic at the same time that Bihar had over 5,000 known smallpox outbreaks and had just reported over 11,600 new cases of smallpox in a single week.”

William Foege underlined this steady optimism by saying he held back from celebrating the triumph over smallpox in any individual country because he thought that would demonstrate surprise at the result which, at the beginning, he had so clearly envisioned.

Poverty Capital: Microfinance and the Making of Development, by Ananya Roy.

In the past year I have participated in a number of conferences focused on social enterprise, poverty alleviation and microfinance. The Skoll World Forum at Oxford and the MicrofinanceUSA Conference in NYC both featured distinguished moderators and microfinance leaders discussing the crisis in the microfinance sector. (This usually shows up as a critique of Comportamos or other successfully profitable MFIs.)

While Professor Yunus is a leading advocate for not profiting from serving the poor, a few realities are sometimes overlooked in this argument. Here’s my list of reasons why a more open view of this sector, including the option for profitability, is necessary at this point in time:

1. The microfinance sector would never have attracted $30 billion dollars without the option of profitability.

2. Microfinance grew out of pent up demand for access to loans that was immense. Servicing that demand has required infrastructure, trained personnel and distribution, all costs that are not trivial.

3. A bell curve of strategies – falling between the two poles of social impact and loan pricing/profitability – have been developed that include a variety of trade-offs. This has resulted in more variety and better choices for borrowers.

4. It is noteworthy that microfinance grew as long as it did before abuses (which would inevitability be encountered) became visible. While the lack of regulation aided the absence of visibility, it is still remarkable events of misuse in India are happening over 25 years of microfinance’s time span.

One of the best summarizing comments made at MicrofinanceUSA came from Ananya Roy, author of Poverty Capital and a professor at UC Berkeley. After extensive study of the specific trade-offs within microfinance, and the equally important trade-offs between microfinance and the other global development options, Ms. Roy pulled a balanced context together with this one line: “Microfinance is the greatest bargain in global development.”

As I mentioned in a question after Ms. Roy’s comment, any other development sector, healthcare, water, slum upgrading, would kill (pardon the expression) to have a thousand people gathered with recognized brand names like Comportamos, ACCION and Kiva, discussing the trade-offs from $30 billion dollars of global development—most of which was paid back! Likewise William Foege and leaders from the World Health Organization and a broad range of other organizations organized and innovated to avoid the deaths and maiming of millions upon millions. Both outcomes show the value of vision and innovation in attracting the human and financial resources and then making measurable progress in solving global challenges.

A version of this post first appeared on CSRwire.

There are no black swans in the Northern Hemisphere, so whiteness was assumed to be an essential quality of swanness. When a Dutch explorer spotted a black one on an expedition to Australia in 1697, that concept had to be restated. It is a simple but useful analogy for how fragile a system of thought actually can be. Our assumptions, whether they result from reason, logic, falsifiability and/or evidence, can be undone in a moment.

As the second decade of the 21st century experiences continued natural and man-made disasters, the popularity of books like The Black Swan (by Nassim Nicholas Taleb) can be seen in a negative light. Added to the natural shocks is a string of unfortunate black swan (rare event) moments that have appeared successively in economics, the financial world infrastructure and politics. (See a brief description at the bottom of this post regarding Taleb’s use of the term “black swan.”) However, when enough people become dissatisfied with the business-as-usual approach, a world of increasing connectedness is also offering opportunities to create movements and infrastructure that can lead to the beneficial, good news black swans.

My take on the past year is that a lot of positive black swan road building is happening that is not visible to the business-as-usual crowd. As these new roads open up – and in many cases this is happening in the not so visible backwaters of the Global South – new innovations, commerce, solutions and jobs will continue to go unnoticed by the short-term profit maximizers.

Here are a few examples we encourage you to build into your thinking as you position your careers, companies and capacities to benefit from the unpredictable positives and mitigate risks of the unpredictable negatives:

Impact Investing While the numbers are still small – $25 billion by some estimates – the concept is big. Two decades ago Domini, Calvert and others began a crusade that resulted in $7 trillion dollars being placed in socially screened investments, i.e., companies that are actively demonstrating they are doing less harm. Now an intrepid group has set out to demonstrate your entire portfolio can be investments that are solving global and/or local challenges. These are organizations that produce significant social benefit as well as making a profit. Space does not permit a list of all the positive events, but the OPIC Impact Investing call is a $250 million bellwether. What if 10 percent of that $7 trillion moved to impact investments?

Innovation and Social Enterprise This first decade saw a lot of attention being paid to innovation. And there’s no question that global problems attract innovation leaders. Innovation conferences have begun to shift their focus to newer concepts like open innovation, crowd sourcing and challenge innovation. One of the largest innovation ecosystems centers on social enterprise and is led by organizations like Ashoka, The Skoll Foundation and a long list of others. If you do not recognize these names then it is time to do some open innovating of your own. The leading global corporate innovators (GE, P&G, Unilever) are definitely opening to the burgeoning sources of innovation represented by social enterprise.

Social Capital Formation I had the pleasure to hear Wayne Silby, founder of Calvert, speak to the Impact Investing conference hosted by Asad Mahmoud of Deutsche Bank last December in NYC. Besides Calvert’s leading role in social investing mentioned above, the Calvert Foundation is one of many leaders in the social bonds space. Calvert’s innovations have placed over $400 million from individuals into social enterprises that can access debt capital earlier than traditional entrepreneurs. Social impact bonds now promise to enable non-profits (and for-profits) to pay back the loans with results instead of assets.

Social Enterprise Scaling Infrastructure A broad range of efforts are coalescing here – Ashoka’s accelerator program, Santa Clara University’s Global Social Benefit Incubator, Poptech, New Profit and our own ReachScale outreach to find the corporate scaling partners for the most innovative SEs – and the trend is growing.

These ecosystems are increasing in richness and connections. They are beginning to demonstrate the “power of pull” (from the book of the same name by John Hagel III, John Seely Brown and Lang Davison) and the “powerlaw” lens (as referenced in Chris Anderson’s guest review of The Black Swan ) that Taleb talks about at length, and they will continue to attract resources and drive innovation. Putting yourself in the path of these positive trends is a good thing, for you and for your co-travelers.

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Note: Taleb’s “Black Swan Events” theory is offered up to explain the following:

1) The disproportionate role of high-impact, hard to predict, and rare events that are beyond the realm of normal expectations.

2) The non-computability of the probability of the consequential rare events using scientific methods (owing to their very nature of small probabilities).

3) The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs.

A version of this post first appeared on CSRwire Talkback.

In conversations with marketing, communications and CSR leaders at the 36 conferences in which ReachScale participated in 2010, an unusually high number of executives said they are doing a strategic review of their CSR commitments and strategies. One might assume that the goal is to be more impactful, to do less harm and do more good. Instead of assuming, a question needs to be asked: Is the purpose of our CSR review to increase impact? The answer is not simple, given the current economic climate.

World leaders are faced with the same challenge as CSR leaders. Every three years the UN Global Compact Leaders Summit assembles the global ecosystem that was built through a commitment to the 10 principles of the Global Compact. (Review the list here.) Much good has come from the Compact and yet at the same time, promises have fallen short. The global economic meltdown has created a kind of schizophrenia in those organizations that committed to goals that appeared reachable in 2007 but seem less so today.

Empowering an ecosystem of leaders to re-envision appropriate responses is a tough challenge. In these circumstances it is no surprise that the proceedings of most conferences on CSR are dominated by testimonials of good works completed, of new projects and collaborations being started. But these are being discussed without the goals and measures that Porter and Kramer suggested are essential.

Based on our advocacy efforts and the testimonials heard from many conference podiums, we have distilled some simple but core questions for companies who are viewing their commitment to “shared values and principles, which will give a human face to the global market” (the quote that appears on the cover of the Gobal Compact Annual Review.)

1. Can we identify and focus on a cause or problem whose solution creates shared value?

As you answer this question please consider the following quote from Porter and Kramer:

“No business can solve all of society’s problems or bear the cost of doing so. Instead, each company must select issues that intersect with its particular business. Other social agendas are best left to those companies in other industries, NGOs, or government institutions that are better positioned to address them. The essential test that should guide CSR is not whether a cause is worthy but whether it presents an opportunity to create shared value – that is, a meaningful benefit for society that is also valuable to the business.”

2. Are we taking on a problem that our stakeholders would immediately recognize as significant?

For example: No one will argue that global banks are reputationally challenged in this post financial crash world. If you are the leader of a global bank and your response to current circumstances is to do exactly what community reinvestment laws require (and only in those countries that currently regulate you,) then you are working at zero base. On the other hand, you could make a commitment to address the global migration to cities problem, actively build community reinvestment principles and seek innovative partners to address the global slum problem in every country that delivers profit to you. That is an effort that would be clearly recognized as a commitment to a highly significant problem.

3. Is the problem we have chosen core enough to our business that we can ask our experts to apply their knowledge to the problem across multiple functions?

Using global banks as an example once again: Virtually every functional group within the organization has talent that can be applied with the appropriate innovation partners to solving this problem in every major city in the developing world in which that bank operates.

4. Is the problem we have chosen important enough that each member of the executive committee could justify spending 2 days a month (10% of work time) leading the organization and the ecosystem in seeking a solution?

The Global Compact is all about commitment. One could argue that for some companies, implementing the 10 principles will take at least that much time from executives at the beginning. As leaders drive the principles deep into the organization’s collective psyche, the muscle strength needed to take on larger opportunities will develop.

5. Is our wisdom, work and investment focused on attracting participants across the value chain?

The behavior of all players must change to achieve real results. Looking to engage multiple innovation sources encourages not just one corporation’s investment but also the commitment of many other companies as well.

Increasingly the ability to create value depends on market mechanisms that attract multiple value chain and investment participants. The social innovation to attract the participants will often come from outside the companies championing the changes. Finding and cultivating these innovations often depends on a problem solving commitment that goes beyond simply serving one company’s goals. The commitment must flow from an understanding that the problem goes beyond what any single company can do; the real work is assembling an ecosystem to solve a problem which requires a committed company’s best and brightest wisdom and work.

At Sustainable Brands 2010, Jason Saul of Mission Measurement stated that the CSR practice of reporting on the checks written and the volunteer hours logged will not be an adequate measure going forward. Ben Packard of Starbucks stated very openly that Starbucks knows they have not made enough progress in addressing the most significant impact they create as a business — the cup. Jason Saul and Ben Packard are two examples of leaders asking the right questions about real CSR impact.

Note: A version of this article first appeared on CSR Wire in February.

Happy New Year…I’m expecting 2011 to take off with energy this week.

As we dive into the new year, I quote from the background page on ReachScale:

Over the past forty years, over 200,000 nonprofits were established. Only 144 achieved budgets of 50 million (USD) or more. Of that group fewer than 15 were scaled through corporate financial contributions.* In other words, corporate funding has scaled one nonprofit every three years.

Corporate philanthropy has historically favored the same large nonprofit organizations even though each dollar donated results in less than a dollar of impact. While business leaders are very aware of the upside potential for scaling an entrepreneurial business venture, the concept of applying the same principles of scaling to viable social enterprises has not been explored.

We did a lot of exploring in 2010—36 conferences and over 4000 conversations with social enterprise and corporate leaders. Our client Healthpoint announced their first corporate scaling partner, Procter & Gamble, and several other highly innovative social enterprises are in serious discussions. [For more about Healthpoint, see the coverage in Fast Company and my earlier post.]

One reason that these conversations are taking shape is the recognition that there is a new additive triple bottom line of benefits to global corporations that realize that their business and innovation talents are squandered when they are not driving scale in every investment and social responsibility activity.

ReachScale works with companies to achieve their sustainability and social responsibility goals by partnering and scaling innovative, problem-solving social enterprises. Selecting an area of social concern that affects a company’s core business and then innovating to make measurable progress in solving that problem is a win/win/win opportunity.

Here are three examples of what that triple bottom line could look like.

License to Grow
Social impact scaling that can demonstrate progress in meeting people’s fundamental needs while making a modest profit is a new innovation. It results in ethical marketing instead of interruption marketing. As corporate strategy guru Michael Porter pointed out in his article coauthored with Mark Kramer, “Strategy and Society” in the Harvard Business Review:

No business can solve all of society’s problems or bear the cost of doing so. Instead, each company must select issues that intersect with its particular business. Other social agendas are best left to those companies in other industries, NGOs, or government institutions that are better positioned to address them. The essential test that should guide CSR is not whether a cause is worthy but whether it presents an opportunity to create shared value–that is, a meaningful benefit for society that is also valuable to the business.

Healthpoint and Lifespring Hospitals are two examples of licenses to grow, one in rural villages and the other in maternal health. Arogya Parivar, an innovative outreach by Novartis India to rural regions of India is another example. AP received a prestigious award for “Best long-term rural marketing initiative” from the Rural Marketing Association of India (RMAI).

Increasingly companies will recognize that it is not enough to do less harm. A license to grow requires more vision and more impact. It requires building ecosystems and innovation models that turn problems into profits.

Reputation based on Results
Jason Saul of Mission Measurement said it best at Sustainable Brands: Donations and volunteer hours are no longer newsworthy unless presented in the context of strategic commitments to solve real problems.

This theme was repeated in a number of sessions at Sustainable Brands as forward thinking companies like Nike and Timberland admitted openly that they know their businesses are not currently environmentally friendly. Going forward they need to drive innovation to change their businesses drastically. In the future we cannot produce every day products like T-shirts the way we do today. The companies that do not exemplify this shifting reality will not be able to use “pretty pictures” CSR to shift their reputations.

Choosing an appropriately big problem and making measurable results in its solution can and will shift reputations based on results.

Return on Investment
This triple is not new. What is new however is how it is being achieved. In the past the core business produced the return and a small percentage was allocated to CSR and philanthropy—the cost centers. Increasingly global companies are seeing that the most pressing problems that seemed to be intractable resource sinks can be, with appropriate innovation and collaboration, profit making (or at least break-even after scaling and capacity building investments.) General Electric’s global business strategy centers on two critical challenges: health care and energy.

In the case of the for-profit through innovation and collaboration opportunity, the new goal becomes demonstrating the people impact, license to grow and reputation value. These can be mixed and deployed to attract multiple sources of capital. As you watch the investment announcements in 2011, you will increasingly see strange bedfellows clasping hands and acting together to drive integrated social and monetary returns.

Capacity building opportunities can be attractive as well. They enable the founders to develop social brand equity with great returns. Imagine if your organization had been the strategic scaling founder of Teach for America, a question we have addressed in an earlier post. Scaling to create profitable or breakeven portfolios of solutions or to attract a broad range of supporters who gladly join because of high impact through social innovations enables value creation without incremental funding.

This new triple bottom line enables the leveraging of corporate strategic and brand resources with highly innovative social enterprises. This achieves impact, enhanced reputation and a return on investment that can then go after new challenges.