World Economic Forum: Where will the “Household Names” in Social Enterprise come from?

Shared_value

Scaling Social Impact, the new Insight Center from HBR and The Bridgespan Group, is full of articles with useful ideas.

The concept is a vital one and Bridgespan knows well the limited role corporations have played in scaling social impact because they did the definitive study.

As a term, “social impact” may be too inclusive, encompassing a range of very different undertakings such as non-profits, company initiatives, program related investments, crowdfunding, social bonds, and social enterprises.

When something is this all-inclusive, the tendency is to advocate for the obvious good outcomes and required support without understanding the distinct innovations and capabilities that would be needed to make the business and impact models truly scalable. It is easy to say that if you want scale, focus on profit.

But if it were that easy we’d have many more “household name” social enterprises—we don’t.

As world leaders gather in Davos for the World Economic Forum, many are questioning the effectiveness of the modalities being used by nation states and corporate entities to create economic opportunity for their own citizens and employees. Focusing on solutions to challenges where benefits are shared (by governments, communities, companies and future generations) seems a potential win-win, but who will prime the pump to support sector development?

The priming ideas come from millions of social entrepreneurs who are stepping forward. Working on shared space their own or with philanthropic and sweat equity, these efforts are testing solutions designed to bypass broken policies and systems (or anti-systems in many cases.) Why aren’t the big players flocking in to scale these enterprises that are solving problems and could be doing so profitably when they reach scale?

A Pervasive Mis-Allocation of Resources

One answer is a pervasive miss-allocation of resources combined with lack of clarity among those who “own” the capabilities to scale about how to create sustainable social impact. In trying to “do more good” universities, foundations, companies and others focus on adding more seedlings while ignoring the successful crops that have sprouted (often in out of the way fields) but need watering and nutrients (plus harvesting equipment, silos and transport).

The majority focus on seed stage is clear from the proliferation of competitions, fellowships, mentoring programs, incubators and accelerators. While easier to do and sure to attract attention, the mature social enterprises who obtained their credentials several years ago, already know it does not lead to scale nor sustainability. The lack of successfully scaled examples demonstrates that the sum total of these “do more good” efforts falls far short of the wisdom, talent and investment needed to solve real social challenges.

To shift the resource allocation we need new partnerships to identify those that have navigated multiple crop cycles.

© Copyright 2012 CorbisCorporation

From Sponsors to Active Innovators

As with other innovation this selection is just the beginning. From here, testing which models and management teams can absorb talent and capital with continuous learning and adapting to new cultures and systems becomes critical. Experimentation now consumes the reallocated investment, competitionbeginning with select innovators funded to test and learn alongside “go to market” partners who already have testing infrastructure in place.

With this vision, companies shift from passive sponsors of competitions to active innovators. Conversations are no longer about the role of the corporation as donor and customer. The real market creation levers for most corporate partners come from any of five possible roles:

Innovator/Tester
Integrator
Capacity Builder
Marketer
Distribution Innovator
Focusing on these critical roles aligns the social enterprise with the corporation and enables bi-directional leaning and capability building from the best talent and assets of both organizations.

Here are three examples that illustrate the “cross silo” merging of most of these five possible positions:

1. Social Enterprise Exposes Massive Market Opportunities
Naya Jeevan’s [which means new life] mission is to provide social protection to low-income families in Pakistan in an efficient and inclusive manner through a unique micro health insurance model that reaches poor populations residing in urban areas of developing countries.

Model development has been supported with knowledge, talent and funding from global insurance leaders led by Allianz-EFU. Experiments with scalable partnerships resulted in several viable go-to-Social enterprise Naya Jeevanmarket strategies attracting other corporations, schools and individuals to leverage existing, inpatient and ER-trauma healthcare delivery systems.

Naya Jeevan now offers its insurance program in Pakistan at subsidized rates under a novel national group health insurance model underwritten by Allianz-EFU, IGI Insurance, and AsiaCare.

Naya Jeevan’s success has lead to plans to take the model to India with active collaborations with corporate, academic, and non-profit institutions underway currently. Cofounder Asher Hasan is also a leader of the WEF Global Agenda Council for Social Innovation, so look him up at Davos and talk scale.

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2. Innovation and Integration-Driven Model
P&G’s FutureWorks group, often referred to as an “entrepreneurial engine,” seeks opportunities to grow and import innovation from entrepreneurs and social entrepreneurs globally, similar to GE’s somewhat self-disruptive approach.

Futureworks supports P&G’s goal to import half their new consumer products from the outside, enabling new solutions to leverage P&G’s integrated capabilities or apply its own expertise to building integrated capacities as needed.

Innovation success in developing countries will depend on accessing and importing the most active global innovation sources led by social entrepreneurs. One P&G investment example is Healthpoint Services, a for-profit social enterprise scaling from Punjab, India. Started by Al Hammond, a global base of the pyramid expert, and Amit Jain, a clean water pioneer, Healthpoint is the first scalable integration of telemedicine, clean water, diagnostics and generic pharmaceuticals. This integrated solution enables real foundational healthcare and water delivery in a sustainable manner (i.e., profitably) via a village facility where doctor visits and tests average less than a dollar.

3. Internally Created Platform Opens Distribution Innovation
The past two years at the Skoll World Forum on Social Entrepreneurship, Dorje Mundle of Novartis has presented the progress of Arogya Parivar (“healthy family” in Hindi), a social initiative developed by Novartis to reach the 740 million people living at the bottom of the pyramid in rural India.

Now operating in 11 states across India, it is the first industrial social enterprise to tailor affordable products, local training and capacity-building to diseases endemic among the rural poor, which are frequently ignored by the country’s mainstream healthcare providers.

The program broke even in 30 months and sales have increased 25-fold in the last five years. As the innovator and business designer, Novartis has played all roles while actively innovating with other social and healthcare organizations. Last year’s presentation included their strategy for distributing Embrace infant warmers through the nearly 400 health advisors Novartis employs.

In 2013, we look forward to the progress of the model opening in Kenya and Vietnam.

These three cases exemplify what HBR wrote in an article titled How GE Is Disrupting Itself in December 2009:

“If GE’s businesses are to survive and prosper in the next decade, they must become as adept at reverse innovation as they are at glocalization. Success in developing countries is a prerequisite for continued vitality in developed ones.”

Innovation and social solution success, both in the U.S. and globally, will depend on accessing, scaling and even importing the most active global innovation sources. Working with social entrepreneurs beyond contests and fellowships can leverage corporate scaling capabilities to enable measurable solutions that improve communities and economies creating markets today and in the future. Isn’t that the goal?

Note: This post originally appeared on CSRWire.

The Need to Scale: Social Enterprises and Community Health

Community health workers: Now that is a profession that must be compensated.

That is my paraphrase of Jeffrey Sachs’ response to the question I posed at the mHealth Summit about this issue. Investments in technology to support community health workers (CHWs) must be balanced with the need for volunteer CHWs — which are still the majority in Africa — to be paid in order to have any hope of building a skilled professional corps of these life savers.

Working in the Millennium Villages since 2006, Jeffrey and Sonia Sachs are leading proponents of a program to deploy, train and equip one million CHWs across rural Africa. This effort and its partners are described in Sachs’ article, Breakthrough in Saving Lives in Rural Africa. The scale of the effort is both visionary and challenging to the donor governments who are asked to support it.

These compensation issues are more narrowly focused in the United States. For example, many nurses are not recognized as care providers who can be reimbursed under the Affordable Care Act. We too have underserved populations where innovation and new partnerships are critical to reaching those in need.

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Beyond the App: Verizon Models New Ways of Partnering

The innovation needed is not a new app — there will be plenty of those — but instead a new way of partnering that merges corporate resources with technology and organizations that are bypassing the international development and social enterprisemany impediments in our care system to directly reach those in need.

Because of ReachScale’s focus on corporate support of social innovation (The New Triple Bottom Line,) we found Verizon Foundation’s new efforts laudable: an innovative step that ensures that technology is actually used for good. In their words, “For the first time at Verizon we are integrating our technology solutions and philanthropy to accelerate change in healthcare and improve patient outcomes.”

While four different partners have been chosen to reach children, women and seniors in the $13 million program (roughly one-third cash and two-thirds in kind through technology and services,) most attention at the Summit was on the mobile health clinic parked in the Verizon Foundation display.

Working in six of the 50 underserved communities where Children’s Health Fund operates, Verizon will enhance impact by equipping the three to five person teams in each clinic-on-wheels with smart phones, applications, and support.

The young health worker who conducted the tour said that having Verizon ensure that all their electronic gear could access the network as the clinic arrives at each remote location was one of several significant impact drivers in reaching children at risk due to poverty, homelessness and lack of healthcare access.

Verizon_app

Social Entrepreneur, Meet the Health Worker

While the underserved populations in the United States are in the tens of millions, we have adequate verizon social enterpriseeconomic power to reach them if we choose to. In Africa and Asia, the number of people exceeds one billion and basic components are missing, including a paid profession of local health workers.

While donor government support is probably the only way to accomplish comprehensive CHW coverage, participation in conferences like the mHealth Summit by groups such as ReachScale brings a social enterprise point of view to these issues.

Social entrepreneurs are infamously unwilling to wait on governments, and nearly one-fifth of them focus on healthcare, water and sanitation. The remaining 80 percent innovate with business, technology and finance models. Many options for economic empowerment are available — as exemplified by leaders like Professor Yunus and by a million or more social entrepreneurs around the globe who are actively exploring new approaches and better solutions.

These social entrepreneurs are supported by a well-developed ecosystem.

And while these players may not be household names, they are well known to university and corporate leaders seeking to train and recruit the millennial generation. Grameen, Ashoka, Skoll and Schwab Foundations are among the leaders as are universities including Babson, Columbia, Oxford, Stanford, Harvard and Santa Clara with their Global Social Benefit Incubator and TECH Awards. (Note: ReachScale tracks over 30 such organizations seeking to surface the most innovative social entrepreneurs, not to mention several hundred competitions with similar goals.)

The questions that must be answered include:

- Are these social entrepreneurs important to expanding primary health systems across Africa and Asia?

- What role should they play in addressing needs around food production and nutrition, education, water and sanitation, technology innovation and entrepreneurship?

- How can philanthropists, non-profits, corporations and local and national governments decide where to invest for most impact?

- And finally, how can we share innovations that create income in communities and enable sustainable payments to CHWs, teachers and other critical social capital developers?

Building Capacity From The Bottom Up

Most social entrepreneurs start with a very personal obsession to improve lives by solving a challenge or inequality. They prefer to spend as little time as possible fundraising, and often they bring innovationinnovations to the table that decades of nonprofit work have not uncovered.

Social enterprises typically get off the ground with a small loan, such as the $36 that funded Professor Yunus and his innovation of microfinance. As Yunus points out in every speech he gives, “When I saw a problem, I started a business to solve it.”

Microfinance is the best-known category of business models in social enterprise, and it includes organizations ranging from Citigroup to Kiva.org. According to the Microfinance Information Exchange, the global microcredit portfolio in 2010 was estimated at US$65 billion versus US$12 billion in 2004.

Microfinance has demonstrated that the leadership of several global innovators– combined with support from multiple NGO and private sector players with sustainable and therefore scalable business models — can aggregate to billions of dollars. As BusinessWeek described the Nobel Peace Prize win of 2005:

Grameen Bank, a leading advocate for the world’s poor that has lent more than $5.1 billion to 5.3 million people. The bank is built on Yunus’ conviction that poor people can be both reliable borrowers and avid entrepreneurs.

© Copyright 2011 CorbisCorporation

Social Enterprise, Local Development & Healthcare Access

Here are five ways that social enterprises can support access to health/healthcare and compensation of CHWs:

1. The provision of a health foundation built on safe water, sanitation and health education. Examples: Blue Planet Network and Community Health Clubs

2. Enabling job creation that increases income in rural villages, especially for women. Examples: International Lifeline Fund (Cook Stoves) and Katosi Women Development Trust

3. Align with locally-led models built on revolving loan funds creating sustainable community development and income. Examples: Nyaka Aids Orphans Grandmother Groups and Hiinga.

4. Utilize and develop the entrepreneurial skills of community members to create profitable local businesses. Examples: Solar Sisters and Living Goods

5. Establish portfolios of social businesses enabling communities to choose optimal investments that also maximize education and income to support healthcare access and other social capital.

The last option is an outcome of the first four and others yet to be innovated/created. The drive to organize these portfolios can come from the goal to empower local entrepreneurs to create income or from support for the concept of scaling sectors, as recommended by the Omidyar Network in Priming the Pump.

Scaling_social_enterprise

Leveraging Social Enterprises for Bottom Up Scaling of Essential Services

As Jeff Sachs makes clear, to talk “Africa scale” we need to talk in billions. From Sach’s article, Funding a Global Health Fund:

The annual cost of specific disease control in the next three years is perhaps $6 billion, and another $6 billion per year for health-system expansion. The total, $12 billion per year for an expanded Global Fund, might seem unrealistically large compared to the $3 billion per year spent now. But total annual funding of $12 billion is really very modest, representing around 0.033 percent (three cents per $100) of the donor countries’ GNP. This is a tiny sum, which could be easily mobilized if donor countries were serious.

So how can larger players leverage social enterprises to help in scaling? Here are five suggestions:

1. Build partnerships to scale innovative models that reduce healthcare burdens and risks such scaling social enterpriseas combining water, sanitation and health education or scaling cook stoves with local manufacturing, education and finance.

2. Tie social businesses to the UN’s Millenium Development Goal [MDG] investments that promise results that the social business can secure. For example, provision of clean water promises freedom for women and the option for girls to attend school. Meanwhile revolving funds enable women to farm or start self-employment businesses, which in turn fund school fees. Nyaka’s grandmother groups support school fees for 30,000 children in southwestern Uganda.

3. Adopt social innovations that enable CHW’s to become more productive. ChildCount+ is used by Millennium Villages to guide the CHW through malaria treatments, nutrition advice, and danger signs. Switchboard working in Liberia, Ghana and Tanzania uses mobile phones to build nationwide networks of health workers. Referring patients to a clinic is critical but so is the provision of clean water that CHWs don’t have to gather such as Grameen Danone.

4. Adopt social innovations from outside each country and use them to become more sustainable. Healthpoint Services in Punjab, India, combines water and health clinics to create a more sustainable model. Punjab state has built around a 100 sites in a year to scale Healthpoint’s sustainable model.

5. Seek social enterprises that are already scaling and become lead strategic scaling partners, attracting other partners with your commitment. The options are extensive, and choosing the ones that leverage investments that need to be made anyway can drive sustainable scale.

Social business has transformed Bangladesh into a country that should achieve six of the eight MDGs. The goal is not to be wildly profitable but to sustain solutions and then scale eventually shifting resources to the next set of challenges.

The opportunity to leverage entrepreneurs whose work determines their and their families’ survival is essential in reaching the billion plus people in extreme poverty today. Social enterprise leverages this essential “human resource” building from the base to meet programs coming from governments and donors.

Note: This post originally appeared on CSRWire.

Corporate Volunteerism: When You Care Enough to Give the Very Best

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- The Corporate Intrapreneur
- Strategic International Corporate Volunteerism
- Smarter Solutions for a Smarter Planet (IBM on Global Citizen’s Corp)
- Special Edition on International Volunteering

These are just a few of the sessions offered at the recent Business Civic Leadership Center Global Conference that focused on corporate leaders and employees improving the world and growing business through volunteering. In every industry, knowledge-based global companies are approaching corporate volunteerism as both a business and societal win/win.

Leading organizations are crafting their own particular approach.

GE is centering their global growth strategy around solutions to healthcare and energy with the expectation that many innovations will come from the Global South. (Relevant: How GE Is Disrupting Itself)

Dow Corning is seeking opportunity through deploying high potential leaders/innovators as cultural and commercial anthropologists in Africa, Asia and Latin America. IBM’s Vice President of Corporate Citizenship and Corporate Affairs Stan Litow credits a significant source of IBM’s continuous innovation capability to their understanding that “when you give what differentiates you in the marketplace, you produce not only significant benefit in the community but also for yourself.” These are just a few from a long list of innovators in this area.

Volunteerism & Corporate Value: IBM Responds
How does corporate volunteerism create value for companies, and how can companies organize to create maximum impact in the societies where they work and volunteer?

For leaders who are not yet convinced about the fundamental importance of corporations acting responsibly to both avoid doing harm and to improve society, Litow explains IBM’s view of company value creation from corporate responsibility in a recent interview. In answer to the question, “how do you put metrics in place to track company impact?” Litow has very specific advice. Here is a summary of the key results that IBM expects and measures:

1. Find and keep the best talent.
2. Deploying the best talent and tech in exigent environments maximizes learning.
3. Ranking high in CSR means ranking high in SRI Funds. (Socially responsible investment funds control over a trillion dollars worth of assets.)
4. Earned media has calculable economic value
5. IBM (and all corporations should) measures the effect of corporate responsibility on brand value.

Some leaders may view volunteerism as a way to save on cash contributions. It is unlikely that the leaders at this conference would advocate for a short-term financial advantage from corporate volunteerism. The advantages sought are leader development, learning, innovation, market creation and emerging market and consumer understanding.

In seeking the five values IBM measures and the people benefits above, it might be useful to ask a slightly different question: What are other admired companies doing that don’t seem to be using corporate volunteerism as aggressively?

P&G: An Innovation-Driven Model with Similarities
One example of a company taking a different approach is P&G, an organization with a reputation for innovation (Bestselling book, The Game-Changer, was written by P&G’s former chairman and CEO, A. G. Lafley).

One of its core strategies is FutureWorks, often referred to as P&G’s “entrepreneurial engine.” The Futureworks group is out in front on opportunities to grow and import innovation from entrepreneurs and social entrepreneurs globally, similar to GE’s self-disruptive approach.

Like IBM, the Futureworks team also builds partnerships. While IBM is approaching volunteerism and the associated leader development on a broad scale (over a thousand leaders deployed through their Global Citizen Corp last year) and their citizen executives are learning through building capacity outside of IBM mostly in non-profit organizations, Futureworks is supporting P&G”s goal to import half their new consumer products from the outside.

Under the mantra of converting “not invented here” to “proudly found elsewhere,” P&G’s 50 + partner experts scour the globe and offer to partner voluntarily. For P&G the “volunteer entrepreneur supporters” are more likely to partner with for-profit enterprises, and P&G’s successful engagements can often lead to investment opportunities as well.

One P&G investment example is Healthpoint Services, a for-profit social enterprise scaling from Punjab, India. Started by Al Hammond, a global base of the pyramid expert, and Amit Jain, a clean water pioneer, Healthpoint is the first scalable integration of telemedicine, clean water, diagnostics and generic pharmaceuticals. This integrated solution enables real foundational healthcare and water delivery in a sustainable manner (i.e., profitably) via a village facility where doctor visits and tests average less than a dollar.

P&G, IBM, Dow Corning and GE recognize that the world is changing rapidly and their strategies need to focus assets on new geographies and markets where innovation requires partners. Adding new generations of customers requires following their lead and rejecting single bottom line thinking. In many cases the global south entrepreneurs and social entrepreneurs will create the products and services that will bring a new generation of customers to insightful companies who scale these entrepreneurial efforts.

Expanding Impacts of Volunteering
As any global development leader can tell you, the complexities of solving societal problems are substantial. Understanding and measuring whether a particular intervention has succeeded has become so complex — think of randomized control trials — that it is not surprising that many companies default to those programs put forward by employees working in their own communities (or in the case of companies working in developing countries, working in the communities that are impacted by their presence.) In emerging markets, leaders usually engage development experts to assist in design and implementation, but in most cases the focus is still on local community programs.

There is much to be learned from community-focused development, and having the employee leadership and personal volunteer investment guarantees a win/win when programs are successful. However, the ability for local community-focused individuals to be strategic and to consider alternatives with superior innovation models or impact profiles is limited. Employee-led programs are usually stuck in the history of where the company assets are instead of where they need to be for future “licenses to operate” to enable growth and pay dividends.

If the goal is to create societal impact and develop leaders who understand the complex tasks of innovation, market creation and policy making in emerging markets, a company cannot have its efforts derived exclusively from employee-driven development and volunteerism.

Guidelines for Increased Impact
To increase both company impact and societal impact from corporate volunteer programs, learn from the leaders and partner with the most innovative and sustainable solutions. Here are four key guidelines for getting the best results:

1. “Giving the very best” is fundamental in creating corporate value and sustainable societal value.
2. Rather than starting with the company’s capabilities, begin with this question: What organization is most capable of solving the challenge we are seeking to address in a sustainable manner and what do they most need?
3. Seek social enterprises that build capacity to solve problems and scale solutions across countries and continents using hybrid and/or for-profit models and compare these models to nonprofit alternatives.
4. Compare local solutions against regional and country-wide solutions that improve societal outcomes more broadly and seek partners to scale proven solutions.
Going forward, funds and talent should flow to the organizations making and reporting measurable progress actually solving key challenges. Some leaders call this “buying impact”.

By deploying the best, companies can bring added critical capabilities that enable impact to become partially or fully sustainable. In these cases, “buying impact” is replaced with “investing in impact engines.” (Relevant: Social Enterprise and Social Innovation: Not the Same Thing)

Successful social entrepreneurs create business models where the product or service provision draws resources from customers, donors, government, corporate and investor markets. This combined support and innovation actually can make the difference between a profitable and a non-profitable model.

These models are all evolving, and this fluidity is evident throughout the world. Viewing corporate volunteers as leaders who can attract other partners, bring business acumen to solutions, add critical distribution and scale capabilities, while enabling money to become a catalyst in building societal improvement capacity means the landscape of both business and society can be transformed.

Note: This post originally appeared on CSRWire.

Social Entrepreneurship & Social Innovation: Not the Same Thing

At the UN Social Innovation Summit held at the end of May in New York City, a plenary panelist stated that social enterprises and social innovation are “really the same thing.” This conclusion was not questioned and appeared to be a point of view the conference leaders and speakers were eager to adopt.

The summit was content rich and featured many of the best known nonprofits, but the absence of any Q&A prevented discussion of whether conjoining those terms makes sense. For many social entrepreneurs, including me, it is a topic worth examining more thoroughly.

Like most organizations, nonprofits and social enterprises seek ways to innovate. And entrepreneurs, whether starting a for-profit venture or a nonprofit one, tend to be particularly innovation-centric. What’s more, many social entrepreneurs are now utilizing a hybrid business model that combines revenue, borrowing, and donations.

The largest gathering of social entrepreneurs is the Skoll World Forum on Social Entrepreneurship held every spring in Oxford. At the 2012 event, one of the most popular tweets was this: “To be a social entrepreneur, you have to be misunderstood for at least 10 years.”

“Really the same thing” and the above statement do not jive. In the words of one impact investor speaking to newly minted MBAs at the recent Harvard Business School Social Enterprise conference:

“You really would not want to go out for beers with most social entrepreneurs. They are stubborn, opinionated, obsessional and basically difficult people.”

To further the distinction, when the nearly 400 UN Summit attendees were surveyed, only five checked the category of social entrepreneur while over 100 claimed they were nonprofit leaders “doing social innovation.”

4 Differences Between Social Entrepreneurs & Social Innovators

Here are four reasons why social entrepreneurs are significantly different than nonprofit social innovators:

1. Two Worlds

Most foundations and many nonprofits came into existence through a significant donor or donation. The people who shepherd the outcomes for those donors must be attentive and accommodating. Quite simply, donors drive much of the nonprofit world’s activities.

Most social entrepreneurs start with their very personal obsession to improve lives by solving a challenge or inequality, prefer to spend as little time as possible fund raising, and often bring innovations to the table that decades of nonprofit work have not uncovered.

Social enterprises typically begin with a small loan, such as the $46 that funded Professor Yunus and the invention of microfinance. As Yunus points out in every speech he gives, “When I saw a problem, I started a business to solve it.”

2. The Against Position

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. At the New York Forum on Africa held in Gabon, Professor Yunus stated it clearly: “I looked at how traditional banks do business and we did the exact opposite.”

In very practical terms, these stubborn, opinionated entrepreneurs frequently show up after the aid and development models have failed or at least failed to become sustainable. Their arrival on the scene is less a Kumbaya moment and more a “disruptive innovation” one.

3. Core Competencies

Successful nonprofits are either great at fundraising or great at measuring impact. The superstars are good at both. These critical capabilities assemble billions of dollars to accomplish good works and they represent an important innovation source for the world.

Social entrepreneurs fundraise too, but they hate it. Seldom do they surface innovations in fundraising. A primary goal for most social entrepreneurs is to demonstrate that appropriate capacity building enables their innovation model to solve problems profitably and reduce dependence on fundraising altogether.

4. Buying Impact/Measuring Success

Jason Saul of Mission Measurement exhorts funders to stop thinking about giving to charities and to shift to buying impact. As valuable as this change to the donor frame would be, the repercussions would also result in significant reductions in the total charity population.

Funds should flow to the organizations making and reporting measurable progress actually solving key challenges. But impact buying reinforces the prevalent tendency in the nonprofit world to spend significant dollars on measurement. Funding those added “measurement investments” makes solutions more expensive and less sustainable.

Successful social entrepreneurs create business models where measurement is integral to the normal course of solving a challenge. This one innovation actually can make the difference between a profitable and a non-profitable model. Healthpoint Services in the Punjab is the first to couple the delivery of clean water and healthcare. This disruptive innovation touches villagers each day: when they pick up their water they are also exposed to an urban quality healthcare clinic offering services at a much lower cost.

So what does Healthpoint management measure?

Here’s one: At what monthly water subscription price do half the villagers become customers in 90 days? For Healthpoint, measurement is not a separate expense, it is a core business activity.

Social Entrepreneurs Use Unique Strategies

When combined, these four differing frames demonstrate that social entrepreneurs are using a disruptively unique set of strategies and business models that are not just incremental “social innovation”.

Social entrepreneurs often work on bigger problems that require capacity building to reach the scale at which profits become possible. The ultimate impact buying opportunity is actually to strategically partner with unique social entrepreneurs whose models are globally scalable and can solve global challenges sustainably.

Note: This article first appeared on CSRWire.

World Water Day: Watering “No business can succeed in a failed society”

On Friday, UN special rapporteur Catarina de Albuquerque warned that government delegates to the World Water Forum appeared to be watering down their human rights commitments to water and sanitation. These rights, formally recognized by the UN in 2010, must form the basis of any proposals to expand access to essential services, said De Albuquerque.

Water is a $400 billion global industry, the third largest behind electricity and oil.

Last week (in anticipation of World Water Day) The World Water Forum, a tri-annual event, assembled 18,000 water, environmental and sanitation leaders from 173 countries with over a hundred country water ministers attending the event in Marseilles, France.

Some Progress On Drinking Water Access

In the last two decades, over 2 billion people gained access to improved drinking water sources. United Nations Secretary-General Ban Ki-moon said recently:

“Today we recognize a great achievement for the people of the world. This is one of the first MDG targets to be met. The successful efforts to provide greater access to drinking water are a testament to all who see the MDGs not as a dream, but as a vital tool for improving the lives of millions of the poorest people.”

Water will be on the Rio+20 agenda for the first time.

Our ability in the global north to turn on the tap and flush has resulted in water not rising to the same attention level as energy and climate change. This is changing as the interconnected global economy is demonstrating connections that have gone unnoticed, or at least unattended to, for decades. Circle of Blue’s strong work on Choke Point: China, Confronting Water Scarcity and Energy Demand in the World’s Largest Country, is one example out of many.

The Challenge: Getting the Right People To The Table

Part of the challenge that the World Water Forum and Circle of Blue are beginning to address is whether we can get the right people at the table. Eight billion person hours of conversation in Marseilles demonstrated the complexity of these interconnected challenges. What remains to be seen is the ability to keep these efforts going and attract participants who bring both demand reduction and supply production and conservation to the table.

The real learning may be around integrating conversations and obtaining commitments to bring new talent to the table especially around innovation and scaling solutions. At the synthesis session on water basin management I got the feeling that while the leaders were ecstatic to be collaborating with their peers, the absence of the non-participants was more visible.

ReachScale represented one of these ecosystems: social enterprise. The broad water industry is unaware of social enterprise and its innovation engine. Other missing participants included the non-water industry corporates, innovation design and related sectors like healthcare and agriculture— agriculture and food production consumes around 80 percent of water worldwide. There was a food security track that attracted Nestle, but most speakers were academics and NGO leaders.

In Marseilles, the opportunity to engage was aggressively pursued, and several session leaders mentioned lists of innovation ideas in the mid-five figures. I believe that many of these conversations will continue over the next three years (The next WWF is in Korea in 2015). However, optimism where it appeared was tempered by challenges in persuading current stakeholders to compromise and/or sacrifice to achieve sustainability.

The need for corporations to join the collaboration is essential and a number of efforts have attracted participation from the leading water users, beverage and food producers.

Companies Can Be Water Stewards

This is a huge opportunity for companies to demonstrate their commitment to successful societies through water stewardship. The reasons are clear, as are the advantages. So, here’s a starter set of suggestions:

1. Advocacy: In the global north, taps and toilets are automatic. It should be easy for us to align with water and sanitation as a human right. Instead we often leave it off the agenda.

2. Advocacy Action: Identify a natural water and sanitation advocate and encourage them to seek both talent and resources that the company could marshal for water and sanitation advocacy. Pick the most effective advocacy organization with which to partner.

3. Demand: Set corporate goals to reduce your water footprint and seek innovations to extend sanitation in globally relevant countries.

4. Demand Action: Marshal the talent and partnerships to meet the goals and join with the organizations that are most productive in assisting you.

5. Innovation: Identify the water intersections with your businesses and challenges that could use your innovation capabilities. If you work in healthcare or energy there are a myriad of possibilities. Consumer products and education suggest plenty of targeted opportunities.

6. Innovation Action: Identify the organizations innovating in these sectors and challenges, and pick one to support and grow, or a portfolio if the associated business opportunities are strong. A perfect example, courtesy Fast Company: Power From The Sun, Floating On Top Of Sewage.

7. Community and Watershed Stewardship: Space does not permit fully treating these and there are excellent examples of companies “doing the right thing” in communities. Nestle and Coca-Cola come to mind from Water Forum 6.

8. Stewardship Action: Watershed cooperation is newer and holds some of the greatest promise in achieving real sustainability. And now is the perfect time to engage, since the Alliance for Water Stewardship just released their first draft standard, open to stakeholder comment until June 15, 2012.’

9. From Incremental Gains to Social Innovation: As gains in footprint and community development continue and watershed collaborations develop, each company should compare the next set of incremental improvements with the opportunity to innovate more broadly to create healthy societies. This opportunity is not embodied in the water and sanitation stewardship progress to date, perhaps because identifying the alternative models and opportunities appears too daunting.

Social Innovation for Water Rights

Yet, the WWF had multiple tracks trying to examine and find alternative models and answer to social innovation. The most alarming statistic: 2.6 billion people lack access to improved (or any) sanitation.

Kamal Kar, founder and advocate for Community Led Total Sanitation (CLTS), made a strong case for creating access for the final billion people to both water and sanitation at the same time, as a way of ensuring healthier lives. CLTS and similar organizations represent one of the most important social innovation capabilities to replicate and scale today. Some brilliant marketers in the next decade will realize that stakeholder engagement around “Open Defecation Free” is more authentic and will engage stakeholders longer than many causes that make for pretty pictures.

The reason for CLTS’ scalability is simple. With modest interventions, communities solve the challenge themselves with local leaders moving on to other challenges. CLTS’ work results in leadership development every day on the community level. Companies that speak highly of their leader development capabilities could do worse than support a multiplicative effort whose core engine is leadership development.

Cross Sector Social Collaboration

Over half of the ministers – representing more than a 100 countries – at Water Forum 6 were from Africa.

The final Africa-centric session was lead by African leaders including Maria Mutagamba of Uganda. Mutagamba is an excellent example of the new, more transparent generation of leaders emerging all across Africa, often women, who driving striking progress in their communities.

However, celebration was not the main reason for their trips. These leaders were first to admit the work remaining to be done. ReachScale represented one such cross sector effort: Blue Planet Network (BPN), a social enterprise, and member International Lifeline Fund (ILF) are seeking partners for a water, sanitation and healthcare cross-sector effort to link village and health clinic access to water and sanitation.

Joining the team to create the health connection is Management Sciences for Health (MSH) whose health system experts already work in Uganda and many other countries to support local health systems.

MSH, BPN and ILF will link health and water committees more closely to seek direct impacts on both villagers and community health workers. The need was highlighted when MSH identified over 400 clinics in the 25 districts they serve that lack access to clean water. Coordinating between clinics and villages the needs of both can be better met and cost per water point can be lowered by as much as 30 to 40 percent.

These partnerships represent just two examples of many social entrepreneur and innovation opportunities that can be leveraged to improve societies in which companies desire a strong license to operate and grow. What is the private sector waiting for?

Note: This post originally appeared on CSRWire on March 22, 2012.

A New Triple Bottom Line

As we dive into the New Year and face up to the challenges ahead, I am reminded of the fundamental reason so many of us are working in this area. We came to do more good, though we often find most of our time is spent doing less harm.

CSR organizations are increasingly tasked to cover both.

And we will have to come up with new approaches to scale doing less harm and doing more good at the same time.

The Cost of Incrementalism

What is taking so long? Looking at just one aspect of CSR, corporate philanthropy, we see lack of results from scale — from the ReachScale site:

“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.”

Adding to the old answers to “What is taking so long?” are some new challenges:

First is the fragmentation of social responsibility activities in most companies. Executives talk about the need to track involvement in major issues (pensions, training, employee healthcare, etc.) as well as environmental impact (carbon, water, energy, packaging, etc.). But treated as individual issues, the solutions often receive inadequate attention for any comprehensive solutions.

This fragmentation problem is most extreme for companies who ignored externalities until recently and then just tacked on an external function to try to handle them. Doing what’s right needs to be mainstreamed, and it all begins by comprehending what it means to “do less harm.”

Unfortunately many companies fall victim to the equivalent of the mission creep that plagues the non-profit world. Creeping incrementalism in both environmental and philanthropic activities falls short in three ways:

- Essential focus and risk taking never happens, and under-resourced efforts yield inadequate progress.

- Instead of focusing on innovation and testing sustainable approaches, attention drifts to smaller and easier approaches and/or unsustainable activities (often with high visibility). As a result, real challenges—like measuring water risk without addressing water stewardship—are avoided altogether.

- Too many resources are spent communicating small wins and covering up a lack of progress. The focus on perception vs. reality becomes a resource sink and can actually do more harm.

Scaling “Do Less Harm”

Two years ago, Wal-mart began to scale its comprehensive supply chain initiatives. Many questioned the resource allocation and the criticality. Two years later, these new comprehensive mainstream models are being talked about as table stakes.

The genie is out of the bottle on these issues. These days the scorecards are being kept by a variety of independent monitoring organizations.

While some companies are still in denial, the smart corporate players are partnering with the scorekeepers to assist them in mainstreaming their “do less harm” commitments. The recent comprehensive fleet mileage targets agreement between the US Government and the global auto companies (highlighted in a recent editorial by Tom Friedman) represents an example of this trend that will continue across many ecosystems.

Scaling and mainstreaming “do less harm” is garnering much of the effort in the best companies. And as leaders see the positive benefits of this approach, the most innovative already realize that the same idea set should be applied to “do more good.” They are also the first to see that the big problems can only be solved through a mix of both approaches along with a significant dose of innovation.

Scaling “Do More Good”

Here are three reasons why scaling “do more good” will have even more impact on creating virtuous cycles that support both better environmental stewardship and better economic growth. First, an example:

Many challenges exist around young people, learning, access for people at risk and education for the disadvantaged. One critical reason that youth are at risk and people lack access is disabilities. There are a broad range and most require donor driven approaches with limited sustainability.

One exception is hearing loss—an opportunity that can directly overcome the disability of 300 million people and over 180 million infants, children and young adults. As is often the case, these opportunities exist because of underserved markets and this is one of the largest underserved markets with 60 percent of 600 million people at risk, untouched, globally.

Access to the market has been created by a small team of innovators working over the past decade to invent the solar hearing aid. Solar Ear is already manufacturing in Botswana and Sao Paolo. Eventually there will be 10 manufacturing sites serving 60-70 countries, with low tariffs, and reaching millions of people that are not served by traditional companies. They are completing a deal for the distribution rights for Solar Ear in Brazil that will fund their third manufacturing line in China — and all the hearing aids and chargers are manufactured by deaf young adults.

Solar Ear and Howard Weinstein just won the Social Entrepreneur Award at the World Technology Summit, among many other recognitions.

From “License to Operate” to “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. With an ethics-based marketing model instead of interruption-based one, new opportunities emerge. As corporate strategy guru Michael Porter pointed out in “Strategy and Society,” a Harvard Business Review article he coauthored with Mark 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.”

Other examples include Healthpoint Services (see this article on exceptional scale) and Lifespring Hospitals, operating in rural India, are two examples of a license to operate that has evolved into a license to grow. Arogya Parivar (AP), an innovative outreach by Novartis India is another example. (AP received a prestigious award for “Best long-term rural marketing initiative” from the Rural Marketing Association of India.)

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

Reputation based on Results

Donations and volunteer hours are no longer newsworthy unless presented in the context of strategic commitments to solve real problems.

Forward thinking companies like Nike and Timberland admit openly that they know their businesses are not currently environmentally friendly. Going forward they need to drive innovation to drastically change their businesses. In the future we cannot produce products like T-shirts in the environmentally damaging way we do it today.

Going forward, companies will not be able to protect and preserve their reputations through “pretty pictures” CSR. Instead they will need to identify an appropriately big problem and then demonstrate measurable results towards a solution.

Return on Investment

What is new with ROI in the sustainable impact world is how it is achieved. In the past the corporation’s core business produced the returns with a small percentage of the profits allocated to cost centers including CSR and philanthropy. Increasingly global companies see how the most pressing problems that seemed to be intractable resource sinks can be, with appropriate innovation and collaboration, profit producing. For example, General Electric’s global business strategy now centers on two critical challenges: healthcare and energy.

Achieving profit through social innovation and collaboration requires new partners that are assembled from all over the globe. These partnerships are generating profitable and sustainable innovations by offering products at price points that a large segment of the pyramid can afford. Ideally these solutions are marketable because they also result in behavior change. The creation of delivery systems for clean water to rural villages is an example of a rapid behavior-change solution.

The reputational value of sustainable solutions can attract multiple sources of capital. As you watch the social investment announcements in 2012, you will increasingly see strange bedfellows clasping hands and acting together to drive integrated social and monetary returns.

This new triple bottom line leverages strategic and brand resources within the corporation with highly innovative social enterprises. By combining social impact, enhanced reputation and a return on investment in this way, the whole becomes significantly greater than its parts.

Photo credit: Organic Soul

Note: A version of this post first appeared on CSRWire.

UN Opening Week: Facing the Non-Communicable Disease Epidemic

“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.

World Water Week: Negotiating the Non-Negotiable

During 2011, Circle of Blue has collaborated with the China Environment Forum at the Woodrow Wilson International Center for Scholars to report on energy demand and water supply in China. Their extensive coverage and reporting included over a dozen presentations of the results in China. The context for this coverage—called Choke Point: China—is positioned as follows:

“Over the last decade alone, 70 million new jobs emerged from an economy that this year, according to the World Bank and other authorities, generated the world’s largest markets for cars, steel, cement, glass, housing, energy, power plants, wind turbines, solar panels, highways, high-speed rail systems, airports and other basic supplies and civic equipment to support a modern economy.

Yet, like a tectonic fault line, underlying China’s new standing in the world is an increasingly fierce competition between energy and water that threatens to upend China’s progress.”

Last week in Stockholm, the 23rd World Water Week convened and could have featured the tag line, Choke Point: World. Over 2600 water professionals (and semi-pros) gathered to focus on Water in an Urbanising World. (For an overview themes and participation at the conference, read Céline Hervé-Bazin’s post.)

Many thought leaders including Paul Reiter, CEO of the International Water Association (IWA), lauded China as a potential source for ideas and innovations. Motivated by those 70 million jobs and terrible conditions in rural areas, China is the most rapidly urbanizing country in world history. The challenges facing China’s urban leaders and planners are extensive. (While not mentioned at a conference with an urban focus, another indication of the connectedness of everything through water is the amount China will spend on rural water, sanitation and healthcare: $125 Billion.)

Assessing which problem is more challenging may be less productive than thinking about how both challenges could share technology, innovation and social enterprise approaches to make progress. China so far has not acknowledged the need for outside social enterprise or technology models, and is betting on competition between the provinces for innovation.

A New Style of Urbanization

At the first day plenary session, both Dr. Joan Clos, Executive Director of UN Habitat, and Sheela Patel, head of Shack/Slum Dwellers international, made a strong case that this is one of the most complex development challenges facing the world. According to Clos, “Every year the number of people who live in cities and town grows by 67 million – 91% of this figure is being added to urban populations in developing countries.” Unlike the urbanization that accompanied 19th century industrialization, this new urbanization often lacks the job and revenue base to invest in public services. Sheela Patel challenged leaders to seek cooperative solutions agreed to and supported by beneficiaries: “Participation does not mean bringing in the poor to rubber stamp a predetermined solution.”

Essentially every rapidly urbanizing city must be viewed as a resource poor environment. These circumstances require a combination of innovation, ingenuity and people that is simply not required in most high- and middle-income countries. Innovation in the coming century must come from these exigent environments. In the case of water, cities and countries recognize the need for a combination of tariffs and taxes, but the challenge in poor countries flows from compressed finances. According to Greg Browder of the World Bank, water can garner 2-4% of individual income—$1000 per person per year in rich countries, $200 in middle-income settings and $40 per person in poor countries.

Challenges: Non-negotiable

The session on Integrated Urban Water Management Challenges was a microcosm of the overall conference. Here are a few of the @ReachScale tweets from that session:

Urban Water Mgt: 2-4% of income to water means: High income $1k/yr/person; mid=$200; low=$40; so mid 5x>low; high 5x>mid: Big Constraint

IWA Paul Reiter: Challenges in urban means urban must use 50% less as globally; 800k new urbanites added weekly!

IWA Paul Reiter: Challenges means new urban water systems in Asia & Africa must cost a fraction of current.

Urban must use 50% < water, as globally 800k new urbanites added weekly. If Ag water use 10% less; Amount for urban 2x.

Paul Reiter Point: Realities of Water Challenge are non-negotiable; Glenn Oroz Counterpoint: Realities require much Negotiation.

Global Water Intelligence through the Water Risk Index is one source for looking at the areas where challenges will be greatest: http://www.water-risk-index.com/index.html

Collaboration, Innovation and Investment to Succeed

In the case of water, we are all part of the potential solutions. Seeing the water fraternity hard at work to enhance collaboration provides the basic foundation for seeking solutions. Here are scenarios/suggestions for the kind of transformative changes IWA, SIWI, the World Bank and others insist are essential.

1. Agriculture is the center. New practices are needed to double agriculture production, protect natural systems and enhance global food security. As stated by the CGIAR Challenge Program on Water and Food:

“There is an urgent need to rethink current strategies for intensifying agriculture, given that food production already accounts for 70 to 90 percent of withdrawals from available water resources in some areas. The report, An Ecosystem Services Approach to Water and Food Security, finds that in many breadbaskets, including the plains of northern China, India’s Punjab and the Western United States, water limits are close to being ‘reached or breached.’”

2. The World as a Scaling and Learning Laboratory. In meeting after meeting, I saw studies and decks that talked about pilots, prototypes and tests. While there were a few exceptions – the Asian Development Bank’s remarkable progress with the Metropolitan Waterworks and Sewerage System in Manila for one – too many projects were “learn now, scale later.” Mechanisms need to be developed to compare and promote the most scalable opportunities. This could include funding scaling learning labs and then funneling funding into the winners. Brookings along with the Shell Foundation and others funded by the Japan International Cooperation Agency are developing thinking in this arena. Healthpoint Services with P&G have already embarked on scaling in India. Next year they will add scaling investors and journey to other countries.

Homi Kharas of Brookings pointed out in a call today that aid projects have actually been shrinking in scope in order to improve measurement. This runs smack against the non-negotiable realities of urban everything, including water. I spoke with country and DFI leaders at World Water Week that are concerned about the lack of scale. Turning this thinking and action around is critical.

3. Seeking social innovation and making it profitable. The only way to attract enough capital to fully address this problem is to identify the segments that are willing to pay and then deliver low-cost solutions that fund extensions further down the pyramid. In the early stages, focusing resources on getting profitable (or close to) is more important than studying impact.

Social enterprise models including for-profit, hybrid, leveraged and cross sector innovation models will be critical to attracting new capital sources. Social innovators often breach silos that an industry can’t see beyond. They also aggregate investments from multiple donor, DFI and profit-based sources to get to scale faster. In some cases these models will be superior; in others they can augment, so that less study is needed and more action can happen sooner. Both Water for People’s FLOW model and the Blue Planet Network are examples of these types of innovations.

Looking out to 2030, there is a shortage of innovators from inside water, as well as outside water. Not enough innovation is being crowd sourced, and not enough adjacent and non-adjacent innovators are engaged in the water challenges. Over the next decade, Millennials will create more social enterprises than those created to date. We need to make sure a significant share of those social innovators are working on scaling water and agriculture sustainably.

Note: A version of this post first appeared on CSRwire.

Summer Reading: The Holy Grail and the Greatest Bargain

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.

New Styles of Courage


All our connections are deeply interrelated (from a close up of a large scale woodcut by Paul Edmonds)

Sometimes I am overwhelmed with admiration for those who have faced danger and summoned the courage to step forward and act. It is easy to see them as different from the rest of us. But some recent experiences have shifted my focus to what we have in common with that class of courageous heroes. No matter where we work, there are opportunities to connect the dots, to create our own style of courage.

Good examples help reveal what this might look like. The Skoll World Forum on Social Entrepreneurship is the capstone event for an ecosystem built from the Ebay success of Jeff Skoll. It is a good place to hang out with courage counterparts. In addition to this global community of social entrepreneurs, there were about 20 corporate representatives in attendance this year. But what a boon it would have been if there had been over a hundred.

The Oxford Jam, a fringe conference happening alongside Skoll, offers more opportunities to connect. I met a former hedge fund executive there who is investing her own assets to address the obesity epidemic. Her courage will rally others to innovate while she is also able to turn a profit.

Both Skoll and Oxford Jam offer a panoply of ways for companies to connect with social enterprises. Corporate leaders who make the decision to get to Skoll next year a priority will find a uniquely rich set of courage leaders with which to interact.

Another opportunity for exploring new styles of courage is Saving Lives at Birth: A Grand Challenge for Development. This Grand Challenge (issued by USAID, the Gates Foundation, Grand Challenges Canada, the Government of Norway and the World Bank) will fund efforts to combine technology, service delivery and/or demand innovations that can directly improve the lives of mothers and their newborns. Up to $15 million will be awarded in the next 6 months. This will include 25 awards of $250,000 that will test new innovations.

The collaborative conversations around Saving Lives at Birth has resulted in a broad range of proposals that reflect how multifaceted this sector is. One of the teams I am working with is led by the Royal College of Gynecologists and Obstetricians (RCOG) and also includes an Ashoka fellow and Movirtu, an ingenious company that enables low-end cell phones to be shared while still maintaining individual identity and custom information (funding will develop simple applications such as calculating gestation month and providing tailored advice).

The proposal from SMILE (Saving Mothers and Infant Lives with Education) leverages relationships with governments, health systems and community health workers (CHW) that RCOG has been building for over a decade in Africa. Combining these relationships with Movirtu’s technology will enable low-resource environments to become high-touch environments where lives are saved through tailored advice and learning. When scaled, this program expects 30% or greater improvements in outcomes.

Forward-thinking companies who have women as primary customers can participate in these outcomes by finding programs that feature innovations where their expertise could add value.

The Skoll World Forum and Saving Lives at Birth are just two examples where courageous investors—of both time and money—are visible and can play a part in the innovation networks of a corporation. The learning and innovation that flow from these connections can be transformative, and begins with a simple sense of how you and your organization can find new styles of courage in your own innovation spheres.