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.
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:
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.
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.