Archive for the ‘ Game changers ’ Category

Marketing to – and Connecting With – Your Next Billion

© Copyright 2012 CorbisCorporation

TV advertisers are watching as millennials and their family members—especially their parents—who have adopted similar socially conscious views increasingly populate prime demographics. One outcome of these increasingly “sustainability-supporting demographics” is that advertisers and corporate leaders are now actively exploring how they can persuade their global customer base that they “get it” too.

In the Rush for Social Media

Most agencies that guide the marketing world have been working hard these last few years to “get” how they can use social media. As a result, it is not surprising that many have missed the other major social movement that has erupted in the same time: social enterprise and social innovation. While social media can influence customers, if you need to add a billion new customers (P&G’s goal) social enterprise, not social media, is developing the models to reach those numbers.

In the end, the “other social” oversight may be for the best since the knowledge and resources required to leverage the growing social enterprise movement actually exist at the intersection of companies and social enterprises. Corporate leaders must identify the problems they could step forward to address and seek out the most innovative organizations already solving those challenges.

To do that, they must first answer this question: Who is the most innovative social business already solving “our challenge” and how can we drive their solution to scale?

Then build partnerships with the innovators. Use new partnership models (like the one proposed in World Economic Forum: Where will the “Household Names” in Social Enterprise come from?) that shift resources from adding new social enterprises to the funnel and invest instead in scaling proven models that have the capacity to leverage corporate talent, technology and commitment.

Engaging Directly With Social Entrepreneurs

It is good news that the World Economic Forum is bringing Schwab Foundation social entrepreneurs to Davos. And the Skoll World Forum on Social Entrepreneurship – the largest annual gathering of social billboardenterprise leaders – is happening again this year in Oxford, England from April 10-12.

I have written about the opportunity for companies to engage directly with social entrepreneurs. (A New Triple Bottom Line provides a good introduction.) Since social enterprises focus on opening markets across the base of the pyramid (BoP,) their models often represent the innovations needed to understand how commercial entities can grow their BoP markets. Companies who assume that their ‘Global North’ engagement models are going to work in these new markets are going to be a day late and a dollar or rupee short.

The Task Ahead for Marketing Chiefs

Visionary global CMOs are engaging now to understand and connect with billions of their future customers. Here are four reasons why every CMO should be doing the same.

1. Meet the designers of the engagement models of the future.

Whether you believe that the world ahead must include less consumption or not, your most effective marketing spend will need to be one that is less customer interruptive. Marketing expenditures are being redirected from TV ads to content and cause marketing, and other activities that depend on authentic customer engagement.

If you want to connect with your future customers globally, you will need to understand the engagement models that are evolving in their villages.

2. Share your progress in solving a globally recognized challenge with your stakeholders by embracing a sustainable innovation business model.

In order to persuade “sustainability and social good” customers of your authenticity, you need partners with intimate knowledge of what your current customers and even more importantly, what new marketing toolsthe next billion customers care about. You can’t read about this in books posts or tweets. A good example is how Dow Corning sent its executives into the Global South as brand anthropologists. IBM’s Global Citizen’s Corp is another model with potential.

BUT you need to flip the requirements so instead of working with non-profits, your executives rub shoulders with the leading creators of the hybrid and low price/modest profit models that can scale to the next billion—your execs need to be their scaling partners.

3. Social entrepreneurs build sustainable models that become brand assets.

Claire Lyons, formerly of the PepsiCo Foundation and one of the designers of Pepsi Refresh, wisely advised CMOs to “stop propping up PR with dilutive dollars.” Money spent for marketing and PR campaigns that require an equivalent or greater investment to create the next set of impressions is a perpetually dilutive effort. To build a social brand asset, the model must build capacity to continue solving problems as the spend decreases or ends.

4. Your window into entrepreneurs who must “innovate to live” can be opened through social entrepreneurs.
You can meet and work with leaders who are solving complex problems for broad populations by combining community leadership, technology, social marketing, silo busting, policy levers, movement building and partnerships in ways your organization has never considered.

Global corporations whose new customer goals are in the neighborhood of a billion must find models that operate in the neighborhoods where the next few billion customers live.

Note: This post originally appeared on CSRWire.

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.

Naya_Jeevan

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.

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.

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.

Five Questions to Measure Commitment to CSR

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.

“Every Woman Every Child” Could Help Everyone


(UN Photo/Mark Garten)

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At UN Meetings (and the Clinton Global Initiative) last September I participated in the announcement of an expanded round of commitments for MDG 4 and MDG5. The Every Woman Every Child campaign is a massive set of commitments from countries, NGOs, corporations and others. (The original announcement can be found here, and progress on commitment announcements and partnerships is covered here.)

Headlines for the September 22nd announcement read:

UN Summit launches drive to save the lives of more than 16 million woman and children—Global Strategy on Women’s and Children’s Health Draws more than $40 Billion in Resources

After the announcement, I read the commitments document. This is compelling reading for anyone interested in this area, particularly those who work in this space.

I am not an expert in development, women’s health or healthcare in general. But our work with social enterprises does expose us repeatedly to organizations that are working on the ground to deliver services and achieve transformative outcomes. These social enterprises tend to be smaller and more focused than many of the large organizations making commitments.

Given the difference in size, it is easy to see why these smaller entities might be overlooked in a process that is seeking large and visible commitments. I want to suggest however that these enterprises may be a key to actually achieving the spend that needs to follow the announcements.

As I read the commitments—especially those made by countries—I frequently found what I will call “pick a number” commitments. An example: Zimbabwe is committing to train 3,000 midwives. Sounds simple. But there’s more to understand.

Social enterprise leaders often speak about development efforts that under perform. Many of the examples they use are siloed, “pick one visible problem and fix it” projects. Most social enterprises are using more integrative and holistic approaches, dealing with causes and connections in ways that solves underlying issues ahead of the symptoms.

At many of the conferences I have attended recently I have asked questions about the reality of commitments ostensibly totaling $40 billion. One of the more common answers I have heard is a bit cynical: Many people have said that the financial commitments, especially those generated by individual countries, will never be spent.

Part of me resonates with that stance because the total dollar numbers being allocated across the 16 million lives to be saved is difficult to justify given the outcomes relative to the investments.

It is at this fulcrum that social enterprises can be a significant resource to the entire ecosystem. But what is needed to leverage social enterprise and translate their innovations into outcomes is not yet in place. New models and modalities are needed to make that happen.

Here is a simple example of what I am talking about:

Healthpoint: Integrated clean water, healthcare and mobile innovation

Healthpoint, a ReachScale client, is operating in Punjab, India and beginning operations in the Philippines. They are a for-profit social enterprise that can attract social, impact, corporate and other investors to address the recognized problem of basic modern healthcare for rural populations. This innovative holistic solution combines clean water, telemedicine, diagnostics, generic drugs, ERMs and mobile-enabled health workers. The combination of services makes profit possible and enhanced interaction with essential healthcare partners.

The numbers work as follows: An integrated clinic, telemedicine, pharmacy and water system costs $40,000. Spending $1 billion of the $40 billion currently identified in the EWEC commitments on building these clinics would deploy 600 clinics in 40 countries with the capacity to do water, healthcare, and maternal and child health basics for a half billion people—2/3rds or more women and children.

For $25 million—just .000625 of $40 billion—a country can serve 3-6 million women and children (and men) in 600 villages. This is a persuasive argument that a countries leaders could get behind.

Healthpoint along with Lifespring Hospitals and the Royal New Zealand Plunket Society are social enterprises with transformative models. In our view, this is an approach that is worthy of attention.

Scale and The Triple Bottom Line

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.