Archive for the ‘ Advocate Action ’ Category

“Real” Sustainability: The New Disruptors

© Copyright 2010 CorbisCorporation

The CSRwire community recently participated in a Twitter chat in response to this query: “What will disrupt your year?” Leading experts gathered to discuss CSR and sustainability trends in 2014.

Over an hour’s time, a range of assumptions and common frames emerged. In spite of the challenge to explore the concept of disruption, please judge for yourself whether most of the responses were disruptive or best described as incremental.

Industry Ripe for Disruption

In their breakthrough publication, Competing for the Future, Hamel and Prahalad made the trenchant observation that when leaders of an industry come to share a common set of rules and frames about how things must operate, that industry is ripe for disruption.

In light of that insight, perhaps the more critical question to be asked is this: Does the world of corporate sustainability/social responsibility share common rules and frames that make it ripe for disruption? If the answer is yes, who will the disruptors of CSR be, and what will the disruptions look like?

Frames and assumptions reflect a particular viewpoint so let me say upfront that I am a champion of social innovation and view social enterprise as a key source for both solutions and sustainable disruptions. After four years of seeking both globally and cross sector candidates for the most innovative social enterprises with sustainable and scalable solutions, I am partial to frames and disruptions that move resources to these opportunities. That said, here are two frameworks that appear ripe for disruption.

Framework One: Risk Taking in Sustainability

As stated in my 2012 article, The New Triple Bottom Line:

Many companies fall victim to the equivalent of 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.

© Copyright 2013 CorbisCorporation

Risk Avoidance Frame

What does the risk avoidance frame look like?

Let’s ask the CEOs of a thousand companies as reported in the Accenture CEO Sustainability Survey and shared at the tri-annual UN Global Compact Leaders Summit:

CEOs see business caught in a cycle of “pilot paralysis” – individual, small-scale projects, programs and business units with an incremental impact on sustainability metrics – and while they see a role for business in promoting sustainable development, their responsibilities to the more traditional fundamentals of business success, and to the expectations of markets and stakeholders, are preventing greater scale, speed and impact.

Pilot paralysis risk avoidance is not limited to corporations. These characteristics are replicated across multiple organizations in the non-profit and foundation worlds as well. Many experts have discussed the impact of this lack of social risk taking. As I noted in Changing Business As Usual: Three Questions for Nonprofit & For-profit Innovation Leaders:

Lucy Bernholz, a Stanford professor speaking at the Global Philanthropy session, of the Council on Foundations Annual Conference last year, pointed out that while philanthropy has been managed by the rules of money in the past, in the next century it would be driven by the rules of data.

Clara Miller, CEO of FB Heron Foundation, questions the basic assumption of what to measure with the data. In The World Has Changed and So Must We, Miller describes the “rude awakening” of the post crash economy:

Decades of effort to bring the poor into the mainstream where a “healthy and growing labor market” would enable a steady income (and for some, even prosperity) have been shattered as “more Americans experience poverty today than at any time in the 53 years the Census Bureau has published such figures.”

In addition, Chris West, head of the Shell Foundation, told Skoll attendees last year that corporate foundation capital should be the most risk capable capital in the world. In practice however it is some of the most conservative.

Who Will the Disruptors Be?

What will the disruptors look like? The disruptors on the sustainable social business front are already at work. Typically they have won awards for their innovations a few years ago and are continuing to refine and improve their effectiveness. They have also been designing for scale and are now doing just that in one or two locations or countries.

Corporate Partners to Disruption

Innovation and scaling is attracting corporate “disruptor” partners, a few leaders who realize the immense opportunity to leverage a select pool of proven social enterprises to drive disruptive innovations. These innovations are able to align with their brand and engage their current and future customers.

It’s early and these disruptors are organizing to leverage these opportunities. The strongest tone from the top does not mention CSR – see Unilever’s Sustainable Living Plan. But leadership has created numerous experiments and test-at-scale spends in multiple countries (see Reel Gardening and Unilever in South Africa).

These commitments to sustainability have C-level executives meeting with founders of innovative social enterprises around the world and line of business leaders are breaking down silos and testing new models in Global South countries where most of the future growth is located (see Allianz-EFU and Naya Jeevan).

Scaling Up Disruptive Sustainable Models

Leaders are discovering the innovations in business modeling, technology application, asset utilization and resource efficiency at the base of the pyramid will not flow from their executives but are being developed by innovative leaders (and their future partners) who are already solving these challenges.

Disruptor investments in supply chain, marketing, CSR. philanthropy, etc., are concentrating on the most innovative disruptions, and innovation and scale leaders are shifting away from small grants and dilutive activities. By investing in the scaling of disruptive sustainable models, they can help create social brand assets that pay dividends to all stakeholders for decades to come.

Framework Two: Corporate Brands and Leadership Addressing the “Olympic” Challenges

The Olympic games demonstrate the power of focus in driving success in sports competitions. Early identification of talent, seeking the best technology, looking for innovative ways to train and finding the leaders to remove the roadblocks are all part of success. Success then attracts governments and global corporations to bring all manner of talent and resources to the table as well. BMW’s leading innovation on bobsled design for the United States is a just one example.

In the world of global social problem solving, scale is like an Olympic event. Unfortunately the way most companies approach global problem solving and scaling looks more like the bush league.

What will the disruptors look like?

Disruptors will ask different questions. To shift resources to scale will require recognition by leaders and resource holders that the current resource investment processes are not working. How often I am reminded of Einstein’s famous definition of insanity: Doing the same thing and expecting different results.

USLP_1

Five Ways to Know if Scaling Is Being Taken Seriously

So is scaling being taken seriously? Here are five ways to positively answer that question:

- Are resources focused on the most innovative and scalable solution to this challenge in the world?
- Is this solution already scaling where it was founded and is it moving towards sustainability in that environment?
- Will this solution add value to peoples’ lives and the supporting systems in ways that create jobs and income leading to virtuous cycles?
- Are the leaders guiding this solution already attracting partners, donors, investors and governments that want the solution to spread across a continent or the globe?
- Do leaders and partners have plans for several times growth increases over multiple years whose success would make them “household names.”

Creating the First Household Name in Social Enterprise

These are the questions that the disruptors are asking. They intend to disrupt by scaling in a way that can create the first household names in social enterprise solutions.

Disruptors will no longer focus on seed stage. Competitions, fellowships, mentoring programs, are only interesting if they further the scaling plans for participating social enterprises.

Disruptors know that pilots do not lead to scaling or sustainability. “Do more good” efforts that only help the people around a localized facility fall far short of the innovation and impact needed to solve real social challenges. Philanthropy efforts that spread funds across hundreds of small grants are non-scalers and non-starters.

These new disruptors are consolidating their efforts, risking real failure to reap real scale and investing in models and management teams that can absorb significant capital – and more importantly, their best talent and capabilities – as they go global.

Leveraging the Against Position: How Two Leaders Are Driving Sustainability

Against-position

Most articles work up to a conclusion, but the conclusion of this article is right up front, stated by Gavin Newsom, former San Francisco Mayor and current Lt. Governor of California, in his keynote address at the California Economic Summit: “You can’t continue to do what you’ve done and continue to get what you’ve gotten.”

As my last post pointed out, the results of the Accenture CEO Sustainability Survey were recently reported at the tri-annual UN Global Compact Leaders Summit in New York City. Included in that survey were quotes from CEOs expressing concern about the mediocre progress most corporations are making in addressing issues of sustainability. That lack of progress is causing CEOs across nations and industries to lose confidence.

From the survey:

CEOs see business caught in a cycle of “pilot paralysis” – individual, small-scale projects, programs and business units with an incremental impact on sustainability metrics – and while they see a role for business in promoting sustainable development, their responsibilities to the more traditional fundamentals of business success, and to the expectations of markets and stakeholders, are preventing greater scale, speed and impact.

Ending Pilot Paralysis Through SocEnt Innovation

We constantly advocate that global corporations can learn from social entrepreneurs in order to build business in emerging markets and improve the societies that in turn give them life, creating the virtuous cycle on which all success is predicated. Interest in this SocEnt innovation source revealed itself in 2012 when Social Entrepreneurship & Social Innovation: Not the Same Thing became the second most read blog post on Talkback.

Although that post dealt with the comparison of for-profit (or hybrid) social enterprises with non-profit social innovation, two of the key parameters from the article offer opportunities to innovate and drive sustainability for all organizations:

1. 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 Uncola 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.”

Social enterprise models have to operate in low resource environments, and they have to scale without big capital investments. These are two of several reasons why they must do the opposite. Several of the most profitable global scale successes have followed low fixed cost scaling. Google as the prime example through their data center in a container model – doing the opposite can happen in many different ways.

2. Buying Impact/Measuring Success

Jason Saul of Mission Measurement exhorts funders to stop thinking about giving to charities and shift to buying impact.

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.

© Copyright 2011 CorbisCorporation

The Against Position: Doing the Opposite—Hauling Assets

“My greatest weakness is that I have never run a local operation. My greatest strength is that I have never run a local operation,” said David Steiner, CEO of North America’s largest trash hauler, Waste Management, in his keynote speech at BSR.

Steiner outlined how the company faced increasing pressure a few years ago with the emphasis on low or zero waste. Many Waste Management executives felt that advocacy was an attack on their raison d’etre. Many chose fighting environmentalists as the way to execute the corporate reinvention that was required. A lack of vision was demonstrated by previous management, as they spent more of their time cooking the books than creating the recycling and renewable energy recipes that now power the company.

Taking the opposite approach in less than two decades, Waste Management has been transformed into the largest environmental solutions provider in North America, serving more than 20 million customers. In their own words, Waste Management is “committed to developing new waste solutions that can help communities and organizations achieve their green goals, including zero waste.”

According to Steiner, Waste Management produces more renewable energy than the entire U.S. solar industry and has converted 134 landfills into wildlife refuges.

The company’s future was transformed when they realized that billions of dollars in value were locked up inside their “collection and transfer vehicles” and begin to shift significant resources to realizing that value. Doing the opposite has also resulted in Waste Management being named to Ethisphere’s World’s Most Ethical Companies for six consecutive years. They will continue to “develop strategies to extract value from waste, which both minimizes our environmental impact and saves our customers money,” said Steiner as he accepted the most recent award.

Measuring Success: Make the World “Run Better”

Expanding SAP’s tag line from “Run Better” to “Make the World Run Better” did not begin in the marketing department. The beginning of the thinking is represented in this statement from a September 2010 interview with Peter Graf, named SAP’s first CSO (Chief Sustainability Officer) the previous year:

What is SAP’s sustainability strategy?

Simply stated we have a two-part strategy: First, become a role model for how a large company can address sustainability both by policy and principles, and by using technology. Second, enable our customers to address sustainability using our technology.

As we started to develop our own sustainability approach, we found that software tools weren’t very well-developed to gather and collect information as part of a business process. There were no links to common master data, no organized workflow and little built-in reporting standards. So we identified several different opportunities to create or improve existing tools. As a result we established our ‘enabler’ strategy to help customers use software to become more sustainable, and make it much easier to track and report progress, allowing for more time to focus on improvement.

This year SAP published its own integrated annual and sustainability report, putting the company on the cutting edge of sustainability reporting just three years after the 2010 report that experimented with transparency for the first time. It didn’t hurt that sustainability efforts saved SAP $285 million over a similar period.

As Peter Graf shared at BSR, the initial conversations around sustainability did not yield immediate resources to implement the full Global Reporting Initiative standards. “Not interested” was the more common stance. But Graf saw a different vision of the future. His insight was that no software company could help the world’s big companies “run better” if they could not show them how to run integrated-reporting more sustainably.

Fortunately SAP’s customers were seeing the same things. It came in pieces at first, in managing product safety, traceability and energy management. With a CSO in place, SAP had a focal point for role model awareness and shared their approach with their customers. As customers bought in, resources flowed, schedules were met and standards were adopted. Sustainably managing the business became an integral part of running better.

In Graf’s words:

On Monday we are publishing our very first integrated report, which means we do not report our sustainability performance separately from our annual report. Instead, we are creating one online experience that documents both our financial and non-financial performance in 2012. This allows us to explore the connections between our financial, environmental, and social performance. We see this as a big step in our journey to move from having a sustainability strategy to having a corporate strategy that is sustainable.

As Newsom pointed out, we can’t continue to do what we’ve done. Sustainability is a must, and these two leaders show how to shift, scale and drive corporate sustainability.

How Three Quiet, Seismic Shifts Are Changing the Social Enterprise and Social Innovation Landscape

© Copyright 2010 CorbisCorporation

A year ago, I participated in the Social Innovation Summit (SIS12) that Landmark Ventures, working with the UN, curates so well.

It was the interactions – and lack thereof – at SIS12 that led to my article, Social Entrepreneurship and Social Innovation: Not the Same Thing, the second most read post on CSRwire’s Talkback in 2012.

A couple of weeks ago, CSRwire and Triple Pundit cohosted a Twitter Chat with Unilever Chief Sustainability Officer Gail Klintworth on the progress and challenges in shifting consumer mindsets through Unilever’s Sustainable Living Plan, which attracted over 200 engaged attendees and generated millions of impressions – besides becoming a worldwide trending topic for the day.

The attention paid to my article and the sheer strength of the people who showed up to discuss one company’s sustainability plans on a social media platform that few people had even heard of three years ago, suggests a convergence of trends that could lead to seismic changes as corporate, social innovation and sustainability circles engage.

“What is the largest social enterprise in the world?” Professor Marty Anderson asks his Babson class filled with bright young entrepreneurs. “What firm provides free services globally to rich and poor that enables learning and commerce?”

The answer: Google.

At first there is surprise and then it is obvious. That this social enterprise is highly profitable is a stellar example of the ability to make money at scale when solving global challenges.

While this article won’t go into how thoroughly Marty covers low-fixed cost scaling and a range of entrepreneurship and other innovations that Google deploys around the world, the fact that Google demands that employees spend one day a week working on future solutions outside their scope of work suggests there are a lot of “blue ocean” opportunities still available.

Trend 1: All Business Will Become “Social/Commercial”

There is a long list of social/commercial businesses — Wikipedia, Ebay, Baidu — and they represent the future of business. In the words of Unilever CEO Paul Polman:

“We are finding out quite rapidly that to be successful long term we have to ask: what do we actually give to society to make it better? We’ve made it clear to the organization that it’s our business model, starting from the top.”

© Copyright 2010 CorbisCorporation
Trend 2: Competition to Collaboration

“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.“

This idea also expands to competition whose well known against position is collaboration. But can we speak of this as a new trend?

At the 2013 Skoll World Forum on Social Entrepreneurship, I reconnected with Ron Schultz who was carrying his new book, Creating Good Work. I immediately handed him £20 so I could read it on the flight back.

The team at Second Muse who wrote Chapter 11 of Creating Good Work makes a compelling case for this “new trend,” something reflected in the comments of leaders at virtually every conference I attend. Here’s an excerpt from the chapter:

The “culture of contest” that results from this is becoming increasingly maladaptive in an age of ever-increasing social and ecological interdependence. These maladaptive consequences can be seen in the growing disparities of wealth and poverty within and between most nation-states, and in the social conflict and instability that results. These consequences can also be seen in the mounting ecological crises that stem from a global race to liquidate the earth’s ecological capital in the name of self-interested, short-term, material acquisition. And collaboration and alienationfinally, these consequences can be seen in the growing epidemic of alienation, depression, and anomy that characterize the most competitive societies today.

In order to move beyond the prevailing culture of contest and create a more just and sustainable social order, we need to critically reexamine the concept of competition itself. Competition, as the term is widely used today, tends to conflate two distinct sets of ideas that need to be disentangled. When people use the word “competition,” they are often referring, simultaneously, to (a) the pursuit of excellence, innovation, and the establishment and productivity within a market system; and (b) the self-interested pursuit of mutually exclusive gains, with resultant winners and losers…

Once we disaggregate conventional notions of competition in this way, we can see that the most valuable aspects of “competition”- the pursuit of excellence, innovation, and productivity-are not contingent on self-interested behaviors, and they need not result in winners or losers. On the contrary, they assume their most mature form within a framework of cooperation and mutual gains-or a framework of collaboration.

This is a new framework for entrepreneurship. The broad diffusion of this reality that will take place over the next decade will create a dramatic systemic change.

© Copyright 2012 CorbisCorporation
Trend 3: Unlocking the Entrepreneurial Human Spirit

At the World Health Care Congress, I had the privilege of moderating a panel on the rise of social business models in global healthcare featuring Nobel Prize innovator Mohammed Yunus and Kaiser Permanente CEO George Halvorson.

No one has done more to call on leaders to expand their vision of “Progress Out of Poverty” than Yunus. “Whenever I found a problem, I started a business to solve it,” he has said repeatedly. The $30 billion microfinance markets grew from that “I started a business to solve it” premise and the understanding that poor women are some of the world’s best entrepreneurs.

Grameen Bank started by lending $27 to 42 of these new entrepreneurs.

Now it goes into the villages of Bangladesh each week to imbue courage and skill and collect ripple effect payments from 800 million borrowers and bank owners who hold $1.5 billion in entrepreneurial assets. Grameen Bank is well known, but social enterprise leaders everywhere are solving complex problems with broad populations by combining community leadership, technology, social marketing, silo busting, policy levers, movement building and partnerships often in ways that standard for-profit organizations have never considered.

Goonj in India is a great example of unlocking the entrepreneurial human spirit. As founder Anshu Gupta explained to a rapt audience of us at Babson, “Cloth for Work” unlocks the human spirit with dignity in three ways:

It recognizes the talent and time of each individual and community by asking them to select and design solutions that they will create through hard work.

Villagers are paid for their work in cloth and clothing, maintaining their dignity in the process.

Goonj is a global voice for clothing including the taboo subject of sanitary pads, calling attention to the problem while encouraging replication of the Goonj model.

Microfinance has opened up entrepreneurship for a couple of billion who otherwise would be in the depths of poverty. Instead, their courage, skill and hard work have made them entrepreneurs. Goonj and multiple other models need to be scaled globally to add their unique impacts to the global economy. ReachScale works with partners like Babson to design an important next step: invite multiple stakeholders to design and build scaling engines that streamline growth commitments and reduce risks so portfolios of “most innovative” social enterprises can be scaled.

However, as conversations continue to indicate, many unique challenges and opportunities for engaging the entrepreneurial human spirit in the U.S. remain. Social innovators and entrepreneurs from New Orleans to Detroit and from Asheville to Cleveland, are hard at work to leverage these trends and overcome obstacles.

Several of these were addressed in Changing Business as Usual: 3 Questions for Non-profit and For-profit Innovation Leaders. I will address more in future columns.

Changing Business As Usual: 3 Questions for Non-profit & For-profit Innovation Leaders

© Copyright 2013 CorbisCorporation

I returned home to Boston after a 10 day conference “intensive” – the Council on Foundations in Chicago, the World Healthcare Congress in Washington, D.C. and the Skoll World Forum on Social Entrepreneurship in Oxford – looking forward to a Patriot’s Day holiday to recover and enjoy a beloved Boston tradition, the Marathon.

Of course, that fateful day did not unfold as expected. During the week of grief and being asked to shelter in place that followed, I thought a lot about quiet heroes who run toward a blast, not away.

The suddenness and unexpectedness of that scene in Boston and the coming together of skill and courage to address life-threatening outcomes raised questions about the slow moving challenges where we need skill and courage to come together, many of which were showcased in Chicago, D.C. and Oxford.

From Money to Data: A Rude Awakening

Sessions with leaders from global and corporate foundations explored new avenues of innovation and money collaboration to yield better outcomes. Lucy Bernholz, a Stanford professor speaking at the Global Philanthropy session, pointed out that while philanthropy has been managed by the rules of money in the past, in the next century it would be driven by the rules of data.

As I listened to Lucy Bernholz, I found myself thinking about a provocative piece from another leader in the foundation ecosystem, Clara Miller, which questions the basic assumption of what to measure with the data. In The World has Changed and So Must We, Miller describes the “rude awakening” of the post crash economy:

Decades of effort to bring the poor into the mainstream where “a healthy and growing labor market” would enable a steady income (and for some, even prosperity) have been shattered as “more Americans experience poverty today than at any time in the 53 years the Census Bureau has published such figures.”

Questioning the assumptions that got us here and describing the scene from her vantage point, Miller suggests that “business as usual” must change:

If our field is to address a more fundamental set of issues, our tactics must change, broadening our approach to go beyond a traditional set of activities. Admittedly, this emerging approach lacks some of the theoretical certainty of the dominant view, which sees access and ownership strategies as reliable steps into mainstream opportunity.

Yet given the reality that access strategies have been helpful but not adequate, we must be intentionally experimental. Only by rigorously questioning and transcending our own cherished assumptions will we progress.

Philanthropy, Impact Investing & Social Enterprise: Three Questions

In the spirit of the provocative visions and admonitions of Clara Miller and Lucy Bernholz, the following questions surfaced from the many viewpoints heard at these conferences regarding philanthropy, impact investing, and social enterprise.

(Note: The royal “we” in each question below encompasses philanthropy, business, non-profit, investment, government, multi-lateral organizations, and most importantly, the communities and leaders where change is desired.)

1. How can we come together–with skill and courage–to get beyond the for-profit vs. non-profit dichotomy that often prevents even envisioning sustainable solutions?

At the Council Global session, social enterprise was featured as a “big idea” alongside “shifting money rules to data rules.” Social entrepreneurs are applying business models to solve social challenges, and they represent some of the most intentionally experimental leaders in the world. The rich range of hybrid, leveraged, and social business models offer multiple paths to move from non-profit to sustainable.

What is lacking: cross sector commitment to engage, evaluate, invest and scale the most innovative and sustainable models. The need for this shift and this commitment is reinforced each time a Clara Miller says, “We plan to invest 100 percent of our endowment, as well as other forms of capital, for mission.” These are some of the models that can make mission sustainable.

The separation of non-profit church and for-profit state creates significant hurdles to sustainable solutions, however. For example, NGO Source, just announced in Chicago, enables U.S. Foundations to provide unrestricted grants to organizations in other countries that have been qualified as valid U.S. non-profit equivalents. The dedicated team from TechSoup Global and the Council on Foundations spent five years working on this breakthrough.

Yet, NGO Source simply extends U.S.-centric money rules to the global landscape.

The near term cost is the lost competition of non-profit programs with more sustainable models. IRS rules of money favor less sustainable and scalable models. The much larger cost is the massive loss of innovation that could come from engaging community, philanthropy, non-profit, social enterprise, business and government leaders across global north and south opportunities to invent and scale sustainable solutions.

2. How can we collaborate to scale “best solutions” now while advocating and changing the rules so that data (and sustainable models) are more influential in allocating resources to global, country and community engines of economic development?

The knowledge silos and non-profit money rules limit our innovation visions. Simple questions like the difference between social innovation and social entrepreneurship are not well understood. Even organizations who understand the distinctions and know proven innovators who could scale, continue to over-invest in adding new pilots and enterprises and underinvest in scaling these proven winners—begging the question: Where Will All the “Household Names” in Social Enterprise Come From?

The value of getting to scale was clearly discussed at the World Healthcare Congress. I had the privilege of moderating a panel on the rise of social business models in global health care, which featured Nobel Prize innovator Mohammed Yunus and Kaiser Permanente CEO George Halvorson.

No one has done more to call on leaders to expand their vision of “Progress Out of Poverty” than Yunus. “Whenever I found a problem, I started a business to solve it,” he has said repeatedly. The $30 billion micro-finance markets grew from that “I started a business to solve it” premise and the understanding that poor women are some of the world’s best entrepreneurs.

Grameen Bank, started by lending $27 to 42 of these entrepreneurs. Now it goes into the villages of Bangladesh each week to imbue courage and skill and collect payments from 800 million borrowers and bank owners who hold $1.5 billion in entrepreneurial assets. When Yunus encourages the sons and daughters of these entrepreneurs to invent their own jobs, he uses the example of their heritage as expressed in the simple statement:

Of course you can do it. Your mother owns a bank.

And George Halvorson leads one of the most innovative healthcare delivery companies in the U.S. and created a similar “Aha moment” when he announced that Kaiser Permanente is a social business. Kaiser’s unique model of prepaid healthcare ensures coincident incentives to keep its clients healthy with clients paying a premium for their healthcare, not for individual procedures.

When clients stay healthy, Kaiser has more money to invest in improved services. For three years, Halvorson has written a weekly letter to his entire staff celebrating each achievement in keeping clients healthy.

3: How can we engage and collaborate with innovators and entrepreneurs in every sphere of influence to leverage the entrepreneurial human spirit?

We see from Mohammed Yunus’ example that successful leaders and models are those capable of tapping the entrepreneurial human spirit. When people who must “innovate to live” (immigrants, for example) engage with leaders who are motivated to share these innovations, the potential is enormous. Social entrepreneurs demonstrate that these stretch goals are achievable and could result in scale and profit.

These leaders are solving complex problems for broad populations by combining community leadership, technology, social marketing, silo busting, policy levers, movement building and partnerships often in ways that standard for-profit organizations have never considered.

An important next step: to invite multiple stakeholders to design and build scaling engines that streamline scale commitments and reduce risks so portfolios of “most innovative” social enterprises can be scaled.

As Thomas Freidman recommended, we need a radical middle ground for revenue and for sustainable business that leverages the best of both non-profit and for-profit thinking. Social enterprise shows us multiple pathways to move towards sustainability. The intentional experimentation advocated by Clara Miller will empower new leaders, policies, partnerships and models tailored to our underutilized human and economic assets.

We simply must adopt the best examples and never underestimate what talented entrepreneurs can do, no matter where we find them.

© Copyright 2010 CorbisCorporation

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.

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.

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.

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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.

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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.

Summing Up World Water Week: Making Way For Disruptive Social Innovation

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The theme for World Water Week 2012, Water and Food Security, was a great step forward in cross sector cooperation. And as hurricane Isaac descended on New Orleans seven years after Katrina’s devastation, the importance of collaboration was highlighted in the new “Dutch treated” levee system that was ready for any onslaught.

Creeping Challenges & Incremental Responses

While hurricanes are concentrated disasters, the food and water/access and conservation issues are more of the creeping variety. Even when droughts lead to shortages and starvation, symptoms get treated while the long-term trends are ignored — such as climate change — that will exacerbate symptoms slowly and inevitably.

Cross sector solutions are underutilized — and that creates other challenges.

An example in food security is two adjacent problems. Creeping obesity in the U.S. can be juxtaposed with the fact that 20 to 30 percent of food grown, produced and transported is not actually consumed. Incremental solutions will not address synergies between those distinct but related problems.

Congratulations are in order to World Water Week organizers for first time invitations to the Food and Agriculture Organization (FAO) and the Consultative Group on International Agricultural Research (CGIAR). But it does beg the question of how 20 years of World Water Week conferences were unable to break through those silos before now.

In fact, the deadening combination of silos and incrementalism is a serious challenge throughout global development, corporate responsibility and the overall global resource crunch and World Water Week’s Food Security collaboration sets a good example that will lead to the United Nations International Year of Water Cooperation in 2013.

Disrupting Silos & Incrementalism

While it may be too early to predict which disruptive innovations will surface from this water and food security collaboration, two questions might help clarify how to proceed with the 2013 Year of Water Cooperation and beyond:

Are there any large untapped sources of disruptive innovation?
In order to leverage these sources, how can existing leaders seek out and open up to collaboration and disruption?
While there are many potential sources, let me highlight just one.

One of the most underutilized sources is social enterprise. A few social enterprise leaders were present in Stockholm including Water for People and Water.org. Many more should be—because they bring ideas and innovations that are being tested in the real world with know-how and money that comes from outside the government and corporate economic engines.

Social Entrepreneurs: Innovation & Solutions

No matter what country or industry you are focused on, there is much to learn from social entrepreneurs and their early adopter scaling partners. As the water, food and energy sectors seek disruptive innovations, here are five examples of social enterprises that can enhance partnerships.

1. Cross Sector Visionaries: Healthpoint Services

Billions have been spent on water and billions on health care. For the first time in 2009, an organization built a for-profit model for rural villages, which creatively combined both of these donor-dominant approaches. When the government of Punjab, India, was shown four cash flow positive water and health care clinics in early 2011, they committed to build the structures to house over 100 life-giving water points.

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2. Vertical Value Creators: GADCO

In 2009, a London investment banker and a Ghanian agriculture innovator combined forces to build a for-profit, small holder Ag social enterprise. Two years later GADCO is the largest domestic rice Social entrepreneurprovider in Ghana.

By expanding the scope of the project to build an organization that can provide branded consumer products, GADCO captures additional margins and passes that back to the small holder farmers. This innovation captured the attention of development finance organizations like USAID as well as GADCO’s first significant investor, Seattle-based Summit Partners, a traditional venture capital firm.

3. Engagement & Finance Innovations: Water for People and Water.org

The mantra “Everyone Forever” and innovative solutions like Flow have drawn the Skoll Foundation and other supporters to Water for People. Water.org is the leading innovator in merging microfinance and water and sanitation innovation. Pepsi-cola’s work scaling Water.org was one reason cited at World Water Week for their receipt of the Stockholm industry Water Award.

4. Leader Driven Cross Continent Collaboration: Blue Planet Network

Starting with water and sanitation projects from developing regions of India or Africa, Blue Planet members improve the projects through voluntary advisory and vetting services resulting in a quality rating and likely success. The Network matches these quality projects with donors who want to fund testing for new solutions and scaling of proven solutions.

5. Building Social Enterprise into Global Government Innovation: Akvo and Aqua for All Foundation

The Netherlands is a prime example of social enterprise adoption by an entire country’s water and sanitation leadership. From the innovative partnership between Netherland’s water innovator Akvo (developing the open version of Flow from Water for People) to the government funded Aqua for All Foundation that predominantly funds programs with social enterprise scaling models, we have a great example of thoughtful integration to enhance cooperation.

And let us not forget to thank the Netherlands for the “Dutch-treated” levees in New Orleans.

The collaborations listed above, including Healthpoint and the Punjab state, GADCO and Summit Partners, Water.org and Pepsi, are just a few examples of partnerships that grew out of the search for more scalable, sustainable models. And to open up more of these opportunities, leaders will need to do three things:

1. Seek innovation and scale as part of every partnership design — an exclusively donor driven model is not scalable,

2. Learn by doing: Adopt the key innovation and scale levers that social enterprises offer, and

3. Concentrate resources and leadership around the disruptive, scalable innovations.

The 2013 Year of Water Cooperation presents opportunities galore to follow these leadership examples. Every partnership can start immediately by declaring today the first day of your Year of Cooperation. Because disruptive innovations come when coalitions engage to scale the best ideas.

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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.