New York Stories

Manhattan is a city filled with ten million stories, and I particularly felt that vibrancy last week. The UN was in session and the Clinton Global Initiative (CGI) was also under way. Together these two organizations represent significant horsepower on behalf of the disadvantaged of the world.

At the UN’s Inclusive Finance: A Path to the MDGs luncheon, Hilary Clinton and the President of Honduras announced a program which, if adopted globally, could create a new source of pro-poor loans for everything from education to housing improvements in slums. The previous day at the CGI, Hilary led the charge with the Global Alliance for Clean Cookstoves along with a bevy of partners. (That alliance requires a separate discussion which I hope to write about at a later point in time.)

Both of these efforts represent improved ways of solving social challenges. They incorporate government, NGOs and the private sector. They utilize disruptive innovations that have surfaced from a variety of sources but especially from social entrepreneurs and/or social innovations that have been created by combining private sector models with Global South entrepreneurship. Many of these ventures are using income derived from the Global North to help those less fortunate in the Global South. More examples will continue to appear as Global North companies and governments seek to achieve disruptive innovation in the Global South.

U. S. Under Secretary of State Maria Otero outlined the components needed to support more rapid deployment of these efforts:

1- Seek Investments from Multiple Sources. On display at SOCAP in San Francisco next week will be an entire ecosystem building around profitable problem solving. This ecosystem includes philanthropists and foundations joining forces with for profit social entrepreneurs.

2- Innovation Sourcing (as outlined above.)

3- Scaling Platforms. The platforms needed are technological as well as new models built on existing assets. These include combinations of banking, remittance and microfinance assets and can be used to create a pro-poor engine to attack poverty. Affordable Housing Institute is a good example of that approach, embedding slum upgrading banks into innovative microfinance institutions (MFIs) to convert informal housing to formal housing throughout the Global South.

4- Policy Initiatives. Identify what policy changes are needed to remove road blocks and/or leverage incentives that relocate talent and capital into sectors that have demonstrated platform innovation potential. The Global Alliance for Clean Cookstoves is in the process of doing that now.

5- Rigorous Analysis and Measurement.

6- Leadership. The kind of leadership needed is open to innovation from any partner, at any moment, and is obsessive about migrating innovation to everyone and every life, globally.

These guidelines are already informing new innovations that have surfaced in countless conversations we have had recently. We will have more to say about many of these ideas in the future.

Edgestorming and The Power of Pull

Edges, seen and unseen; conversations for possibility and a sense of the open view…(Looking across the Canadian Rockies in Waterton Lakes National Park, Canada)

Tomorrow I’ll be joining several hundred individuals to discuss what The Economist has designated the Ideas Economy. As I look forward to the conversations, I am also stopping to take note of how much has been happening to me and to my organization over the last few months.

Perhaps you too have felt a surge in conversations that are full of possibility and synergies.

In March we launched this ReachScale site and outlined our model for the work we do. The first step is envisioning, which is described on a tab at the top of this page:

Envisioning is the first step in a four phase process that changes the way good is grown. This step is about looking at resources, opportunities, challenges, processes and talent with a new set of eyes. “Unlearning” is the term used by Hamel and Prahalad in their influential book, Competing for the Future. Think of brainstorming with the edges of your social network; then invite your edges to invite their edges.

New eyes, unlearning and edgestorming often lead to a search party. Seek out people who are thought catalysts–the ones who can experiment instead of just plan, ask questions instead of just answer. Then search for underutilized resources, challenges that connect across sectors and ecosystems, networks with common action agendas or purposes, and create something with hybrid vigor.

So far envisioning has exceeded my expectations and I want to thank all the corporate and social enterprise leaders that have offered their time and ideas to invigorate the process.

Seeking the “best of best” social innovations and the companies who are their natural scaling partners means that every conversation is relevant. The pure power that comes from hearing each social innovation as a viable solution and each company’s aspirations as viable opportunities has been transformative.

A few months ago I ordered the recent (published in April 2010) book from John Hagel and John Seely Brown, The Power of Pull. A few minutes into the read, on page 16, the following confirmation surfaced:

Meeting new people and finding new ideas can be fun in and of themselves. But attraction—and the serendipity that arises from it—takes on an increasing value as we look to attract and retain the attention of people who exist at the edge of our areas of interest and to increase the probability of serendipitous encounters at the most relevant times. Edges are the places that become fertile ground for innovation because they spawn significant new unmet needs and unexploited capabilities and attract people who are risk takers. Edges therefore become significant drivers of knowledge creation and economic growth, challenging and eventually transforming traditional arrangements and approaches.

As an advocate for transforming the traditional arrangements and approaches in the marketing activities of global companies, I see the social enterprise leaders as one of the most fruitful edges that companies need to explore. Social entrepreneurs understand attraction (as Hagel and Seely Brown describe it) intuitively. Their “chutzpah” in seeking to meet those unmet needs and asking others to contribute to their genius transforms arrangements. Social entrepreneurs embody experimentation and insightful attraction, and as a result they are some of the most interesting edge thinkers that corporate leaders can engage with to increase innovation.

The Power of Pull provides a lucid study of the concepts, but what I’m suggesting is that you can transform your own ability to innovate by seeking those social entrepreneur edges in every business in your portfolio. You’ll find many suggestions at this site on how to do that, but you can also refer to the Harvard Business Review as well where a recent article describes GE’s efforts to disrupt its existing business model:

Emerging markets are becoming centers of innovation in fields like low-cost health-care devices, carbon sequestration, solar and wind power, biofuels, distributed power generation, batteries, water desalination, microfinance, electric cars, and even low cost homes. 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.

Sometimes the synergies are just what you need to keep things moving forward.

Step by Step

Global wedding in Charleston, West Virginia: Mona Ramakrishnan Iyer and Clayton Barlow-Wilcox

Last week was a week full of ideas and visions of the future that isn’t here yet but I believe can be someday. The insights came from many sources but the most significant inspiration was the merger of families at a global wedding in, of all places, Charleston, West Virginia.

Our contribution was Clayton, a young man whose background is an unexpected integration of American frontier religious stock and the socially liberal values of the eastern seaboard. His new wife Mona is a blend of the two extraordinary cultural traditions she inherited from dual doctor parents who came from India and Korea. Raised in West Virginia, she is the face of a multicultural future world.

We spent the weekend with 500 wedding celebrants. Guests came from every continent, some speaking English and some not. But the language barriers were breached as we all came together around a common cause. I can’t imagine a better group of people to help me send my son and his wife off into the next chapter of their lives and the future world they will inhabit.

In recent posts I have written about Healthpoint and the Affordable Housing Institute, both examples of a similar kind of hybrid vigor and both doing transformative work in India. Their efforts have the potential to globalize in the next half decade. These social enterprises are merging the innovations resulting from leaders and countries solving global problems and permanently changing the way people live.

Those innovations are not possible without the dedication and sacrifices of people who are inspired by a future that, though difficult to see at times, is possible to envision. David Smith and Al Hammond, the visionaries behind AHI and Healthpoint, are from my boomer generation but they represent values that are very different from those that resulted in the current global economic crisis. They are global social innovation leaders and they will participate in leading us to that envisioned future.

Clayton and Mona come from the new generation. While they are not social entrepreneurs themselves, they represent a future where social innovation and careers in business and law will mix together seamlessly. Whether you grew up in Seoul or Gujarat or West Virginia, you can participate in this shift in thinking that is happening everywhere now.

As I watched our new Korean friends navigate a weekend of wedding events without any knowledge of English, I could see how they found other ways to connect and participate. I have seen that same “beyond language” approach at many of the global conferences I have attended. At times like these I think of the inspiring collection of essays, The Impossible Will Take a Little While. As demonstrated in that book, the future is achieved step by step. Some of those steps seem tiny. You just need to take lots of them, one after another.

And then every once in a while you have that extraordinary experience of looking around you and realizing that those distant goals are a lot closer than you might have supposed.

Social Innovation Funding: Where are the Global Companies?

On August 12 The Economist published an article about social innovation. Focusing on the
the Social Innovation Fund (SIF) support for social innovation, the piece led me to imagine how this significant event might encourage companies to take a closer look at including social innovation in their innovation and investment models. It also parallels a lot of the writing I have been posting here over the last few months.

Here are four examples of where our thinking comes together and, in some cases, diverges:

1. The Economist:

Policymakers on both sides of the Atlantic are keen on a new approach to alleviating society’s troubles. On July 22nd Barack Obama’s administration listed the first 11 investments by its new Social Innovation Fund (SIF). About $50m of public money, more than matched by $74m from philanthropic foundations, will be given to some of America’s most successful non-profit organisations, in order to expand their work in health care, in creating jobs and in supporting young people.

In several earlier posts here (such as Problem Size, Innovation and Scale) I have approached the issue of tackling big, intractable problems. The complexity inherent in addressing these problems garners more attention from governments and from thought leaders such as the Economist, and it also encourages new forms of innovation, collaboration and the expansion of ecosystems where participants are willing to contribute “wisdom, work and dollars.”

2. The Economist:

The idea behind social entrepreneurship is that fresh, businesslike ideas will bring about a productivity miracle in the “social sector” (public services plus charity) similar to the one that began in business in the 1990s. Already, a growing number of social entrepreneurs have made a mark. The best known is probably Muhammad Yunus, the Bangladeshi founder of Grameen, a microfinance bank, and winner of a Nobel peace prize. Another prominent example is Wendy Kopp, the founder of Teach for America, which puts thousands of recent graduates from leading universities to work as teachers in some of the country’s worst schools.

Teach for America is an example I often use to illustrate the lost opportunity when companies do not step up to an opportunity to make measurable progress in solving a significant problem. See the post, Largest Strategic Branding Error Ever?

3. The Economist:

However, so far the enthusiasm for social entrepreneurship has run ahead of its effects. The problem has not been a lack of good ideas (even if plenty of people who call themselves social entrepreneurs are in truth conventional charity workers). Innovative projects have ameliorated seemingly hopeless social troubles, for instance by reducing rates of reoffending by former prisoners or by helping children from the rougher parts of American cities to graduate from college.

The problem is instead one of speed and scale. Successful innovations have spread only slowly, if at all. In business, entrepreneurial firms that do well grow fast; but social entrepreneurship does not yet have a Microsoft or a Google. Policymakers hope that with encouragement from the state social entrepreneurs’ best ideas can be spread faster and wider.

One of the greatest opportunities going forward is persuading global companies that solving global problems is the best possible form of marketing. These efforts will be aimed at for profit ventures as well as those solutions that offer a strong reputational affiliation. Reassigning 2% of the global marketing budgets of large companies could quadruple philanthropic funding from companies as well as motivating them to add their wisdom and their work.

Adding wisdom and work can transform some problems from money losers to money makers, bringing attention from both impact investors and corporate investors. For example, Healthpoint is an innovative organization working on the delivery of water and basic healthcare to rural India. The approach Healthpoint is taking is profitable, sustainable and transformative. As these new models prove themselves, the most innovative companies will join in early and eventually result in the internal social-investment groups I have mentioned in earlier posts.

From Problem Size, Innovation and Scale:

“In the future: Much in the way M&A groups are used today to scour the horizon for profitable acquisitions, successful future global companies will use internal social-investment groups to find and scale the most innovative approaches to solve the biggest global challenges. The current trend of sponsoring business plan competitions – which provide only a pittance of what these innovative ideas need to actually scale – will be replaced by whole teams inside and outside companies that can build on the value creation from solving global problems.

If you are a corporate leader and this sounds totally new to you, then you may want to do some catch-up.”

For more on this topic, see Road Work: Be Aware, or Fall Behind.

4. The Economist:

Politicians’ interest in social innovation has been sharpened by the rapid deterioration of governments’ finances. Even sustaining today’s public services out of taxes alone looks impossible. Fresh ideas that promise as much, or more, for less are welcome. “The silver lining in any economic crisis is that it can force government to take necessary steps that, in more comfortable times, would fall victim to inertia,” explains New York’s mayor, Michael Bloomberg in a foreword to a new book, “The Power of Social Innovation”…Its author, Stephen Goldsmith, is a Harvard professor, but his insights come from experience. As Republican mayor of Indianapolis, he won a reputation as a leader of a new breed of reform-minded American city bosses….

Mr Goldsmith says that society is on the threshold of the fourth stage of how it addresses its thorniest problems. In stage one, at the start of the 20th century, caring for people was largely left to families and charities. In the second stage, marked by the welfare state in Britain and the Great Society in America, the government took on the job of ending poverty. Private efforts were largely crowded out. In stage three the state tried to foster partnerships with the private sector through competitive outsourcing, but although this sometimes made a big difference (as in Indianapolis), too often the partnerships were too prescriptive and highly focused on cost-cutting. In the fourth stage government will tap the ability of the private sector, for-profit and non-profit, to deliver “disruptive, transformative innovation”.

Since most corporate leaders have not been involved, they will see these four stages as foreign territory. In reality the fourth stage is the source of the innovations that they have invested billions to create but have made only modest progress in realizing. I believe their vision and their visualization are too narrow. The learnings, ideas, tests and collaboration partners that they need are running ahead of them and hoping that they get their act together and start following, so that they can be real leaders soon.

For more on this topic, see Innovation and Scale.

Problem Size, Innovation and Scale

Polynesian seafaring “wayfinders” used devices like this to navigate the vast Pacific, a tool that takes into consideration the location of islands, sea currents, wave patterns and astronomical data. Solving complex problems, like sea navigation, doesn’t happen with singular, linear approaches. (On display at the Museum of Fine Arts, Boston Massachusetts)

When the challenge of poverty is viewed from the standpoint of the individual, government and NGO efforts to solve poverty on a grand scale look remarkably narrow-minded or, more accurately, narrow-visioned – they focus on what is easy for the funder to deliver rather than what is an integrated solution for the recipient. A common example is rural health-care delivery efforts that don’t deal with clean water: what benefit is there of getting well if the next drink you take makes you sick again?

Those silo approaches are doomed to fail, so strategic social entrepreneurs are creating braided solutions. As my previous post discussed, they are leveraging (1) the pervasiveness of the entrepreneur, (2) new delivery innovations, (3) new ways to collaborate, and (4) the power of scale and innovation to create virtuous cycles.

A key enabler for these new “big problem” social entrepreneurs is the presence of an already on the ground “mission entrepreneurial entity” or MEEs, a local social enterprise. (Click here for more on MEEs, a term introduced by the Affordable Housing Institute.) MEEs cut across the silos and mitigate against non-responsiveness by government and surrogate NGOs by organizing and advocating at the same time. Most importantly, they insure that approaches are tested and structured to deal with the local challenges. (Think of the population in India who refused to relocate from their neighborhood on a toxic waste dump to the safety of a high rise.)

The changes have to occur in the local environment, and MEEs are farther along on the learning curve in working with governments and NGOs to create solutions. As collaborators from outside the MEE’s world, governments and donors/ social investors need to bring insights into how to test the four approaches identified above. The best results are achieved when the learning environment integrates knowledge from on-the-ground operations as well as external experts.

When problem resolution is viewed from this perspective, certain things look very different. For social investors, bigger problems are more worth tackling, because they have:

1-Availability of existing investing systems and business channels that can be repurposed to address these large scale problems. It will be fruitful to use the world’s investment infrastructure to augment impact investing.

2-MEEs that possess significant relationships, skills and access to entrepreneurs. Just like levering the investment platform for social investment, we can use existing entities to launch new combined initiatives. For example, the microfinance infrastructure built in the last few decades can expand to address slum upgrading, cleaner cooking/energy and other related problems.

Problem size can also be leveraged in other ways to drive innovation and to attract talent and resources. Here are two examples:

1-Happening now: The millennial generation is creating an explosion in small collaborative organizations. These groups are populated with “digital natives” who refuse to look at problems as intractable. L3Cs, B Corporations and other new business forms are expressions of the Millennials’ desire to formally integrate social impact alongside profit as a business goal.

2- In the future: Much in the way M&A groups are used today to scour the horizon for profitable acquisitions, successful future global companies will use internal social-investment groups to find and scale the most innovative approaches to solve the biggest global challenges. The current trend of sponsoring business plan competitions – which provide only a pittance of what these innovative ideas need to actually scale – will be replaced by whole teams inside and outside companies that can build on the value creation from solving global problems.

These changes and others are transforming every aspect of global problem resolution. More to come in future posts.

Innovation and Scale

Sometimes the best place to look for something new is in the margins between large existing forms.

Innovation and scale are two concepts that are sought after by most for profit organizations and by many non profits and social enterprises.

The for profit world has spent five or more decades scaling their operations by working down the learning curve. We all know what that cure looks like—it gets flat when you reach high volume output, and most manufactured products have been at high volumes for a while. They get scale through big investments in automation, and when that isn’t enough they outsource functions to get scale in services like human resources and information systems. In this scenario, it is harder to squeeze out that next increment of savings and innovation cycles are shorter. All in all, you get less bang from those innovation bucks.

So is social innovation similar? Is it only possible to win if you scale? And does scale eventually level with incremental investment yielding smaller and smaller value increases?

Here are four fundamental differences that can make social innovation respond differently to scale and perform well as scale increases. Not all social enterprises embody all these features, but the most scalable ones do.

1. Social innovation leverages more entrepreneurs in creating new value.

In the for profit world, there are entrepreneurs and there are those that follow. In the social world, many of the value chains are in fact populated by entrepreneurs throughout the chain.

Microfinance is the obvious example. Muhammad Yunus is one of several master entrepreneurs. Every MFI contains entrepreneurs and most of the loan recipients are entrepreneurs as well. The innovations at the end of the chain create value because there is so much capacity to improve–increments are big in these situations and gains go directly to the entrepreneurs for basic needs.

2. Innovation in the for profit world tends to focus on productizing. Standards are set, experiences are defined, repeatability is sought. The consumer uses the same product or service as others in the market.

Social innovation requires productization as well but only up to a point. And the most interesting social innovations often require significant innovation at the delivery point to create something tailored to each client’s experience.

Teach of America does a lot to productize the preparing of talented young people to teach. However once in the classroom, there is ample room for innovation and ample necessity. Each student’s decision to take the Teach for America job is unique as well, and it creates repeatable but unique wins for Teach for America that are talked about extensively.

3. In the for profit sector the competition vs collaboration trade off leans heavily in the compete direction.

In the social sector the most interesting scale opportunities lean in favor of collaboration. Often the most scalable social enterprises are collaborating with existing social and for profit value chains to create new offerings and innovations.

Self-help pioneered lending in poor urban neighborhoods and then scaled by partnering with Bank of America and other large institutions.

4. Innovation and scale are often trade offs in the for profit world. As we standardize and productize to increase volume, the operation becomes less flexible and innovative.

The most interesting social enterprises see innovation and scale as virtuous reinforcing systems.

Grameen and Acumen did not try to own microfinance. Instead they disseminated microfinance knowledge and encouraged other players to play. This dissemination approach enabled the ecosystems to scale to $30 billion plus as the attraction factor drew medium and large organizations with plenty of incentives to invest, innovate and grow.

Making CSR “Strategic Reviews” Strategic

Value sharing: The power of linking with more than one


In conversations with communications and CSR leaders at the UN Global Compact and Sustainable Brands conferences, an unusually high number of executives said they are doing a strategic review of their CSR commitments and strategies. As an advocate for significant changes in these strategies (and for changes in the overall communications and marketing investments that companies are making,) I see the scaling of innovative social enterprises as a means to increase focus, impact and measurable solutions to world problems.

Given the number of companies doing these strategic reviews however, it is also important to identify the best reasons for such a review and to pose this simple question: Is our review being done for the right reasons? In the current economic climate, a review driven by economic conservatism will not be strategic almost by definition.

Below are three key questions that focus the thinking on strategic issues. Incorporating the answers to these questions will provide the basis for a truly strategic 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:

“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.”

Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility, Harvard Business Review, by Michael E. Porter and Mark R. Kramer.

2. What are the primary ways that we measure our CSR activities? Do these measures track the most significant impacts our business creates and the outcomes that our activities are designed to accomplish?

As you answer this question please consider this fact: 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. The stakes are increasing every day. 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.

3. 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—and from multiple innovation sources to encourage not just our own corporate progress but also the progress of as many other companies as we can reach?

Increasingly the ability to create value depends on market mechanisms that attract multiple value chain and investment participants. The innovation to attract the participants will often come from outside the companies championing the changes. ReachScale’s focus on scaling social enterprises and Nike’s GreenXchange are two examples, and there will be more. Finding and cultivating these innovations often depends on a problem solving commitment that goes beyond simply serving just 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.

Follow up to the UN Global Compact Leaders Summit: Three Questions that Gauge Commitment

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. (You can 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 the organizations that had committed to goals that seemed reachable in 2007 but seem less so today.

Empowering an ecosystem of leaders to re-envision the appropriate responses is a tough challenge in its own right. Well respected leaders including Secretary General Ban Ki-moon, Georg Kell, Lord Michael Hastings and Jeffrey Sachs among others (the featured attendee list here) were doing yeoman’s work to course correct while all the measuring instruments are being recalibrated.

Under the current circumstances it is no surprise that the proceedings were dominated by testimonials of good works completed and new projects and collaborations being started. (For more on the results, read the Global Compact Annual Review.) I expect many people listening to the testimonials were asking themselves some recalibration and authenticity questions such as:

“Is that challenge or project worthy of the global organization that has taken it on?”

“Is there a problem that is so core to that organization’s business that they could dramatically increase the resources they have committed?”

“Would taking on a larger issue do a better job of engaging their human capital and leadership?”

Making decisions about our own response as individuals and company leaders becomes increasingly difficult during times like these. In small group discussions that took place during the conference, these questions were discussed. (One group I participated in came up with a three step process which I’ll cover in my next post.) Those conversations, along with the multiple testimonials heard from the dais, led me to three simple but core questions. I share them here as a possible path for companies who are viewing their commitment to “shared values and principles, which will give a human face to the global market” (a quote that appears on the cover of the Gobal Compact Annual Review). For those leaders who are willing to identify a global problem that has seemed intractable and to focus their energies on demonstrating progress towards its solution*, these questions will help.

1. Are we taking on a problem that our stakeholders would immediately recognize as a significant problem?
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 problem that has been viewed as intractable but could shift significantly with the right focus.

2. Is the problem we have chosen core enough to our business that we can ask our most competent associates to invest in its resolution? Is its strategic business relevance demonstrated by our experts applying 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 or their partners operate.

3. 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 the 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.

Next post: More from the UN Global Compact Leaders Summit.

* For a seminal discussion of these issues, read the Harvard Business Review article, Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility, by Michael E. Porter, Mark R. Kramer.

Sustainable Brands and Authenticity

We are surrounded every day by the fallout from authenticity disconnects and dichotomies. The examples are glaring and particularly poignant right now, with “green branding” investments being made while the most elemental safety precautions were ignored.

At the Sustainable Brands Conference last week in Monterey, I spent three days hearing and seeing the positive side—real initiatives that are making a difference, shifts in fundamental thinking at the C-level in major enterprises, innovators inside and outside companies working together. It restores some hope in our global future.

Three themes emerged from that conference for me that can enable all of us to act and innovate more authentically:

License to operate
No matter how you view the ubiquitous presence of Starbucks in your neighborhood, Starbucks is coupling significant investments in reducing their footprint with jobs that offer healthcare as fundamental. Those are issues that are of importance to all of us. In talking about the Starbucks cup recycling efforts, Ben Packard acknowledged that while they have to deal with all aspects of their footprint, the real touch point of everything is the cup. If Starbucks can’t address that issue then they do not deserve to be in your community.

Responsible Profit
Jason Saul of Mission Measurement said it best: 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 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 do not deserve to be in the sustainable brands community.

Commitment and Authenticity
Most of the conference attendees are sincere proponents of improving the world and securing their license to operate. The most common question asked was a variation of this one: “How can we communicate our sincere efforts to be responsible?”

This is the wrong question. And if it is the question you are asking then it is likely that your sincere efforts cannot be communicated authentically. Sincerity does not guarantee authenticity. The plethora of recent green washing debacles include sincere companies as well as cynical ones. Corporations from either end of that spectrum were criticized—and rightfully so—for their lack of authenticity.

Seeking authenticity means carefully considering the capabilities you possess and the costs you impose. It also requires an answer to the following: “What significant challenge in the world can our leaders and stakeholders commit to solve that makes our commitment clear? How do we responsibly apply capabilities and budgets so that our customers, employees and the general public can measure our willingness to think big and to innovative solutions for serious social problems?”

If your organization is handing out money, leaving the selection and solutions to others and placing no reporting or measurement requirements other than check size, your authenticity is going to be minimized. If you are logging volunteer hours in ways that don’t leverage core competencies to solve serious problems, you are disrespecting your potential to shift the impact and really make a difference.

Collaboration is critical in navigating this new territory. One of the focal points should be on social enterprises already innovating to solve problems that improve the world and are core to your business at the same time. Partnering with the most innovative social enterprises can move you forward in becoming a leader that is making demonstrable progress towards solving real problems. Other approaches such as open innovation, mass collaboration and tri-sector partnerships can add further leverage to your talent and capabilities. Regardless of your approach, the license to operate will be much more rigorous in the future.

The #Promise Conference, Part 2

GUEST POST by Deborah Barlow*

More highlights from The #Promise Conference, June 10 2010…

The corporate presentations (reported on here) offered food for thought, but the programming also included thought leaders who are not traveling the central artery. My thinking was provoked and inspired by each of the following presenters.

Doug Rushkoff (Photo: Bodley Head)

Doug Rushkoff, author of Life Inc: How the World Became a Corporation and How to Take it Back, gave out copies of his book at the conference. After I heard his rapid fire mind present 20 minutes of nonstop ideas, I put his book on my to read list.

Rushkoff has a strong point of view, but his take on the evolution of the corporation is a helpful history with which to view so many of the disconnects we see evident today. First introduced in the Middle Ages says Rushkoff, corporations were a way of keeping power in the hands of the elite. That and central currency were forms of control. This helps frame how frequently corporations are not market responsive or unable to advocate for the people who actually use and need the products they produce. “BP’s loyalty is to its shareholders. Its genetic code was not set up to care about the Gulf,” he pointed out.

Here’s a few more nuggets from Rushkoff:

“The concept of the consumer was an invention. We are people–parents, producers, gardeners, employees. And the peer to peer qualities of the Internet have stripped back that artifice of “consumer” and allowed us to just be people again.”

“Branding is an imitation of a human relationship. It is the mythologizing of a real relationship, with a box instead of a person.”

“Corporate communications don’t matter anymore. All that matters is corporate activity. What are you doing?”

“You can’t ‘decide’ to be transparent. If you have employees, you ARE.”

“Doing good is profitable. But the problem is it may not be enough given the expectations of venture capital and the market.”

“Most investment capital is impatient capital.”

“A false equality exists between ‘doing business’ and ‘doing corporatism’. Doing business is making stuff, creating value with people and selling it to others. Corporatism is extracting value, from people and the earth.”

“The best business in the world is doing good stuff.”

Andrew Rasiej (Photo: New York Magazine)

Andrew Rasiej is the founder of Personal Democracy Forum, an annual conference and website covering the intersection of politics and technology. Rasiej has the wisdom and experience of an elder statesmen (meant as a compliment!) Where he thinks the world is going is of interest to me.

A few memorable Rasiej comments:

“RSSA is the new holy grail: Real simple social action.”

“Technology is not a slice of the pie. It’s the pan.”

“Viteracy–the video equivalent of literacy. Our culture is leaning towards being more comfortable with video rather than text.”

“Soon 9 billion people will be connected by phones. It is going to create a new form of governance for all of humanity. People will start ignoring government and just start solving problems themselves.”

Caterina Fake (Photo: Lessig 2.0)

Caterina Fake, founder of Flickr (and more recently Hunch) has been in this space since the late 80s. She uses the word “passionate” like a badge of honor and had some great off-the-cuff witticisms to share:

“Flickr is an emotional database.”

“Babies, pets and sunsets–the backbone of the Internet.”

“Strangers used to be bad and dangerous. Now strangers are the source of good things online.”

“We now live in a culture of generosity–all these people putting stuff they love online for free.”

“The explosion of personal storytelling is profoundly transformative for the culture in general–politics, brands, quality of life.”

Goodness 500: “The others talk about profit, we talk about responsibility”

Also a highlight: Meeting some of my favorite smart Tweeters IRL, like Michael Mossoba of Goodness 500 and Nidhi Chaudhary.

*Deborah Barlow is a communications consultant with ReachScale whose other life is painting, writing and observing life online and off. She shares her personal point of view on her blog, Slow Muse, and her artwork on her website.