Improving the world and the bottom line simultaneously has never been more on-trend. Social entrepreneurship, the concept of applying business techniques and market mechanisms to solve social problems, such as poverty, violent crime or environmental threats, has been around for decades.
The practice received a significant public boost, however, in 2003 when a group of NGO heads was invited to the first-ever social entrepreneurs sessionat the World Economic Forum in Davos. Since then the idea has been embraced globally by businesses, governments and non-profits alike.
The result is a new breed of socially-conscious business models and a rising demand for organisational leaders who can steer innovation along such lines.
A Multi-Purpose Model
In practice, social entrepreneurship is a flexible methodology that’s applied differently depending on the type of organisation, but the goal is the same – to help an organisation excel at its core mission. “Non-profits want to know how to move away from a charity-based model and toward more sustainable sources of funding that leverage their activities to generate revenue,” says Hans Wahl, Co-Director of the INSEAD Social Entrepreneurship Program (ISEP), an executive education course offered in Fontainebleau, France and Singapore. Integrating business ideas facilitates this. One such example is DC Central Kitchen, a non-profit in Washington, DC that provides free meals to homeless shelters and produces income by operating a catering service.
For-profit companies have discovered that integrating socially responsible practices into their business operations has benefits well beyond positive public relations. According to Sarah Soule, Faculty Director of Stanford’s Executive Program in Social Entrepreneurship (EPSE): “Corporations see that some of the best business opportunities come from solving real problems, hence their exploration into new markets and developing countries where opportunities to grow are expansive yet at the same time meaningful.” Coca-Cola, for instance, sponsors business training programmes for women in Brazil, many of whom operate kiosks, a main sales source for Coke products. It’s a win for the women, who acquire the means for success, and a gain for Coke, as it helps the company maintain a strong supply chain in a growing market.
In addition, for-profits increasingly rely on their social commitments to attract prospective employees who are drawn to organisations that support good causes. “Smart for-profit firms recognise that to win the war for millennial talent, they must deliver on this dimension,” adds Soule. Wahl agrees: “People want to work for more than just a paycheck.”
Even some governments are integrating “business for good” ideas into their planning in an attempt to be more effective. Among ISEP’s recent alumni is the head of an economic development agency in Denmark.
Leading It Socially
The many success stories of social entrepreneurship in action show it can drive innovation in nearly any organisation. Interest in executive education courses for leaders of socially-driven organisations is high. Both Stanford and INSEAD claim the number of applicants to their 6-day programmes grows steadily. The majority of participants are executives in non-profits who’ve been tasked with scaling up the business by rethinking revenue streams or launching a new social arm. Also filling seats are top managers of companies that want to broaden their corporate social responsibility activities. It’s a similar mix at Hertie School’s Social Innovation and Social Entrepreneurship seminars. Harvard Business School offers separate education programs to leaders of non-profits and for-profits.
Nurturing the Next Social Entrepreneur
Learning to innovate like a social entrepreneur requires a shift in strategic thinking, especially for leaders in well-established organisations. Executive education programmes come at this training from different angles. Stanford’s EPSE cohorts participate in a full day design thinking bootcamp, where they learn the techniques of empathizing with customers, defining problems and developing rapid prototypes in order to create new social initiatives. At ISEP, students work through challenging case studies around themes like the difficulties of scaling or negotiating tradeoffs between being responsible to local stakeholders and answering to company shareholders.
The opportunity for participants to make connections is an important component of social entrepreneurship courses. Many find that they can adapt the innovations they learn about from peers for their own organizations. Stanford ensures that its EPSE alumni are well connected on social media, and invites many back to campus to network with current programme participants. Wahl stresses that ISEP is much more than an executive education programme: “It’s an entire community around social entrepreneurship.” ISEP’s true strength lies not just in the participants’ diverse backgrounds but in the networking that continues long after a course ends, he says.
Leaders across all types of organisations are now charged with broadening social agendas. A non-profit must learn to operate like a business in order to realise its vision, and a company needs to innovate models that benefit both society and its business activities. Adopting a social entrepreneur mindset will soon be a must for all leaders.
Kate Rodriguez is a former senior career search researcher and government analyst who covers career development and higher education marketing for The Economist Careers Network.