Social entrepreneurs, social enterprises – you’d be hard-pressed not to find these terms in recent headlines. Many businesses are starting to turn their attention and their dollars towards making a social impact. But are these terms simply new marketing buzzwords or part of a new management theory set to transform the corporate world?
In a recent Forbes article, Willy Foote, CEO and founder of Root Capital, a non-profit agricultural lender building rural prosperity in developing markets, set out to determine the difference between social entrepreneurship as a marketing buzzword and as a true management theory.
Foote turns to Sally Osberg and Roger Martin, experts in the field. Osberg, president and CEO of the Skoll Foundation, and Martin, a former dean of the University of Toronto’s Rotman School of Management and a Skoll Foundation board member, co-authored the book Getting Beyond Better: How Social Entrepreneurship Works.
The book explains that in its true form, social entrepreneurship doesn’t aim to replace an existing broken system. Rather, the enterprise takes direct action by leaving the broken system in place, with the ultimate goal being to transform it permanently into a superior and stable system. Take small-scale farmers in developing markets for example. A true social enterprise doesn’t aim to replace the existing system of workers, operations and supply chain management. Rather, the goal becomes providing financing and training so jobs are created and incomes increased, and as a result, related issues such as food insecurity, emigration and youth unemployment are addressed. A true social enterprise recognizes that challenges won't be solved overnight and that changing equilibrium takes time and patience. To become a true social enterprise, Osberg and Martin offer the following four-step management-style approach:
• Understand the system in its current state;
• Envision a future state;
• Build a sustainable model for achieving the future state; and
• Scale the model appropriately.