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Getting Beyond Better, a new book by Skoll Foundation CEO Sally Osberg and noted management strategist Roger L. Martin, explores how social entrepreneurship developed and how it works to disrupt and replace systems that entrench inequality and marginalize large swathes of society.
In this segment from the Business of Giving, Ms. Osberg talks about social entrepreneurs who are challenging the status quo to address the world’s most pressing problems. She traces the four stages of transformation an effective social entrepreneur must undertake and presents vivid examples of how each contributes to building solutions for a better, fairer world.
The following is conversation between Sally Osberg, President and CEO of the Skoll Foundation and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.
Denver: In 1999, Jeffrey Skoll, the co-founder of eBay, decided to turn his attention from entrepreneurship to social entrepreneurship and started the Skoll Foundation. When he went looking for someone to run the organization with him, he was fortunate to find my next guest– who was also fortunate to find him. Now we’re all fortunate to have her with us. She is Sally Osberg, the President and CEO of the Skoll Foundation and the co-author of Getting Beyond Better: How Social Entrepreneurship Works. Good evening, Sally, and welcome to The Business of Giving!
Sally: Thank you so much, Denver. It’s a pleasure.
Denver: Tell us about the Skoll Foundation, a bit more about how it got started, and the mission and objectives of the organization.
Sally: Happy to! You’ve already mentioned Jeff Skoll, and Jeff Skoll is an iconic Silicon Valley entrepreneur, renowned for, as you said, co-founding eBay with Pierre Omidyar. Jeff, as an entrepreneur, really resonated to a very special kind of leader who took the discipline and the drive and the disruptive vision to the work of trying to make the world a better place.
So right from the get-go, although neither Jeff nor I had the frame for social entrepreneurship, much less the term, we had a really clear sense of the kind of individual and organization that we thought could really drive the scale of change that Jeff was after for his philanthropy. That was the grounding for the foundation’s mission. It took a couple of years, but eventually we landed on a mission to drive large-scale change on the world’s most pressing problems– by investing in, connecting, and celebrating social entrepreneurs and the innovators who help them.
So, that really was the genesis of the foundation. Jeff’s vision for a world of peace and prosperity that was sustainable, translated into a mission, and that really then became our work with social entrepreneurs and their organizations.
Social entrepreneurs are attacking a system that leads to the marginalization or suffering of some very large segment of a society, and it’s that paradigm that the social entrepreneur is really driven to transform… Social entrepreneurs drive equilibrium change on the world’s pressing problems, consistent with the way entrepreneurs do their work with the business model.
Denver: What is a social entrepreneur? I know that was a gist of your piece back in 2007 when you wrote the article about “The Case for Definition.” What is a social entrepreneur and how does that differ from social enterprise?
Sally: That’s a big question, Denver. As we landed on this idea of social entrepreneurship, one of our board of directors, Roger Martin, who is himself renowned for his work and strategy, felt it was really important. In fact, it was our responsibility to come to clarity about the term and what we meant by it. Because we couldn’t really develop… much less execute a good strategy without being really clear about the kind of folks we were looking for and in whom we wanted to invest.
That’s what led to that article you referenced that we published in 2007 in the Stanford Social Innovation Review, “Social Entrepreneurship: The Case for Definition.” And there, we advanced the idea, first of all, that social entrepreneurs are entrepreneurs, and that entrepreneurs are disruptors. Entrepreneurs really shift a status quo, whether it’s in business – it has to do with a product or service, or lack of a product or service. Think of Larry Page, Sergey Brin, and the internet before you had Google, before you had search engines. It was impossible to really get the information you needed and wanted from the internet. They created a disruptive service that really transformed the way people use the internet.
Same with social entrepreneurs. The difference is that social entrepreneurs are attacking a system that leads to the marginalization or suffering of some very large segment of a society, and it’s that paradigm that the social entrepreneur is really driven to transform. So that was the definition we put forward: that social entrepreneurs drive equilibrium change on the world’s pressing problems, consistent with the way entrepreneurs do their work with the business model.
The most transformative changes have really come from either government policy innovation… or they’ve come from business innovation…It’s really about adapting the principles and the practices of business and government in creating something entirely new to the world.
Denver: Where does this fit on the continuum or spectrum of society, Sally? If we have government on one end, and we have private industry on the other: where does social entrepreneurship fit? And what is its unique contribution?
Sally: This is a really interesting point, and it’s one we dive into in the book Getting Beyond Better. “Beyond Better” is really the kind of meme we are putting forward to say: social entrepreneurs aren’t trying to make things better; they’re trying to change them altogether so that the problems actually no longer exist, and society moves forward in a really positive way. In doing our homework and really looking back over time, we realized that the most transformative changes have really come from either government policy innovation – think of the Civil Rights Act of 1964 in the U.S., or even the Magna Carta in the U.K – or they’ve come from business innovation. Think of Henry Ford and the automobile and the manufacturing process that he developed. It transformed the way products like cars could be put together.
So, in thinking about social entrepreneurship and where it fits, we’ve looked at the difference between government policy innovation and business innovation. We looked at the difference between a customer and a citizen. We looked at the difference between profit and social purpose. We looked at the scope where one transformation policy really applies ubiquitously. Whereas a product or a service that a business puts forward only gets uptake as people purchase it, so it’s voluntary. We looked at all those principles and practices. Rather than saying or concluding that social entrepreneurship has to be a nonprofit organization, we said, “No. It’s really about adapting the principles and the practices of business and government in creating something entirely new to the world.”
Denver: That’s very interesting. It’s a hybrid, in other words.
Sally: Yes. It’s a hybrid, but it’s not about the corporate structure. People think of these three Venn diagrams. They think of government, civil society, and business or private sector. There’s a lot of interest in seeing these new forms emerge. But we said, “It’s really not about the form.”
Denver: Absolutely! I talked to my daughter the other day about that, and she said to me “Dad, that’s a tax classification.” And she just smirked, like it doesn’t make any difference to the millennials. It’s really: who’s doing the social good? And who cares about the rest of it?
Sally: Exactly. You have hit on something really important that we see, too, and that’s these young people and their talent and the way they see the world, the way they see their opportunities and their responsibilities. They are not differentiating between “Oh, I have to go into business, and that’s going to constrict me from doing good.” They’re seeing that as the path for making a difference at scale on these problems that they know are affecting their future.
Right from the beginning, we understood that it was through stories, and through storytelling, that you could really move hearts and minds.
Denver: I think, Sally, it was Rudyard Kipling who said, “If history were taught in the form of stories, it would never be forgotten.” But that, just as easily, could have been Sally Osberg. You really believe in the power of storytelling. Tell us why you think it is so effective.
Sally: You referenced right at the beginning of our conversation, Denver– the way Jeff and I came together, and how fortunate I was to meet someone who was as grounded and ambitious in all the right ways, and who brought this entrepreneurial energy and focus to his work in philanthropy. Well, one of the things that Jeff and I really agreed on, right from the get-go, was this power of storytelling. My academic background is in literature; Jeff really developed his worldview and his inspiration for his philanthropy from reading as a kid. And so that was something, right from the beginning that we understood: it was through stories, and through storytelling, that you could really move hearts and minds. And so Jeff’s work in media through Participant Media, I think, is an example of a really ambitious and profound social endeavor and a phenomenal use of his philanthropy, in addition to the foundation’s work.
So, when we say we invest in, connect, and celebrate social entrepreneurs, “celebrate” is really the word we use to talk about the storytelling. And often, it’s not just a story of the social entrepreneur and how she or he came to the decision to make a difference in the world; it’s about the people whose lives they transformed. They will tell you about a young African girl who has an opportunity to achieve her ambitions in education because of the work of an organization like Hampstead. So, storytelling, as a way to really reach the heart as well as the mind, is absolutely core to our mission and to Jeff’s vision of how to change the world.
Denver: Well, you and your co-author, Roger Martin, do tell some wonderful stories in your book… and I’m talking from rugs to rats, from Senegal to the Amazon. And in the spirit of storytelling, I’m going to list the four steps of social entrepreneurship that you outlined and ask that you illustrate each through a story.
Sally: I’m happy to do that, Denver. Happy to!
It is understanding the context… how the problem got to be the way it is, the actors, the forces, the incentives, the disincentives… When you’re dealing with societies or social conditions, it’s really critical to understand the forces and the actors so that your intervention has a better chance of actually creating the transformation you look for.
Denver: The first stage is understanding the world, and it sounds as if that’s going to take a little a patience on the part of our social entrepreneur. Tell us about understanding the world.
Sally: Yes. This, again, was a discovery as we really dug into the research. With a portfolio now of about a hundred social entrepreneurs, we really have the chance to look at the patterns and try to understand what makes for success in this work of trying to transform an unjust, dysfunctional social equilibrium. And there we came to the conclusion that it’s not just having a terrific idea or a solution… seeing a problem and saying “This is the solution. I have it. I know what should be done. Let’s go make it happen.” It is understanding the context. It is understanding how the problem got to be the way it is. It is understanding the actors, the forces, the incentives, the disincentives.
The example we chose to write about was Molly Melching, who showed up in Senegal as a student and ended up making her life’s work in that country. Now, Molly came to study the colonial heritage of Senegal and really was a scholar in French literature. But over time, she came to understand the culture and to see this pattern of oppression of women and really wrestled with why it came to be that way. And she both abhorred what she saw, but came to appreciate deeply: the norms underpinned that reality for Senegal’s women. Eventually, she comes to this strategy to develop what’s called a Community Empowerment Program, a three year-program working deeply with communities, where communities themselves begin to question some of the norms that they’ve taken for granted.
And here you have a profound example of how a social entrepreneur comes to her solution, comes to this design, comes to this powerful program through years of experimentation and iteration and learning and deep respect for community and the work. And that’s another “Ah Ha!” because we tend to think that entrepreneurs have these great ideas and go after them, and then we just impose them, and everything changes. Well, not true! When you’re dealing with societies or social conditions, it’s really critical to understand the forces and the actors so that your intervention has a better chance of actually creating the transformation you look for.
Denver: That is an absolutely profound point because I think it’s counter-intuitive. We, in the West, see something and we want to fix it. And I’m sure what Molly saw, she abhorred. But unless she became part of that system and understood it, she was never going be able to change it. And if she did, it would go right back after she left.
Sally: That’s so true, and that’s the other thing she realized. Her background was French, and one of the ways she earned money was to work with development organizations as a translator. So, she was out in the field. And it was simply by listening intensively and doing the work of translation, of course, she realized that this imposition of a technocratic Western solution was common practice in the field. As you say, the minute the money was withdrawn, or the NGO left, or the aid was cut off, guess what? There was no lasting embrace of the solution by the people who were most affected by the problem.
Denver: It was doomed. The second key stage you cite is envisioning a new future. Tell us about that.
Sally: Yes. That’s another differentiator because we, of course, correlate vision with leadership. But there’s a difference between an inchoate vision that things will get better, or that they’ll change forever, and a very specific understanding of what that new future looks like… how the actors are reconfigured.
And there, we talked about an organization we’ve worked with for years… have tremendous respect for… and that’s Riders for Health. These are two motorcycle enthusiasts, Andrea and Barry Coleman, who in working in the motorcycle field, raised a good deal of money for Save the Children and its programs to support children in Sub-Saharan Africa. But travelling to Somalia, they were actually shocked by what they saw: rusted vehicles, motorcycles, ambulances, trucks by the side of the road– left to rot and rust for want of an oil change, or a lug nut, or just common maintenance. And, of course, in the harsh conditions of Africa, the life for a vehicle that’s not maintained is very, very short indeed.
So, what they saw was waste. More importantly, what they saw was the cost to healthcare delivery in countries like Somalia, Zimbabwe, Kenya and throughout Sub-Saharan Africa. So, they launched this organization, Riders for Health, to build transportation infrastructure for health delivery in Sub-Saharan Africa. They’ve been on an intense learning journey themselves; they’ve iterated the model, and it looks like today that much of the work will actually be carried on by African countries themselves. The Riders for Health operation will actually be fully embraced by the countries, and that’s a profound achievement.
The social entrepreneurs’ challenge is really to develop a model for change that transcends the business model and the organizational mode. And that model for change, inherently, is about punching way above your weight.
Denver: That’s fantastic. OK. I understand the world; I have envisioned the new future. Now, what I need to do is build the model for change.
Sally: Here’s where things get interesting, Denver, because that model for change is actually different from what we usually think of as an organizational model, or even a business model. Business comes into it because the economics of a dysfunctional equilibrium have a lot to do with the fact that there’s a segment of society that can’t pay for or doesn’t have the power to bring about the change that’s required. Whether it’s sanitation or healthcare or education, they lack the means and the power to bring about the change that would benefit them and disrupt this dysfunction in society. So there, the social entrepreneurs’ challenge is really to develop a model for change that transcends the business model and the organizational model. And that model for change, inherently, is about punching way above your weight.
So there, you mentioned the rats, and that’s really a wonderful example. This is Bart Weetjens, who’s Belgian. The organization is APOPO. Bart realized that rats– African pouched rats– could provide a very efficient, cost-effective solution to demining. A country like Mozambique in Sub-Saharan Africa, for example, was one of the most heavily mined countries in all of Africa… in fact, in all of the world. But an African rat can actually carry out demining.
Denver: Who knew?
Sally: Who knew! And it cost $3 to make one of these land mines, and it cost $1,000 just to get one out of the ground. Well, with rats, you can reduce that cost exponentially, and you can also reduce the carnage. Dogs and heavy equipment are used, even human beings. So you reduce the danger. The rats are too light, and you can clear more mines, at less cost, more quickly. And so the economics of this work– you get the falling unit cost; you get development money that goes a whole lot farther in the demining process; and you get a result that actually takes your breath away. In fact, in September of last year, Mozambique was declared mine- free, which is a victory. It’s a major victory!
Denver: It’s an incredible story! It really is!
Sally: Yes, it is. And there’s Bart Weetjens, and his love of rats.
Denver: He’s always had that. He had that as a kid.
Sally: He had it as a kid, and he actually saw potential to harness rats in the business of demining. And now, he’s going after using rats to sniff out tuberculosis in sputum samples. So, a great example of a model for change, falling unit cost, a powerful lever for bringing about transformation.
When social entrepreneurs are thinking about scale, it’s scale of impact they’re after. And no organization can achieve the scale of transformation of equilibrium change without partners… Social entrepreneurs figure out the leverage points, the partnerships, and that’s how they achieve scale of impact.
Denver: And your final stage, Sally, was scaling the solution.
Sally: Right. And that is differentiated from the way we normally think about scale. Everybody thinks about scale as getting bigger, growing your budget, more people, bigger footprint, dominating a market– that’s our whole paradigm of scale. “Going to scale” is a phrase that most people use. But when we’re talking about scale and when social entrepreneurs are thinking about scale, it’s scale of impact they’re after. And no organization can achieve the scale of transformation of equilibrium change without partners. Those partners actually have to operate at scale in some really important ways.
So, one of the examples we talked about in the book is Paul Farmer and his colleagues, his colleague founders of Partners In Health. And the work they did in the 90’s, in the shantytown of Lima, where there was a horrible outbreak of multidrug-resistant tuberculosis. The World Health Organization’s policy was that it would be too expensive to actually provide drugs to combat tuberculosis in these conditions because the poor couldn’t adhere to the complex regimens – you have to take the drugs for a long period of time; the consequences are actually pretty unpleasant for people. But Partners In Health raised the money on its own, went after the challenge, administered the drugs, and proved that it could achieve a cure rate that was in fact superior to much of what was achieved in the developed world and cities like New York, for example. With that, they shifted WHO policy.
So, this is an example of how you scale a solution. You change the policy; you unlock billions of dollars; and you save millions of lives because this treatment is now available for people who are suffering from this scourge. We see that over and over and over again with social entrepreneurs, that they figure out the leverage points, the partnerships, and that’s how they achieve scale of impact.
Denver: Those are four great stories, and they really bring those points to life. Let me ask you this: What kind of impact do you think social entrepreneurship is having on traditional philanthropy– and specifically some of those nonprofit organizations that have been around for decades, if not a century or more?
Sally: It’s really important to look at social entrepreneurship in context. It’s part of the solution; it’s not the whole solution. We still need service providers. We need social advocates. We need the people who are going to just hammer away to get the policy shift. And then, we need social entrepreneurs to help unlock the potential of these policies.
People think of social entrepreneurs as trying to bypass government. And in fact, we found most of the really successful social entrepreneurs figure out how to work with government. They figure out how to unlock the potential of government, and that’s again a big, big change. So, we see the future of social entrepreneurship as really unlocking capacity in the private sector and in the public sector to advance humanity’s best interest.
Denver: One thing I’ve always been curious about is “founder’s syndrome,” and I’ve worked with a couple of founders in my time. It can be very tricky indeed. So many of these social entrepreneurs have started organizations. They’re visionaries. They have magnetic personalities, and some have been at it for quite a while. So when the time comes to pass the baton and assure the long-term health and future of the organization, it might be a challenging proposition for them… not to mention for the organization itself. What’s your take on all this?
Sally: Social entrepreneurs– in this– are no different from entrepreneurs, and “founder’s syndrome” cuts across both domains. Social entrepreneurs aren’t always founders. We talk about several social entrepreneurs in the book who came into organizations that were not doing so well. Marine Stewardship Council, for example, was founded by the World Wildlife Fund and Unilever– a kind of a private partnership between two very powerful actors. But it wasn’t until Rupert Howes came on board that the organization really took off and started to actually make a dent in the problem of overfishing and bringing sustainable practices to the wild-caught fishing industry. So, social entrepreneurs aren’t always founders. But the challenge of letting go when there is this psychic commitment to a solution and seeing it really scale, consistent with his visions for a new equilibrium… is just difficult.
Again, it’s a differentiator for great social entrepreneurship though. And social entrepreneurs, just like entrepreneurs, need really great boards. Those great boards, those very good, aligned board directors, effective governance models: that will do a whole lot to ensure that the DNA of the social entrepreneur — that’s the vision, that’s the way of working in solidarity with those you serve, it’s the integrity, it’s the purpose – that all of that is preserved as the organization shifts into its next stage. So every organization has to evolve to keep pace with the changes in the ecosystem, to bring new technologies into play… whatever is required to really advance progress on this societal challenge that the social entrepreneur has taken on. That requires a great board. The great social entrepreneurs will build those great boards; they’ll build great teams, and they’ll know when it’s time to transfer the reins to a new leader.
Denver: That’s a great point. Everything begins and ends with the board, and if you’re going to have any kind of continuity, they are the critical linchpin in all that.
Sally: They are, and it’s an Achilles heel, I think, for entrepreneurs. It’s a big challenge for social entrepreneurs, but the asset that a great board aligned with the mission… understands enough about the model for change, ensures fiduciary responsibilities are met! That’s no different for a business and for a social venture. You have to have enough money to pay the people. You have to ensure that you’re a going concern, even more so– because of the contract you have with the society you’re serving– than in business. You can go out of business in business, and it’s not a tragedy. We have bankruptcy laws, and so on. But when you go out of business in this field, there are people on the other end who will suffer the consequences. And so fiduciary oversight is even more critical, I think, in social entrepreneurship.
Denver: You’re right. Getting Beyond Better is one of the first real examinations of social entrepreneurship as a field of study in its own right. And with that said, where do you see it going? How do you see it evolving over the course of the next 5 or 10 years?
Sally: There’s a lot of enthusiasm for social entrepreneurship, and we want to make sure that that enthusiasm doesn’t get ahead of the reality. So, we feel at the Skoll Foundation, we feel it’s really incumbent on us to get better ourselves at documenting what we’ve learned… some of these lessons… and putting forward what we believe are the most credible and inspiring stories of how social entrepreneurs at their best do their work, and about the difference they are making.
We’re not saying social entrepreneurship is the be-all and end-all. As I said, we need the providers. We need the advocates. We need business. We need government. We need it all, and we need it all to work much better than it does to serve the common good. But social entrepreneurship is a big tool in the toolkit. And the enthusiasm from young people… you referenced your daughter. I think that’s just a wellspring of such promise for the world. We see this coupling of social purpose and sometimes viable business models and sometimes not-for-profit models. We see that interest in young people and that talent just flocking to this field and to the larger opportunity it represents for society.
Denver: Let me get you out on this question, if I can, and it concerns the overall health of the world today. I look at so many encouraging things, Sally – global poverty has dropped precipitously; life spans have been extended; more children, particularly girls, are being educated, and so on. But on the other hand, it seems that the world is on edge. There’s a lot of angst and frustration as demonstrated in our current political season, but that fear and uncertainty is displayed everywhere – Greece, Brazil, you name it– terrorism, climate change. You have a very unique perch to thoughtfully assess all of this. What’s your take, from your perspective, on where we stand at this moment?
Sally: Well, much as yours, Denver. Charles Dickens said it beautifully, “best of times, worst of times.” We have new technologies. We have these powerful new medicines. AND,we have growing inequity. We have destabilized parts of the world. We have extremism. We have all these forces. And we also have, I think, a deep misgiving about leadership, especially about political leadership. And yet from the perch we occupy here– the very privileged perch at the Skoll Foundation–we see the brilliance of these social entrepreneurs, the integrity, the commitment, the purpose, and the leadership for the world that holds so much promise. So we see the yang and we feel the yin, and we’re hopeful that these social entrepreneurs are going to make leadership across the board: stronger and more purposeful and more honorable in the pursuit of community’s interest, the interest of women, the interest of a more just and sustainable world going forward.
Denver: Well, Sally Osberg, the President and CEO of the Skoll Foundation, thanks for being here with us. The book again is Getting Beyond Better: How Social Entrepreneurship Works. Great stories like the ones you’ve heard this evening and, dare I say, you will be feeling more optimistic after reading it. It was a real pleasure having you on the program.
Sally: Thank you, Denver. It was just a great pleasure to talk to you. And you give my best to that daughter of yours. She clearly gets it.
Denver: It will be my pleasure.
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. on AM 970 The Answer in New York and on iHeart Radio. You can follow us @bizofgive on Twitter and at facebook.com/business of giving.