Is Social Innovation Ready For Prime Time? We Need More Business That Better The World.

Is Social Innovation such as Kiva ready for prime time? (Kiva offers peer-to-peer micro-loans, and Thamel.com facilitates in-kind remittances from the Nepalese Diaspora to family members back home) These innovations are primarily powered by the rise of social networks and these networks grow and transform into active, collaborative communities. In a couple of years, we should anticipate massive change through emergence of these networks. At some point, suddenly and surprisingly a new system emerges at a greater level of scale. Let’s not get too much into the theory.

These social ventures must also understand the fundamentals of market orientation and business economics. There needs to be a big enough market that will pay enough money to make the business financially viable and sustainable. No matter how well meaning this higher ground was, if it didn't make a good product or a good user experience that was competitively priced and easy to use, no one would buy/use it, and moreover, no one would notice your message. That is why they are called social ventures -- they need to be treated like any business ventures. Watch out for the next generation of Social Ventures, unlike the past, these are started by smart young MBAs (not the power hungry types) with a mission and a strong market focus, powered up exploding social connectivity and new capital that wants to see change.

There were a few health-related enterprises started the last two years. Sprinkles Global Healthcare Initiative from Canada manufactures sachets of micronutrients for home fortification of foods to improve the health of women and children. Claudia pointed out that micronutrient deficiency is a factor in over 2 million deaths per year- more than malaria- and affects over 750 mm children. MDF is estimated to reduce GDP by at least 2% in developing countries, and is the #2 global health priority after HIV/AIDS according to the WHO.

There’s the Whirlwind Wheelchair International, which is one of the original appropriate technology initiatives targeting health care needs in developing countries, started by SFSU design star Ralf Hotchkiss. Whirlwind is implementing a franchise model of locally owned workshops that produce robust high-performance wheelchairs that enable the disabled to participate in economic and social activities in developing countries. Their vision is to make it possible for every person in the developing world who needs a wheelchair to obtain one that will lead to maximum personal independence and integration into society. In order to fulfill this mission, WWI seeks to give wheelchair riders a central role in all of its projects and activitieYou’ll be amazed at what Whirlwind’s wheelchairs can do.

Don't you want to have a Kiva Mastercard? I definitely want to get one. That's the power of social innovation. Every enterprise should have more than one bottom line. There's always the Financial Bottom Line. The business operates like a for profit enterprise by selling goods or services to its customers and should make a decent return on capital investments. The Social Bottom Line is about achieving balances between its financial mission with a clearly defined social mission. There is a lot of opportunities at the bottom of the pyramid.

The same holds true for healthcare delivery strategies in the U.S. (which is messy today) as much as the developing world. More innovation effort is needed to look at viability of business strategies that engage the bottom of the pyramid and draw on user-inspired innovations to deliver tangible value to consumers.

Comments

[David Moyle]

You make some very interesting points in your article. The one that stands out the most to me is the point regarding multiple bottom lines.

I have long felt that non-profits would be more beneficial if they at least acted like for-profit corporations and delivered their social benefits while practicing business like a business. They wouldn't be so reliable on budget cancellations and could actually accomplish more.

[Jennifer Silva]

This is a great post. I am in full agreement that the lines between for-profit and non-profit should not exist..or at least should not be a clear one. The capital system exists to serve us and not us serving it. We should not let the system take control. Non-profit should be about creating value..not just asking donation and spending time promoting the cause and fighting for the waller. They should be ran like a business. BTW I enjoy this blog so much that I come here everyday. Thanks

[Alan Johnson]

Love this post. Anyone has more examples to share would be great.

[Colin]

Having worked in a non profit agency my biggest beef with the operation was the fact that it didn't act or think as a 'business'. It was handcuffed by being a not for profit.

The personal benefit from acting on a socially responsible front is something that I greatly enjoyed. I know so many others that question their professional lives as not being of any social value. There is a huge talent pool looking for something that adds professional, social and personal value. This ripple could turn into a tidal wave of movements if the right minds come in to play on enabling this type of new Social Business thinking.

[Jonathan Merrill]

I see a lot of talk about how NGO needs to be act like For Profit and vice versa. I think Non-Profit needs to learn from traditional business from how they see themselves adding value, beyond fund raising. They need to recruit entrepreneurs to look for opportunities than outside their usual practices. BTW I enjoy this blog a lot. Thanks

[Aykan]

There are many more examples in the report from Sustainability http://www.sustainability.com/downloads_public/TheSocialIntrapreneur.pdf

This report focuses on how individuals in big corporations make a difference and hit multiple bottom-lines