Yes, if they want to take their ideas to scale. That’s where business excels.
By Matthew Bishop
Read the other side of the argument on The Debate Zone
We all love the social entrepreneur who steps up in a community, takes on the power structures, and creates an organization or movement that makes a difference in the lives of the poor. Yet such talent is rare. Which comes as no surprise, since those skills and passion are equally rare among entrepreneurs in the business world. Where business has succeeded and the social sector has failed (with a few honorable exceptions such as Muhammad Yunus’s Grameen Bank), is in finding ways to take the new, innovative ideas to a scale at which they really can change the world.
One of the great achievements of capitalism has been the evolution of different kinds of capital to support businesses at different stages of growth—from family, friends and other angel investors who support start-ups to the venture capitalists who help high-potential organizations grow, all the way through to the public-debt and -equity markets for large, scalable ideas. Different skills are required at different stages along the way—from the single-minded determination of the entrepreneur with an idea to the visionary and organizational capacities of the CEO leading a large corporation. Those like Bill Gates who make it all the way from the garage to the corporate boardroom as the head of their firm are remarkably rare.
Contrast this with the social sector, where the praise and reward always seems to be focused on innovative new ideas rather than the boring challenge of taking these ideas to scale. Social entrepreneurs are rightly celebrated, but we should also celebrate the social bankers, social venture capitalists, social equity investors, and so on. This is why I’m excited by the influx of suited MBAs into the world of doing good. And why, more generally, I think that those who want social change need to embrace the language and methods of business.
That does not mean that delivering social change should become a business— though if social entrepreneurs can find a way to harness the profit motive to achieve social good more quickly than through charity, as has recently happened in microfinance and is starting to take place in basic education, health care, etc then they would be daft not to do so. But the “philanthrocapitalists” that Michael Green and I write about are not looking to make a profit, they are trying to deliver social change. And, from Bill Gates and George Soros to Michael Bloomberg and Mo Ibrahim, they believe that the language and techniques that helped them succeed in business can be, if carefully applied to the admittedly more complex context of the social sector, a powerful force for good.
These philanthrocapitalists, armed with the tools of business, are starting to take on the challenges of finding and scaling solutions to the problems that blight the lives of more than a billion people on this planet who live in grinding poverty. Rather than bristling at the alien culture of business, social entrepreneurs in poor communities should be figuring out how to speak its language—and welcoming its arrival as the chance to finally have the impact they have always craved.
The Debate Zone: Should social entrepreneurs adopt the language and practices of business?
Yes, if they want to take their ideas to scale. That’s where business excels.
By Matthew Bishop
Read the other side of the argument on The Debate Zone
We all love the social entrepreneur who steps up in a community, takes on the power structures, and creates an organization or movement that makes a difference in the lives of the poor. Yet such talent is rare. Which comes as no surprise, since those skills and passion are equally rare among entrepreneurs in the business world. Where business has succeeded and the social sector has failed (with a few honorable exceptions such as Muhammad Yunus’s Grameen Bank), is in finding ways to take the new, innovative ideas to a scale at which they really can change the world.
One of the great achievements of capitalism has been the evolution of different kinds of capital to support businesses at different stages of growth—from family, friends and other angel investors who support start-ups to the venture capitalists who help high-potential organizations grow, all the way through to the public-debt and -equity markets for large, scalable ideas. Different skills are required at different stages along the way—from the single-minded determination of the entrepreneur with an idea to the visionary and organizational capacities of the CEO leading a large corporation. Those like Bill Gates who make it all the way from the garage to the corporate boardroom as the head of their firm are remarkably rare.
Contrast this with the social sector, where the praise and reward always seems to be focused on innovative new ideas rather than the boring challenge of taking these ideas to scale. Social entrepreneurs are rightly celebrated, but we should also celebrate the social bankers, social venture capitalists, social equity investors, and so on. This is why I’m excited by the influx of suited MBAs into the world of doing good. And why, more generally, I think that those who want social change need to embrace the language and methods of business.
That does not mean that delivering social change should become a business— though if social entrepreneurs can find a way to harness the profit motive to achieve social good more quickly than through charity, as has recently happened in microfinance and is starting to take place in basic education, health care, etc then they would be daft not to do so. But the “philanthrocapitalists” that Michael Green and I write about are not looking to make a profit, they are trying to deliver social change. And, from Bill Gates and George Soros to Michael Bloomberg and Mo Ibrahim, they believe that the language and techniques that helped them succeed in business can be, if carefully applied to the admittedly more complex context of the social sector, a powerful force for good.
These philanthrocapitalists, armed with the tools of business, are starting to take on the challenges of finding and scaling solutions to the problems that blight the lives of more than a billion people on this planet who live in grinding poverty. Rather than bristling at the alien culture of business, social entrepreneurs in poor communities should be figuring out how to speak its language—and welcoming its arrival as the chance to finally have the impact they have always craved.