Welcome the World-Changers
Today’s social innovators combine all the traits of a successful entrepreneur—ambition,
creativity, persistence, business know-how, a strong stomach for risk—with the unshakeable
conviction that they can change the world. And you know what? THEY ARE.
Faced with Big Problems—shrinking land and water resources, rising energy prices
or global poverty—many of us feel overwhelmed. A social entrepreneur feels inspired
— this same problem presents an opportunity.
Social entrepreneurs are relatively new to the business landscape. If you’re
not familiar with the term, here’s a quick rundown: social entrepreneurs operate
on large scale, using market-based approaches to create social benefits, like producing
renewable energy or eliminating homelessness. They aim to be profitable, but profit
isn’t their sole motivator.
A thriving ecosystem of public, private and government support services is growing
up around them. And many believe that the men and women working in this space—call
it a “fourth sector,” as Harvard does—will reshape the way we think of capitalism.
And in this new space, Smith alumni are leading the way.
Show Me the Money
Jigar Shah MBA ’01 is in that small category of extraordinary thinkers. He founded
Sun Edison, the nation’s largest and most successful provider of solar energy, and
he created its innovative business model.
At the time, most companies weren’t interested in investing in solar equipment
because they wouldn’t see returns for many years. So Sun Edison installs the arrays
for free. Companies don’t have to invest in the equipment to generate solar power;
they can just purchase the power itself.
Customers agree to a set price for at least 10 years. Sun Edison gets a steady
cash flow, and its customer gets energy prices that are locked in and reliable.
This arrangement quickly won a following among some big corporations, including
Staples, Whole Foods, IKEA and Kohls. “People aren’t doing solar because they’re
angels. They’re doing it because they hate their utility company,” Shah says cheerfully.
Shah had been fascinated with solar energy since he was a teenager. He pursued
a degree in mechanical engineering because no one had any better ideas on how he
could get into the solar business. He wrote the business plan for SunEdison as an
assignment for one of his MBA classes.
After graduation, he joined BP Solar as an analyst and pitched the idea for SunEdison
to his bosses, but it didn’t catch their interest. In September 2003 he quit his
job, took out a loan on his house and started Sun Edison.
While environmentalists support solar power because it can supply clean, green,
quiet, virtually limitless electricity, Shah freely admits that he was in it for
“The term social entrepreneur is a misnomer. I just call myself an entrepreneur,”
says Shah. “We all have to live by the rules of capitalism. Can you make money by
doing things that are in the best interest of society? Yes, you can. There are technologies
that have multiple positive externalities and are also low-risk. Businesses that
don’t think of the negative externalities face significant headwinds now.”
In his view, the world’s big problems represent a big business opportunity. “I’ve
made more money in this sector that I could have at BP or at a consulting firm,”
says Shah. “I think this is where the next crop of billionaires will come from.”
“Think Unreasonable Thoughts”
It isn’t easy to make a profit—hopefully, a significant profit—while addressing
a pressing societal problem.
Nick Singer ’08 hopes to tackle one of the most serious problems hindering development
in Africa: mobility. In rural areas, most roads are nearly impassable by car. Not
that most rural Africans can afford even the most stripped-down vehicle. The most
common method of transport is a three-wheeled, motorized rickshaw
Mobius Motors has designed a tough, bare-bones car for East Africa’s rough roads
and rural consumers—one with heavy-duty suspension and a tough tubular steel frame,
and without costly extras like glass windows or air conditioning. Mobius vehicles
will cost $6,000 each and “can go anywhere,” Singer says proudly. “Our parts come
from all over the world,” says Singer, who manages the company’s complex global-supply
chain. “Long-term, we’d like to use as many local products as we can. But braking
or steering systems, anything with complex moving parts or that is safety-critical
— right now, we have to source globally.”
The company has completed two prototypes and expects to produce its first 50
vehicles this year. “This year is about market validation and learning,” says Singer.
“We have to put these cars together by hand, and we want to get them in the hands
of customers and entrepreneurs on the road to see what they love and where the design
needs to be tweaked.”
Increasing the average person’s ability to get around will boost economic development
in some big ways. Reliable, affordable cars will help local entrepreneurs get their
products to market, improve the delivery of health and education services, and move
supplies from place to place more efficiently.
Mobius’ investors are motivated by the social good the company promises, but
also by the prospect of a significant return. Mobius is shooting for $2 billion
in revenues in 10 years’ time. Singer thinks Mobius is on the right path—and their
Singer, a supply chain and marketing major at Smith, never expected to end up
in Nairobi, Kenya, where Mobius is headquartered. After graduation he went to work
for Deloitte as a consultant on supply chain projects. He enjoyed it, but jumped
at a chance to work with an NGO that sent management consultants into the developing
world. The work took him to Swaziland for a time, and when he returned to the U.S.,
he searched for another global, socially responsible company to use his talents.
As Mobius’ supply chain senior associate, Singer traveled about 50,000 miles
across four continents over a recent three-month-period, visiting potential global
suppliers as well as small enterprises in Kenya. He spends a lot of time dealing
with the intricacies of government regulations and import/export laws in a country
the World Bank ranks among the worst for ease of trading goods across borders.
Still, the career rewards can be substantial. “How many other 26-year-olds are
running a global automotive supply chain?” he asks. “In this field, you get to do
a lot more a lot earlier in your career. Nairobi in particular is full of social
entrepreneurs. Everywhere you go there are people who think unreasonable thoughts.”
“I want to leave my legacy,” says Singer. “If Mobius achieves our goals to revolutionize
transportation in developing countries while generating world-class manufacturing
capabilities in East Africa, then this region would become globally competitive
across numerous industries. No one has done that before. That’s a great thing to
be part of.”
That sense of mission, of making a big difference to a big problem, is why people
become social entrepreneurs, says Lynn Reyes, MBA ’99. “It’s not because things
are easy, but because you like to crack tough nuts.”
Reyes is practicing social innovation from inside one of the largest, most corporate
environments out there: IBM. After a stint at the World Bank, she went to work as
a consultant in IBM’s strategy group focusing on economic development, helping governments
of developing countries with fiscal management. She then shifted to the IBM Institute
for Business Value, one of the nation’s largest think tanks, where she was the global
government lead. This summer she moved to Dubai with her family to work on IBM’s
Smarter Cities business development initiative in the Middle East and Africa.
“We’re looking at how information across systems can be shared and put to work
in new, generative ways,” says Reyes. “For example, there’s terrible traffic in
Nairobi that affects businesses and people’s lives. How can you use the information
that sits in all kinds of places to make decisions that have value for the long
Social innovation is easy to pursue at IBM because it is ingrained in the company’s
corporate values, says Reyes. “IBM realizes that if we’re going to see the benefits
of change, then part of that is making the planet smarter through information technology.
We want to help cities deal with the rapid pace of urbanization.”
Mobility is a serious problem in Africa. In America, one of the most intractable
social problems is K-12 education. Sarah Campbell, MBA ’10, originally wanted to
work in education policy, but a stint in the classroom with Teach for America convinced
her that she had a better chance to effect change by dealing directly with students.
Campbell met Susan Schaeffler, founder of the first Knowledge Is Power Program
(KIPP) public charter school in Washington, D.C., and joined the educational startup
as its first fifth-grade math teacher. In short order she became vice principal,
then principal, then chief academic officer of KIPP’s regional office, overseeing
four schools. (KIPP opened its 10th school this summer).
Today she is senior director of national-local leadership development with the
KIPP Foundation, training KIPP leaders other educators from around the country in
ways to use KIPP principles in their own schools and districts. While earning her
executive MBA from Smith, she says she was surprised to discover that KIPP’s entrepreneurial
nature made it more nimble than the organizations of her classmates.
“My classmates would say ‘We could never change that in our company because that’s
the way it is,’ Campbell says. “I would say, ‘Are you kidding? I’m going to go change
That nimbleness is part of what makes social enterprises more effective than
governments in driving societal change. KIPP is obsessed with its organizational
report card. It zealously tracks data to find best practices that can be replicated
across all schools, and to swiftly change practices that aren’t making an impact.
Few if any government institutions can replicate that responsiveness.
Of the statistics KIPP tracks, Campbell is most proud that 100 percent of the
fifth graders she taught went on to graduate from high school — double the rate
of other D.C. fifth-graders — and 80 percent of them went on to college, 10 times
the rate in the city’s public schools.
“In a traditional business, the number one driver is profit. For us, the number
one driver is results. We measure our organization’s success by the success of our
kids,” says Campbell. “We track kids from middle school through college graduation.
College graduation is our indicator of success, and we can see that our work pays
off in better graduation rates,” Campbell says. “Traditional businesses are totally
driven by the bottom line. Well, so am I.”
Doing Good, But Data-Driven
That may be the biggest different between today’s social innovators and the do-gooders
of yore, says Melissa Carrier, executive director of the Smith School’s Center for
Social Value Creation. This crop of social entrepreneurs cares about measurable
impact. It is a rigorous, business-school approach to social change that weds the
best of the corporate world with the best of the not-for-profit, social benefits
“Social enterprise is about really leveraging the strengths and assets of the
business sector to address unsolved problems in the social sector,” says Carrier.
“Addressing these problems through policy, philanthropy or volunteerism has not
brought sustained change. These are important tools in addressing certain immediate
needs but there is simply not enough philanthropic or government dollars to wipe
out hunger, disease, climate change, poverty and more.”
“But when you impart business principles, get industry competitively engaged,
and think big, social entrepreneurs can discover ways to unleash markets that have
failed or have been locked up — and that creates significant positive value for
the world around us.”
Teaching Social Entrepreneurship
Melissa Carrier, executive director of the Smith School’s Center for Social Value
Creation (CSVC), spoke to Smith Business magazine.
Q: Why should business schools care about social value creation?
At the Smith School of Business, we recognize that the role of business is irrevocably
changing. Business leaders are increasingly being called upon to redefine success
and organizational viability through goals that not only ensure desired business
outcomes, but that also enable the advancement of the quality of life for stakeholders
and society as a whole. As a result, we are seeing innovations in business models
and the application of business to address social and environmental challenges.
We believe that educational institutions have an important role to play here. That’s
the world we are preparing students for.
And they’re ready for it. Generation Y seems to have given themselves permission
to look at the current system and think, “Why does it have to be that way?” They
are not constrained by traditional ideas of career success, organizational structures
and institutional walls. I think we are seeing a 10- or 20-year transition that
will bring sweeping changes in all sectors as this generation finds itself in strategic
leadership positions. As business educators, we must be at the cutting edge of the
trend — now.
Q: Why should businesses care about social value creation?
I think most companies realize that we are in unchartered territory this decade.
The world has become inextricably connected, increasingly complex and even unpredictable
in many ways. Over the next several decades, we will see an evolution from pure
private-sector market capitalism to a much deeper and broader role for business.
Society demands it. Creating long-term value for the firm and its shareholders demands
Firms are moving away from the “do no harm” compliance and risk management perspective
to “how can we create new revenue?” Then the opportunity for simultaneous creation
of social, environmental and economic benefit becomes strategic, and it impacts
every business decision you make. The activities that were viewed as simply “doing
good” can actually result in revenue creation and competitive advantage over time.
Research shows that firms who do this well perform better and have more satisfied
employees than those who don’t.
But let’s be clear that this is not about a pretty corporate social responsibility
report. And it's not easy. This is about a mindset, a shift in thinking that permeates
the organization, drives innovation, engages your workforce and becomes everyone’s
job to co-create social impact and economic returns, thus giving long-term viability
to the organization and the global community in which it operates.
The Center for Social Value Creation
The Smith School’s Center for Social Value Creation is primarily student focused
and delivers hands-on learning opportunities through the Social Innovation Fellows
program, consulting projects, programmatic and extracurricular activities, its connection
with industry leaders, and events such as the annual Social Enterprise Symposium.
It invests in the creation of new courses and content integration of existing courses
at the graduate and undergraduate level, and funds faculty research in the areas
of corporate social responsibility and sustainability. Launched in 2009, the center’s
mission is to create a better world through business principles, and to prepare
Smith students as business leaders to advance economic prosperity and social change.
For more information please call 301.405.9454, or visit