Social Mission as Strategy
By Neerja Raman
Measuring social return is also new; there is no accepted language or metric for it. In addition, given that factors like geography, culture, community norms and local relative poverty levels play a significant part in how a business should be run, investors want to make sure the social entrepreneur has hands on experience. Also, first time results need not mean replicability. For example, further development needs to be done to ensure that video-induced motivation can be made to last long enough to take the children to literacy and employability even when the first step has been successful in an area where traditional methods of education and reaching out have failed. Social entrepreneurs may sacrifice some profitability by reinvesting in their mission thus delaying a financial return on investment which makes it harder for the investor to track progress. Thus there are aspects of social entrepreneurship that do not fit traditional business models making it appear financially riskier than standard for profit business.
The table below highlights differences business and social entrepreneurship in order to assess when a socially motivated business approach may be more successful than a traditional approach.
| Business Entrepreneur | Social Entrepreneur |
| • Motivation: Revenue (social benefits follow) • Metric: growth, profits ($) • Market: growth demands geographic expansion (but 50-70% of world market lives in “relative poverty”) • ROI: lower costs enable larger customer base; reduction through supply chain optimization | • Motivation: Social agenda (economic benefits follow) • Metric: Social return sustained by revenue from business • Market: 4+ billion living in “relative poverty” (but growth is outcome of business sustainability) • SROI: investment in training leads to virtuous cycle of empowerment; product or service quality through employee and community support; (requires local knowledge) |
Conclusion
A global economy demands new insights. Multinationals must expand into new geographies to grow market share as well as to tap into new employee pools. As SCC, DE and VB show, entrepreneurs can employ a social mission as strategy to deliver competitive advantage and develop new markets in the twenty first century.
Note: “Doing well by doing good” was used to set vision for innovations in technology in Hewlett-Packard.
1) The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, by C.K. Prahalad; Wharton School Publishing
2) World Bank, PovertyNet website: Measuring poverty at the global level: “It has been estimated that in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day.”: http://go.worldbank.org/K7LWQUT9L0
3) Definition - Jerr Boschee: http://www.socialent.org/definitions.htm
4) SCC: http://www.southwestcreations.com/html/contact_us.htm
5) India Unbound: The Social and Economic Revolution from Independence to the Global Information Age, Gurcharan Das, Anchor Books, Introduction pg xiv
6) Digital Equalizer, Introduction: http://www.aifoundation.org/site/Programs/Digital%20Equalizer/index.html
7) DE presentation 05/09/06, Mythili Sankaran, DE Executive Director
8) AIF Annual Report 2004-2005, Programs: Digital Equalizer, pg 25
9) Berkeley Media Study: http://www2.sims.berkeley.edu/research/projects/how-much-info/sitemap.html
10) Projeto Uerę is a non-profit organization: http://www.projetouere.org.br/eng/s01/eng_p0101.htm
11) Vamos Blogar http://blogar.org/index.html
12) Video and Illiteracy : http://netsquared.org/conference/conference-sessions/watch-the-video-then-read-the-book-video-and-illiteracy
13) Reuters Digital Vision Program: http://rdvp.org/fellows/2005-2006/saori-fotenos
14) The Working Poor: Invisible in America by David K. Shipler page ix www.vintagebooks.com
Acknowledgements:
1. Sincere thanks to Susan Matteucci, Mythili Sankaran, Saori Fotenos, Deepti Rohatgi for candid interviews and permission to analyze their operations.
2. This article would not have been possible without the expert guidance of Karen Coppock, Executive Director, Reuters Digital Vision Program, Stanford University.
3. Thanks to Reuters Foundation, Digital Vision Fellows and staff for supporting the research for this article.
