Three lessons for leaders from social entrepreneurs

A great deal of the conversation in Davos this year focused on creating greater inclusive growth, particularly for those at the base of the socio-economic pyramid. The need for collaborative approaches was a near-universal refrain.

Social entrepreneurs are crucial to the global conversation about inclusive growth; they are innovators who use market forces and business discipline to provide solutions for local problems and improve the lives of low-income and marginalized people.

For the past 15 years, the Schwab Foundation for Social Entrepreneurship, co-founded by Klaus and Hilde Schwab, has supported the participation of the Social Entrepreneurs’ delegation at the Annual Meeting. While this year’s Davos brought to light a renewed focus on inequality and social exclusion, the stark reality is that we are still moving in the wrong direction. Global inequality is increasing so dramatically that soon the world’s wealthiest 1% will hold more net wealth than the remaining 99% combined. Reversing this trend is the most urgent calling of our time, and will require the attention and commitment of decision-makers at all levels.

The Social Entrepreneurs’ delegation to the Annual Meeting 2015 has three practical suggestions to offer leaders of business and politics, to increase momentum and turn goodwill into action:

1. Make inclusive growth an explicit part of your agenda

Economic growth alone will not lead to prosperity for all. Manufacturing, construction, processing, retail, services and trade are all triggers for generating employment for millions of young people entering labour markets every year. Yet, for their immense contribution to the global economy, workers in a vast range of emerging economies remain vulnerable to low and uncertain wages, appalling work and living conditions, unstable jobs, financial exclusion, and a lack of social security and protection.

“Jobless growth – growth without universal education, without access to clean water, sanitation or primary healthcare – is unsustainable growth,” said Anne Githuku-Shongwe, CEO of Afroes Transformational Games. “Private companies and governments alike must structure their investments, trainings and CSR activities more deliberately to ensure the skills that are being developed and the jobs that are being created measurably reduce inequality.”

2. Infuse your executive teams with a “can do” attitude

A hallmark of this year’s Annual Meeting was the willingness of top decision-makers to listen and learn from social change-makers. “I was in Davos a few years ago, and the difference between now and then is remarkable,” said Asher Hasan, Founder of Naya Jeevan. We all feel encouraged and empowered to do deep dives with leaders who have tremendous influence, and you can sense their sincerity and interest in engaging with you.”

Social Entrepreneurs can often achieve more in a 30-minute meeting in Davos than they can over a period of many years in their “real lives”. It’s all about talking to CEOs and decision-makers who understand the mutual value of collaboration and have the influence to make things happen. “Typically, when we approach companies, we start from the bottom and fight hard to work our way up,” said Tom Szaky, CEO of TerraCycle, which has engaged over 29 million people to recycle 2.6 billion units of waste. “But everyone here in Davos is in a leadership position. They come to the discussion with a completely different attitude. Instead of expressing scepticism about why it won’t work, they ask: ‘How can we make this work?’ And that breaks down so many barriers and accelerates things.”

3. Contribute your core expertise and assets

The private sector can and should be a powerful contributor when it comes to creating more inclusive societies. “When it comes to social challenges, we have traditionally relied on governments and philanthropic organizations,” said Nick O’Donohoe, CEO of Big Society Capital in the UK and Chair of the Global Agenda Council on Social Innovation. “But when you think about what’s needed to make headway against complex social problems, it is human capital. It is technological capital. It is global networks. It is expertise. And when you think about who has that, it’s really corporations.”

How can corporate leaders be more creative with the resources at their disposal, in order to contribute to inclusive growth? Maybe they could create a secondee programme to coach start-ups or offer retiring employees meaningful opportunities to apply their expertise to social-sector organizations as an “encore” career. Or they could commit to filling a portion of entry-level positions with unemployed young people who have been made workforce-ready by rigorous, results-based social enterprises such as Education for Employment, which operates in six countries across the Middle East and North Africa.

Companies could also partner with social entrepreneurs to create social impact along supply chains, or provide “social impact goods and services” at points of distribution. They could offer expertise and technology systems, like Hewlett Packard did to help Martin Burt, Schwab Foundation Social Entrepreneur, digitize his Poverty Stoplight diagnostic tool. They could offer data to solve a problem directly related to a business model, such as MasterCard is doing to address financial inclusion. And, if they’re feeling truly radical, they could champion a complete reinvention of their business model, akin to Pearson’s transformation from publisher to education company, committed to improving student outcomes.

Whatever a company chooses to do, however it chooses to start, the time is now. The untapped market opportunities are vast. The ideas are battle-tested and ready to be scaled up globally. Creating truly inclusive growth requires a commitment to action from companies around the world – starting with yours.

Author: Katherine Milligan is the Director and Head of the Schwab Foundation for Social Entrepreneurship.

Image: Commuters wait at a bus stop early in the morning near Howth, in Dublin, November 19, 2010. REUTERS/Cathal McNaughton