Social Entrepreneurs in Dalian

On Tuesday 13 September, 2011, over 40 social entrepreneurs of the Schwab Foundation global community convened in Dalian, China for the World Economic Forum's Annual Meeting of the New Champions.

Woven into the fabric of several conversations among social entrepreneurs was the higher calling to serve underserved populations, the feeling of a greater responsibility to provide intellectual leadership for public policy in their particular issue area, and a commitment to each other to ensure that the social enterprise space was delivering the greatest possible good. There are two sessions of note from Tuesday afternoon where these themes surfaced.

First, we invited as a guest speaker the innovation strategy firm, Frog Design, to speak to the community about scaling up their enterprises in new frontier markets. Frog challenged social entrepreneurs to contemplate how the way in which they deliver impact must change when they move to a new context. This at first sounds obvious and straightforward. However, we rarely spend enough time thinking about the differences across situations. We are caught off guard when a tremendous success in one community is hard to replicate in a seemingly similar community. What we forget is that success in one context can often hide shortcomings that otherwise would be surfaced in another context.  This is not to say that all successes are a chance of circumstances. Rather, it means that there are so many considerations we must contemplate when approaching new or unique contexts.

Ignoring the importance of context can have large ramifications beyond the beneficiaries of the enterprise. It can also create a negative hype about the sector at large and can cause irrational speculation about the risks for other social enterprises to scale into new markets. With this in mind, several social entrepreneurs in the Schwab Community expressed an ethical obligation to make sure that they scaled their enterprises responsibly.

The second session focused on three thematic areas that require further collective reflection and coordinated action of the Schwab Community. These three themes were: 1)How to serve the Base of the Pyramid in a way that is sustainable for the enterprise, is an effective market intervention and that treats the beneficiaries or customers with dignity 2) What governance mechanisms (e.g. Boards of Directors, Advisory Committees, Reporting mechanisms) should social enterprises adapt to have the right level of transparency, accountability and solid decision-making and 3)Should there be a code of ethics for social enterprises and if so what should it include? A few questions that were raised include: at what point does a highly profitable social enterprise cease to become a socially focused enterprise? Should there be a standard multiplier for what is a fair salary differential between the highest paid employee and lowest paid employee of a social enterprise?

Often we think that social enterprises are intrinsically ethical organizations because social impact is inherent to their strategy. Yet, in an increasingly complex world where every interaction we have has an impact on others, is this enough? Should social enterprises be held to a higher standard, and if so, is this because social enterprises are setting the bar for other businesses and institutions or because they have committed to a higher societal purpose than others? What are your thoughts?

Abigail Noble

 

Editors Note
Abigail Noble, Head of Africa, Schwab Foundation for Social Entrepreneurship