Global Social Benefit Entrepreneurship and the Jesuit Network

Co-Authors

James L. Koch

Santa ClaraUniversity

Michael Petty, S.J.

CPAL

Albert Bruno

Santa ClaraUniversity

Eric Carlson

Santa ClaraUniversity

Pat Guerra

Santa ClaraUniversity

Pedro Hernández-Ramos

Santa ClaraUniversity

14th Annual World Forum

Colleagues in Jesuit Business Education

International Association of Jesuit Business Schools

Business and Education in an Era of Globalization:

The Jesuit Position

July 20-23, 2008

The Santa ClaraUniversity Model

With a full-range of related initiatives to support its ongoing development, the Global Social Benefit Incubator is a pivotal program in the Center for Science, Technology, and Society. Founded in 2003, it has evolved out of the Center’s core competencies in understanding the social dimensions of technological change from a systems perspective, seven years of collaboration with the Tech Museum Awards—Technology Benefiting Humanity, and a dynamic network of highly regarded Silicon Valley mentors and thought leaders working in concert with tenured faculty in the nationally ranked Leavey School of Business. In addition, the Center’s interdisciplinary foundation has enabled the GSBI to draw on relevant knowledge in engineering, law, education and the social sciences, as well as targeted expertise in the development of web-enabled learning communities.

Mobilizing Silicon Valley Resources

In the Summer 2007 issue of Innovations, an article by Diego Rodriguez and Doug Solomon described the Global Social Benefit Incubator as one of six examples of successful networked innovation today:

Based at Santa ClaraUniversity, it provides an innovative mix of both

physical and virtual collaboration and education to enable social

entrepreneurs to scale their endeavors and achieve sustainability. GSBI

has a two week “course” they offer each year, as well as pre and post

course mentoring and collaboration. . .

Describing what can be learned from efforts like the GSBI about how things get done, the authors define network innovation systems as being “built on capabilities and skills rather than rank and reporting structures” and “a culture of collaboration that enables networked innovation to happen.” In a similar vein, an analysis by Geoffrey Desa of Tech Laureate applicant pools for GSBI selection identifies resource mobilizing and “collective agency” as significant factors in the scalability of social ventures (University of Washington Ph.D. dissertation, personal correspondence). The GSBI mobilizes relevant Silicon Valley resources through an intensive in-residence education program that is augmented with web-enabled pre-work and on-going incubation support for social enterprises with the potential for large-scale impact. In arching a bridge between Silicon Valley and social entrepreneurs the GSBI seeks, to paraphrase Gandhi, “be the change we wish to see.”

Silicon Valley and Santa ClaraUniversity—A Unique DNA

The GSBI has been built from the ground up through intimate knowledge of the work of social entrepreneurs and the barriers they face in achieving sustainability (see, Koch, J.L., et.al., (2004). “The Global Social Benefit Incubator: Toward a New Pedagogy for Scaling in Social Benefit Entrepreneurship,” STS Nexus, Vol. 5. Number 1, 2004, pp. 44-50). These foundational efforts have benefited from the best thinking of actively engaged Silicon Valley entrepreneurs, as well as business school faculty, and experts in pedagogical design from Carnegie Mellon and Santa ClaraUniversity[Hernandez-Ramos, P., Koch, J., Bruno, A., Carlson, E., Guerra, P. (2007). Designing the Online Collaboratory for the Global Social Benefit Incubator, Innovate: Journal of Online Education, 4 (1), 35 pages, These cross-boundary collaborations emerged out of the unique “DNA” of the Center for Science, Technology, and Society under Chairman Regis McKenna’s and Founding Director Jim Koch’s shared vision of the Center as a network as opposed to a conventional disciplinary-based academic department or think tank. This approach reflects both Silicon Valley’s non-hierarchical ethos as well as Santa ClaraUniversity’s Jesuit mission of fostering the common good through active engagement with society.

Building on Core Competencies

In 2001 the Center co-founded the Tech Museum Awards—Technology Benefiting Humanity. Over the past seven years its continuing leadership of a global judging process has enabled the Center to examine the widest possible range of technologies and to gain a first hand appreciation of the vital role of social entrepreneurs in the imaginative use of these tools. The inspired work of these individuals underscores the critical role of human agency, with social entrepreneurs driving approximately seventy five percent of all the innovations recognized by the Tech Awards during the period 2001-2007 (Koch, J.L. (2006). Tech Laureates—Searchers and Pathfinders, STS Nexus, Volume 7, No 1, 10-14). Through trial and error learning and imaginative combinations of heterogeneous resources social entrepreneurs use both indigenous and advanced technologies to develop significant new ways of addressing critical human concerns. Their path finding efforts extend beyond technology solutions to models of social change. When combined with innovative business models that properly align incentives, the work of these pathfinders has the potential for large scale impact.

Focusing on Large-Scale Impact

The GSBI supports the scaling up aspirations of social entrepreneurs though capacity building that combines leading-edge knowledge with access to an exceptional network of highly engaged mentors. The business plans developed through this program are often novel and always adapted to the local realities of ventures. They address the fundamental challenges associated with going from proof-of-concept to large scale replication (e.g., incentive-based distribution and supply chains, leadership and organizational capacity, etc.). They reflect solutions that provide goods and services to improve human well-being and address unmet needs, while at the same time creating good livelihoods. Plans developed in the GSBI have contributed to a success rate two and a half times greater than that of conventional for-profit incubators More than twenty-five percent of GSBI alumni have “scaled” significantly—most by placing an increased emphasis on achieving growth targets through earned income.

Enlisting World Class Partners

In additional to its seminal work with the Tech Laureates, the GSBI has collaborated with the World Bank Development Marketplace (WBDM), Acumen Fund, IFC’s Grassroots Business Initiative, and others. In the case of WBDM, the Global Social Benefit Incubator is recognized as the premier program for developing the knowledge and skills that executive leader finalists will need if they are to scale their organizations. WBDM colleagues actively screen candidates and promote the GSBI in conjunction with their goal of providing winner services for innovations which have the potential for large-scale impact. In 2007 a two-hour GSBI symposium at the WBDM was attended and enthusiastically reviewed by more than one hundred of approximately 125 competition finalists. Similarly, Acumen, IFC, and MIT have proactively provided funding to support the participation of social ventures in the GSBI, and both Gram Vikas and Fundación Paraguaya from the Skoll Fellows portfolio have developed business plans and strategies for effectively deploying major grants to achieve sustainability at scale through the GSBI.

The GSBI’s mobilization of Silicon Valley expertise, its partner network, and its continuously improving model of education and ongoing incubation positions this effort as a unique high-impact program in the field of social entrepreneurship. In the next sections we will describe the logic model or theory of change that informs this work; the four key elements of the GSBI that are unique to this program; and a proposed Skoll partnership investment to strengthen key program elements and position the GSBI for wider global impact. We will also address how the value created by these investments in the GSBI can contribute to its long-term sustainability.

GSBI Theory of Change

Five factors are frequently used to describe a “logic model” or theory of change: resources or inputs, activities, outputs, outcomes, and impact. These factors and how they apply to the GSBI are illustrated in the Figure 1 below.

Resources, Inputs, and Activities. The GSBI has established effective collaborations with the Tech Awards, World Bank Development Marketplace, and Social-Edge to identify and select scalable social ventures—many of which are or have the potential to become best of breed examples (e.g., Drishtee, IDE-India, Kiva, Equal Access, DDD, etc.). Fifteen to eighteen social entrepreneurs are invited to each GSBI class. Activities during the in-residence phase of the GSBI tap leading edge knowledge from the Leavey School of Business in such areas as supply chain management, finance and business model innovation, marketing, leadership, and business development. This content is augmented by thought leading workshop sessions with Geoffrey Moore (crossing the chasm), Regis McKenna (branding), Jeff Miller (vertical market strategies), Charly Kleissner (hybrid business models), Sara Olsen (measuring social return on investment) and others, as well as leading case examples in social entrepreneurship (e.g., Aravind, Kick-Start, etc.)

Approximately twenty successful and highly-regarded Silicon Valley mentors are a critical resource and success factor for the GSBI (see GSBI Mentors, Attachment 1). They are selected and trained in the GSBI program objectives, business planning frameworks, and lessons learned from work with earlier cohorts. In addition, they are carefully matched with social entrepreneurs to augment the in-residence phase of the program as well as the associated pre-work that occurs through distance learning, and to provide on-going support in the months following the GSBI. Follow-up work also benefits significantly from the pairing of each organization with MBA student consulting projects in Professor Eric Carlson’s Social Entrepreneurship class.

The pre-work phase of the GSBI follows a Social Edge application process which includes exercises on value propositions, market segmentation, and revenue/expense models. Mentoring that takes place during two-months prior to arrival for the in-residence “boot-camp” critically examines these work products and includes the development of a five year vision as well as an elevator pitch. The latter is used as a personal introduction at the MissionGardens welcoming barbeque at a ceremony which includes an address by Santa Clara University President Paul Locatelli, S.J., Global Secretary for Jesuit Higher Education. On-line advance work has proven to accelerate the learning that occurs during the two-week on campus program, and this is evident in the quality of business plan outputs. In addition, the GSBI’s competency in on-line delivery provides a channel for future program scaling—or reaching a much wider global audience in a cost effective manner.

Outputs. The primary output of the GSBI is a scalable business plan, or a plan that enables an organization to serve more beneficiaries in a financially sustainable way. Consistent with the tenets of strategy research, the GSBI emphasis is on how above average performance can be achieved and sustained (see, for example, Rumelt, R.P., Schendel, D., & Teece, D.J. [1991]. Strategic Management Journal, 12, Winter Special Issue, 5-29). In addition, to a focus on revenue and expense drivers this work inevitably entails the development of a second output—a total solution, or one that encompasses considerations which may range from educating the market to distribution, partnering, and the local development of critical skills. These are common issues in Silicon Valley and the theory of leverage that underlies the GSBI involves bringing this acumen—what we do best—to social ventures around the world in the most robust manner possible. In this way scale exists less in the number of organizations served per year and more in the growing number of beneficiaries served by these organizations and their ability to become sustainable at scale. In addition, by embedding this work in a mission-aligned university, the expanding GSBI alumni network is envisioned as becoming a global innovation eco-system and research laboratory for developing best practice case studies, new business models and models of large-scale social change.

Outcomes and Impact. The theory of scale that underlies the GSBI is fundamentally grounded in the Center’s appreciation of the vital role of social entrepreneurs. The compassion, perseverance and imagination that inspires their work also mobilizes the commitment of individuals and cross-sector stakeholders around them. They are the feet on the ground agents of change that others who seek to optimize both social returns and financial viability can emulate. Four principles guide the work of the GSBI with these individuals:

  • The discipline of business planning adapted to the context of a social enterprise empowers leaders to act in ways that combine competence with the conscience and compassion that inspires their work—business planning competence is critical in developing a sustainable and scalable organization.
  • The incorporation of market-based approaches has proven to be an efficient and effective solution to social needs because they align incentives with behaviors that are critical to success—market-based incentives enhance the sustainability of social ventures.
  • The ability to access tacit knowledge through Silicon Valley executives will facilitate reflective engagement with new concepts and the transfer of new knowledge to practical applications—mentoring accelerates the development of both useful skills and leadership acumen.
  • The sharing of knowledge and resources through an on-line collaboratory is essential to continuous learning in the on-going incubation of widely dispersed social enterprises—scaling the GSBI and peer-to-peer learning will be enhanced through field building efforts that encompass research and policy advocacy as well as parallel development of on-line resources.

The GSBI has evolved out of an appreciation for the values and insights that social entrepreneurs bring to the design and use of technology—a perspective that views technology as a tool for increasing human welfare as opposed to personal wealth maximization. It does not attempt to impose dominant economic models on local sensitivities and the lived experience of social entrepreneurs, but to empower these leaders with the disciplined logic of business planning, practical skills, and a supporting eco-system. The GSBI engages Silicon Valley in the problems of our world and allows mentors to accompany path finding social entrepreneurs in their search for solutions that are financially sustainable. Through its six years of work, the GSBI has demonstrated a twenty-five percent success rate, which we measure by evidence of substantial social benefit impact, significant growth in beneficiaries served, and income streams exceeding expenses—with an emphasis on income growth rates from economic buyers greater than expense growth rates. This success rate is two and a half times greater than the ten percent success rates in incubators that serve for-profit organizations.

Moving from Hub-and-Spoke Learning to a True Network

In 2007 eminent sociologist and noted information society authority Manual Castells became associated with the STS Center to participate in what he sees as a novel effort by the GSBI to bridge an arc between Silicon Valley acumen and human needs in our globalizing world. In placing this work in the broader context of social change his thinking underscores the need to capture the power of networks in order to accelerate innovation in our globally interconnected world.The formative work of Castells on network society also underscores the need to conceive of networks not as hub-and-spoke systems of information exchange, but as true multi-nodal systems of knowledge and resource exchange. In this vein, Allen Hammond from World Resources Institute (WRI) has become a Visiting Senior Scholar in the STS Center in order to work more closely with its leadership team in examining how deeper sector-based market and supplier information might accelerate the development of large scale impact through cross-learning in geographically diffuse networks of social entrepreneurs in the water treatment field. As a specific instantiation of true network learning the GSBI envisions this effort as advancing knowledge and practice in how to provide communities with access to affordable clean water.Approximately 1.2 billion of the world’s population lacks access to safe water and water borne disease accounts for eighty percent of human illness around the world. One third of the 2008 GSBI class will be comprised of water treatment organizations. Findings from this sector focused work, as well as future sector work in off-grid energy and information technology will be disseminatedwidely.

The GSBI theory of change is based on the leverage that comes from combining carefully screened social entrepreneurs with a unique pedagogy that integrates education with super mentors. In turn, scale in achieving outcomes that address urgent human needs is viewed as occurring through the innovative work of social entrepreneurs who are empowered by new skills as well as enhanced access to capital and innovation resources. Tacit business model knowledge that exists through Silicon Valley mentors needs to be complemented by a global network of similar capabilities to support business model innovations that make sense in highly diverse institutional and cultural settings. The example of Gram Vikas in India, one of manyGSBI success stories, illustrates the importance of local culture and the need for local capacity building services that might be offered through IAJBS (see box insert below).