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Big Business, Bigger Impact – report from the Skoll World Forum

Skoll Scholar Mark Hlady gives us his perpective on this key session from Day 2 of the Skoll World Forum

Mark Hlady

Big Business, tadalafil Bigger Impact was delivered in an overflowing lecture theatre. Surrounded by an esteemed group of entrepreneurs and financers, sitting on stairs because all the seats were taken, I left excited and thoughtful. Excited because the people on the panel Kavita Prakash (Syngenta), Mark Davis (L’Oreal/Body Shop), and Tony Siesfeld (Monitor Institute) seemed to “get it”. Thoughtful, because a long-time social entrepreneur called out the contradiction between doing social good with one hand while doing social harm with the other.

I felt the panel “got it” because a consistent theme throughout the discussion was about moving social, environmental, and governance factors from a project basis, driven by a specialist groups (e.g., CSR groups), to a main business focus. Robert Annibale from Citi joked, we can’t commit 1% of our resources to “corporate social responsibility” – what does that mean we’re practicing the rest of the time? Corporate Irresponsibility?” Kavita from Syngenta had a more serious tone – she explained with conviction that small hold farmers in Africa represent a significant potential customer base, but they are largely inaccessible at this point. Kavita further explained that clearly Syngenta wants to help lift these farmers out of poverty because it mean they can purchase more seeds (a primary revenue source of Syngenta). The problem she explained was “How”. Similarly, L’Oreal has created a plan to fully integrate best sustainable sourcing practices it its innovation – and the question is “How”.

The Panel: Big Business, Bigger Impact

Robert Annibale, Mark Davis, Kavita Prakash-Mani, Tony Siesfeld

Overall – to see these executives from leading companies thinking hard about how to solve societal issues make me optimistic, though one audience question made me step back.

When a social entrepreneur implied a multinational food processor’s social initiatives were futile because the company’s main business was selling unhealthy products the audience’s shock was audible. Does a company need to be fully dedicated to a philosophy of positive change to do Good? Some members absolutely thought so. Other members thought the comment was quick to judge what was good and bad, and the source of each. Back to the issue in the comment, food processing. On one hand, it is easy to understand how unhealthy products may create more social harm (obesity, cardiac disease, and other health complications) than the social good they provide (immediate gratification), but does this mean these companies should stop their main business? Exploring the idea further it doesn’t seem to hold.

We must ask, is it really the company that is creating the social problem or is it the peoples’ consumption patterns? If it is consumption patterns, then are the patterns motivated by corporate marketing or is corporate marketing simply enabling people to realize an underlying motivation? This question  then leads us back to, what should corporates do to improve social well-being? The consensus in the room was that large companies should integrate SEG factors throughout the business, but should they also stop business lines that some perceive as harmful. If so, who should decide what is harmful?

These questions are appropriately large for the history of Oxford and the impact of the delegates at the Skoll World Forum. Now, regardless of the answer, it is clear that big business has a big impact and I am excited to be part of the conversation to figure out how that impact can be more positive.

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Aligning Operations For Impact

Sabre Collier is a Skoll Scholar and one of our Shell Foundation Fellows. She shares with us reflections from Johannesburg, see where she is working with GroFin. GroFin finances small and medium enterprises (SMEs) in Africa. 

I had the interesting experience recently of taking a preliminary GIIRS/ B Corp assessment. For those not familiar:

GIIRS is a ratings agency and analytics platform for impact investors and B Corp certification is to sustainable business what LEED certification is to green building or Fair Trade certification is to coffee.

B Corps are certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.Today, there is a growing community of more than 600 Certified B Corps from 15 countries and 60 industries working together toward 1 unifying goal: to redefine success in business (Read more).

The experience was interesting because it reveals some of the complexity and trade-offs that will increasingly be faced as impact investing and social business become more and more sophisticated and industrialized.

In general, I support the idea of the B Corp and GIIRS Rating as they are vital to sector development and positively changing the nature of business and finance. Also, the assessment was very comprehensive and useful for business improvement. I would highly encourage fellow entrepreneurs to use it even if just to gain better perspective on one’s business model. The assessment must have had 100 items from governance to transparency to worker rights to LEED certification to employee training to staff diversity to environmental responsibility to infinitely more.

However, the rigor of such an assessment, particularly for small and growing businesses in low-income communities and countries, may be a bit unrealistic. How do we ensure higher standards without precluding more economically disadvantaged segments who can’t afford to invest in LEED certified buildings or paid worker training, etc? How many organizations from this segment have limited growth just because they lack awareness, capacity or tools for impact tracking and measurement and how do we change this? Note that we have to to take this in consideration when it comes to both organizations and individuals or the social impact space will not fulfill its potential to empower the most vulnerable.

In their favor, GIIRS and B Corp do actually take these challenges into consideration and thus, assessments have stratifications with different criteria.

The very existence of these rating systems underscore the increasing sophistication of social impact measurement. Back in the day, when primarily non-profits and NGOs were delivering social impact programming, social impact measurement had only a few tools and smaller sets of indicators. As the private sector has increasingly embraced shared value and the third sector has sought more commercial approaches to impact, rigor has increased. We all know what gets measured gets done. In the private sector, performance indicators can be narrowed down at the most granular level to make decisions about a store, a program or an employee.

As the social impact space continues to grow with the emergence of new corporate and social ventures, impact data is also increasing. This creates a network effect which will possibly make disclosing a broader and broader array of social impacts a requirement for impact investors and social businesses. The small set of indicators reported within an annual report are useful but with GIIRS and B Corp, the indicators encapsulate the life of the business or organization.

This holds them accountable for the broader social mission they uphold, not just their programs, but their whole business model and operations. For example, if an organizational mission is advancing professional outcomes for disadvantaged groups, then their HR policies would theoretically show some inclusion of this target and some specific growth opportunities, such as training. If solar plant manufacturer’s mission is environmental sustainability, then this is shown in both the number of panels produced but also in their sourcing and transport systems. For a long time, social businesses and organizations could simply focus on the core indicators but it is more tactical to ensure mission is aligned with operations at every level. This will be critical as much more transparency and measurement become the norm.

In the long run, this will certainly be a good thing. It will force businesses and organizations that are already doing good to do better. However, it will bring additional costs and time requirements. For impact investors serving small and growing businesses, we will have to make special effort to help them through this process because their impact is immense and deserves to be better reflected. For impact investors and social businesses at large, align operations with impact to bring your “A Game”.

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Skoll Scholar Blogs: Austin Harris

Next in our series of blogs from this year’s Skoll Scholars is a post from Austin Harris.  Austin is the founder of Inkomoko, a Rwanda-based business accelerator for high-potential SMEs. 

Austin Harris

“I began my career working in finance, working first with a startup M&A and then a major bank. I appreciated the skills I gained, yet rarely felt a strong connection with the impact of my work. Throughout my career I have taken time to travel and volunteer in the developing world, witnessing hardships of many and the positive transformations that can be yielded by socially minded businesses.

In the beginning of 2010, I transitioned from traditional finance into microfinance, hoping to apply my work experience to financial services in areas of need. I worked in Bangladesh and then Rwanda, witnessing first-hand the transformational effect of lending and the notable growth in borrowers’ lives. In contrast to my former jobs, I felt proud of my contribution to a product that provided beneficial change.

Over my life, a variety of entrepreneurial projects have captivated and inspired me, continually building a desire to create a socially beneficial and sustainable business. In January 2012, I started Inkomoko, an accelerator firm in Rwanda that has been providing the necessary consulting, capacity building, and financing services for SMEs that are creating innovative products and services. The companies we are supporting are helping to expand and strengthen the Rwandan economy, and will serve as a model for others who are planning their own entrepreneurial ventures.

I am inspired most by providing growth to the developing world through the private sector in a way that can be both viable in business and impactful to the public. I believe supporting innovation through business will broaden industries as well as supply new career opportunities. I trust that original goods and services can benefit the people of a country as well as address many of the developing world’s pressing issues. My hope is to deliver the means for entrepreneurs to build constructive businesses. I also hope to be a conduit for investment in SMEs to help grow these businesses and broaden the areas they serve. This often overlooked sector is large in scale and has the ability to benefit all socioeconomic levels. With support and guidance, these SMEs can be a driving force in self-driven development.

A hurdle I strive to help overcome in the investment of SMEs is reducing the unknowns and strengthening the connection of the business to the outside world. By consulting for these companies, providing mentors who can report on company progress, and establishing a track record through our own financing, we develop a wealth of information and establish a history with SMEs. The intimate level of due diligence reduces the unknown factors in financing companies of this size and at this stage in development. It also opens up alternate forms of financing to reduce necessary collateral and provide affordable support with flexibility. Through our accelerator track, we can provide greater reassurance on the strength of the SME’s business and present a more comprehensive picture, giving investors greater understanding of viable SMEs and their prospects in the developing world.

My experience at Saïd will provide me greater understanding of financial services and business operations so I can expand the benefits of supporting and actively guiding SMEs. Saïd will deepen my knowledge and strengthen my ability to both improve my own business and advance other socially-minded businesses. In addition, the Skoll Foundation connects me to a wealth of knowledge and a supportive community. The Foundation will offer exposure to the successes and difficulties of others in similarly-minded tracks, and a learning opportunity that can be applied to my own venture. The combination of Saïd and Skoll will provide the support and guidance for me that I strive to extend to the businesses in Africa. “

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Skoll Scholar Blogs: Nicolás Argüello

Continuing our series of scholar blogs, here’s a post from Nicolás Argüello , another of our Skoll Scholars for 2013-14.  

Nicolás Argüello

Nicolás Argüello

Nicolás is co-founder and director of Mentores Solidarios, an education-focused nonprofit in Nicaragua that provides full scholarships, one-to-one mentorship, leadership training, job skills, and college transition assistance to over 300 impoverished yet academically exceptional students.

“Starting a business as an MBA student has many advantages. You get free, top-quality advice and mentoring from expert professors and accomplished classmates. Class projects can be used to develop your idea and refine your business plan. You can analyze strategy frameworks and financing schemes in terms of how they can best be applied to your business model. And since you’ve already decided to forgo a salary for the program’s duration (a deterrent to many aspiring entrepreneurs), you might as well invest your free time in developing your business instead of participating in career-related clubs, events and workshops—a massive time-sink for most MBA students.

However, not all MBA programs are the same. The degree to which business schools support entrepreneurs varies considerably. Whereas some schools offer few entrepreneurship-related opportunities, others have robust entrepreneurship programs. Yet, even in this latter category, there are top-performers that are in a league of their own. Such is the case for the Saïd Business School at the University of Oxford.

In my opinion, the Business School provides exceptional support to students that want to start a new business. The Entrepreneurship Centre offers skill-building programs such as ‘Building a Business’ and the ‘Lean LaunchPad’. The Skoll Centre for Social Entrepreneurship provides access to leading social innovation research, a vast network of social entrepreneurs across the world, and expert mentoring. The SBS Seed Fund helps entrepreneurs with great ideas to launch their businesses by providing early stage venture capital and considerable post-investment business support. The Entrepreneurship Project, part of the MBA program, allows you to work with classmates to develop a business plan and pitch it at an investor forum. You can then use the eight-week Strategic Consulting Project, also part of the MBA curriculum, to do market research and further develop your venture. The list goes on. All of these initiatives come together to create a truly remarkable ecosystem for entrepreneurs. And as an added bonus that not many other schools can claim, many of the world’s leading experts (in all kinds of academic subjects) are minutes away. Whether you want to start an off-grid solar energy distributor, a game-based learning startup or a financial services company (to name a few of the businesses that Oxford MBA graduates have recently launched), chances are you’ll find the support you need.

I came to Oxford to start a social enterprise and I cannot imagine a better place to do so. Staff at the Skoll Centre have been incredibly supportive and inspiring. They’ve put me in touch with other social entrepreneurs, given me great ideas (as well as much-appreciated critical feedback), and offered me working space, whiteboards, and all the post-its I need to brainstorm ideas and lay the foundations for my business. When I came to Oxford, I knew that I wanted to start a business, but I didn’t have a concrete idea. All I knew was that I wanted to return to Nicaragua and do something in the field of education. Thanks largely to all the support I’ve been given, I now have a very clear idea for a social enterprise: a technical school to provide job skills to unemployed youth in Nicaragua.

It’s time to start building.”

 

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Skoll Scholar Blogs: Chris (CK) Raine & Hello Sunday Morning

The new academic year is well underway, and we are excited to welcome the new intake of MBA students – including the new crop of Skoll Scholars for 2013-14

CK Raine

CK Raine

 Over the next few weeks we’ll be publishing blog posts from each of our Skoll Scholars, and hearing more about their ideas, passions and the impact they want to have on the world, now and in the future.

Chris (CK) Raine is the first of our Scholar-bloggers, and is the Founder and CEO of Hello Sunday Morning. You can find out more about him and all the other Skoll Scholars on the Skoll Centre web Site.

” I’m CK Raine. I’m passionate about developing online programs that change the way people think and behave, particularly focusing on health. I’m interested in understanding why people do stuff (often stuff that isn’t that good for you in the long term) and how you can incentivise them to change. Over the past five years, my work has focused on one particular health issue in the world – misuse of alcohol.

Misuse of alcohol is responsible for 4% of all deaths globally (around 2.5million – more than AIDS or tuberculosis) and costs governments tens of billions each and every year.  Yet, like most non-communicable diseases, rarely do entrepreneurs look for consumer-focused solutions to them. The problem is that “non-policy” solutions often lack the necessary evidence, don’t have a commercial market and are terminably unscalable. I think there is a huge opportunity to use technology to create scalable solutions to issues like this.

My team in Australia has built an NGO called Hello Sunday Morning. Over the past four years we have built a simple three month program to help individuals go through a process of change around the way they drink as well as use their story (through blogging) to recreate the culture around them. Our overall participant base now sits at 17,000 people, over 50% of whom drink at very hazardous levels. As you can see from the graph below that measures the audit score (alcohol consumption test) of people in our program vs other treatment services – we get a significantly higher amount of people who drink hazardously and want to change. These are people who either don’t want to, don’t have access to or don’t know how to get help from traditional services, yet they want to change! This is the power of technology, not just in alcohol – but for all behaviour change in society.

AUDIT Score distribution of HSM in Australia

AUDIT Score distribution of HSM and Australian general population

So where are we going? Changing the way the world uses alcohol is a HUGE opportunity. If we look at the annual social costs of alcohol (Over £ 20 billion in the UK, $AUD 36 billion in Australia and $US 200 billion in the United States), if we can reduce the costs by just 1% through changing a few hundred thousand people – we will have been successful.

My post-MBA goal is to continue to build Hello Sunday Morning as a program while also seeking large-scale investment from governments and individuals to build a technology company that takes the best in behaviour change programs in the world and use investment to scale them to the point that any individual in the world has an opportunity to change the way they drink, when they are ready.”