As I look back over 20-plus years of work with social entrepreneurs and their organizations, I often wonder where I got sidetracked into thinking that success meant the entrepreneur scaling up his or her venture so that it achieved massive impact on national and international policy and practice. On reflection, it is easy to understand how the discourse on scale took the path it did, and why many of us were seduced into thinking that the promise of transformational social change lay solely in the heroic man or woman and their individual organization – hence the imperative to ramp up and replicate that single organization as fast as possible.
Fortunately, there is a collective acknowledgement among most of us who have had a role in influencing the thinking on ‘social entrepreneurship’ that it takes a lot more than a passionate, talented and charismatic visionary to change the world – although that is certainly a good starting point.
Of course, no one doubts that the size, breadth and scope of an organization relates directly to its impact, both positive and negative. Take ExxonMobil, currently the world’s leading company according to the Financial Times. This oil and gas giant operates in over 200 countries on an annual budget of $500 billion; it has a significant impact on our lives and the environment.
The Fortune 500 companies have influenced our thinking to such an extent that ‘scale’ now means growing an organization from a locally spawned start-up to a multi-country, preferably global, entity. But these companies have been able to bloat out to ‘ExxonMobil-esque’ size in large part because of the infrastructure or ecosystem, legal and fiscal, that governments have put in place to support them – not to mention the critical involvement of financial markets.
Our ideas of what scale means have also been influenced by New Economy entrepreneurs such as Bill Gates, Richard Branson, Warren Buffett, George Soros and Ted Turner – followed by a younger generation including Jeff Skoll, Pierre Omidyar, Sergey Brin, Larry Page and others. All these moguls grew their organizations to global size. Fortunately, many of them had a social vision. Indeed, they are a main reason why social entrepreneurship has emerged on the global stage with such force and fanfare. In seeking to tackle insurmountable social and environmental problems, these powerful, wealthy individuals naturally turned to their experience with their own companies. Again, conversations about achieving scale for impact were characterized by an emphasis on growing a single organization.
But the last few years have seen a substantive shift in that conversation. There is now a recognition that there are different ways to strengthen and spread a successful social innovation, and the corporate model may not apply.
While social entrepreneurs are driven primarily to create value for society, commercial entrepreneurs are focused primarily on appropriating value for shareholders and managers – although each must do some of the other as a wholly value-creating venture will not be sustainable and a wholly value-appropriating one will not be legitimate. The central unit of analysis for commercial business is thus the company as the locus of appropriation of rents through residual control rights over resources. For social entrepreneurs, there has come a realization that one can scale a social venture to huge size and not make a dent in the issue: the central unit of analysis is not the organization but the sustainable solution and its underlying business model.
This point of view is reinforced by history. Massive social changes have never been attributed to a single organization. The environmental movement, the women’s movement, the civil rights movement, the 2008 election of US President Barack Obama – and unfortunately, terrorism – have not stemmed from a single organization grown to huge scale but from a uniting of many around a common cause.
So what we need to think about is how we scale a movement whereby all entrepreneurs and their organizations – indeed, all corporate entities – balance value appropriation and social value creation goals from the outset. It is no accident that the theme of Skoll World Forum 2010 is Catalysing Collaboration – and that for the first time the Forum has panels comprising government leaders, international aid influencers and social media shapers in addition to the usual investors and philanthropists.
It is only through coming together across sectors that we can reintegrate economic and social values. Only when all enterprises are social enterprises, with the good of society utmost in their commercial activities, will we achieve the ‘scale’ we so passionately seek.
Pamela Hartigan is Director, Skoll Centre for Social Entrepreneurship,
Saïd Business School, University of Oxford. Email Pamela.Hartigan@sbs.ox.ac.uk