This is Greg Van Kirk and I am responding after participating in the www.ashokagloablizer.org event where 20 of us met with business leaders to discuss how to replicate globally. This experience has reinforced a certain number of my opinions about what the challenges are and has brought light to some additional ones. These all relate to a natural conflict at times between social and business. Let me outline a few of the more significant ones from my perspective here.
First, there can be an inherent conflict between social and business based on the indicators of success of each. We measure social success by improved standards of living of those we are serving/working to empower. Business success is measured by increased shareholder value. There is an old saying that“No man can serve two masters.” It is certainly not this black and white but this is extremely important to take into account and can add significant complexity. In the end though, we have to always remember that the social impact is why we exist and the business mechanism is a tool to create the social impact. Overall, trying to do good while the venture “does well” can at times bring strategies into conflict and staying true to mission can be a challenge.
Second, the whole point of development work on the whole is to “drive yourself out of business” by making your work unnecessary. For example, we are trying to create access and as a development objective we actually want competition and we want there to be retail outlets in small communities that sell what our entrepreneur sell. That is success. We don’t want to have to be necessary. This is the total opposite for a business. In a business you want to be the leader in serving the market and in a crude sense would hope to be some type of monopolistic player ie Walmart. So, how do you attract investors for the long term if you hope to not have to exist in the long term? It is not that cut and dry and there are certainly solutions but this is a challenge to consider.
Finally, in business you guard your intellectual property at all costs. It is what creates the value proposition for your organization. In development work , if you truly want to scale and create broad impact the only way to do it is to give away your intellectual property to others. Again, there are solutions through franchising models etc but in the end you have to do something at some level that is counterintuitive from a business person’s perspective. No one organization can change the world. You have to find a way to continue to have the value of your organization be unique to maintain relevancy but at the same time empower others that in business would be seen as competitors often times.
I hope this helps. These are certainly challenges and I applaud the efforts of changemakers as you are helping all of us in this field to try to find the optimal responses.
Comments
Dear Beck Pryor,
According to your experience what are the main barriers or challenges so that social business model can thrive?
Cheers,
The Changemakers's Team
This is Greg Van Kirk and I am responding after participating in the www.ashokagloablizer.org event where 20 of us met with business leaders to discuss how to replicate globally. This experience has reinforced a certain number of my opinions about what the challenges are and has brought light to some additional ones. These all relate to a natural conflict at times between social and business. Let me outline a few of the more significant ones from my perspective here.
First, there can be an inherent conflict between social and business based on the indicators of success of each. We measure social success by improved standards of living of those we are serving/working to empower. Business success is measured by increased shareholder value. There is an old saying that“No man can serve two masters.” It is certainly not this black and white but this is extremely important to take into account and can add significant complexity. In the end though, we have to always remember that the social impact is why we exist and the business mechanism is a tool to create the social impact. Overall, trying to do good while the venture “does well” can at times bring strategies into conflict and staying true to mission can be a challenge.
Second, the whole point of development work on the whole is to “drive yourself out of business” by making your work unnecessary. For example, we are trying to create access and as a development objective we actually want competition and we want there to be retail outlets in small communities that sell what our entrepreneur sell. That is success. We don’t want to have to be necessary. This is the total opposite for a business. In a business you want to be the leader in serving the market and in a crude sense would hope to be some type of monopolistic player ie Walmart. So, how do you attract investors for the long term if you hope to not have to exist in the long term? It is not that cut and dry and there are certainly solutions but this is a challenge to consider.
Finally, in business you guard your intellectual property at all costs. It is what creates the value proposition for your organization. In development work , if you truly want to scale and create broad impact the only way to do it is to give away your intellectual property to others. Again, there are solutions through franchising models etc but in the end you have to do something at some level that is counterintuitive from a business person’s perspective. No one organization can change the world. You have to find a way to continue to have the value of your organization be unique to maintain relevancy but at the same time empower others that in business would be seen as competitors often times.
I hope this helps. These are certainly challenges and I applaud the efforts of changemakers as you are helping all of us in this field to try to find the optimal responses.
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