10 March 2008

The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World, a Review

Social entrepreneurs. They have been variously defined as people with game-changing models to address the world's most pressing social problems or individuals who address market failures by using new business models to affect change globally by acting locally. Or just crazy people.

Whatever your definition, social entrepreneurs can be pretty unreasonable people: tenacious, stubborn, and focused on pursuing their ideas to the fullest.

Judging by The Power of Unreasonable People, the new book by SustainAbility's John Elkington and Pamela Hartigan, until recently managing director of the Schwab Foundation for Social Entrepreneurship, which takes its title from a quote by George Bernard Shaw, there are plenty of them out there ready to take on the world or at least disrupt its equilibrium.

Jean-Baptiste Say, author of A Treatise on Political Economy (1803), is credited with coining the term "entrepreneur" as someone who "shifts economic resources out of an area of lower production into an area of higher yield and production."

Add the word "social" and you have someone applying that same principle to the concerns of civil society. Wherever there is a market failure that leads to a social or environmental ill, you're likely to find a social entrepreneur coming up with a solution.

Whether you're talking about Takao Furuno, whose ducks are used to protect rice crops; Fabio Rosa, who has pioneered systems to electrify rural Brazil; or Wangari Maathai, founder of Kenya's Green Belt Movement, who aims "to plant trees to provide sustainable sources of firewood and halt soil erosion," you're talking about people who will not rest until their idea is realized and the world is changed as a result.

These "unreasonable people" are making steady progress not by, "giving a man a fish or even teaching him to fish," to paraphrase Ashoka's founder Bill Drayton, who is credited with coining the term social entrepreneur, "but by revolutionizing the fishing industry."

As such, according to Elkington and Hartigan, social entrepreneurs are "highly sensitive barometers for detecting market risks and opportunities." The authors suggest it's an important reason that global corporations are scouting for high-impact social entrepreneurs.

But how to find them and where?

The social entrepreneurs I know say, "You know one when you see one." After my recent trip to India, where I met half a dozen or so in as many days, I kind of understand what they mean.

Elkington and Hartigan offer "Ten Characteristics of Successful Social Entrepreneurs" that may help to call them out, including "Try to shrug off the constraints of ideology or discipline"; "Identify and apply practical solutions to social problems, combining innovation, resourcefulness, and opportunity"; "Show a dogged determination that pushes them to take risks that others wouldn't dare"; and "Display a healthy impatience (e.g. they don't do well in bureaucracies...)." Describe anyone you know?

They also offer a useful framework of three models for the types of organizations social entrepreneurs set up: leveraged non-profit ventures, hybrids, and social business ventures, which try to put some parameters around some of the more classic types of ventures.

To date, most of the social entrepreneur ventures with which I am familiar are of the leveraged non-profit variety. But issues of sustainability and technological innovation seem poised to demand alternative approaches.

Much of this important book draws on the stories of social entrepreneurs from around the globe who are focusing on social value creation. And this is a good and useful thing. Where the authors stray a bit too far afield, in my view, is when they erect too large a tent.

While I appreciate GE's ecoimagination as great market innovation, it seems clear that a large multinational corporation such as GE can hardly be described as a social entrepreneur, even if they ditch the company's Six Sigma culture. Even with the disruptive nature of GE's marketing and product development, most social entrepreneurs would chafe at the bonds of their corporate culture.

Shedding light on social entrepreneurs who are bringing solutions and innovations to the "epochal challenges" we face is a timely exercise. David Bornstein did it well with How to Change the World, and Elkington and Hartigan have complemented that earlier work in the field.

The bottom line is: we need more celebrants of such agents of change and perhaps even need to cultivate the art of being unreasonable. For if Shaw was right that "all progress depends upon the unreasonable man," then we are at risk if we do not call them out and give them the resources they need. It may just save our assets.

(Disclosure: The author is a vice president of Ashoka, which seeks, invests in, and supports social entrepreneurs around the world.)