Product, Service & Design Innovation
Creating Good Work:
Ron Schultz on How Social Entrepreneurs Are Building a Healthy Economy

Creating change on any scale is challenging enough, but doing so for the good of society is even harder. Facing difficult odds and large-scale social problems, social entrepreneurs are driven to produce measurable impact, opening up new pathways that unlock society’s full potential to effect positive change.

In Creating Good Work (Palgrave Macmillan, 2013), social entrepreneurs, using free market principles to solve pressing problems, show how to make a positive difference in the world. Ron Schultz, founder of Entrepreneurs4Change, gathered some of the world’s leading social innovators to create a field guide for successfully setting out on a journey that benefits all of us.

Over 20 contributors show how they have launched their efforts and sustained them, highlighting both the hurdles they have had to clear as well as the social victories they have achieved.

We recently had a chance to speak with Schultz about the new book and how aspiring social entrepreneurs can use its lessons to make their dreams a reality.

In the book, Craig Dunn describes the term “social entrepreneurship” as inadequate for capturing the field’s “heart.” Is there a better term? How would you describe the field to a newcomer?

One of the greatest contributions Craig Dunn makes to this field is his description of the object of social entrepreneurship: Deliberate Disruptive Design. Within this phrase Craig captures the heart and head of social entrepreneurship. It’s so captivating that the Skoll World Forum recently themed their entire event as being about “disruption.” But social entrepreneurs don’t simply disrupt, they deliberately do so to shake up the design of what hasn’t been working, to try a new design that is both new and now, or what we call “innovation.”

Social entrepreneurship is often defined as using free market principles to address pressing social issues. But as Craig makes clear in his chapter, the driving force of social entrepreneurship is not just the mechanism for making change but the interaction of both the heart and the mind of the social entrepreneur, together with the heart and mind of those being served, as well as all those engaged to serve. Out of these interactions new patterns emerge that hopefully can help solve some of our most immediate social challenges.

Jeff Trexler claims social enterprise speaks to young people’s “existential anxiety.” What does he mean by this? What role do you see today’s young people playing in the future of social entrepreneurship?

Young people today want to do work that is both meaningful and purposeful. But with the pressures of paying off astronomical student loans, the lure of jobs that sacrifice meaning and purpose for the sake of expedience ends up costing these folks in 20-25 years, when they find their lives have not been as satisfying as they had intended. In essence, we are forcing these young people to make what we call a “rotten compromise.” It’s imperative that our social enterprises can accommodate these young people and provide them with a career in which they can thrive.

You reference Bill Shore’s book The Cathedral Within, which claims that social entrepreneurs ought to view themselves as “cathedral builders,” with their labors taking far longer to complete than can be accomplished in a single lifetime. In a world accustomed to instant gratification and many shareholders expecting short-term results, how can social entrepreneurs and those engaged in big business alike apply this concept to change business for the better?

Often folks involved in work, other than crisis efforts, that has to deliver now, now, now, are in it for reasons other than benefiting others. Fortunately, within a non-profit world and now a for-profit one that also accommodates “benefit” corporations, the quarterly report does not have to drive every business decision being made.

We are seeing a shift in business, too, with the growing investments of patient capital. The sub-title of Creating Good Work is Building a Healthy Economy, and part of that healthy economy is recognizing that enough wealth for 100 percent of our population is a better plan than vast wealth for 1 percent. As long as business is driven by what it can take from the system, rather than what it can generate for others, our modern “cathedrals” will invariably crumble and fail to serve those for whom they were constructed.

Paul Herman’s chapter talks about the difficulty of “old-school” investors not embracing the idea of Human Impact + Profit (HIP). How are social entrepreneurs to convince these investors to see the value of HIP?

Paul’s remarkable work emphasizes what dozens of university and industry studies have shown: Those enterprises with the highest Human Impact + Profit outperform the market by 4-5%. With the rise of impact investment protocols and new vehicles being developed, more and more investors are beginning to recognize that they would rather have their money feeding the system for good than pulling from it just for their own benefit. The proof is not just in the ROI, but the social and overall economic return.

How can social entrepreneurs use tools such as microfinance as a springboard?

Microfinance has been shown, time and again, to be an effective tool when properly administered. New start-ups can begin operations with small amounts as opposed to huge investments. When we can provide micro-entrepreneurial opportunities to people so they can feed themselves and their families, we create positive change. Our viewpoint of business in the west is to create the biggest and wealthiest corporations. But the fact is, our economy runs on micro and small businesses. Microfinance is not about creating vast wealth – it’s about creating enough wealth.

How can social entrepreneurs move from competition to collaboration to produce positively disruptive solutions?

Many of our social issues are so big and so extreme no one can create and implement disruptive solutions alone. Competition actually comes from the root words “to strive with;” there is nothing in the original definition of competition that implies “to strive against.” Competition is how markets are built - the more folks who are operating in a space together, the greater the attraction to the market. Collaboration is about recognizing our interdependence. Only when we can find a way of working together to solve our social problems can we truly hope to shift the challenges we face.

How can maximizing relationships over profit be good for business?

Long-term profit is actually a measure of the success of business relationships. If a CEO of a company forsakes his relationships with his customers, there are no customers… no matter how good their product is. We tend to forget one of the most critical elements in our economy — what we call “Commonwealth,” what we share together. And that’s not just the roads, bridges, rivers and parklands. It’s also our expertise, our knowledge, our wisdom, our generosity and our compassion. Paul Herman’s scorecard shows it — raise your human impact in relationship to your profit and you outperform the market. If we value profit over relationship, it may work in the short-term, but no business system that operates in that fashion will have a lasting impact.

What role does technology play in advancing the social entrepreneur’s cause? What social, cultural and physical barriers stand in the way of widespread adoption of technology in the developing world? How does Benetech’s New Project Framework attempt to overcome these barriers?

Jim Fruchterman and Benetech have been a remarkable model for transferring technology from one purpose into another to benefit those who could never afford it before. What Benetech has done so remarkably, and Jim champions with great delight, is their ability to assess what they can add to their repertoire of products that can truly benefit others, while not requiring them to reinvent the wheel. His framework also allows him to be more discerning about which projects they take on. You can imagine that an operation in the middle of Silicon Valley might be overrun with more good technology ideas than they can possibly address. So, Benetech has very wisely instituted a set of criteria for each new project they take on. In doing so, they believe they can produce the greatest benefit with the broadest reach.

In terms of spreading new technologies into the developing world, SecondMuse has created a whole industry out of large-scale collaborations that take emerging product innovations and make them more accessible. They combine the imagination of folks from NASA, USAID, Nike and others to assess, and when necessary, redesign innovations that can be implemented inexpensively into developing nations. They then launch production of these products so they can benefit millions, while solving major social issues in these countries such as dealing with water, waste and energy.

Social innovation is not different than any other innovative practice. It takes what is both new and now and transforms it into answers that deliberately disrupt previous answers that were not solving the problem.

You conclude that social entrepreneurs should strive to put themselves out of business by solving a given social problem. How might social enterprises build this into both their mission statements and business models?

I think a social entrepreneur who sees herself or himself as creating a job for life is missing the point. We are ultimately in the business to put ourselves out of business – to solve the problem. Mohammed Yunus challenged social innovators in a remarkable way at the recent Skoll World Forum. He said much like those who envision science fiction as a way to push science to its next and newest frontiers, social innovators should be creating social fiction that provides a similar effect. If we imagine our social challenges as being without end, we are missing an opportunity to transform the impossible into the possible. And if we are unable to imagine that, then the problem is a failure of our imagination.