Some thoughts on Clayton Christensens article on Social Innovation

Clayton Christensen, who has written extensively on a number of strategic ideas, recently opined in The Huffington Post about the potential role the White House Office of Social Innovation could play. (The article was co-authored by Vanessa Kirsch who founded New Profit – an interesting organization itself espousing a venture philanthropy model)

In the article they highlight four areas where the White House can help in the social sector. They are to

  1. Demonstrate a new way to solve social problems where government serves as an investor in innovations that are developed and identified by citizens outside of government.
  2. Guide more social innovators towards “bottom-up” initiatives, in preference to “trickle-down” philanthropy.
  3. Use the convening power of the White House to initiate a focus on impact and metrics.
  4. Use its convening power to break down an antiquated assumption that all social innovation is the province of the non-profit sector.

Taking these suggestions to a logical conclusion, an ideal future state would be one where social investors – whether they be organizations applying public monies, like the Social Innovation Fund, private philanthropists or individual investors – would have a set of social impact metrics to help them measure an organization’s social effectiveness and to make rational “investment” decisions. The culmination could be the creation of a “Social Stock Market” as envisioned by Prof. Yunus in his book “Creating a World without Poverty”. Social organizations (or Social Businesses as Prof. Yunus calls them) would be rated by independent rating agencies much as S&P and Moody’s rate current firms. The role of government would be to facilitate this future state and then get out of the way.

It is here that the first two Christensen /Kirsch suggestions fall apart. Without agreed upon metrics, it is futile for the government to inject itself as an investor, as suggested in the first point. It implies either that the government knows something about social investing that private philanthropists and individual investors don’t or that the investment criteria are going to be totally arbitrary or politically influenced.

In addition, the Office of Social Innovation – a top-down initiative itself – can perhaps lead by example to encourage “bottom up” innovation. However the real issue is not “bottom up” initiatives but a complete lack of a supporting social ecosystem to encourage radical innovation and nurture young social entrepreneurs. More than just a mind set change in large non-profits and foundations, young social entrepreneurs need the help of the same supporting systems that encourage successful for-profit tech visionaries.

Today, any young tech visionary can go out and start a for-profit company and avail of a complete set of services from angel and early stage funding, mentoring and incubated space. The venture funded model is well known and there are many players at different stages in the model. Such a social ecosystem is completely missing to support young social entrepreneurs. There are some innovative investors, like Ms. Kirsch’s New Profit, Echoing Green and others, but a socially focused startup has to survive several years of futility before they even get on the radar screens of a handful of these organizations.

More young students are turning to social entrepreneurship in America than ever before. With the right policies in place, there is an opportunity to channel these energies and grow the next set of Hewlett Packards and Intels of the social entrepreneurial sector.

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10 responses to “Some thoughts on Clayton Christensens article on Social Innovation

  1. Pingback: Twitted by lhtorres

  2. Raj, my position is that both views are right and needed. We need largescale momentum and support of social entrepreneurship and innovation; we also need local individuals who commit themselves to building a network for support for social entrepreneurs. What is exciting is that there are already great new groups emerging that are supporting these social entrepreneurs. It’s already happening.

    I’ve been a social entrepreneur for 15 years, and in startup mode twice. Agreed that you have to prove yourself for years, bootstrapping and scraping, until you achieve success. But the next generation will be more fortunate.

    See below what some of the Y generate is doing to create the social fabric of which you speak. They are not waiting! I strongly believe more support of social entrepreneurs is on the rise, and, generated by these young social entrepreneurs themselves:

    http://www.Sparkseed.org (the only organization supporting college social entrepreneurs with their entrepreneurial projects)

    http://www.Unreasonableinstitute.org (supporting great new innovative ideas from social entrepreneurs: Anything is possible)

    http://www.UniversalGiving.org (supporting global social entrepreneurs and their projects in more than 70 countries across the world.

    Working in collaboration with institutions on the macrolevel, while bolstering a stronger, local network of support for social entrepreneurs seems to be the most potent combination.

    All my best and thank you for your sincere comments.

    Pamela Hawley
    Founder and CEO
    UniversalGiving
    http://www.universalgiving.org

    Living and Giving Blog
    http://pamelahawley.wordpress.com

    • Pamela

      Thank you for your detailed response. I too agree with you that both large scale and grass roots support is needed. The recent Obama Administration on Social Innovation has definitely raised the profile of Social Entrepreneurship. However we really need to reinforce the infrastructure for innovation for social impact and the government does have a role in this. I will post a follow up to this post shortly with my thoughts on what I think is an appropriate role for the government based on all the feedback I have been getting from my comments.

      Thanks again and I look forward to perhaps collaborating in the future
      Raj

  3. Good Day Raj. First off, thank you very much for your post. I couldn’t agree with you more that there is a current significant gap in the support, incubation, and investment of young social entrepreneurs. There is a gap between their brilliant business models and ideas, and their ability to receive the support, ecosystem, incubation, collaboration, and investment to make their ventures actualized. Taking these realizations to heart, we have founded The Unreasonable Insittute (http://unreasonableinstitute.org).

    The Unreasoanble Institute is an organization that strives to do one thing: to give young social entrepreneurs wings. In short, our vision is to create a world where tomorrow’s leaders develop sustainable, systemic solutions to issues of global magnitude. In the summer of 2010 we will unite 25 of the world’s boldest, most unreasonable young social entrepreneurs from every corner of the world. We will bring them together for a 10 week summer institute, to train, incubate, and invest in their social ventures to ensure their impact is scalable, sustainable, and replicable. We are very much a TechStars or Y-Combinator, but our focus is on young brilliant social entrepreneurs from around the world instead of young tech entrepreneurs. I would love your thoughts and feedback on our approach and model if you have the time!

    Thanks again for the great article!

    • Daniel
      Thanks for your comment – looks like The Unreasonable Institute is taking steps in the direction of encouraging emerging social entrepreneurs. We need more like you so we have as thriving an entrepreneurial environment with $$s and support for Social Entrepreneurs as there are for biotechs, or renewable energy or high tech startups. I will try to contact you directly to better understand your organization and model.

      • greatly looking forward to the conversation Raj. I actually just noticed the comment above mine posted by Pamela, and I have to also extend my thanks and my appreciation to her. Her organization, Universal Giving, is doing some truly incredible work around the world utilizing market principles and with a specific focus on nothing less than what works. She is actually a personal inspiration for me in the development of Unreasonable.

  4. Pingback: Responding to Clayton Christensen’s article on Government’s potential role in Social Innovation « The Social Ecosystem

  5. Raj and Daniel,

    Great to see the conversation going forward so productively. Raj, thank you again for getting the word out about important social movements, causes and social entrepreneurs.

    I think it important to bring into the mix: How can we be creative during challenging times such as these?As social entrepreneurs, we need to be tailoring our services to how people are already living. For example, on UniversalGiving (http://www.universalgiving.org) we feature Gift Packages. People can give $50 to feed a family in Sudan, or $25 to buy eyeglasses for a child in Tanzania.

    Why is this so important? One main reason is that people are still going to give on birthdays and anniversaries, no matter how tough the economy. And we can use this as an opportunity to allow people to make their gift

    and make it more meaningful.

    Work with existing habits and patterns, and change the world gift by gift, birthday by birthday. http://www.universalgiving.org/gifts

    Keep sharing the innovation!

    Pamela

    Founder and CEO
    UniversalGiving
    http://www.universalgiving.org

    Living and Giving
    http://pamelahawley.wordpress.com

  6. Campus Entrepreneurship

    Thanks for the link and your commentary. The Eco system for social entrepreneurs is growing w/out direct government action. The office is nice, but due to policy realities ($$) will have little impact. Moreover, the size and scope of the vested interests in the current allocation of government resources will likey have a major role in writing rules and regulations if new metrics were demanded. All that said, the office, however small, is there and is a reality. That is a good thing. Secondly, as more individuals choose to get involved and show they can provide real social value, finders (donors/philanthropists) will support social entrepreneurs.. Americans, from the masses to folks like Ford and Gates, have an incredible track record of funding social innovations.

  7. Campus Entrepreneurship thanks for sharing your insights. I agree with you that Americans have a tremendous track record of supporting social innovation. In the past this was in the form of grants and checkbook philanthropy. The Gates and Clinton Foundation have increased the focus on results based philanthropy. As people become more concerned about the impact of their donations, they need tools and metrics to evaluate across different non-profits and social entrepreneurs to assess which organizations provide the best impact for their dollar. While entrusting the task of creating metrics to the government carries come risk of bias, there are ways around this,

    For additional thoughts on what I think government’s role in social innovation should be see my next post entitled “Responding to Clayton Christensen’s article Government’s potential role in Social Innovation”

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