Sanjay Anandaram offers a thought provoking piece about social entrepreneurship at the Wall Street Journal Online. I agree with many of Anandaram’s thoughts on social entrepreneurship and highlighted a few of them below. This is a piece well worth reading.
Isn’t every business a social venture? After all, it pays taxes, generates employment and hopefully increases incomes of its stakeholders. So why the hoopla around social ventures, social entrepreneurship and social investing? Not surprisingly, social entrepreneurship is the latest victim of feel-good “buzz-word compliance,” an all too common disease in management. What was a business process improvement in the 80s is now a hotly debated incremental or quantum innovation; hiring someone who speaks a foreign language in a foreign location is part of the new and improved HR strategy; no self-respecting company will let go the opportunity to talk sustainability and social responsibility and Bottom Of the Pyramid (BOP) strategy!
The increased media focus and the casual throwing around of fashionable jargon serves some purposes -some useful and others not. It democratizes notions and concepts and makes them acceptable; it generates pressure to actually do something, however small, with a social angle; It can also however, unfortunately, trivialize the enormous challenges of having really meaningful social impact and make it just an agenda item for the next corporate event.
Various discussions are afoot on what constitutes social entrepreneurship. In my mind, a social venture is one where the dominant goal of the venture is to have social impact (e.g. jobs, enhanced incomes, health, education) with profits (to ensure sustainability) being only the means of achieving this social impact. Investors in the venture participate because they believe in the dominant goal, not because they want great returns through a successful IPO. There are other investment opportunities for investors seeking great returns. The entrepreneurship mindset determines the approach (e.g. scale, problem-solving) and culture (e.g. speed, efficiency, low cost, innovative) of this social venture.