A new paradigm for change
In an MBA world, I remain an unreconstructed, unrepentant MPhil. And that degree was in city planning in the last century, not business management in this one. Still, I have now spent 35 years helping CEOs and other leaders wake up to—and tackle—the new risks and opportunities thrown up as a series of societal pressure waves have pounded, shaped, and powered markets.
Time and again, against a seemingly chaotic backdrop, I have found myself defaulting to a standard MBA device—the 2×2 matrix—in an attempt to extract signal from noise. Another tic is to populate the matrix cells with sharks, orcas, sea lions, and dolphins (mapping stakeholder engagement in the mid-1990s) or locusts, caterpillars, butterflies, and honeybees (when exploring 21st-century economic models as the new millennium launched). There’s method to the apparent madness, however, in that the visuals can help engage a wider audience.
So here I go again—in an attempt to answer the question, “Can social entrepreneurs create the necessary large-scale change?” A simple question—and a simple answer: no.
That may strike you as unexpected, misguided, unfair, or even schizoid, given that I have spent so much of the past decade working with—and celebrating—social entrepreneurs and their intrapreneurial cousins within mainstream companies.
Don’t get me wrong; I still believe that, in the right circumstances, many of these extraordinary innovators, entrepreneurs and investors will drive potentially transformative solutions to scale. But the fact is that our current trajectory simply won’t take us to where we need to be by 2050.
And, yes, I admit it; I have followed the standard politician’s ploy of changing the question asked to one I wanted to answer. The key word that I quietly added to the McKinsey question is necessary. Necessary is a slippery word, its meaning morphing over time.
Once they have gained traction, no question, social entrepreneurs like Muhammad Yunus of the Grameen Bank, Fazle Hasan Abed of BRAC, Dr. G. Venkataswamy of Aravind Eye Care System, Wangari Maathai of the Greenbelt Movement, or Tim Smit of the Eden Project can move mountains. But generally the benefits they provide are far from ubiquitous even in their own countries, let alone globally.
The uncomfortable truth is that the nature and scale of the economic, social, environmental, and governance challenges we face are unparalleled. Humanity is headed towards 9 billion people by midcentury, with more than half of our species already concentrated in seething urban areas—and billions more destined to follow. Add to that the growing risks related to abrupt climate change; pandemics; and energy, water, and food security. Expecting social entrepreneurs to solve these problems is both unrealistic and a misreading of the real value they bring to bear.
To get a better sense of the benefits and challenges of social entrepreneurship, Volans released a report a year ago at the 2009 Skoll World Forum, largely funded by the Skoll Foundation. We offered the following simple five-stage model to map and explain the pathways social and environmental innovators, entrepreneurs, and intrapreneurs must take to replicate and scale their solutions:
- Stage one spotlights the eureka moment, whether it be Archimedes in his bath, Edison in his lab, or Craig Venter advancing synthetic biology.
- Stage two sees intensive experimentation, as when the Wright Brothers tested heavier-than-air flying machines on the sand dunes at Kitty Hawk.
- Stage three involves the formation of new enterprises to carry forward the new technologies or solutions—many of which fail, but a small proportion of which seed the future.
- Stage four sees a more urgent focus on economic ‘ecosystems,’ with growing efforts being devoted to creating clusters of activity in such areas as renewable energy, cleantech, or sustainable urbanism.
- Stage five is reached by achieving truly systemic change across the entire economy.
It’s easy to identify innovators and entrepreneurs who have fought, blagged, or elbowed their way through those first four stages—but tough to think of anyone from the latest crop of entrepreneurs who has yet made it into stage five.
For that to happen, we must now raise our collective sights from technologies and business models—important though they are—to psychological, social, and even civilizational change. Social entrepreneurs perform a crucial role in stage one and stage two—and a fair few go on to develop significant enterprises, with ecosystems that, in a small but growing number of cases, include major corporations. This stage can be double edged, however. The strength of social entrepreneurs is that they connect with the community, the culture. When they form strategic partnerships with corporations, the risk is that they, too, become more corporate—and come to see those they help as customers or clients, with all that goes with that.
In recent months, as I have tried to think this through, I sensed a new 2×2 struggling to be born. This distinguishes on one axis between change that happens at the individual and collective levels, and, on the other, between change that affects thought and action.
I have been absorbing (if not always reading cover-to-cover) a trailer full of books. They include the fashionably monosyllabic Nudge by Richard Thaler and Cass Sunstein (required reading in the early days of the Obama administration), Connected by Nicholas Christakis and James Fowler, and Switch by Chip and Dan Heath. Such books tackle the deeply taxing question of how to drive transformative social change. And their very existence is a lead indicator of where this whole area is now headed.
Cultural revolutions, deservedly, got a bad name because of what Mao did in China in the decade from 1966 to 1976. But what we need now is a sustained, global cultural evolution that takes us from a “Cornucopian” paradigm, in which the world is ours to pillage in pursuit of consumerist lifestyles, to a “Gaian” paradigm, in which national and regional economies may take different pathways to sustainability—but where our planetary footprints and responsibilities are internalised, becoming second nature in a critical mass of economies.
Cultural revolution in four steps
Change starts with individual beliefs and behavior, then spreads to the wider community.
So what’s the recipe for transformative change? Let’s work our way around the matrix, cell to cell. In the first, mind-sets, the emphasis is on changing our mental operating systems at the individual level. The last century taught us that brainwashing doesn’t work very well, so how do we rewire our brains? Well, happily, there is some evidence that leading social entrepreneurs are helping CEOs and other C-suite leaders –and a growing spectrum of intrapreneurs—to spot new market risks and opportunities, prototype innovative business models and test out novel leadership approaches.
Great, but even the best-intentioned leaders can hit the wall when attempting the transition from cells 1 to 2. They make the announcements, but their behavior remains unchanged: critically, they fail as models of the new behavior. Still, if you get this bit right, the process can go viral.
Those who do make it into cell 2, must then make the even tougher transition to cell 3. Here the focus is on integrating new values into corporate, urban, national, or global cultures.
Culture is the new frontier—and we’re going to have to get dramatically better at cultural engineering, or perhaps catalysis would be a better word. As we probe the margins of cell 4, the spotlight shifts to paradigms. The emerging paradigm we’re groping our way towards draws on the work of people like James Lovelock, whose thinking around what he calls geophysiology—which treats the earth as if it is a living organism—feels like a critical building block for the coming decades.
True paradigm shifts take decades, generations to work their way through—partly because those infected by old paradigms have to retire and die, clearing the way for the new order. Without wanting to sound Millennial about this, my sense is that we are at least 50 years into a shift toward a Gaian paradigm. And it is accelerating towards some sort of systemic transformation in key world regions by the late 2030s. Social and environmental entrepreneurs will be crucial facilitators in this process. Picture social innovators and entrepreneurs as scout bees returning to the economic hive to perform the waggle dance in Davos, at Clinton Global Initiative or TED events, signalling where the new opportunities are emerging. But they can’t do the heavy lifting solo: they typically achieve solutions that are local and remain vulnerable to economic and political cycles.
Going back to the stages I outlined earlier, what we need next are stage-four ecosystems and clusters designed to build towards stage-five transformations. Among other things, this means catalyzing the shift towards a Gaian paradigm built around transparency, compassion, reciprocity, intergenerational equity, accountability, evolution, resilience, and sustainability. And it means brokering fair and high-performance partnerships between innovators and those able to bring their solutions to scale.
Squint and you can already see bits of the new order forming, like a new solar system out of a dust cloud. It’s encouraging, for example, that Yunus and Grameen are partnering with Danone, producing fortified dairy products for poor children in Bangladesh.
But I’m even more interested in General Electric’s global Ecomagination and Healthymagination initiatives. Or in GlaxoSmithKline CEO Andrew Witty’s announcement of radical cuts in the pricing of critical pharmaceuticals for poorer countries—and GSK’s impending move into branded generics. Or in Nestlé’s offer to open out its new Creating Shared Value approach to other companies (full disclosure: I am on the relevant Nestlé advisory board)—and Nike’s similar offer with its GreenXchange. Such initiatives have the potential to deliver change at much greater scales than even the most energetic social enterprises.
What is needed to switch my earlier no to an unqualified yes is not increasingly vigorous assertions of how insanely great social entrepreneurs are. Instead, we urgently need not just a revamp of corporate-citizenship strategies or stock-market algorithms, but way smarter mindsets, behaviors, and cultures—all drawing on (and helping shape) that new economic paradigm.
Not a trivial task. Indeed, even if every social entrepreneur were a Yunus, a Smit, or a Maathai, we would still struggle to scale fast enough. So in trying to get a fix on the future, perhaps our motto should be a line attributed to Peter Drucker, a change agent who operated across the stage 4–5 boundary. It ran thus: “The best way to predict the future is to create it.”
What matters? Well, social entrepreneurs have been pointing the way for some time. Wangari Maathai served as a government minister in Kenya, for example, while Muhammad Yunus considered running for president in Bangladesh. It’s time to do the politics, locally and globally. Wrap in geophysiology and we potentially have a new form of geopolitics—and not before time.