Social enterprise and business leadership

By a strange coincidence, I recently met two different millennials who told me they were working in a social enterprise. They were above average graduates of De La Salle University and UP-Diliman who I would have imagined should have ended up as entrepreneurs or working successfully in the corporate world. 

Curiosity led me to do some quick research on this topic. According to Google, a social enterprise is “...an organization that applies commercial strategies to maximize in financial, social and environmental well being – this may include maximizing social impact alongside profits for co-owners.” My own interpretation is that a social enterprise is formed to address a  special social issue – unemployment, climate change, animal welfare, livelihood and other issues burdening the poor and those who are in need of help to lead lives as close to normal as possible.

At the same time, in order to survive as a business enterprise, the entity must also operate profitably. This need to balance profits and social objectives is an extremely difficult work. I can imagine that there are  high casualty rates for social enterprises. There have been, however, some very successful examples.

Muhammad Yunus founded the Grameen Bank in Bangladesh to focus on lending small loans to women, in the rural areas, who would never receive a regular bank loan. He used the term “microfinance” to describe the loans; and, he used the term “social enterprise” in his book Banker to the Poor. In 2006, Yunus won the Nobel Peace Prize.

This combination of managerial abilities and an activist social conscience is very difficult to find. But I have discovered that they are not as rare as one would think. In his essay, History Will Remember the Social Entrepreneurs, Paul Hawken wrote:

“The constraint of capital, the constraint of growth, the constraint of competition and the constraint of time to market or time to profit – these are huge constraints that encumber what corporations can and cannot do. There is an underlying assumption that we do what we can within the constraints that are imposed upon us. I understand that. It’s why the truly innovative acts of entrepreneurship that are occurring now and will continue to occur are no longer in business. Social entrepreneurship – that’s where the action is. That’s where the real innovators are. That’s where you will find the people who will be  remembered 50 to 100 years from now. We won’t remember a single person who is in business except as a footnote. Every single person who runs a corporation today, including Mr. Bill Gates, will be forgotten. Their names may live on as a foundation or a residual pool of capital, but nothing they have done will be seen as valuable 50 to 100 years from now. Nothing. The real value being added today is by people who are outside of the business framework.

The world needs to take care of itself. You know the numbers. A billion people cannot work who want to work. Nearly three billion people live on less than $2 a day. Hundreds of millions of people are malnourished. Millions of children die every year because of malnutrition and disease. It is the people who devote their lives to addressing these issues who will be remembered.”

The two biggest social issues facing the world today are climate change and worsening income inequality. I have yet to meet serious thinkers who believe that business will lead the way in ridding the world of these two apocalyptic scenarios. Business is solely motivated by short term profits. In fact, in many places business is blamed for these two conditions – income inequality and global warming. However, I recently came across an old essay written in 2002 which tries to appeal to business leaders. Perhaps, a few might be touched by this essay written by Betty Sue Flowers. The title is The Need for Wise Business Leaders to Will the Good:

“ Whether business leaders want to or not they have a leadership role in the world. Leaders have certain responsibilities and one is to ‘will the good’. Now our problem is that we are having a pause of will at the moment, while events  cascade around us. We don’t know what to will because we don’t know what the good is. That’s a deeply philosophical question: what is good?

“In the past the business of business was business. Now we are all linked together. You can’t just do business anymore because you’re connected to everything else. Real business leaders have always known this, but they could do things in their local communities…What happens if your responsibility is the entire world? Can you possibly do anything and if so what is it you can best do? What is it to will the good in a global context? What is the will to do good in the global context?”

Everywhere I go, I get the sense that people feel powerless. From the outside, corporations look really powerful and have tremendous resources. Governments look really big and everybody feels there is nothing they can do. And yet we continually hear business, government, religious leaders say that there is nothing they can do. It will be a disaster if everybody gives up. 

Creative writing classes for kids and teens

Young Writers’ Hangout on Feb. 22 on the Hero’s Journey with Neni Sta. Romana Cruz (1:30 pm-3pm; stand-alone sessions) at Fully Booked BGC.   For details and registration, email [email protected].

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Email: [email protected]