I am in Bangkok this week spending time at one of Southeast Asia’s premier MBA programs, Thammasat University, to participate in the judging event of the Global Social Venture Competition South East Asia Semifinals, and a question that hovers much of the time in the back of my mind has come to the fore. Social capitalists and entrepreneurs may in some cases be born, but where do you go if you want to learn the science of social investing or impact management?
Many people have begun to suspect by this time that there must be knowledge about what works and what doesn’t that they should start with, or that could make what they are already doing smarter. This is underscored for me every year when the Global Social Venture Competition rolls around, as judges, entrants and student organizers all grapple with how to evaluate the business plans’ “social return on investment” which each team is required to quantify in its business plan.
The few pages of instructions the GSVC provides for how to develop an impact assessment in a business plan feel somewhat less adequate to all sides with each year that passes. And, when a venture moves beyond planning and into implementation, the questions that come up are much more numerous, and require more than the high-level knowledge than can be found in the survey courses many MBA programs now provide. They include, to name but a few:
Finance questions: How does a high social return on investment affect the cost of capital? Are there ways this can be used to decreased the cost of capital? How can this be employed as a strategy in capital formation? Can and should deals be structured to leverage large amounts of money without the social investors subsidizing the conventional investors? How?
Accounting questions: What are the appropriate environmental, social or other impacts to measure in a given industry or sector? Are there any sector-specific performance benchmarks for carbon footprints, water footprints, health impacts or other kinds of impact? Whose job is accounting for this, and what training should they have to do it? Do audit standards exist? How can management use this information to inform strategy and improve results?
Marketing and communications questions: What is the difference between marketing and “social marketing”? What are ways social media can be used to reinforce or undermine a venture’s intended impact? Are there principles or standards of practice for branding socially responsible businesses? How can branding and communications affect the value of sustainable business?
Legal questions: What issues do managers need to understand about their right to remain true to a socially responsible business model when that comes into conflict with quarterly profit maximization? How can and should the needs of investors be balanced with those of other stakeholders and the environment? What legal and tax issues do managers need to understand about hybrid for-profit/non-profit business models?
Corporate social responsibility and social entrepreneurship courses are becoming more common, and touch upon these questions. However, we need to institutionalize the field’s knowledge into our academic institutions if we are to reach a significant percentage of the population who will shape business in the coming years and decades. While leading practitioners have knowledge of every one of the topics above, 99% of their time they are in the field, not in the classroom. Over many years of experience they have accumulated datasets in their heads, and in some cases produced formal research for papers, conference presentations and university lectures. But this knowledge has not been codified into the scholarly disciplines that produce Ph.D.s who can be hired onto faculties, develop textbooks, develop curricula teach every day. In most cases I am aware of, it is only the faculty (and often these are only Ph.D.s) who can actually change curricula.
As a result, with minor exceptions, future business leaders—at least those who get MBAs— are still being taught the same canonic skill set that managers were taught before the world realized that natural resources were not limitless, the climate could be made uninhabitable, and poverty may in fact be solvable. And, ten years into the competition, the GSVC’s entrants are still having to rethink the same questions when they assess their potential impact, instead of building on the efforts of the rougly 1200 teams from around the world who have come before them. Social entrepreneurs and social investors will continue to operate on the margins of our economic system until this situation changes.
Although the canon needs to evolve, what this looks like will also be different than education prior to the advent of the global economy. One place where experienced entrepreneurial leaders are bridging academia, government and the private sector to address systemic gaps is here in Bangkok. Soon I’ll talk about the fascinating ways Ed Rubesch and Pattraporny Yamla-Or are teaming with the Thai national laboratory system and Thammasat to create a truly global entrepreneurship program. What other universities or programs do you think should be spotlighted as models?
Invitation: The public is invited to both the GSVC Symposium this Friday, March 20 at the Bangkok Art and Culture Center and to witness the semifinalists’ pitches to the judges there the day before. See www.gsvc-sea.org for more information.
Update: the need to update MBA curriculum to speak to the systemic ethical and management failures the business world is seeing is addressed by Kelley Holland in the New York Times.
This entry was originally published on the Skoll Foundation’s SocialEdge.org website on our other blog – SVT on Impact.