What Companies Can Learn From Social Scalers

Social entrepreneurs show that big results can come from small initiatives.

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Many companies with Corporate Social Responsibility (CSR) programs are striving to scale their contribution to solving the world’s social problems such as poverty, environmental concerns, health — the list goes on. In this article, we describe what these companies can learn from a special breed of social entrepreneur, whom we call “social scalers.”

Like social entrepreneurs, social scalers focus on market-based solutions that do not consume the scarce resources of donors and government agencies. But social scalers are able to go well beyond the social impact normally achieved by social entrepreneurs, even in regions of the world characterized by weak institutions and nonfunctioning markets.

Consider, for example, Tasso Azevedo, who is one of the most successful Brazilian social entrepreneurs working to protect the Amazonas region. After receiving an award for creating a nonprofit that had generated significant impact, he turned to one of the authors and whispered, “To be honest, the nonprofit for which they are giving me this award is not so important. I created it because no nonprofit like it existed. Afterwards, I created a company. Next, I need to change the laws. The Amazonas is a complex region that needs different types of institutions.”

As Peter Drucker observed long ago, social entrepreneurs transform social problems into business opportunities. But social scalers like Tasso do more than that. They address social issues on a national or global scale.

We recently interviewed social entrepreneurs associated with VIVA Trust to understand what they did and how they did it. The VIVA Trust was established by Stephan Schmidheiny, founder of the World Business Council for Sustainable Development (WBCSD), to demonstrate how sustainability goals can be realized. It has a network of more than 6,000 social entrepreneurs of which we interviewed 45 successful social scalers from 9 Latin American countries.

Strategies of social scalers

Social scalers neither work outside of markets like most foundations, nor within functioning markets like the CSR efforts of many companies, nor between civil society and markets like social businesses. They act where markets do not work and follow either a “grass-roots” or a “designed” scaling strategy (see Figure 1).

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Topics

Leading Sustainable Organizations

Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
See All Articles in This Section

References

1. Khanna, T., & Palepu, K. G. (2006). Emerging Giants. Building World-Class Companies in Developing Countries. Harvard Business Review, October, 60-69.

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