Keynote wharton socialimpactconf_apr2014


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  • So let’s start delving into a definition of social innovation. Here is a picture of the social change landscapeSince the early 90’s there has been an explosion of “social” as a modifier, leading to a world today where we have social entrepreneurs, social enterprise, social capital and of course - social innovation. These are all important and valuable efforts. However, solving social problems takes more than adding the adjective “social” to business terms to create real solutions. Therefore, if we are serious about addressing the world problems we have to be serious about defining and understanding what we are talking about. So let’s take a deeper look at what these constructs are and how they are different and similar and in particular what is a social innovation.
  • Now lets move to the diffusion and scaling stageThe 1990’s and 2000’s saw a dramatic scaling and diffusion of microfinance, both geographically and across sectors. The combination of social impact and commercial viability attracted traditional commercial banks to the sectorAnd government’s played a key role to bridge nonprofits and traditional banks - Across countries new relationships built Rise of for profit Microfinance institutions – organized as non-bank financial institutions (NBFIs)India as an example:Government move to link self-help groups with formal banks1999 – 33,000 credit linked banks2000 – 115,000 credit linked banks20004 had linked to 1,000,000 banks
  • Tipping PointBecame viral after reaching over a million customers and implementing learned lessons:Ubiquitous distribution network Strong Brand- stand out in the community Product work all the timeAgent TrainingCombat FraudImportant to remember, the growth of M-pesa was not based on its original intention, rather from real customer usage
  • So even on a small level – demonstrated value of cross-sector collaboration
  • Keynote wharton socialimpactconf_apr2014

    1. 1. Social Innovation: How it really works Kriss Deiglmeier, CEO April 10, 2014 Wharton | San Francisco | Social Impact Conference
    2. 2. Text The emergence of social as a modifier
    3. 3. Soraya Salti INJAZ al-Arab Bill Drayton Ashoka Premal Shah/Matt Flannery KIVA Muhammad Yunus Grameen Bank; Nobel Laureate Adalberto Verissimo and Carlos Souza Jr. Imazon Social Entrepreneurs
    4. 4. Social Entrepreneurship Social entrepreneurs play the role of change agents in the social sector, by: • Adopting a mission to create and sustain social value (not just private value), • Recognizing and relentlessly pursuing new opportunities to serve that mission, • Engaging in a process of continuous innovation, adaptation, and learning, • Acting boldly without being limited by resources currently in hand, and • Exhibiting heightened accountability to the constituencies served and for the outcomes created. Source: Greg Dees, The Meaning of “Social Entrepreneurship,” J. Gregory Dees, Duke University, May 30, 2001
    5. 5. Contemporary Social Innovations Charter Schools Microfinance Fair Trade Emissions Trading Socially Responsible Investing
    6. 6. Need to do something with this and the next slide. I like the stool metaphor, but this is a poor visual, and I have not been able to find a decent stool photo (surprisingly)
    7. 7. Social Entrepreneurs The Great Man or Woman Theory Social Enterprise Self-Sustaining Organization Theory Social Capital Market Microfinance
    8. 8. Social Innovation Definition A novel solution to a social problem that is more effective, efficient, or sustainable than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals.
    9. 9. Criteria differentiation Innovation Criteria • Novelty- new to user, context or application • Improvement- more effective or efficient Social Innovation Criteria • Sustainable • Just • Public Value
    10. 10. Social Innovation and Traditional Innovations Social Innovation • Socially Responsible Investing • Microfinance • Sustainable Development (Amazon) Innovation • The Internet • Hydraulic Fracking • Deep water Trolling
    11. 11. Stages of Innovation Defining the Problem and Opportunity Idea Generation Piloting & Prototype Diffusion & Scaling
    12. 12. Case Study – Microfinance
    13. 13. Lack of access to: • formal credit • financial services • formal financial sector The Problem
    14. 14. Idea Generation 1000’s– 1500’s 1800’s 1950’s– 1960’s • Chit Funds (India) • Mujins (Japan) • Esusu (Nigeria) • Savings Clubs • People’s Banks • Credit Unions • Subsidized Rural Credit
    15. 15. Piloting & Prototyping Microfinance 1960’s– 1970’s 1980’s • Target market poor women • Microbusiness • Group Lending • 1961- Accion Venezuela • 1976- Grameen Bangladesh • Failure of government initiated poverty programs
    16. 16. Diffusion & Scaling 1990-present 1990’s 2000’s Present • Microfinance Decade • Nonprofit + Emergence of For Profit • Rise of Non-Bank Financial Institutions (NBFIs) • 2005- UN declared the year of microcredit • 2006- Yunus and (Grameen) received the Nobel Peace Prize
    17. 17. State of Microfinance - Global View • Over 12,000 MFIs • More than 94,000,000 borrowers total • 91 countries
    18. 18. • Data and Metrics • Organizational Efficiency/IT Systems • Scale and Reach Technology’s Influence on Microfinance
    19. 19. The Story of M-Pesa: Problem • Needed to deepen financial penetration into the unbanked community
    20. 20. The Story of M-Pesa: Idea Generation • Utilized cross-sector community collaboration to be successful
    21. 21. The Story of M-Pesa: Pilot • Adapted to practice on the ground
    22. 22. The Story of M-Pesa: Scaling Established a network of agents Set a bold goal
    23. 23. The Story of M-Pesa: Tipping Point Became viral after reaching over a million customers and implementing lessons learned • Ubiquitous distribution network • Strong Brand • Work all the time • Agent Training • Combat Fraud
    24. 24. The Story of M-Pesa: Kenya Today • Moves between $500-$700million per month (20% of Kenya’s GDP) • 15 million active users
    25. 25. The Story of M-Pesa: Global Expansion • Tanzania • Afghanistan • South Africa • India
    26. 26. Commit to cross-sector collaboration Social innovations require everyone’s involvement.
    27. 27. . Save The Amazon Rainforest Organisation
    28. 28. Focus on your strategic lever Social innovations grow as leverage points are identified and utilized.
    29. 29. Fair Trade Mainstream Markets
    30. 30. Never mistake a clear view for a short distance Social innovations do not happen overnight.
    31. 31. Social Innovation Continuum Source: kdeiglmeier Stagnation Chasm
    32. 32. What can civil society do? • Leverage trust, networks, and deep customer knowledge • Ensure voice of customer is heard • Provide long-term thinking
    33. 33. What can government do? • Set effective policy, regulation, and rules • Provide access to reach large number of customers • Raise awareness
    34. 34. What can business do? • Leverage assets, efficiencies, and resources (Financial, management, supply chain, etc.) • Demonstrate rapid action • Provide flexible funds
    35. 35. “If we want to build a stronger, more sustainable world for future generations, one with more partners and fewer enemies, we have to work together.”
    36. 36. @tidescommunity @kdeiglmeier Kriss Deiglmeier Reach Me