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Business 3.0 Presentation Transcript

  • 1. S. Dev Appanah dev@trnlab.org www.trnlab.org JANUARY 2008 By accepting this document the Recipient is deemed to have recognized that this report is the property of TRN Institute and that copyright relating to this report vests in TRN Institute. Images are reproduced without permission.
  • 2. ation bserv &o outcome nding rsta mapping unde rming ainsto br typing SROI to id pro rap ent efinem n&r aluatio tation ev emen impl
  • 3. Youth Social Enterprise Initiative (YSEI) www.ysei.org
  • 4. what is social entrepreneurship? INNOVATION IMPACT INCOME
  • 5. balance the generation of social/environmental and economic returns to remain effective and sustainable over time
  • 6. Keys to a successful social enterprise* Purely philanthropic Purely commercial Appeal to goodwill Mixed motives Appeal to self- Motives, interest Methods & Mission driven Mission driven & Goals market driven Market driven Social value Social & economic Economic value value Subsidised rates or Market-rate prices beneficiaries Pay nothing mix of full of payers & those who pay nothing Below-market capital, or Key stakeholders Donations & Market-rate capital mix of donations & capital grants market-rate capital Below-market wages, or Market-rate workforces Volunteers mix of volunteers and compensation fully paid staff Special discounts, or mix Make in-kind Market-rate prices suppliers of in-kind & full price donations donations * Sailendra Dev Appanah, TRN, http://www.thairuralnet.org/download/Social_entrepreneur_tools.ppt
  • 7. Keys to a successful social enterprise Purely philanthropic Purely commercial Appeal to goodwill Mixed motives Appeal to self- Motives, interest Methods & Mission driven Mission driven & Wikipedia Goals market driven Market driven Social value Social & economic Economic value value Subsidised rates or Market-rate prices beneficiaries Pay nothing mix of full of payers & those who pay nothing Below-market capital, or Key stakeholders Donations & Market-rate capital mix of donations & capital grants market-rate capital Below-market wages, or Market-rate workforces Volunteers mix of volunteers and compensation fully paid staff Special discounts, or mix Make in-kind Market-rate prices suppliers of in-kind & full price donations donations
  • 8. Keys to a successful social enterprise Purely philanthropic Purely commercial Appeal to goodwill Mixed motives Appeal to self- Motives, interest Methods & Mission driven Mission driven & Aravind Wikipedia Goals market driven Market driven Social value Social & economic Economic value value Subsidised rates or Market-rate prices beneficiaries Pay nothing mix of full of payers & those who pay nothing Below-market capital, or Key stakeholders Donations & Market-rate capital mix of donations & capital grants market-rate capital Below-market wages, or Market-rate workforces Volunteers mix of volunteers and compensation fully paid staff Special discounts, or mix Make in-kind Market-rate prices suppliers of in-kind & full price donations donations
  • 9. Keys to a successful social enterprise Purely philanthropic Purely commercial Appeal to goodwill Mixed motives Appeal to self- Motives, interest Methods & Mission driven Mission driven & Hybrid Aravind Wikipedia Goals market driven Market driven Social value Cars Social & economic Economic value value Subsidised rates or Market-rate prices beneficiaries Pay nothing mix of full of payers & those who pay nothing Below-market capital, or Key stakeholders Donations & Market-rate capital mix of donations & capital grants market-rate capital Below-market wages, or Market-rate workforces Volunteers mix of volunteers and compensation fully paid staff Special discounts, or mix Make in-kind Market-rate prices suppliers of in-kind & full price donations donations
  • 10. water is supplied to the children play on schools and surrounding advertising merry-go-round community finances maintenance powerful pumps store lots of water in tank Clean Water: Playpumps Intl
  • 11. Jaspal Shakya Community Friendly Movement
  • 12. Marielle Nadal idea!s
  • 13. Salah Uddin Ahmad XayanIT
  • 14. Cyber-health program
  • 15. CSR Institute, Stock Exchange Thailand www.csri.or.th
  • 16. Sus. Social NGOs Hybrid Biz Biz Ent convergence
  • 17. BUSINESS 3.0 Does business have a future?
  • 18. At the rate we’re going....
  • 19. NO!
  • 20. WHY? (explicit)
  • 21. can itself is more costly and complicated to manufacture than the beverage Lean Thinking, James Womack & Daniel Jones the life of a Cola can
  • 22. loss of ecosystem, threat to other living systems land area cleared
  • 23. natural resource loss; improper valuation of natural capital bauxite mined in Australia
  • 24. producer level waste trucked to chemical reduction mill where 1 ton of bauxite, when purified, generates half-ton aluminum
  • 25. loaded on giant ore carrier and sent to Sweden or Norway (1 month journey); sits in smelter for 2 months
  • 26. energy loss & heat not captured 2 hours smelter takes 2 hours to turn half ton aluminum into quarter ton of aluminum metal - ingots 10 meters long cured for 2 weeks b4 being sent to sheets are punched and cans are roller mills in germany each ingot formed, painted w/ product info, heated to 900 degrees F and rolled lacquered, flanged, sprayed w/ down into thinner sheets protective coating 900 F
  • 27. social cost of urban migration? factory workers bear the brunt of the toxic materials and processes; most supply of cheap labour comes from communities/ ecosystems that have been destroyed
  • 28. 1500 cans per minute health impacts of synthetic materials?
  • 29. consumer level waste; average 84% of cans are discarded drinking the cola takes a few minutes; throwing away the can takes 1 second
  • 30. Every product we consume has a social & similar hidden history, an unwritten inventory of materials, resources, and = ecological impacts. It also has attendant waste footprint generated by its use and disposition. we’re killing the very systems that sustain business
  • 31. WHY? (implicit)
  • 32. unsustainable capitalism extract raw materials labour + tech = products sold for profits discarded somewhere low or no values attached to largest & fast depleting stocks of capital natural resources living systems the environment
  • 33. value disconnect karma Value For-profits Non-profits philanthropy
  • 34. greenwashing Energy consumption = Bangkok Nonthaburi Kanchanaburi Samut Prakan Pathum Thani * Source: Green Peace Thailand
  • 35. Oprah calls it the “rush of giving” “The best shopping experience there is!” philanthropy is just plain wrong because... creating dependency on sign that you’ve ‘stolen’ easy way to buy some grantees somewhere down the line “karma credits” what’s the point of doing something external to your business model???
  • 36. irrational fear • why aren’t we scared? • we’re more scared about terrorism, and flying, than smoking or global warming • we fret more about remote possibilities than higher possibilities • old brain living in a new world - responding to old types of fear • what we can’t control - driving vs. flying • immediate - smoking/ drinking vs. flying • threats readily available in memory - fear of spectacular killings vs. undramatic like smoking
  • 37. ...there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits…To burden business with wider goals, was pure and unadulterated socialism” Milton Friedman, Capitalism and Freedom
  • 38. true...but! • accounting system flawed - natural capital treated as free, unlimited and indispensable part of production process • business is interlinked - decisions made in biz world do have repercussions in social and environmental spheres • somewhere down the line, we forgot that business is about value creation and profit is merely a tool to grow
  • 39. triple bottom line “… the truly sustainable company would have no need to write checks to charity or ʻgive backʼ to the local community, because the companyʼs daily operations wouldnʼt deprive the community, but would enrich it. Sustainable companies find areas of mutual interest and ways to make ʻdoing goodʼ and ʻdoing wellʼ synonymous, thus avoiding the implied conflict between society and shareholders” Andy Savitz & Karl Weber, The Triple Bottom Line
  • 40. blended value In the realm of the new model, then, if you want to maximize economic value by generating financial returns for investors, you should no longer be able to do it without taking into account how your execution of a business strategy is effected by social and environmental factors. And if you want to achieve greater social and environmental justice in the world, you shouldnʼt be able to unless you understand the economics of modern business. Over coming decades we will have a window of opportunity to significantly decrease poverty—and create more sustainable (in every sense of the term!) enterprises, companies driven to maximize their full value potential. To do so, however, we must advance a new understanding of how we invest in value creation and manage corporations to capture their full value potential. Jed Emerson, Blended Value
  • 41. economic social environmental sustainability
  • 42. green
  • 43. reduce energy, waste and costs • biomimicry - based bldg design termites nest • temp maintained at 73 - 77 F • less than 10% of energy in equivalent bldg • immediately saved US$ 3.5 million by not installing a/c unit • alternative fuel sources
  • 44. Collins Companies Wonderworld
  • 45. innovative new products & processes • new material - solenium, remanufactured back into itself • production - simpler (fewer steps) and less wasteful (99.7% less waste & 0.3 gets reused) • stain-resistant and easily cleaned by water • so superior, not marketed as environmental product
  • 46. open new markets • new material - solenium, remanufactured back into itself • production - simpler (fewer steps) and less wasteful (99.7% less waste & 0.3 gets reused) • stain-resistant and easily cleaned by water • so superior, not marketed as environmental product
  • 47. worker productivity • ING designed green building in HQ, Amsterdam - annual energy savings of $3 mill • building cost an additional 700k - which was paid back in 3 months • worker satisfaction gains in labor productivity - 6% - 16% • attracts and retains good talent • more and more people want meaning in their work - greater good
  • 48. differentiate yourself reduce legal risk & insurance cost
  • 49. key points • one intended goal can yield other unexpected benefits - reduce bldg energy - improved worker satisfaction - increase in bottom line • linear is out, cyclical is in! • innovation & experimentation - we are born from here • measure, measure, measure - like TQM, six sigma - measure against a triple bottom line • internet - abundance of knowledge & info - blogs! • business as usual is dead - evolve!
  • 50. quot;I don't think it's that naïve to actually think that the mission of business is to help create a better world, Why is 'greed is good' the only motto for business? Why not use business for idealistic purposes and yet be a profitable business?quot; Ho Kwon Ping, Founder of Banyan Tree Group