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MONDRAGON COOPERATIVE EXPERIENCE &
            SOCIAL ENTREPRENEURSHIP
   Confronting the case to FSSD (Framework Strategic
    Sustainable Development) with MSLS 2010 tribe
MSLS 2010 – BTH – Karlskrona – Sweden – November 19th 2009


                                                                      Dr. JM Luzarraga
                                                                 Mondragon University
                                                      jmluzarraga@eteo.mondragon.edu



      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
How do we create more knowledge?




Are we ready for “optimal disconfort” co-creation?
  Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
CHECK IN:
                                   Who am I?
                                   What is my life dream?

                                   What knowledge do we want
                                   to co-create today?
Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Our destiny/vision for today? …backcasting

What knowledge do we want o co-create today?
                                        FSSD &
                                     MSLS2010
                                     passions &
                                     life dreams




             MONDRAGON                                  Social
              Cooperative                          Entrepreneurship
              Experience




    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Our destiny/vision for today?... backcasting
What knwoledge do we want o cocreate today?
                              FSSD & MSLS2010 passions & life dreams
                              – Create a company to leverage awareness on sustainability in
                              my home town
                              – Facilitate companies transformation process to become
                              sustainable
                              – Develop & design new sustainable production industries
                              through eco-design
                              – Create an education project on sustainability and social
                              entrepreneurship
                              –…



                              CHANGE THE WORLD
                              THROUGH SUSTAINABILITY
                              :)
    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Our destiny/vision for today? ... backcasting
What knwoledge do we want o cocreate today?
                                 MONDRAGON Cooperative Experience
                                – What is MONDRAGON?
                                – What is shared/promoted?
                                – How big is it? Effective? Who’s involved?
                                – What is SUCCESS for M.?
                                – What makes M. so successful?
                                – How does MONDRAGON engage coop members?
                                – Is administration of M. coop different than others?
                                – What stages has M. taken from the beginning till now?
                                – How started? How proceeded? & What is planned now?
                                – What was the process of creating M.?
                                – What was the original IMPETUS?
                                – What is M. view of sustainability? What is you vision?
                                – Does cooperativism guarantee sustainability?
                                – How does M. take “sustainability” into account? (not only
                                social sustainability but ecological?
                                – Does the companies in that region form a local supply
                                chain to support each other?
                                – What are the common shared values by companies in M.?

    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Our destiny/vision for today? … backcasting
What knwoledge do we want o cocreate today?
                              Social Entrepreneurship
                              – Social entrepreneurship: profit? Non-profit? How to make a
                              better world?
                              – What are some NGO’s/orgs?
                              – Who is using that model?
                              – What is a cooperative? What are some hybrid models?
                              – How would an organisation with social entrepreneurship
                              features be set up?
                              – What are the challenges in setting a SE, how do we
                              overcome them?
                              – Cooperatives as a TOOL to rebuild trust in society
                              – How does it work?
                              – Advice for creating cooperative networks in our home cities
                              through social entrepreneurship.
                              – How can a company as individual integrate in a social
                              cooperative?
                              – How can I use a model of SE to start a Facilitation business?
                              – Successful models of SE?
                              – Does a cooperative have to count on higher level of TRUST
                              among its “members” than “conventional” companies
    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Our destiny/vision for today? … backcasting
What knwoledge do we want o cocreate today?
– What MSLS can teach                                                 – How to integrate the social
MONDRAGON & What                                                      entrepreneurship potential to
MONDRAGON can teach                                                   MSLS strategies?
MSLS?
                                                                      – How Social Entrepreneurship
– Building FSSD approach                                              theory understands the
into MONDRAGON                                                        importance of ecological value
university education                                                  as opposed to just social value?
system?
– How does MONDRAGON
take “sustainability” into
account? How can we
leverage its commitment?
                           – How to design a SUSTAINABLE
                           COOPERATIVE SOCIAL BUSINESS
                           MODEL?




       Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
INDEX – stepping stones to our shared vision
CHECKIN: What knowledge do we want to create today?
1. What was the process of creating MONDRAGON? Mondragon
   Cooperative Corporation (1956-2006)
2. How does the Framework for Strategic Sustainable Development
   feed in MONDRAGON? Confronting MONDRAGON to FSSD
3. Understanding Social Entrepreneurs Who is a SE? Characteristics?
   The power of unreasonable people

CHECKOUT: What might be our next step to our shared dream?

Our shared dream…
  CREATING A SUSTAINABLE COOPERATIVE SOCIAL
                BUSINESS MODEL

      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
What was the process of
                                   creating MONDRAGON?
                                   Mondragon Cooperative
                                   Corporation (1956-2006)


Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
1. Mondragon Cooperative Corporation
             (1956-2006)




 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Starting point (1940)
   Massive unemployment & social crises: Spain dictatorship after civil
   war.
   Lack of any education: technical or in business
   Steel-mechanic industrial roots, small & local
   Closed and protected market
   Lack of any technology

A shared dream…


 EDUCATION & CO-OPERATIVE ENTREPRENEURSHIP
     TO SURVIVE & TRANSFORM THE SOCIETY!!!



     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Mondragon education: Leading thoughts
  “The world is not there to contemplate it but to transform it”

  “Share knowledge & education to democratize power”

  “A technical school that it is not at the same time a school for
  human being development, is caving its own grave”

  “Work and study hast to go hand by hand”

  “God ideas are those ones who transform into real actions”

  “Se ha dicho que el cooperativismo es un movimiento económico
  que utiliza la acción educativa. Pudiéndose también alterar el orden
  de la definición diciendo que es un movimiento educativo que utiliza
  la acción económica”

                                                                       JM Arizmendiarrieta


    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Mondragon education: historical facts
  Prior to industrial co-operatives creation:
  – 1943: In-factory technical training
  – 1948: Engineering Technical school
  – 1956: First industrial co-operative ULGOR (13 years later)
  – 1966: First local co-operative cluster ULARCO (inter-cooperation)
  – 1974: Degree studies / international university agreements
  – 1998: Mondragon University -3 faculties: Engineering MGEP –
       Business ETEO – Education HUEZI

  Academic course:                         1974-75                             2007-08

  –    International experience:               2                                 110
  –    Post-graduate:                          -                                 459
  –    Graduate:                               -                               3.248
  –    Courses:                               237
  –    Technical:                             815

      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Highlights at Dec 2007
  Number of companies: 107                                         Mondragon Group
                                                        Mondragon Congress/ Permanent Commission

  Workforce: 103.731                                        Mondragon Presidency/ General Council

  – Worker members: 80.9%                              Financial       Industrial Division      Distribution
                                                                                                 Division
                                                       Division     Industrial Automatisation
  – Female/male members:
     42.2%                                                                  Automotive

                                                                            Body Builders
  – Abroad: 14.261                                                          Components

                                                                            Construction
  Total sales: 15.056 M. euros                                                Elevation
  (57% international sales ind.)                                             Equipment

                                                                        HouseholdGoods

  Business ranking if listed:                                        Engineering & Services

  – Spain: 7th                                                              Machine Tools

                                                                       Industrial Systems
  – Europe: 32nd                                                        Tools & Systems
  – Forbes 500: 462nd
                                                            Group activities: Mondragon University,
                                                        12 Technology Centers & Garaia Innovation Park
                                                         Source: MCC 2006
                                                                    -

    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Mondragon background & leading thoughts
  A worker cooperative network started by Father Arizmendiarrieta in 1956
  in Mondragon, a 30.000 people village in the Basque Country (Spain)

  Named by several academics as one of the best examples of democracy
  at the work place (Macleod, Vanek, Williamson, Malone, Whyte &
  Whyte,…)

  VISION: The companies that make up MONDRAGON share their
  commitment to cooperation and democracy in the workplace, backed by
  a unique system of worker participation.

  VALUES:
  – Cooperation: owners & main actors
  – Participation: management involvement
  – Social Responsibility: fair distribution of wealth created
  – Innovation: permanent change

     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Mondragon Worker Co-operative principles
  Worker Co-operatives: working people are the heart of the
  companies

  Committment to the local environment & society: continuous
  experimentation to satisfy society needs (Alecop, MU, Eroski,…)

  Business excelency, assuming the leadership & maximum
  competitiveness using the cooperative legal form

  MONDRAGON CO-OPERATIVE PRINCIPLES:
  1. Open membership           6. Incomes/wages solidarit
  2. Democratic member control 7. Inter-cooperation
  3. Work over ownership       8. Social transformation
  4. Capital as a tool         9. Universal character
  5. Management participation  10. Education and training


    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Devoted to employment creation: Mondragon net-
job growth: 1956-2006


                                                                                                    80000
                                                                                                    70000
       1) First production plant abroad
       2) MCC holding structure creation                                                            60000
       3) Started Eroski Group                                                                      50000
            expansion all over Spain / 5
            production plants abroad                                                                40000
       4) 26 Production plants abroad                                                               30000
       5) 57 Production plants abroad
                                                                                                    20000
                                                                                                    10000
                                                                                                    0
1955    1960     1965      1970     1975      1980     1985      1990     1995     2000      2005

                                            Years
 Source: ex novo - Adaptation from MCC - 2005            1)        2)        3)         4)    5)




         Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Committed to “companies creation & survival”
through inter-cooperation
   Companies created on diverse sectors & industries:

           Number of Mondragon cooperative companies: 1956-2003




   Source: Clamp 2003




   Avoid companies shut-downs: every Mondragon company has
   suffered a critical difficulties period over its history

    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Mondragon Factories abroad




    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
International “multi-localization” industrial strategy
–“Creative vs. destructive international trade”
         45,000

         40,000
                         1) First production plant abroad
         35,000          2) MCC holding structure creation
                         3) 26 Production plants abroad
         30,000
                         4) 65 Production plants abroad
         25,000                 Total employees
                                Employees abroad (since 99)
         20,000

         15,000

         10,000

          5,000

              0
                  1960
                         1962
                                1964
                                       1966
                                              1968
                                                     1970
                                                            1972
                                                                   1974
                                                                          1976
                                                                                 1978
                                                                                        1980
                                                                                               1982
                                                                                                      1984
                                                                                                             1986
                                                                                                                    1988
                                                                                                                           1990
                                                                                                                                  1992
                                                                                                                                         1994
                                                                                                                                                1996
                                                                                                                                                       1998
                                                                                                                                                              2000
                                                                                                                                                                     2002
                                                                                                                                                                            2004
                                                                                                                                                                                   2006
                                                                                    Years                    1)               2)                3)               4)                 5)
           Source: ex novo - Adaptation from MCC - 2007                                                           1)       2)                                 3)                   4)


      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
What about the Retail division?
Main facts from 2008:
- Total sales 9.013 M. euros
- 2.440 centers: 115 hyper, 1029 super, 274 travel agencies, 53 petrol stations, 44
FORUM (sport), 300 IF (perfume), 6 ABAC (books). In France: 4 hyper, 16 super & 17 petrol
stations. In Andorra: 4 IF (perfume)
- 2.000 workforce growth (reaching 56.000)
- Opening of 164 new retail centers (Hyper, super)
- Strategic decision to transform conventional companies into cooperatives:
     - It might become the bigger cooperative worldwide with more than
     50.000 working members
     - At the end of 2008 already 14.733 people participate in ownership,
     profits and management (1.475 annual growth)


         Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Mondragon University: identity signs
  Prior basement/seed to the industrial companies
  creation

  Devoted to University-Companies integration

  Co-operative & participatory University: companies +
  students + teachers (workers)

  Village University: devoted to local community service

  Committed to Entrepreneurship & R+D+ innovation


    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Mondragon University: main roles
1. Local community Technical, social & business education
2. Supports “education & work” combination (ALECOOP
   1966)
3. Technology Research & innovation
   – Technology centre IKERLAN (1974)
   – Innovation Pole GARAIA (2007)
6. New companies creation & entrepreneurship (1984 –
   SAIOLAN 1996 – Mondragon Team Academy 2008)
7. International education: (since 1974, in 2008 (110 + 12)




     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
How does the Framework
                                   for Strategic Sustainable
                                   Development feed in
                                   MONDRAGON?
                                   Confronting MONDRAGON to
                                   FSSD
Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
2. How does the Framework for Strategic
Sustainable Development feed in MONDRAGON?




Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
The FSSD Funnel: Where might be MONDRAGON?


From                                   To




       Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
The FSSD Funnel: Where might be MONDRAGON?




   Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 sustainability principles: Where is MONDRAGON?
    “In a sustainable society, nature is not subject to
    systematically increasing...
                 ...concentrations of substances extracted
                 from the Earth’s crust,


                 ...concentrations of substances produced
                 by society,



                 ...degradation by physical means,


    and, in that society...
                 ...people are not subject to conditions that
                 systematically undermine their capacity to
                 meet their needs “



    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 Sustainability principles: 1- Concentration of
substances extracted from the Earts’s crust




                                                                    Source MONDRAGON Annual report 2008
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 Sustainability principles: 2- Concentration of
substances produced by society




         Source MONDRAGON Annual report 2008
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 Sustainability principles: 2- Concentration of
substances produced by society




                                                                    Source MONDRAGON Annual report 2008
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 Sustainability principles: 3- Degradation by
physical means




        Source MONDRAGON Annual report 2008
    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 Sustainability principles: 4- ...people are not
subject to conditions that systematically
undermine their capacity to meet their needs




        Source MONDRAGON Annual report 2008
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 Sustainability principles: 4- ...people are not
subject to conditions that systematically
undermine their capacity to meet their needs




           Source MONDRAGON Annual report 2008
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
4 sustainability principles: Where is MONDRAGON?
“In a sustainable society, nature is not subject to
systematically increasing...
                                                                                - Oil dependant industries
            ...concentrations of substances extracted                           - Oil Transport & logistics
            from the Earth’s crust,                                             - Oil Automotive industry
                                                                                -…

            ...concentrations of substances produced                             - Plastic, Iron & Steel
            by society,                                                          components: home appliance,
                                                                                 automotive, construction
                                                                                 -…
            ...degradation by physical means,                                    - Construction industries


and, in that society...
            ...people are not subject to conditions that                        - Humanity at work based on
            systematically undermine their capacity to                          a Cooperative system
            meet their needs “                                                  “People-centred companies”



          Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
5-level model - football example
                                             My text about the systems level, My text about the
                                             systems level, My text about the systems level


                                             My text about the success level, My text about the
                                             success level, My text about the success level


                                             My text about the strategic level, My text about the
                                             strategic level, My text about the strategic level



                                             My text about the action level, My text about the
                                             action level, My text about the action level



                                             My text about the tools level, My text about the
                                             tools level, My text about the tools level




    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Starting point (1940)
   Massive unemployment & social crises: Spain dictatorship after civil
   war.
   Lack of any education: technical or in business
   Steel-mechanic industrial roots, small & local
   Closed and protected market
   Lack of any technology

A shared dream…


 EDUCATION & CO-OPERATIVE ENTREPRENEURSHIP
     TO SURVIVE & TRANSFORM THE SOCIETY!!!



     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
5-level model – MONDRAGON 1940 scenario?




    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Starting point (Mondragon 2007)
    Solid group expanded internationally
    Successful structures in the past
    European production industrial crises: employment threat
    Global & interconnected economy
    Local communities on threat: urban massification, internal migration &
    radical social differences among & within countries
    Lack and difficulties to create new business
    Need of a change/evolution of our competetitive model:
    – FROM production/manufacturing TO Knowledge-Research-Innovation
    – FROM local TO Glocal

Current challenge…

     INNOVATION & MULTI-LOCALIZATION TO DEFEND LOCAL
            COMMUNITY STABILITY & ENABLE SOCIAL
               TRANSFORMATION “GLOCALLY”!!!

      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
5-level model – MONDRAGON 2007 scenario?




    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Backcasting & ABCD – MONDRAGON 2020
                                    1. Begin with the end in mind –
                                    MONDRAGON 2020                                Year 2020
                                                                                              ??


       Awareness
                                 Creative
                                 Solutions                       Future




                                           Decide on
                 Present
                                           Priorities
      Baseline                                   Does it move us in the right direction?
                                                 Is it a flexible platform?
                                    3. Move    step by step towards the vision
                                                 Is it a good return on investment?

   Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Understanding Social
                                   Entrepreneurs
                                   Who is a SE?
                                   Characteristics?


Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
3. “THE POWER OF UNREASONABLE PEOPLE
How Social Entrepreneurs Create Markets that Change the World”
                             (Harvard Business Press 2008)




     - Understanding what is a Social Entrepreneur
     - Classifying types of Social Enterprises
     - Identifying SE market opportunities
     - Tapping SE financial resources




   Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Our goals for today
Based on the book
“The power of unreasonable people”
(J Elkington & P. Hartigan –
 Harvard Business Press 2008)

Our objectives are:
  To introduce a new generation of social & environmental
  entrepreneurs
  To understand their Business Models & leadership styles
  To identify their market opportunities
  To find out their financial resources


      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Understanding what is a Social Entrepreneur

“The reasonable man adapts himself t the world

The unreasonable man persist in trying to adapt the world
  to himself.

Therefore, all progress depends on the unreasonable man”

                                                      (George Bernard Swaw, 1903)




     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Social entrepreneurs are…
 Innovative, Resourceful, Practical and Opportunistic,… as any
 other entrepreneurs

 But… What motivates social entrepreneurs is not doing the
 “DEAL” but achieving the “IDEAL”

 So they have a long term commitment with their projects

 Most Social entrepreneurs stumble across the opportunity to
 SERVE OTHERS

 Common inspiration is:
    “You have to be the change you want to see in the world”
                                              (Gandhi)

    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Why are they unreasonable? Because…
 They Want to Change the World
 They are insanely ambitious
 They are propelled by emotions
 They think they know the future
 They seek profit in unprofitable pursuits
 They ignore the evidence
 They try to Measure the Unmeasurable
 They refuse to be made into Superheroes
 They are, well, unreasonable

   Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Characteristics of Successful Social entrepreneurs
  Try to shrug off the constraints of ideology or discipline
  Identify & apply practical solutions to social problems, combining
  innovation, resourcefulness, and opportunity
  Innovate by finding a new product, a new service, or a new
  approach to a social problem
  Focus-first & foremost-on social value creation and, in that spirit, are
  willing to share their innovations & insights for other to replicate
  Jump in before ensuring they are fully resourced
  Have an unwavering belief in everyone’s innate capacity, often
  regardless of education, to contribute meaningfully to economic &
  social development
  Show a dogged determination that pushes them to take risks that
  others wouldn’t dare
  Balance their passion for change with a zeal to measure and
  monitor their impact
  Have a great deal to teach change makers in other sectors
  Display a healthy impatience
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
How they look like…

                                                        Nicholas Negroponte (MIT-medialab)
                                                        “Entrepreneur behind the One laptop
                                                        per child project”
                                                        VIDEO: http://tinyurl.com/qkavho




 Dr. Govindappa “Aravind Eye Hospital”
 “The largest Eye care medical                          Dr. Mohammed Yumus
  centre in the world”                                  “Grameen Bank – Nobel Price 2006”
 VIDEO: http://tinyurl.com/qb37rm                       VIDEO: http://tinyurl.com/dmbz9f
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Classifying types of Social Enterprises
Traditional classification:
  Model 1: Leveraged Nonprofit ventures
  Model 2: Hybrid Nonprofit ventures
  Model 3: Social Business Ventures

Social Enterprise from a wider perspective




     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Traditional classification
Model 1: Leveraged Nonprofit ventures
  A public good is being delivered to the most economically
  vulnerable, who do not have access to, or are unable to
  afford, the service rendered
  Both the entrepreneur and the organization are change
  catalysts, with a central goal of enabling direct beneficiaries to
  assume ownership of the initiative
  Multiple external partners are actively involved in supporting
  the venture financially, politically, and in kind
  The founding entrepreneur morphs into a figurehead, in some
  cases for the wider movement, as others assume
  responsibilities and leadership

     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Traditional classification
  Model 1: Leveraged Nonprofit ventures
                                                                           Bunker Roy
                                                                           “Barefoot College”
                                                                           http://tinyurl.com/ottmg8




                           N. Negroponte
                           OLPC www.laptop.org
                           http://tinyurl.com/5tfazu
Mother Teresa
“Missionaries of Charity”
VIDEO: http://tinyurl.com/d25chs
          Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Traditional classification
Model 2: Hybrid Nonprofit ventures

  Goods or services are delivered to populations that have been
  excluded or underserved by mainstream markets, but the notion of
  making a profit is not totally out of the question
  Sooner or later the founding entrepreneur or his/her team, typically
  develops a marketing plan to ensure that the poor or otherwise
  disadvantaged can access the product or service being provided
  The enterprise is able to recover a portion of its costs through the sale
  of goods & services, in the process often identifying new markets
  To sustain activities & address the unmet needs of poor or otherwise
  marginalized clients, the entrepreneur mobilizes funds from public,
  private, and/or philanthropic organizations in the form of grants, loans
  As mainstream investors & business enter the picture, even when they
  are not seeking mainstream financial returns, they push to become
  model 3
     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Traditional classification
   Model 2: Hybrid Nonprofit ventures
                                                                      Rick Aubry
                                                                      “Rubicon Programs”
                                                                      VIDEO: http://tinyurl.com/o4dd82




Dr. Govindappa            Martin Fisher
“Aravind Eye Hospital”    KickStart: www.kickstart.org
http://tinyurl.com/qb37rm VIDEO: http://tinyurl.com/p7mep3

           Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Traditional classification
Model 3: Social Business ventures

  The entrepreneur sets up the venture as a business with the specific
  mission to drive transformational social and/or environmental
  change
  Profits are generated, but the aim is not maximize financial returns
  for shareholders but instead to financially benefit low-income groups
  and to grow the social venture by reinvestment, enabling it to reach
  and serve more people
  The entrepreneur seeks out investors interested in combining
  financial and social returns
  The enterprise’s financing-and scaling- opportunities can be
  significantly greater because social business can more easily take
  on debt and equity


     Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Traditional classification
Model 3: Social Business ventures




Dr. Mohammed Yumus                                                    F. Arizmendiarrieta
“Grameen Bank – Nobel Price 2006”                                     MONDRAGON Cooperatives
VIDEO: http://tinyurl.com/qt65ux                                      http://tinyurl.com/p75akt
                                                                      http://tinyurl.com/otm9ft
        Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Team activity
 Select one social entrepreneur you might know?
 Identify which characteristics does he/she have?
 Identify which type of social enterprise is in used?




    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Classifying Social enterprise from a wider perspective




    Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
1. Demographic opportunities
Facts:
-   Human population toward 9 billion to10 billion people
-   Age distribution skewing: old vs. young boom nations
-   Worldwide migration: from rural to cities
-   One of the best ways of reining population growth is encouraging
    economic development
Examples of successful Social Entrepreneurs
-   Jeroo Billimoria – Child Helpline International -
    http://www.childhelplineinternational.org/
-   Martin Fisher – Cooperative Home Care Associates (CHCA), the
    Paraprofessional Healtcare Institute (PHI) & Independence Care
    System (ICS) http://www.chcany.org/
      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
2. Financial opportunities
Facts:
-   The notion that the haves will find ways to gain more and that the
    have-nots will lose more has been acknowledged since biblical times
-   Extreme financial inequality can sow the seeds of insurrections and
    social cataclysm
-   Tools & frameworks for economic justice are weak or nonexistent
Examples of successful Social Entrepreneurs
-   Jeroo Billimoria – Aflatoun - http://www.aflatoun.org/
-   Martin Fisher – Kickstart - http://www.kickstart.org/ (0.6% GDP of
    Kenya GDP & 0.25% of Tanzania GDP)
-   Fazle Abed – Bangladesh Rural Advancement Committee-
    http://www.brac.net/
      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
3. Nutritional opportunities
Facts:
-   True famine, hunger, and poor nutrition have been constants
    through-out human history
-   862 million people across the world are hungry, up from 852 million a
    year ago
-   Every day, almost 16,000 children die from hunger-related causes--
    ONE CHILD EVERY FIVE SECONDS.
Examples of successful Social Entrepreneurs
-   Takao Furuno – The power of Duck - http://tinyurl.com/ojdwy7
-   Hector Gonzalez – Cuadritos - http://www.cuadritos.com.mx/ (the
    largest self-sustaining food bank in Mexico, feeding 100.000 people a
    day)
      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
4. Resource opportunities
Facts:
-   A growing world population will not be a problem if the planet’s
    resources were limitless, but they are not
-   Demographic pressures are fistering awareness of the natural
    resource limits to economic growth
-   Example: the UN argues that the conflict in Darfur has been driven by
    competition for water as climate change bites
Examples of successful Social Entrepreneurs
-   Phil LaRocco – E+Co - http://www.eandco.net/
-   Fabio Rosa – Ideaas - http://www.ideaas.org.br/ & the widely
    replicated Palmares project http://www.ashoka.org/node/3291

      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
5. Environmental opportunities
Facts:
-   Environmental issues are universal: there is not South-North differences
-   Nevertheless, poor populations everywhere in the world re forced to live in
    the worst circumstances
-   The dominant environmental concerns include the immediate of clean water
    & sanitation, the risks of local & indoor pollution , & vulnerability to natural
    hazards.
-   Other parts of the world: noise, traffic congestion, air & water pollution, long-
    term climate change,…
Examples of successful Social Entrepreneurs
- Yan Arthus-Bertrand – The Earth from the Air -
   http://www.wecommunic8.com/earthfromtheair/
- Wangari Maathi – Green Belt Movement -
   http://www.greenbeltmovement.org/
         Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
6. Health opportunities
Facts:
-   From HIV/AIDS, to malaria, to potential pandemics like SARS or Flu-
    A, the world problems can seen overwhelming
-   In 2006,11 million children <5 years died from preventable causes
-   4 million babies will not survive their first month of life
-   > 1/2 million women died in pregnancy, during labor, or after birth
Examples of successful Social Entrepreneurs
-   Dr. Paul Farmer – “The Man who will cure the world” -
    http://tinyurl.com/aovmpq
-   Dr. Devi Shetty – Narayana Hrudayalaya -
    http://www.narayanahospitals.com/
-   Vera Cordeiro – Resnacer - http://www.ashoka.org/node/3420
      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
7. Gender opportunities
Facts:
-   There is always an inescapable gender component
-   In the 1995 Kobe earthquake, 1,5 times more women than men died
-   In the Asian tsunami, death rates for women were 3-4 times those for
    men
-   There are several factors: biological, cultural, economic, or access to
    health care, education & information technology.
Examples of successful Social Entrepreneurs
-   Wu Qing – Beijing Cultural Development Center for Rural Women -
    http://www.nongjianv.org/english/index.html


      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
8. Educational opportunities
Facts:
-   Few factors are as powerful as education in empowering humans
-   In a knowledge society access to educations becomes eevn more
    important
Examples of successful Social Entrepreneurs
-   Bunker Roy – Barefoot College - http://www.barefootcollege.org/
-   Kyle Zimmer - Fist book - http://www.firstbook.org
-   Wendy Kopp – Teach For America - http://www.teachforamerica.org/
-   Michael Brown & Alan Khazei –City Year - http://www.cityyear.org
-   Javier Gonzalez – abcdespanol - http://www.abcdespanol.com/es/
-   Liz Maw – Netimpact - http://www.netimpact.org/
      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
9. Digital opportunities
Facts:
-   Enthusiasts may talk of “growing up digital”, but the IT revolution has
    created its own divides
-   80% of people in the world have never heard a dial tone, let alone
    surfed the Web
-   Kofi Annan: “People lack many things: jobs, shelter, food, health care &
    drinkable water. Today, being cut off from basic telecommunications services
    is hardship almost as acute as these other deprivations, & may indeed
    reduce the chances of finding remedies to them”
Examples of successful Social Entrepreneurs
-   Rodrigo Baggio – Committee for Democracy in IT -
    http://www.cdi.org.br/

      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
10 market opportunities for social entrepreneurs
10. Security opportunities
Facts:
-   September 11th terrorism attack changed world security, however this
    might be an effect of deeper & previous security causes.
-   Instead of turning to companies like General Dynamics or Halliburton
    for security measures, governments should look to social
    entrepreneurs who recognize address the physical, psychological,
    social, economic, energy-related, water-related, or environmental
    security.
-   Rich western countries spend up of 25 times as much on defense as
    they do on overseas aid.
Examples of successful Social Entrepreneurs
-   Pioneer Human Service - http://www.pioneerhumanservices.org/
      Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
“YOU HAVE TO BE THE CHANGE YOU
                   WANT TO SEE IN THE WORLD”
                                      GANDHI




Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
CHECKOUT:
                                   What might be our next step
                                   to our shared dream…
                                   “Creating a Sustainable
                                   Cooperative Social
                                   Business Model”
Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
Our shared dream: MSLS-MONDRAGON
      Potential MSLS thesis to start working
      – What MSLS can teach Building FSSD approach into         – How to integrate the social
      MONDRAGON & What       MONDRAGON University?              entrepreneurship potential to
      MONDRAGON can teach                                       MSLS strategies?
      MSLS?                                             Start a new Team-cooperative to facilitate
                                                                – How Social Entrepreneurship
                                                                       FSSD sustainability implementation?
        – Building FSSD approach                                theory understands the
        into MONDRAGON                                          importance of ecological value
        university education                                    as opposed to just social value?
        system?
        – How does MONDRAGON                              Developing MONDRAGON sustainability
                                                            through: eco-clusters in Euskadi?,
        take “sustainability” into
                                                                     cluster in China?
        account? How can we
        leverage its commitment?
 Start collaboration & exchanges – How to design a SUSTAINABLE
between BTH and MU: ecodesign, COOPERATIVE SOCIAL BUSINESS
         master, erasmus,…
                                   MODEL?
                                  Implementing FSSD into a MONDRAGON
                                               cooperative

              Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
‫ﺷﻜﺮا‬
Eskerrik asko
Muchas gracias
Thank you
谢谢你

               “Our strength does not lead to struggle but co-operation”

                                                     P. JM Arizmendiarrieta - 1956



   Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

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Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

  • 1. MONDRAGON COOPERATIVE EXPERIENCE & SOCIAL ENTREPRENEURSHIP Confronting the case to FSSD (Framework Strategic Sustainable Development) with MSLS 2010 tribe MSLS 2010 – BTH – Karlskrona – Sweden – November 19th 2009 Dr. JM Luzarraga Mondragon University jmluzarraga@eteo.mondragon.edu Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 2. How do we create more knowledge? Are we ready for “optimal disconfort” co-creation? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 3. CHECK IN: Who am I? What is my life dream? What knowledge do we want to co-create today? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 4. Our destiny/vision for today? …backcasting What knowledge do we want o co-create today? FSSD & MSLS2010 passions & life dreams MONDRAGON Social Cooperative Entrepreneurship Experience Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 5. Our destiny/vision for today?... backcasting What knwoledge do we want o cocreate today? FSSD & MSLS2010 passions & life dreams – Create a company to leverage awareness on sustainability in my home town – Facilitate companies transformation process to become sustainable – Develop & design new sustainable production industries through eco-design – Create an education project on sustainability and social entrepreneurship –… CHANGE THE WORLD THROUGH SUSTAINABILITY :) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 6. Our destiny/vision for today? ... backcasting What knwoledge do we want o cocreate today? MONDRAGON Cooperative Experience – What is MONDRAGON? – What is shared/promoted? – How big is it? Effective? Who’s involved? – What is SUCCESS for M.? – What makes M. so successful? – How does MONDRAGON engage coop members? – Is administration of M. coop different than others? – What stages has M. taken from the beginning till now? – How started? How proceeded? & What is planned now? – What was the process of creating M.? – What was the original IMPETUS? – What is M. view of sustainability? What is you vision? – Does cooperativism guarantee sustainability? – How does M. take “sustainability” into account? (not only social sustainability but ecological? – Does the companies in that region form a local supply chain to support each other? – What are the common shared values by companies in M.? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 7. Our destiny/vision for today? … backcasting What knwoledge do we want o cocreate today? Social Entrepreneurship – Social entrepreneurship: profit? Non-profit? How to make a better world? – What are some NGO’s/orgs? – Who is using that model? – What is a cooperative? What are some hybrid models? – How would an organisation with social entrepreneurship features be set up? – What are the challenges in setting a SE, how do we overcome them? – Cooperatives as a TOOL to rebuild trust in society – How does it work? – Advice for creating cooperative networks in our home cities through social entrepreneurship. – How can a company as individual integrate in a social cooperative? – How can I use a model of SE to start a Facilitation business? – Successful models of SE? – Does a cooperative have to count on higher level of TRUST among its “members” than “conventional” companies Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 8. Our destiny/vision for today? … backcasting What knwoledge do we want o cocreate today? – What MSLS can teach – How to integrate the social MONDRAGON & What entrepreneurship potential to MONDRAGON can teach MSLS strategies? MSLS? – How Social Entrepreneurship – Building FSSD approach theory understands the into MONDRAGON importance of ecological value university education as opposed to just social value? system? – How does MONDRAGON take “sustainability” into account? How can we leverage its commitment? – How to design a SUSTAINABLE COOPERATIVE SOCIAL BUSINESS MODEL? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 9. INDEX – stepping stones to our shared vision CHECKIN: What knowledge do we want to create today? 1. What was the process of creating MONDRAGON? Mondragon Cooperative Corporation (1956-2006) 2. How does the Framework for Strategic Sustainable Development feed in MONDRAGON? Confronting MONDRAGON to FSSD 3. Understanding Social Entrepreneurs Who is a SE? Characteristics? The power of unreasonable people CHECKOUT: What might be our next step to our shared dream? Our shared dream… CREATING A SUSTAINABLE COOPERATIVE SOCIAL BUSINESS MODEL Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 10. What was the process of creating MONDRAGON? Mondragon Cooperative Corporation (1956-2006) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 11. 1. Mondragon Cooperative Corporation (1956-2006) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 12. Starting point (1940) Massive unemployment & social crises: Spain dictatorship after civil war. Lack of any education: technical or in business Steel-mechanic industrial roots, small & local Closed and protected market Lack of any technology A shared dream… EDUCATION & CO-OPERATIVE ENTREPRENEURSHIP TO SURVIVE & TRANSFORM THE SOCIETY!!! Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 13. Mondragon education: Leading thoughts “The world is not there to contemplate it but to transform it” “Share knowledge & education to democratize power” “A technical school that it is not at the same time a school for human being development, is caving its own grave” “Work and study hast to go hand by hand” “God ideas are those ones who transform into real actions” “Se ha dicho que el cooperativismo es un movimiento económico que utiliza la acción educativa. Pudiéndose también alterar el orden de la definición diciendo que es un movimiento educativo que utiliza la acción económica” JM Arizmendiarrieta Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 14. Mondragon education: historical facts Prior to industrial co-operatives creation: – 1943: In-factory technical training – 1948: Engineering Technical school – 1956: First industrial co-operative ULGOR (13 years later) – 1966: First local co-operative cluster ULARCO (inter-cooperation) – 1974: Degree studies / international university agreements – 1998: Mondragon University -3 faculties: Engineering MGEP – Business ETEO – Education HUEZI Academic course: 1974-75 2007-08 – International experience: 2 110 – Post-graduate: - 459 – Graduate: - 3.248 – Courses: 237 – Technical: 815 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 15. Highlights at Dec 2007 Number of companies: 107 Mondragon Group Mondragon Congress/ Permanent Commission Workforce: 103.731 Mondragon Presidency/ General Council – Worker members: 80.9% Financial Industrial Division Distribution Division Division Industrial Automatisation – Female/male members: 42.2% Automotive Body Builders – Abroad: 14.261 Components Construction Total sales: 15.056 M. euros Elevation (57% international sales ind.) Equipment HouseholdGoods Business ranking if listed: Engineering & Services – Spain: 7th Machine Tools Industrial Systems – Europe: 32nd Tools & Systems – Forbes 500: 462nd Group activities: Mondragon University, 12 Technology Centers & Garaia Innovation Park Source: MCC 2006 - Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 16. Mondragon background & leading thoughts A worker cooperative network started by Father Arizmendiarrieta in 1956 in Mondragon, a 30.000 people village in the Basque Country (Spain) Named by several academics as one of the best examples of democracy at the work place (Macleod, Vanek, Williamson, Malone, Whyte & Whyte,…) VISION: The companies that make up MONDRAGON share their commitment to cooperation and democracy in the workplace, backed by a unique system of worker participation. VALUES: – Cooperation: owners & main actors – Participation: management involvement – Social Responsibility: fair distribution of wealth created – Innovation: permanent change Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 17. Mondragon Worker Co-operative principles Worker Co-operatives: working people are the heart of the companies Committment to the local environment & society: continuous experimentation to satisfy society needs (Alecop, MU, Eroski,…) Business excelency, assuming the leadership & maximum competitiveness using the cooperative legal form MONDRAGON CO-OPERATIVE PRINCIPLES: 1. Open membership 6. Incomes/wages solidarit 2. Democratic member control 7. Inter-cooperation 3. Work over ownership 8. Social transformation 4. Capital as a tool 9. Universal character 5. Management participation 10. Education and training Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 18. Devoted to employment creation: Mondragon net- job growth: 1956-2006 80000 70000 1) First production plant abroad 2) MCC holding structure creation 60000 3) Started Eroski Group 50000 expansion all over Spain / 5 production plants abroad 40000 4) 26 Production plants abroad 30000 5) 57 Production plants abroad 20000 10000 0 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Years Source: ex novo - Adaptation from MCC - 2005 1) 2) 3) 4) 5) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 19. Committed to “companies creation & survival” through inter-cooperation Companies created on diverse sectors & industries: Number of Mondragon cooperative companies: 1956-2003 Source: Clamp 2003 Avoid companies shut-downs: every Mondragon company has suffered a critical difficulties period over its history Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 20. Mondragon Factories abroad Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 21. International “multi-localization” industrial strategy –“Creative vs. destructive international trade” 45,000 40,000 1) First production plant abroad 35,000 2) MCC holding structure creation 3) 26 Production plants abroad 30,000 4) 65 Production plants abroad 25,000 Total employees Employees abroad (since 99) 20,000 15,000 10,000 5,000 0 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Years 1) 2) 3) 4) 5) Source: ex novo - Adaptation from MCC - 2007 1) 2) 3) 4) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 22. What about the Retail division? Main facts from 2008: - Total sales 9.013 M. euros - 2.440 centers: 115 hyper, 1029 super, 274 travel agencies, 53 petrol stations, 44 FORUM (sport), 300 IF (perfume), 6 ABAC (books). In France: 4 hyper, 16 super & 17 petrol stations. In Andorra: 4 IF (perfume) - 2.000 workforce growth (reaching 56.000) - Opening of 164 new retail centers (Hyper, super) - Strategic decision to transform conventional companies into cooperatives: - It might become the bigger cooperative worldwide with more than 50.000 working members - At the end of 2008 already 14.733 people participate in ownership, profits and management (1.475 annual growth) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 23. Mondragon University: identity signs Prior basement/seed to the industrial companies creation Devoted to University-Companies integration Co-operative & participatory University: companies + students + teachers (workers) Village University: devoted to local community service Committed to Entrepreneurship & R+D+ innovation Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 24. Mondragon University: main roles 1. Local community Technical, social & business education 2. Supports “education & work” combination (ALECOOP 1966) 3. Technology Research & innovation – Technology centre IKERLAN (1974) – Innovation Pole GARAIA (2007) 6. New companies creation & entrepreneurship (1984 – SAIOLAN 1996 – Mondragon Team Academy 2008) 7. International education: (since 1974, in 2008 (110 + 12) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 25. How does the Framework for Strategic Sustainable Development feed in MONDRAGON? Confronting MONDRAGON to FSSD Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 26. 2. How does the Framework for Strategic Sustainable Development feed in MONDRAGON? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 27. The FSSD Funnel: Where might be MONDRAGON? From To Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 28. The FSSD Funnel: Where might be MONDRAGON? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 29. 4 sustainability principles: Where is MONDRAGON? “In a sustainable society, nature is not subject to systematically increasing... ...concentrations of substances extracted from the Earth’s crust, ...concentrations of substances produced by society, ...degradation by physical means, and, in that society... ...people are not subject to conditions that systematically undermine their capacity to meet their needs “ Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 30. 4 Sustainability principles: 1- Concentration of substances extracted from the Earts’s crust Source MONDRAGON Annual report 2008 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 31. 4 Sustainability principles: 2- Concentration of substances produced by society Source MONDRAGON Annual report 2008 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 32. 4 Sustainability principles: 2- Concentration of substances produced by society Source MONDRAGON Annual report 2008 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 33. 4 Sustainability principles: 3- Degradation by physical means Source MONDRAGON Annual report 2008 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 34. 4 Sustainability principles: 4- ...people are not subject to conditions that systematically undermine their capacity to meet their needs Source MONDRAGON Annual report 2008 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 35. 4 Sustainability principles: 4- ...people are not subject to conditions that systematically undermine their capacity to meet their needs Source MONDRAGON Annual report 2008 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 36. 4 sustainability principles: Where is MONDRAGON? “In a sustainable society, nature is not subject to systematically increasing... - Oil dependant industries ...concentrations of substances extracted - Oil Transport & logistics from the Earth’s crust, - Oil Automotive industry -… ...concentrations of substances produced - Plastic, Iron & Steel by society, components: home appliance, automotive, construction -… ...degradation by physical means, - Construction industries and, in that society... ...people are not subject to conditions that - Humanity at work based on systematically undermine their capacity to a Cooperative system meet their needs “ “People-centred companies” Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 37. 5-level model - football example My text about the systems level, My text about the systems level, My text about the systems level My text about the success level, My text about the success level, My text about the success level My text about the strategic level, My text about the strategic level, My text about the strategic level My text about the action level, My text about the action level, My text about the action level My text about the tools level, My text about the tools level, My text about the tools level Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 38. Starting point (1940) Massive unemployment & social crises: Spain dictatorship after civil war. Lack of any education: technical or in business Steel-mechanic industrial roots, small & local Closed and protected market Lack of any technology A shared dream… EDUCATION & CO-OPERATIVE ENTREPRENEURSHIP TO SURVIVE & TRANSFORM THE SOCIETY!!! Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 39. 5-level model – MONDRAGON 1940 scenario? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 40. Starting point (Mondragon 2007) Solid group expanded internationally Successful structures in the past European production industrial crises: employment threat Global & interconnected economy Local communities on threat: urban massification, internal migration & radical social differences among & within countries Lack and difficulties to create new business Need of a change/evolution of our competetitive model: – FROM production/manufacturing TO Knowledge-Research-Innovation – FROM local TO Glocal Current challenge… INNOVATION & MULTI-LOCALIZATION TO DEFEND LOCAL COMMUNITY STABILITY & ENABLE SOCIAL TRANSFORMATION “GLOCALLY”!!! Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 41. 5-level model – MONDRAGON 2007 scenario? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 42. Backcasting & ABCD – MONDRAGON 2020 1. Begin with the end in mind – MONDRAGON 2020 Year 2020 ?? Awareness Creative Solutions Future Decide on Present Priorities Baseline Does it move us in the right direction? Is it a flexible platform? 3. Move step by step towards the vision Is it a good return on investment? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 43. Understanding Social Entrepreneurs Who is a SE? Characteristics? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 44. 3. “THE POWER OF UNREASONABLE PEOPLE How Social Entrepreneurs Create Markets that Change the World” (Harvard Business Press 2008) - Understanding what is a Social Entrepreneur - Classifying types of Social Enterprises - Identifying SE market opportunities - Tapping SE financial resources Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 45. Our goals for today Based on the book “The power of unreasonable people” (J Elkington & P. Hartigan – Harvard Business Press 2008) Our objectives are: To introduce a new generation of social & environmental entrepreneurs To understand their Business Models & leadership styles To identify their market opportunities To find out their financial resources Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 46. Understanding what is a Social Entrepreneur “The reasonable man adapts himself t the world The unreasonable man persist in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man” (George Bernard Swaw, 1903) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 47. Social entrepreneurs are… Innovative, Resourceful, Practical and Opportunistic,… as any other entrepreneurs But… What motivates social entrepreneurs is not doing the “DEAL” but achieving the “IDEAL” So they have a long term commitment with their projects Most Social entrepreneurs stumble across the opportunity to SERVE OTHERS Common inspiration is: “You have to be the change you want to see in the world” (Gandhi) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 48. Why are they unreasonable? Because… They Want to Change the World They are insanely ambitious They are propelled by emotions They think they know the future They seek profit in unprofitable pursuits They ignore the evidence They try to Measure the Unmeasurable They refuse to be made into Superheroes They are, well, unreasonable Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 49. Characteristics of Successful Social entrepreneurs Try to shrug off the constraints of ideology or discipline Identify & apply practical solutions to social problems, combining innovation, resourcefulness, and opportunity Innovate by finding a new product, a new service, or a new approach to a social problem Focus-first & foremost-on social value creation and, in that spirit, are willing to share their innovations & insights for other to replicate Jump in before ensuring they are fully resourced Have an unwavering belief in everyone’s innate capacity, often regardless of education, to contribute meaningfully to economic & social development Show a dogged determination that pushes them to take risks that others wouldn’t dare Balance their passion for change with a zeal to measure and monitor their impact Have a great deal to teach change makers in other sectors Display a healthy impatience Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 50. How they look like… Nicholas Negroponte (MIT-medialab) “Entrepreneur behind the One laptop per child project” VIDEO: http://tinyurl.com/qkavho Dr. Govindappa “Aravind Eye Hospital” “The largest Eye care medical Dr. Mohammed Yumus centre in the world” “Grameen Bank – Nobel Price 2006” VIDEO: http://tinyurl.com/qb37rm VIDEO: http://tinyurl.com/dmbz9f Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 51. Classifying types of Social Enterprises Traditional classification: Model 1: Leveraged Nonprofit ventures Model 2: Hybrid Nonprofit ventures Model 3: Social Business Ventures Social Enterprise from a wider perspective Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 52. Traditional classification Model 1: Leveraged Nonprofit ventures A public good is being delivered to the most economically vulnerable, who do not have access to, or are unable to afford, the service rendered Both the entrepreneur and the organization are change catalysts, with a central goal of enabling direct beneficiaries to assume ownership of the initiative Multiple external partners are actively involved in supporting the venture financially, politically, and in kind The founding entrepreneur morphs into a figurehead, in some cases for the wider movement, as others assume responsibilities and leadership Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 53. Traditional classification Model 1: Leveraged Nonprofit ventures Bunker Roy “Barefoot College” http://tinyurl.com/ottmg8 N. Negroponte OLPC www.laptop.org http://tinyurl.com/5tfazu Mother Teresa “Missionaries of Charity” VIDEO: http://tinyurl.com/d25chs Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 54. Traditional classification Model 2: Hybrid Nonprofit ventures Goods or services are delivered to populations that have been excluded or underserved by mainstream markets, but the notion of making a profit is not totally out of the question Sooner or later the founding entrepreneur or his/her team, typically develops a marketing plan to ensure that the poor or otherwise disadvantaged can access the product or service being provided The enterprise is able to recover a portion of its costs through the sale of goods & services, in the process often identifying new markets To sustain activities & address the unmet needs of poor or otherwise marginalized clients, the entrepreneur mobilizes funds from public, private, and/or philanthropic organizations in the form of grants, loans As mainstream investors & business enter the picture, even when they are not seeking mainstream financial returns, they push to become model 3 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 55. Traditional classification Model 2: Hybrid Nonprofit ventures Rick Aubry “Rubicon Programs” VIDEO: http://tinyurl.com/o4dd82 Dr. Govindappa Martin Fisher “Aravind Eye Hospital” KickStart: www.kickstart.org http://tinyurl.com/qb37rm VIDEO: http://tinyurl.com/p7mep3 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 56. Traditional classification Model 3: Social Business ventures The entrepreneur sets up the venture as a business with the specific mission to drive transformational social and/or environmental change Profits are generated, but the aim is not maximize financial returns for shareholders but instead to financially benefit low-income groups and to grow the social venture by reinvestment, enabling it to reach and serve more people The entrepreneur seeks out investors interested in combining financial and social returns The enterprise’s financing-and scaling- opportunities can be significantly greater because social business can more easily take on debt and equity Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 57. Traditional classification Model 3: Social Business ventures Dr. Mohammed Yumus F. Arizmendiarrieta “Grameen Bank – Nobel Price 2006” MONDRAGON Cooperatives VIDEO: http://tinyurl.com/qt65ux http://tinyurl.com/p75akt http://tinyurl.com/otm9ft Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 58. Team activity Select one social entrepreneur you might know? Identify which characteristics does he/she have? Identify which type of social enterprise is in used? Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 59. Classifying Social enterprise from a wider perspective Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 60. 10 market opportunities for social entrepreneurs 1. Demographic opportunities Facts: - Human population toward 9 billion to10 billion people - Age distribution skewing: old vs. young boom nations - Worldwide migration: from rural to cities - One of the best ways of reining population growth is encouraging economic development Examples of successful Social Entrepreneurs - Jeroo Billimoria – Child Helpline International - http://www.childhelplineinternational.org/ - Martin Fisher – Cooperative Home Care Associates (CHCA), the Paraprofessional Healtcare Institute (PHI) & Independence Care System (ICS) http://www.chcany.org/ Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 61. 10 market opportunities for social entrepreneurs 2. Financial opportunities Facts: - The notion that the haves will find ways to gain more and that the have-nots will lose more has been acknowledged since biblical times - Extreme financial inequality can sow the seeds of insurrections and social cataclysm - Tools & frameworks for economic justice are weak or nonexistent Examples of successful Social Entrepreneurs - Jeroo Billimoria – Aflatoun - http://www.aflatoun.org/ - Martin Fisher – Kickstart - http://www.kickstart.org/ (0.6% GDP of Kenya GDP & 0.25% of Tanzania GDP) - Fazle Abed – Bangladesh Rural Advancement Committee- http://www.brac.net/ Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 62. 10 market opportunities for social entrepreneurs 3. Nutritional opportunities Facts: - True famine, hunger, and poor nutrition have been constants through-out human history - 862 million people across the world are hungry, up from 852 million a year ago - Every day, almost 16,000 children die from hunger-related causes-- ONE CHILD EVERY FIVE SECONDS. Examples of successful Social Entrepreneurs - Takao Furuno – The power of Duck - http://tinyurl.com/ojdwy7 - Hector Gonzalez – Cuadritos - http://www.cuadritos.com.mx/ (the largest self-sustaining food bank in Mexico, feeding 100.000 people a day) Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 63. 10 market opportunities for social entrepreneurs 4. Resource opportunities Facts: - A growing world population will not be a problem if the planet’s resources were limitless, but they are not - Demographic pressures are fistering awareness of the natural resource limits to economic growth - Example: the UN argues that the conflict in Darfur has been driven by competition for water as climate change bites Examples of successful Social Entrepreneurs - Phil LaRocco – E+Co - http://www.eandco.net/ - Fabio Rosa – Ideaas - http://www.ideaas.org.br/ & the widely replicated Palmares project http://www.ashoka.org/node/3291 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 64. 10 market opportunities for social entrepreneurs 5. Environmental opportunities Facts: - Environmental issues are universal: there is not South-North differences - Nevertheless, poor populations everywhere in the world re forced to live in the worst circumstances - The dominant environmental concerns include the immediate of clean water & sanitation, the risks of local & indoor pollution , & vulnerability to natural hazards. - Other parts of the world: noise, traffic congestion, air & water pollution, long- term climate change,… Examples of successful Social Entrepreneurs - Yan Arthus-Bertrand – The Earth from the Air - http://www.wecommunic8.com/earthfromtheair/ - Wangari Maathi – Green Belt Movement - http://www.greenbeltmovement.org/ Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 65. 10 market opportunities for social entrepreneurs 6. Health opportunities Facts: - From HIV/AIDS, to malaria, to potential pandemics like SARS or Flu- A, the world problems can seen overwhelming - In 2006,11 million children <5 years died from preventable causes - 4 million babies will not survive their first month of life - > 1/2 million women died in pregnancy, during labor, or after birth Examples of successful Social Entrepreneurs - Dr. Paul Farmer – “The Man who will cure the world” - http://tinyurl.com/aovmpq - Dr. Devi Shetty – Narayana Hrudayalaya - http://www.narayanahospitals.com/ - Vera Cordeiro – Resnacer - http://www.ashoka.org/node/3420 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 66. 10 market opportunities for social entrepreneurs 7. Gender opportunities Facts: - There is always an inescapable gender component - In the 1995 Kobe earthquake, 1,5 times more women than men died - In the Asian tsunami, death rates for women were 3-4 times those for men - There are several factors: biological, cultural, economic, or access to health care, education & information technology. Examples of successful Social Entrepreneurs - Wu Qing – Beijing Cultural Development Center for Rural Women - http://www.nongjianv.org/english/index.html Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 67. 10 market opportunities for social entrepreneurs 8. Educational opportunities Facts: - Few factors are as powerful as education in empowering humans - In a knowledge society access to educations becomes eevn more important Examples of successful Social Entrepreneurs - Bunker Roy – Barefoot College - http://www.barefootcollege.org/ - Kyle Zimmer - Fist book - http://www.firstbook.org - Wendy Kopp – Teach For America - http://www.teachforamerica.org/ - Michael Brown & Alan Khazei –City Year - http://www.cityyear.org - Javier Gonzalez – abcdespanol - http://www.abcdespanol.com/es/ - Liz Maw – Netimpact - http://www.netimpact.org/ Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 68. 10 market opportunities for social entrepreneurs 9. Digital opportunities Facts: - Enthusiasts may talk of “growing up digital”, but the IT revolution has created its own divides - 80% of people in the world have never heard a dial tone, let alone surfed the Web - Kofi Annan: “People lack many things: jobs, shelter, food, health care & drinkable water. Today, being cut off from basic telecommunications services is hardship almost as acute as these other deprivations, & may indeed reduce the chances of finding remedies to them” Examples of successful Social Entrepreneurs - Rodrigo Baggio – Committee for Democracy in IT - http://www.cdi.org.br/ Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 69. 10 market opportunities for social entrepreneurs 10. Security opportunities Facts: - September 11th terrorism attack changed world security, however this might be an effect of deeper & previous security causes. - Instead of turning to companies like General Dynamics or Halliburton for security measures, governments should look to social entrepreneurs who recognize address the physical, psychological, social, economic, energy-related, water-related, or environmental security. - Rich western countries spend up of 25 times as much on defense as they do on overseas aid. Examples of successful Social Entrepreneurs - Pioneer Human Service - http://www.pioneerhumanservices.org/ Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 70. “YOU HAVE TO BE THE CHANGE YOU WANT TO SEE IN THE WORLD” GANDHI Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 71. CHECKOUT: What might be our next step to our shared dream… “Creating a Sustainable Cooperative Social Business Model” Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 72. Our shared dream: MSLS-MONDRAGON Potential MSLS thesis to start working – What MSLS can teach Building FSSD approach into – How to integrate the social MONDRAGON & What MONDRAGON University? entrepreneurship potential to MONDRAGON can teach MSLS strategies? MSLS? Start a new Team-cooperative to facilitate – How Social Entrepreneurship FSSD sustainability implementation? – Building FSSD approach theory understands the into MONDRAGON importance of ecological value university education as opposed to just social value? system? – How does MONDRAGON Developing MONDRAGON sustainability through: eco-clusters in Euskadi?, take “sustainability” into cluster in China? account? How can we leverage its commitment? Start collaboration & exchanges – How to design a SUSTAINABLE between BTH and MU: ecodesign, COOPERATIVE SOCIAL BUSINESS master, erasmus,… MODEL? Implementing FSSD into a MONDRAGON cooperative Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009
  • 73. ‫ﺷﻜﺮا‬ Eskerrik asko Muchas gracias Thank you 谢谢你 “Our strength does not lead to struggle but co-operation” P. JM Arizmendiarrieta - 1956 Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009