APS1015 Class 1: Introduction to Social Entrepreneurship and Social Systems

APS 1015: Social Entrepreneurship
Class 1: Introduction to Social
Entrepreneurship and Social Systems
Wednesday, May 8, 2013
1
Instructors:
Norm Tasevski (norm@socialentrepreneurship.ca)
Karim Harji (karim@socialentrepreneurship.ca)

© Norm Tasevski & Karim Harji
2

Before we begin…
This course is designed for those that want to generate
social change
3

Course Director – Norm Tasevski
4

Course Director – Karim Harji
5

What Makes YOU
a Budding (Social)
Entrepreneur???
6

Agenda
•  Class Intros
•  Syllabus and Class Structure
•  Ground Rules
•  Defining Social Entrepreneurship
•  What motivates the social entrepreneur?
•  Break
•  Introduction to Social Systems
•  What did we learn?
•  Next week
7

Syllabus
8

Class Rules
–  Participation - quality, not
quantity!
–  No stupid questions (only
stupid answers)
–  Respect your classmates –
attend and be punctual!
9

Defining Social Entrepreneurship…
10

The Roots of Social Entrepreneurship
In the beginning…
11
Then…
Private Sector
•  Earn $
•  Pay tax
•  Donate to charity
Public Sector
•  Collect tax
•  Run programs
•  Grant to charity
Nonprofit Sector
•  Receive
donations/grants
•  Run programs
Nonprofit Sector
•  Donations
•  Grants
•  Sustainability
Response? Nonprofit Sector
Private Sector
Activities

Caveat…
12
Social Entrepreneurship is no longer a
nonprofit-only activity!!!

To Understand Social Entrepreneurship, we
need to understand entrepreneurship...
13

Entrepreneurs…
…are motivated
14

Entrepreneurs…
…are innovative
15

Entrepreneurs…
…are resourceful
16

Entrepreneurs…
…take chances
17

How is Social Entrepreneurship
Different?
18

Entrepreneurs…
…are motivated …are resourceful …are risk takers…are innovative
19

But, for the social entrepreneur…
…motivations are different
20

And…
…innovation is different
21

And…
…resourcefulness is different
22

And…
…risk taking is different
23

An Example – “Civic Engagement, Scaled
Up”
24

Other Differences
Focus on “systems
thinking” and
“systems change”:
“Social entrepreneurs are not content just to give a fish or
how to teach fish. They will not rest until they have
revolutionized the fishing industry”
Bill Drayton
Seek “profit” in
traditionally
unprofitable pursuits:
“(Social entrepreneurs) work in areas where there is partial or
total market failure…what distinguishes them is that they are prepared
to strike a very different balance when it comes to creating
value for those who would not normally be able
to afford it”
John Elkington
Possess a strong
“ethical impetus”:
David Bornstein: “Why do you work on the kinds of projects you do? Why don’t
you just want to make a lot of money?”
Fabio Rosa: “I am trying to build a little part of the world in which I would like to
live. A project only makes sense to me when it proves useful to make people
happier and the environment more respected, and when it
represents a hope for a better future. This is the soul of my
projects.” 25

Some Definitions
•  “Social entrepreneurs identify resources where
people only see problems. They view the villagers as
the solution, not the passive beneficiary. They begin
with the assumption of competence and unleash
resources in the communities they are serving”
David Bornstein
•  “A social entrepreneur is someone who recognizes
a social problem and uses entrepreneurial principles
to organize, create and manage a venture to
make social change”
Wikipedia
26

What is a Social Enterprise?
•  Organizations (non-profit or for-profit) that imbed
both social purpose and business purpose into their
organization
•  Returns are both Social (i.e. impact) & Financial (i.e.
profit)
•  Key distinguishing factors: Intent and motivation
27

The SE Goal - Social vs. Financial Purpose
Social Purpose
–  Creating a “social return” by making positive change
within an inequitable social system
•  Examples: Reduced Poverty, Improved Literacy
Financial Purpose
–  Creating a “financial return”, usually through the sale of
products/services in the marketplace
Blended Purpose
–  Effecting social change by combining social and financial
return
–  Also called “Blended Value”
28

What SE is and is Not
Social Enterprise Is Not… Social Enterprise Is…
• A fundraising strategy (i.e. a “give”
mentality)
• A business line (i.e. a “sales” mentality)
• Solely focused on either “customers”
or “clients”
• Focused on both “customers” and
“clients”
• Dependent on restricted funds for
operations (i.e. not sustainable)
• Sustainable (ideally “self-sufficient”)
• An event or one-off activity (e.g.
conferences, bake sales)
• A continuous, market-driven activity
• Providing value to clients only • Providing value to both “clients” and
“customers” (and distinguishing
between both!)
• Quick • A venture that may take several years
to become profitable/sustainable
29

A test…
30
I am:
•  A retailer
•  Sells goods at rates affordable by low-
income individuals
•  Employs individuals with barriers to
employment
•  Goals:
–  92% of imported goods from green
factories
–  95% of waste redirected from landfill
–  Desire to be supplied 100% by
renewable energy by 2015
Social Enterprise or Not?
Facts:
•  $115M raised for charity since 1995
($18M in 2009)
•  Over 1,000 environmentally-
approved products on sale
•  1700 new jobs created in Canada in
2009

31

What does this mean?
Social
Enterprise
CSR
32
Social
Enterprise
Complexity

Motivators for Social Entrepreneurs…
34

A Question…
What motivates you??
35

Some Definitions
•  Internal and external factors that stimulate desire and energy in people to be
continually interested in and committed to a job, role or subject, and to exert
persistent effort in attaining a goal. Motivation is the energizer of behaviour
and mother of all action. It results from the interactions among conscious and
unconscious factors such as the (1) intensity of desire or need, (2) incentive or
reward value of the goal, and (3) expectations of the individual and of his or
her significant others.”
BusinessDictionary.com
•  “Motivation is the activation or energization of goal-orientated behavior.
Motivation may be rooted in the basic need to minimize physical pain and
maximize pleasure, or it may include specific needs such as eating and
resting, or a desired object, hobby, goal, state of being, ideal, or it may be
attributed to less-apparent reasons such as altruism, selfishness, morality, or
avoiding morality. Conceptually, motivation should not be confused with
either volition or optimism. Motivation is related to, but distinct from, emotion.”
Wikipedia
36

37
In response
to why
people are
not giving to
the Pakistani
flood in the
same way as
they did for
Haiti, one
woman said:!
!
“It’s a rogue
state, if they
can afford
the nuclear
bomb they
can look
after their
own”!
!

38
Costin Militaru, an
outreach worker…
has met addicts as
young as 9 years
old. "His family
had no money for
food. He was
hungry and kept
crying, so they fed
him heroin,"
Militaru says. "If
you're high, you
don't need food.”!
!

39
“On March 24, 1989,
the Exxon Valdez
ran aground in
northern Prince
William Sound,
spilling 42 million
liters of crude oil
and contaminating
1,990 kilometers of
shoreline. Some
2,000 sea otters,
302 harbor
seals and about
250,000
seabirds died
in the days
immediately
following the
spill.”!

40
A total of 32,700
different people
stayed in Toronto's
emergency shelters
in 2005. 4,600
were children. !
!
Over half a million
Toronto
households live
below the poverty
line!
!
1 in 10 homeless
report attempted
suicide in 2006!

41

So What Motivates The Social/
Environmental Entrepreneur?
“…it was an epiphanal experience…”
Ray Anderson, Interface Carpets

“I heard the same story again and again. Someone had
experienced an intense kind of pain that branded
them in some way. They said, ‘I had’ to do this. There was
nothing else I could do.”
Jody Jensen, Ashoka

“…that made a real impression on me…”
Jeff Skoll, eBay, Skoll Foundation, etc.

“I was teaching in one of the universities while the country was
suffering from a severe famine. People were dying of hunger, and I
felt very helpless. As an economist, I had no tool
in my toolbox to fix that kind of situation.”
Mohammed Yunus, Grameen Bank

“…powerful moments of inspiration…”
Jacqueline Novogratz, Acumen Fund

What about…

Introduction to Social Systems…
48

What is a System?
“A set of "Things” (people, organizations, objects…) that are
interconnected in such a way that they form their
own pattern of behaviour over time”
Donella Meadows

System Behaviour
•  A system creates/causes its own responses
•  Outside forces can influence system response, but
don’t cause the response
•  The same outside force that acts upon two different
systems can therefore elicit two different responses
•  Example: the flu virus
50

System Components
1.  Elements
2.  Interconnections
3.  Functions/Purpose
Example: Soccer (Football)
51
Elements
Interconnections
Purpose

System Components
•  Elements
–  Tangible (people, buildings)
–  Intangible (team pride, learned skills)
•  Interconnections
–  Physical flows (e.g. objects moving)
–  Information flows (e.g. rules, instructions)
•  Function/Purpose
–  Intended responses (e.g. goal to win a soccer match)
–  Unintended responses (e.g. violence after a soccer match)
52

Social Systems – the Unintended Responses
53
Social System Unintended Response
• Health Care • Obesity
• Spread of preventable disease
• Education • High school dropout
• High education costs
• Transportation • Environmental damage
• Inefficient movement of people
• Food • Food insecurity
• Food waste

What is Not a System?
•  Anything with one ore more of the components
(e.g. elements, interconnections or function/
purpose) missing
54

“Mapping” a System
55

Another Example
56

What did we learn?
57

APS1015 Class 1: Introduction to Social Entrepreneurship and Social Systems

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