Making social business happen Initial thoughts on a potential - PowerPoint PPT Presentation

Making social business happen Initial thoughts on a potential collaboration January 2011

Executive summary What is social business?  The concept of social business has been developed by Nobel Peace Laureate and founder of Grameen Bank Prof. Muhammad Yunus and represents the cutting-edge idea of market-based solutions to social problems  A social business is a non-loss, non-dividend company with the purpose of solving a social problem . It unites the dynamism of traditional business with the social conscience of charity Why is social business relevant to you?  Social business enables companies to address society‘s most pressing needs in an effective and sustainable manner , allowing you to combine your core strengths with acting as a good corporate citizen  In addition, social business provides various tangible benefits to companies, ranging from its positive impact on the corporate image and organizational culture to access to new markets as well as innovations How can you get involved with social business?  You can address any social issue that you feel passionate about or that is relevant to you (e.g. in light of your CSR strategy, core competencies etc.)  Depending on your commitment, there are various levels of involvement , all the way up to setting up a new social business in your area of expertise How can The Grameen Creative Lab (GCL) help you make social business happen?  As a professional service provider in the area of social business, the GCL team is experienced in developing social business ideas and implementing them jointly with you  We offer a broad range of services to corporate clients all over the world and are looking forward to having further discussions with you 2

Agenda What is social business? Why social business is relevant to you How you can get involved with social business How GCL can help you make social business happen Case studies Next steps 3

Muhammad Yunus ’ vision Using business methods to solve social problems “I am proposing to create another kind of business, based on selflessness that is in all of us. I am calling it social business .” Prof. Muhammad Yunus Nobel Peace Prize Laureate Inventor of microfinance Founder of the Grameen Bank Initiator of the idea of social business 4

A social business is a non-loss, non-dividend company with the purpose of solving a social problem NGOs/Public Social business Traditional business Sector/Charity Profit Ends Social & environmental solutions maximization Donations Self-sustainable Means or taxes (i.e. cost-covering business model) "Social business unites the dynamism of traditional business with the social conscience of charity" - Prof. Yunus 5

Social businesses follow seven principles The principles of social business defined by Prof. Yunus 1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization 2. Financial and economic sustainability 3. Investors get back their investment amount only. No dividend is given beyond investment money 4. When investment amount is paid back, company profit stays with the company for expansion and improvement 5. Environmentally conscious 6. Workforce gets market wage with better working conditions 7. …do it with joy 6

Social business: Operating as a business, but pursuing social goals In principle, social businesses can help address all or most social issues A social business has a social goal at its heart ... ... but has all characteristics of a regular business Selected examples  Clear vision and mission statement as well as 1 a consistent and actionable strategy with Housing and Nutrition measurable goals sanitation and water  Sustainable business model with well-defined 2 Environment Microfinance customer segments, distribution channels, and energy and insurance revenue streams and value proposition Striving for effectiveness and efficiency to  3 Education and Empowerment achieve managerial and operational excellence training of women  Typically incorporated as a limited company or 4 another legal form with well-defined ownership Access to IT … rights and telecoms But remember : Any profit from the company‟s activities is to remain in the company and may not be paid out to investors as a dividend 7

Agenda What is social business? Why social business is relevant to you How you can get involved with social business How GCL can help you make social business happen Case studies Next steps 8

Social business enables companies to address society‘s most pressing needs in an effective and sustainable manner We face a range of pressing … that companies feel … and social business is a social issues in the world … committed to help address … cutting-edge concept Almost half the  Striving to be good corporate Social business allows companies … Poverty world live on less citizens , companies have a  to combine their business know- than 2.50$ a day responsibility to contribute to the how with social impact greater good  to create social value while operating >900 M people are Hunger  Companies form an integral and closely to their strategic core undernourished influential part of our societies  By setting up a SB 1 in its area of ~900 M people have  As such, they need to look and act expertise, a company can leverage Lack of no access to safe beyond their pure self-interest its core competencies clean water drinking water  SB is also a way to act upon a  Most companies genuinely want to company„s CSR strategy act upon this responsibility 1 B people lack Lack of access to health  to address social issues in a  Helping others and acting for healthcare care systems sustainable and effective manner selfless reasons is part of our  SB only requires a one-time human nature 1.6 B people have Lack of investment (vs. regular donations) no access to  Therefore, we have a desire – both energy  SB has proven to be effective in electricity individually and collectively – to the long-term (e.g. Grameen Bank) make a difference in the world … 1. Social business (abbr.) Source: UN Millenium Development Goals Report, World Bank 9

However, despite the non-dividend policy, social business has also proven to provide various tangible benefits to companies 1 2 Impact on organizational culture Access to new markets  Provides source of motivation  Gaining first mover advantages and identification for (e.g. brand awareness) in  Idea: Produce affordable high- employees emerging markets  Idea: Produce an affordable and quality footware for the poor to effective mosquito net to prevent  Thereby, both employee  Developing new markets by prevent infection with hookworm malaria and similar diseases retention and recruiting of gaining customer insight of new  In doing so, adidas has entered new talents is facilitated target groups  BASF has experienced an the Bangladeshi market where unprecedented HR impact (e.g. they have no other activities rise in applications etc.) 3 4 Social business as a source of innovations Impact on corporate image and brand perception  Product innovations due to  Improve company„s footprint as a facing previously unmet responsible corporate citizen customer needs  Idea: Producing an affordable  Idea: Set up the textile company  Position yourself at the forefront of the future with superior yoghurt for the poor to address  Business model innovation of a truly sustainable CSR the issue of malnutrition working conditions due to a different approach to concept  Danone has learned to set up  Companies can only be solving problems and profitably run small-scale successful in the long run if they yoghurt factories act responsibly “, Michael Otto 10

Agenda What is social business? Why social business is relevant to you How you can get involved with social business How GCL can help you make social business happen Case studies Next steps 11

There are many ways in which you can engage in social business Different levels of involvement from interactor, incubator, creator to supporter 1 2 3 4 SB interactor SB incubator SB creator SB supporter  Build awareness of  Generate new ideas  Lead by example by  Support GCL and the the concept of SB by and support SB setting up social SB movement by Objective organizing events entrepreneurs business companies providing resources  Sponsoring of existing  Conduct creative  Start own social  Support of GCL‟s event formats, e.g. workshop to generate business from scratch current and future German SB Forum, new ideas activities Opport-  Transform existing Africa SB Tour, GSBS 1 unities  Invest in SB funds to CSR projects into  For example through  Development of own support SB social business secondments, event format entrepreneurs sponsoring etc. Selected examples - see case study section for more details 1. Global Social Busines Summit 12

Agenda What is social business? Why social business is relevant to you How you can get involved with social business How GCL can help you make social business happen Case studies Next steps 13