End of Semester Recap

Perhaps one of the best parts of being a second year MBA student is getting to pick my schedule. Unlike first year, where all of the core business classes were chosen for me, as a second year student I get to decide which electives I want to take. Not only has this been a relief (since most of the core classes were quantitative, and I am by no means a math whiz), it’s also been fun and rewarding to study topics that interest me through an MBA lens.

Unfortunately, by the end of the semester, there’s little time for anything else – including blogging. I haven’t been able to write on The Changebase for a couple of weeks precisely because I’ve been too busy wrapping up all of the projects, presentations, and papers that these electives have assigned!

But it’s been a great semester of learning, and since I’m often asked to talk about how what I study relates to my interest in CSR and sustainability, I thought I’d share a little recap.

I started out my semester with a one-week intensive course called Global Sustainability, which basically looked at issues like food and water scarcity, energy constraints, and global migration and the impacts they have on our planet. If you haven’t checked out my previous summary on this class, I recommend reading it.

The rest of my four month semester consisted of five other classes:

Government, Society and the New Entrepreneur focused on the topics of “economic globalization, environmental sustainability, international entrepreneurship, and the interplay between growth and prosperity”. Through in-depth studies of various countries (Japan, China, India, South Africa, Saudi Arabia, Singapore, Russia and Brazil), my classmates and I gained a broad overview of how globalization impacts trade, economic growth, education, environmental conservation, and entrepreneurship around the world.

Big Takeaway: While our world is more connected than ever, each country’s national interests are more divergent than ever. To solve an issue as big as climate change, for instance, world leaders must balance their responsibility to their own people with a shared responsibility to care for our global resources. Tough job for sure.

On the other end of the spectrum, Consumer Behavior focused on the attitudes, behaviors, social norms, and decision-making processes that consumers use and reference when they make purchases. For this course I worked with a team to develop a hypothetical new product (along with target consumer and marketing recommendations) for green cleaning producer Seventh Generation. Lots of primary data collection, and lots of consumer behavior theory.

Big Takeaway: The more I spoke with potential target consumers, the clearer it became that people really are wary of the “green” label. They’ve heard it so many times – and yet they still don’t really understand what it means nor do they trust its value. A clear warning sign for marketers…

My Corporate Governance seminar centered on the interplay between governance, accountability and ethics in the corporate and nonprofit sectors. Through in-depth, “governance gone wrong” case studies, we developed a framework for understanding how factors like board oversight, compensation structures, and organizational culture affect the level and type of governance at a company. This class was especially timely one year after the global financial crisis.

Big Takeaway: Much like CSR, there are varied opinions relating to the value that good governance brings to an organization. Is governance just about compliance and risk management, or does it actually add value? Are investors willing to pay more for good governance? I think (and hope) they are.

Entrepreneurial Management focused on the challenges and hurdles faced by early-stage entrepreneurs, including the identification of and access to capital, scaling growth to reach beyond the early adapter market, and building a successful team. Perhaps the most fun part of the class was serving as a consultant to a social entrepreneur who’s facing these kinds of issues right now as he builds a line of ethically-sourced footwear. Like consumer behavior, this involved lots of primary data collection and marketing recommendations.

Big Takeaway: As a social enterprise footwear company, the client I worked with wanted to “do good and do well.” Yet, the potential consumers we spoke with reminded us that it’s not just intention that matters – cause marketing campaigns need to be genuine, transparent, easy to understand, and perhaps most importantly, have an immediate and tangible impact on a meaningful cause. Not always an easy task!

Finally, one project that I started this semester and will finish in early January is a CSR Reporting Directed Study. Back in October a Fortune 300 company contacted my school to inquire about putting a team of MBAs together to evaluate their current CSR reporting – and I jumped at the chance. In order to make recommendations, my team and I have spent the semester doing a deep-dive into the Global Reporting Initiative and the Carbon Disclosure Project. We’re now just starting the recommendation phase and I’ll be sure to keep you posted.

Big Takeaway: Sustainability reporting is more than just wrapping your arms around numbers (although it’s fair to say that getting a handle on a company’s data is hard enough!). In fact, two key themes that keep coming up are transparency in information sharing and stakeholder engagement – two crucial topics that are very hard to get right and very easy to get wrong.

So all in all it’s been an incredible four months, especially compared to my first year of business school when it was so hard to “see the forest” through all that data analysis!

In the end this really was a semester of putting all of the pieces together, which is a great feeling. And now on to winter break!

Creating Change from Within

I've often spoken on The Changebase about social entrepreneurs who've chosen to radically reinvent how business creates social change in our communities and around the world. Organizations like Kiva (microfinance), Carrotmob (conscious consumerism), and Frontline SMS (information access through technology) have literally re-drawn the lines when it comes to creating sustainable, empowered and effective change through grass-roots social entrepreneurship.

While the importance of these examples can't be overstated, if we only focus on social entrepreneurs we actually miss an entire population of changemakers who want to have an impact but can’t quit their day jobs.

What can these people do to create change in their communities and their environment, without reinventing the wheel?

Enter social intrapreneurship – a new movement centered around creating progress internally at existing organizations.

Ok, so this is an interesting concept, you might say. But what does this look like in practice?

From what I hear, it’s all about baby steps - that is, starting small and growing big. Maybe it’s just me but it seems everywhere I turn I hear stories of employees who mobilized themselves and insisted on small initial changes like improved recycling at their corporate office, company incentives for using public transportation, or time off to volunteer in the community. And from there the social intrapreneurship momentum just grew. 

Another example: I recently had the chance to speak with someone in global citizenship at eBay, and I asked her what she thought made the company’s green efforts so successful. While she agreed with me that senior leadership buy-in is important, she pointed first to eBay’s employees as the single biggest driving force in creating change in the company.

It just so happens that much of their CSR efforts actually got started by a group of forty employees who came together to talk about little ways they could “green” the company – and from there it just snowballed. Now, more than 2000 employees in 23 countries are part of eBay’s Green Team – talk about a perfect example of real-life social intrapreneurship!

As a growing wave of MBA students (myself included) begins to dip their toes into the job hunt water, I find eBay’s story of creating change from within particularly inspiring. I know I want to work in CSR and sustainability, but I also know that these jobs are often really hard to find. If eBay's social intrapreneurship story tells us anything, it's that making change isn’t just about your job title or even your job function. No matter where any of us lands after graduation, we can each be changemakers in our organizations. And all it takes are some baby steps.

And that goes for all of you non-MBA students too!

It turns out that this isn't the first time I've extolled the virtues of social intrapreneurship. In fact, I was recently interviewed by my school, Boston University School of Management, as part of a promotional video meant to show prospective applicants how MBAs use their degrees to create change. Since I talk about social intrapreneurship in the clip, I thought I'd include it.

First up is BU Finance professor Yrjo Koskinan, then my classmate Susie Keane, and then me (I’m roughly two minutes and thirty seconds into the video).

Enjoy my 15 minutes of fame! 

And going forward, ask yourself: how can I be a social intrapreneur and create change from within my own organization, school, or community?

High Risk, High Reward

I’ve mentioned in previous posts on The Changebase that, in many ways, my MBA experience has made me feel a bit like a fish out of water. With my non-profit background and change-the-world goals, it’s not surprising that I have had some serious growing pains associated with learning new ways of thinking about and solving business problems.

Funny enough, my favorite learning experiences in school have been when I could relate what I was learning about business with what I knew to be true from my work in the social sector.

Here’s a good, albeit slightly roundabout, example: over the last couple of months a number of my classes have delved into the topic of venture capital – both from an investor and entrepreneur perspective. Now, as someone who practically grew up on Sand Hill Road, the venture capital culture of Silicon Valley is one that I am very familiar with. Still, beyond a very superficial understanding of what VCs do, I didn’t know much about the field before this semester.

Forgive me if this is incredibly naïve of me to say, but it turns out that venture capital is all about making money. I mean, REALLY BIG MONEY.

And how do these VCs make this money? They take risks. Nowhere is the saying “high risk, high reward” more applicable than in VC country.

I've also learned in class that the relationship venture capitalists have with entrepreneurs is an interesting, and some would say, delicate one. On the one hand, the two parties presumably should partner together to execute a winning business strategy and deliver an innovative product or service to the market.

On the other hand, as new majority-stake owners (which is what VCs become when they fund an entrepreneur’s company), the VC has little interest in anything beyond a successful exit strategy that will make him or her millions (if not billions, if you’re lucky enough to invest in the next Google or eBay).

All of this really hit home for me recently when I participated in a venture capital simulation for my entrepreneurial management class.

Picture this: me and my classmate, sitting in a small, windowless room with a “real” venture capitalist trying to negotiate a fake $30M term sheet for a new start-up we’d just created. Let me repeat: the money was fake but everything else was real: real VC, real term sheet, and a very tough, very real negotiation. In fact, at each stage of the negotiation he forced us to fight tooth and nail for any concessions we wanted him to make. Why was he so tough on us?  

Because – just as I’ve learned in class – there was money to be made in the deal and he wanted to make sure that, in the end, his slice of the pie was as big as possible. Remember, high risks and high rewards.

Ok, so you’re probably asking yourself – what’s the point? Why are we talking about venture capital on The Changebase?

Here’s the deal: it's perhaps a silly analogy but just like bees, cross-pollination between the for-profit and nonprofit sectors is happening everywhere. As businesses become more concerned with social responsibility and corporate citizenship, nonprofits are also warming up to the idea of creating revenue-generating models to ensure sustainability of their programs and operations. The social is becoming the financial, so to speak. And nowhere is this cross-pollination more obvious than in the area of Venture Philanthropy (seriously, even the name is a hybrid!).

More and more funders today are providing “VC-themed grantmaking” to social entrepreneurs looking for capital. Organizations like Echoing Green serve as “angels” to social enterprise leaders; Ashoka and Skoll Foundation provide early-stage funds to change-oriented start-ups; and New Profit assists more mature nonprofits and social ventures as they grow to scale. Each one has taken its cues from the venture capital world while tweaking its strategies and funding models to meet the needs of the social enterprise sector.

When I first heard about it, I thought this whole concept of venture philanthropy was pretty cool – and I still do. After all, it’s a no-brainer that social entrepreneurs need the same access to funding, support, and guidance that regular entrepreneurs have, and these organizations provide those services.

But if I go back to what I’ve learned in class about venture capital, that’s when I start getting confused. If venture capital is about taking risks and making money, doesn’t it seem a little backwards to look to that industry for cues on how to fund a sector whose primary goal has never been just financial?

Moreover, when I think about my experience at the negotiating table, I wonder: how do these social enterprise funders treat their entrepreneurs? Is it an adversarial relationship, like I experienced in the simulation? Or a more collaborative partnership?

Interestingly, the organizations that fund social enterprise start-ups may not be buying equity like VCs, but they certainly are taking risks. In fact, one might argue that they’re taking even more risks than traditional venture capitalists, given that they’re investing in people and organizations with truly revolutionary, world-changing ideas.

Maybe for these funders it’s more about “high risk, high social reward”?

What do you think about the world of venture capital being applied to social enterprise? Does the same language apply? And do organizations like Echoing Green actually take on more risk when they bet on entrepreneurs whose ideas can have an impact on people, and not just on the balance sheet?

I don’t have the answer, so I’d love to know what you think.

Choosing Between Trade-offs

For those of you who read my last post on The Changebase, you know that I recently signed up to go to Brazil in January. The trip, organized by the Boston University School of Management, focuses on issues of sustainability, CSR, and social enterprise in the developing country. It sounds like an incredible journey and an amazing way to experience Brazilian life and culture firsthand. How does that saying go, something about the best laid plans? I’m sad to say that no sooner had I hit the ‘submit’ button on that blog post, announcing my exciting plans for Brazil, the financial realities of this trip set in.

As a former “nonprofiteer” interested in pursuing change through social innovation and CSR, I have never really been focused on making a lot of money. The mission has been what mattered (at least mostly – I mean, let’s be honest: the paycheck was nice!). But now, as an MBA set to graduate in May with a boatload of debt, my financial situation (and more specifically, my earning potential) is certainly top of mind.

I’ve often asked myself: how do I strike a balance between doing good in the world while also making enough money to live comfortably and provide for my family?

The mission-driven side of me says money shouldn’t matter. But the MBA side says, go for the paycheck.

Finding that balance is tricky, and the Brazil trip is just my own most recent example of the tradeoffs that every committed social entrepreneur and changemaker must make in their quest to do good and do well.

While I’m certainly not complaining – after all, figuring out whether I can afford to go to on this trip is what my family calls a “good problem to have” – it got me thinking about all of the talented and motivated people out there whose innovative ideas never got off the ground because of money. How many people with truly world-changing, yet unproven ideas never saw these ideas go anywhere because they lacked the financial resources to make them a reality?

Coincidentally, this week I had a great conversation with someone I met at The Feast who works at Echoing Green. For those of you who don’t know it, Echoing Green is a 22 year-old organization that provides start-up funding – and a support network – to social entrepreneurs in need of resources and guidance.

In essence, Echoing Green is working to ensure that social entrepreneurs with incredible ideas don’t lose out in the battle of trade-offs.

Here's a little bit of background on the social entrepreneurs that Echoing Green is supporting through their innovative funding and support network:

While I’m certainly not putting myself and my money woes on the same level as someone looking to cure disease, bring clean water to villages or improve our educational system, the essential decision-making process seems similar. If money were no object, I’d be on that plane to Brazil in a heartbeat. Unfortunately, money plays heavily in all of my decisions these days – which means this trip isn’t going to happen for me.

As disappointed as I am, this experience has been an important first lesson in what inevitably will be a long string of choosing between tradeoffs.

Is it possible to make money doing what I love? Can I find a job that allows me to make a positive impact, yet one that also provides the financial security I’m looking for? I know I'm not alone in asking these questions, and I guess only time will tell what the answer is.

In the end, I’m left wondering only one thing: Who’s hiring?!

Don't Be Late. Period.

Recently, at The Feast conference, I was introduced to an organization called Sustainable Health Enterprises (aka: SHE). Elizabeth Scharpf, founder of SHE, was on-hand at the event to share with us how her organization uses market-based approaches to solve a seriously pressing problem.

But first: take a minute to think about what your life would look like in a developing country. For my part, it’s amazing how much I take for granted – whether it’s reliable electricity, supermarkets filled with fresh produce, a stable political system, or even just a roof over my head. In fact, I go through every day taking advantage of many basic necessities that others in the developing world would consider luxuries.

And I know I’m not alone in this. How many times have you stopped to wonder what your life would look like without internet access, for instance? Or, if you’re a woman, when was the last time you thought to yourself, what would I do if I didn’t have a sanitary pad or tampon to use?

Ok, yes, the topic can make some people feel squeamish, but in actuality this basic biological process has huge consequences for women and girls in the developing world: every 28 days their lives are completely disrupted by their menstrual cycles. This isn’t just a minor inconvenience we’re talking about – rather, SHE estimates that on average women in developing nations lose a total of 5 years of productivity over their lifetimes because they have their periods. Without sanitary protection, young girls can’t go to school and women can’t go to work, which ultimately means the entire community suffers.

Interestingly, Elizabeth and her team at SHE have developed a unique solution in which everyone wins. Take a look:

SHE's initial model involves funding women-owned business in Rwanda with enough capital to purchase banana trees (a bio-waste that farmers normally pay to have removed from their property). These women manufacture pads out of the fiber from these trees, and then sell the finished pads at reduced cost to other women in their community. Here’s the kicker: this business not only provides a clever solution to a basic problem, but it provides much-needed employment to other women. Initial revenues are first paid back to SHE, with any remainder going to build equity in the company. Once SHE starts recouping its initial funding, it’s able to lend it out again to other women. And the virtuous cycle continues.

Elizabeth is a true social entrepreneur whose venture produces a win-win for everyone involved. Don’t you just love these kinds of stories? If you want to learn more about SHE and support their work with a donation of $28, visit their website. Or, you can check out their blog to follow their progress. But hurry: their goal is to raise an initial $28,000 to fund their first start-up in Rwanda. They only need $10,000 more and the deadline is October 28^th! Can you help them? As the video says, “Don’t be late. Period.”