The New Pioneers: Sustainable business success through social innovation and social entrepreneurship

INTRODUCTION

Welcome to the ‘age of globalization’, ‘the turnaround society’, ‘the era of compassionate capitalism’, ‘the new era of creativity and growth’, ‘the era of innovation’, ‘the age of sustainability’, ‘the era of globality’, ‘the entrepreneurial society’ or ‘the era of co-creation’ – the 21st century already has many names. In other words, welcome to a world of profound changes that will affect our way of thinking, living and working for the next many years to come.

Welcome to a world of possibilities – but also to a new world of disorder with financial, social and environmental crises that have left their mark, globally and nationally, on organizations and individuals. This world of disorder is giving rise to new needs. And new needs require new solutions.

Einstein’s famous quote: ‘No problem can be solved from the same level of consciousness that created it’, says it all: the financial, environmental and social challenges of the 21st century cannot be met with solutions based on 20th century mindsets, models and designs. In short, social innovation has become more important than ever.

With crises come breakdowns and fear, which makes it tempting to tell a story of doom and gloom. But crises need not be negative. They are helpful signs that we need to reorientate and change our way of thinking. In fact, the Greek word krisis means ‘decisive moment’. Because with each crisis also comes a window of opportunity to manifest new actions. In this case an opportunity to innovate for the world that is emerging rather than the one we are leaving behind.

The world is changing – and so is mankind. The combined effects of globalization, technologization and changing priorities have led to a burgeoning awareness of the fact that we cannot keep on consuming and developing at the expense of the environment, social commitments and our inner values.

These outer and inner pressures are already blurring the borders between business and society, work and life, making money and doing good. And they are driving revolutionary reconceptions of prosperity and growth.

We do not know exactly what the future will look like, but everywhere there are glimpses of a new, emerging economic world order which builds on sustainable development and a blend of social and financial values. And this is what this book is all about.

It is a story about us and about business. It is about the internal and external dimensions of change shaping our lives in new ways and creating a new face of capitalism. It is about the challenges and new rules that are paving the way for business unusual. And it is about the opportunities and new solutions that are making it possible for us to solve some of society’s critical problems. It is about a new wave of innovations that are bridging humanism and economics. And it is about the New Pioneers that are paving the way: the social business innovators of our time.

A global movement

The New Pioneers are part of a global consciousness movement – a social megatrend – that is based on values such as ethics, responsibility, meaning and the conviction that we are all part of the same greater whole. It is a movement carried forward by a vision of sustainable development as the future foundation for growth, innovation and value creation – a vision which is already becoming a reality.

The global consciousness movement has been working just like an underground seed which no one really notices until it is in full bloom. We started to see the first signs of the current transformation back in the 1960s and 1970s in the shape of flower children and hippies, who were part of a peaceful cultural protest movement as a counter reaction to political conservatism and war.

It was also in these decades that many grassroot movements and NGOs were established. People got involved in charity, human rights and environmental organizations, which became catalysts for anything from anti-nuclear and peace movements to the struggle for women’s lib and gay rights. Likewise, the New Age movement, humanist psychology and alternative treatment also saw the light of day.

This was the kick-off to what was later to be coined by social scientists the silent revolution – a gradual values shift as a counter reaction to the one-sided emphasis on material and financial gain that has ruled Western society for decades. As a result, inner-oriented, immaterial values like individualism, autonomy and self-actualization are today gradually taking the place of the outer-oriented, material values like prestige, power and wealth that have predominated in Western society for the past 25-50 years.

Because of its underground nature, this movement has been under the public radar for years. But in 2002 the silent revolution was given a voice in the groundbreaking book The Cultural Creatives by sociologist Paul H. Ray and professor of psychology Sherry R. Anderson.

For the first time, quantitative data and research on American values and lifestyles from the mid-1980s to the 2000s were compared, analysed and verified. Out of it came a living picture of a subculture with people characterized by awareness of the environment, ecology, of spiritual and personal development and a self-imposed simple way of living. A culture with quality of life and sustainable development at its core.

In the 1960s the Cultural Creatives constituted less than 5% of the American population, but in little more than the span of a generation this ‘cultural virus’ of sustainability and higher purpose has become more like a global social epidemic with an emerging international community.

In 1999 26% of the US population – 50 million people – and a similar percentage of the population in 15 European Union countries were already affecting business and society as employees, managers, consumers, investors and entrepreneurs in the name of enlightened self-interest.¹ And ever since the numbers appear to be growing, with millions of ‘deserters’ from other subcultures that have become disillusioned with the values of money, status and ‘bigger is better’.²

What was once a collection of niche movements has now developed into a critical mass of people that are aware of the consequences of humanity’s unsustainable growth – and they want to make a difference in each their own way. It is an underground movement that has evolved into a gradual, collective awakening – a global mind shift that is marking a change in survival strategies: from maximising economic growth to maximising survival and wellbeing through lifestyle changes.³

But unlike conventional definitions of a movement, this one does not have a leader or an ideology. It has no manifesto or doctrine. Instead, it is driven bottom-up by millions of individuals, groups and organizations that are unified by ideas and actions to protect and save humanity and the environment. It is what has been characterized ‘the largest movement on Earth’ and a ‘creative expression of people’s needs worldwide’.⁴

The silent revolution has become a visible force for good that is transforming the (business) world at this very moment. And thanks to the Internet and the emergence of new social media, it has now been given an even more powerful voice. These technological accelerators of change are, at this very moment, driving new expressions of responsibility, democracy, transparency, self-organization and cooperation, which in effect are creating global communities of problem solvers, co-creators, activists and change-makers of all shapes and sizes – both inside and outside organizations. Personal initiative and collaborative innovation are at the heart of the 21st century transformation game.

In the midst of a paradigm shift

The World Values Survey, conducted since 1981 in more than 80 societies on six continents, shows that the current values shift has been growing particularly in countries like Denmark, Finland, Sweden, Norway, Iceland, the Netherlands, Switzerland, the UK, Canada and the USA.³ Some of the characteristics of this post-modern shift are:

• A tendency for economic growth to be subordinate to concerns for environmental sustainability.

• A general questioning of authority and declining trust in science and technology to solve problems.

• More emphasis on personal authority, i.e. what comes from an inner sense of what is appropriate.

• Growing interest in discovering personal meaning and purpose in life.

• Desire for meaningful work and the quality of the work experience.

• New roles for women that allow for greater self-realization.

Researchers from the World Values Survey predict that these new values will form the predominant values system in Western Europe some time after the year 2020.⁵ Western society is therefore currently in a period of transition towards a new world view of what society, business and the economy are really for.

A paradigm shift is a change of mindset, a new set of assumptions, concepts, values and practices shared by a community of people. The shift happens – and crises come to life – when the existing frameworks create problems or no longer fulfil current needs. It marks the evolution of mankind and development in society as we have seen it during times of transition from the hunter-gatherer era to the agricultural era, on to the industrial era and now to the era-of-already-many-names.

The new 21st century paradigm described in this book is based on the need to bring all the key relationships in our lives into balance: intuitive and rational, masculine and feminine, inner and outer, personal and global. It aims at bridging differences, connecting people, celebrating diversity, harmonising efforts and looking for higher common ground.⁶ And, like in the preceding eras, this requires new mindsets, systems, tools and skills. It is sustainability made manifest at all levels.

This is why we now need to re-evaluate, adjust and possibly fundamentally change our basic assumptions about how to live, work, learn, cooperate, conduct politics, manage economies and technologies, solve problems and do business.

The acclaimed business thinker Peter Drucker, who coined the term ‘knowledge society’, put it this way: ‘Within a few short decades, society rearranges itself – its worldview; its basic values; its social and political structure; its arts; its key institutions. Fifty years later, there is a new world. And the people born then cannot even imagine the world in which their grandparents lived and into which their own parents were born.’⁷ It is no coincidence that the title of the World Economic Forum’s annual meeting in Davos in 2010 was Improve the State of the World: Rethink, Redesign, Rebuild.

The current development is not just a Western fad. We see traces of it around the world in different shapes and sizes, and the vision of sustainable development is already shared by many – although countervailing trends also exist. This is why we are also living in a world of apparent paradoxes: countries use economic growth as the measure of social progress although citizens are slowing down to advance wellbeing; consumers are both price conscious and ethically aware; employees search for both material wealth and spiritual growth; public institutions deliver welfare solutions and are run like businesses; non-profit organizations use market methods to create social value; and companies are socially responsible while making a profit. But paradoxes are better than none – they may even lay the foundation for new solutions.

On a personal level, I have experienced the current transition. ‘Do you want to save the world, or do you want to make money?’ was the choice that many of my generation had to make when we entered the labour market in the 1980s. This was a time when most companies operated with one bottom line and acknowledged only a single obligation: to make money – and left the rest for others to deal with. And it was a time when employees went to work to make a living – and realized themselves in their spare time.

But as I soon came to discover as a business manager throughout the 1990s with responsibility for hundreds of service employees: the times they are a-changin’. Along with the influence of Generation Y (born 1976-1991) came new expectations of feedback, involvement and development. Today’s employees want influence on their daily work routines. They want to understand how their efforts are contributing to the larger picture. And professional development must go hand in hand with personal growth and fulfilment. Today, it is all about creating the good (work) life.

At the same time, in the wake of conflicts like the Greenpeace-Shell confrontation when environmentalists occupied the oil platform Brent Spar to prevent Shell from disposing of it in the deep Atlantic waters off the west coast of Scotland, and the later Enron and Worldcom accounting scandals, issues of business and society, profit making and ethics were also starting to emerge.

Along with these developments came discussions and new questions. Why are these changes happening? Is it possible to meet people’s needs and business needs at the same time? Can companies make money while being positive contributors to society? And if so, how?

Social innovations

When the old answers no longer fit the new questions, significant changes happen. And the changes are often driven by catalytic events such as climate change or the recent credit crunch. Or by the intervention of social innovators.

Social innovation stems from people’s unfulfilled needs. It creates social value or change and thereby drives social development and renewal in society. It is society’s hidden growth and value maker and an expression of our social evolution. It is an expression of how we think, learn, live and work. And it is about new solutions that solve societal problems or meet people’s unfulfilled needs in new ways that improve their lives.

The co-operative movement, legislation, tax, therapy, insurance, stenography, labour unions, social welfare centres, kindergartens, management concepts, pedagogical methods and e-learning are all examples of social innovations that have emerged in the context of a particular period in history to meet the needs of their time. As we evolve as a species, new social innovations are consequently coming to light. In fact, some of the most fruitful periods for social innovation have been in times of transition. And so, once again, social innovation is now proving to be a significant driver of creating value in benefit of society.

Social innovation is not reserved for one particular sector in society. It is found in the public sector, in the civil sector, in the private sector – and in the cross-section between the three. And although social innovation creates social value, it can be used both commercially and non-commercially. In fact, the concept of money as a means of transaction between people is a social innovation that can be traced back to around 3200 B.C. and is consequently also being developed and adapted in support of a sustainable future.

Local Exchange Trading Systems (LETS) and other local currencies, venture philanthropy, microcredit, CSR (corporate social responsibility), the triple bottom line, SRI (socially responsible investing), the market-based Fairtrade system, the Cradle-to-Cradle or BOP (bottom of the pyramid) concepts, Gross Company Happiness measures, emissions trading and indeed hybrid social business models are all examples of recent concepts that have been born from permeating traditional borders between economics and humanism as answers to some of the vital sustainability questions that are being asked right now.

This blending of economic and social values is, in other words, generating new social innovations that are creating wealth and welfare for the benefit of society, the environment, people’s wellbeing and the health of the bottom line.

Similarly, social movements now include movements like the Slow Movement, which aims at a cultural shift toward slowing down life’s pace, the Green Belt Movement International, which aims at empowering communities worldwide to protect the environment and to promote good governance and cultures of peace, and – most recently – Transition Towns, which aim at equipping communities for the dual challenges of climate change and peak oil by seeking out community-led initiatives to reduce energy usage as well as to increase their own self-reliance and wellbeing.

Just like these movements, many other social innovations have come to life as a result of the commitment, enthusiasm and perseverance of individuals before they eventually became commonly known concepts.

Sparked by a protest against the opening of a McDonald’s restaurant in Rome in 1986, Carlo Petrini started the Slow Food movement, which quickly expanded to other areas. Today the broader Slow Movement includes Slow Management, Slow Cities and Slow Trade, and has over 100 000 members in 132 countries.⁸

The Green Belt Movement was founded in the 1970s by Wangari Maathai, a Kenyan environmentalist and women’s rights activist, whose efforts on reforestation were later acknowledged with the 2004 Nobel Peace Prize and a membership of the Kenyan Parliament. The Movement has already educated thousands of low-income women about forestry, has created about 3000 part-time jobs and is now operating in other parts of the world, including Japan, West India and South America.

Likewise, the Transition Town movement was created by Louise Rooney in Kinsale, Ireland and popularized by Rob Hobkins in Totnes, England in 2005, and already now has member communities in other parts of Ireland, England, Wales, Scotland, Australia, Chile, Japan, New Zealand and the USA.

Social innovations are, in other words, often born with the initiative from committed citizens with social visions, will and drive. They are driven by passionate pioneers and grassroots activists rather than from political environments and government-owned research and development laboratories. They are driven from within and from below. For often it is those who have the social problems or unsatisfied needs closest to them who also have the solutions.

Society teems with thousands of ideas for social innovation, often where the problems occur and where the needs arise. The great challenge is, however, to systematize the ideas and to find the resources for turning them into action, so they can be widely distributed and achieve full effect. This is why many social innovators are becoming social business entrepreneurs.

The pioneers of our time

30 years ago nobody had heard about Bangladeshi economist Muhammad Yunus, who conceived the idea of microcredit – a system of extending small loans to the poor so they could start their own businesses as an instrument to eradicate poverty. Today the concepts of microcredit and Grameen Bank’s social business model – for which Yunus was awarded a Nobel Prize in 2006 – have become textbook examples of social innovation and social entrepreneurship, terms which only a few people had heard of a decade ago but which the world is now starting to embrace.

The social entrepreneurship potential of solving social problems in innovative ways is attracting both politicians and businesspeople. In the case of Grameen Bank, its commercial success has convinced large commercial banks to get involved with microfinancing – not only in poor countries but also in wealthy Western nations. And in addition to the many distinguished accolades Muhammad Yunus has already received, he was most recently awarded the American Presidential Medal of Freedom – the nation’s highest civilian award to people who have made a difference in the nation or the world.

‘They remind us that we each have it within our power to fulfill dreams, to advance the dreams of others, and to remake the world for our children,’ US President Barack Obama stated at the ceremony that marked Muhammad Yunus’s pioneering efforts as one of the world’s most effective champions of Obama’s ‘yes we can’ spirit.⁹ The White House now even has an Office of Social Innovation and Civic Participation, which is in charge of a first-of-its-kind $50 million fund to boost the efforts of the country’s most cutting-edge non-profits and social entrepreneurs.

Just like Muhammad Yunus, other New Pioneers are paving the way for responsible and sustainable business one innovative step at a time. And just as the settlers and explorers of the past were the first to enter a new land and settle, the New Pioneers are discovering and cultivating new areas of knowledge, new cultures, new insights, new thoughts and new solutions that bridge economy and humanism – that pave the way for heartcore business.

In this book you will be introduced to New Pioneers that have navigated the current paradoxes and challenged 20th century business logics. By doing so, they have discovered new solutions in the shape of new partnerships, new ways to use resources, new organizational forms, new systems, processes and work methods, new products and services, and indeed new designs and business models that address some of the world’s most pressing social and environmental challenges.

The New Pioneers are this century’s generation of visionary leaders, social entrepreneurs and social intrapreneurs that are turning the doom and gloom of current global challenges into new business opportunities and sustainable ways of creating value. They are continuously setting foot on new land and charting the contours of new paths for the benefit and inspiration of others in society. They are showing us glints of the new economic world order where social responsibility and innovation drive good business. And they are doing it in a wide range of industries from media, food, agriculture and banking to medicine, cosmetics, IT and design.

The New Pioneers are creating new hybrids of doing business and solving society’s problems. They are showing old world companies and organizations how to tackle new world challenges for the benefit of both humanity and the bottom line.

A wave of creative destruction

The Austrian economist Joseph Schumpeter (1883-1950) was perhaps the most powerful thinker ever on innovation, entrepreneurship and capitalism, and to this very day his ideas still have great resonance.

Schumpeter introduced the term ‘creative destruction’ in economics to describe the process of transformation that accompanies radical innovation. In his vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power.¹⁰ And he championed the role of the entrepreneur in both start-ups and in established companies.

‘Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion,’ Schumpeter wrote during the Great Depression of the 1930s.¹¹

The recent downturn, which some economists have labelled the worst financial crisis in seven decades, is reinforcing a new wave of creative destruction to counter the current economic, social and environmental imbalances that are putting their negative mark on both businesses and nations alike.

Innovative sustainability initiatives by large commercial companies and the emergence of hybrid social business models created by social entrepreneurs are some of the testimonials to the fact that it is possible – and necessary – to create a new industrial revolution that rejects unsustainable business models and embraces value creation for the bottom line as well as the common good. They represent the new global mindset that will transform business and society.

There are still a wide number of yet unexploited opportunities in the interface between social entrepreneurship, commercial companies and the social missions of public and civil organizations. New opportunities with the potential to solve many of society’s yet unsolved problems – but also new opportunities to create sustainable business solutions with an economic growth potential in both million and billion dollar categories.

No wonder several economists have claimed that the 21st century is going to be ‘the century of Schumpeter’ in yet unprecedented ways.¹¹

A guide to the ‘new business revolution’

We are the first generation of global citizens. And the choices we will be making now and in the next decade will affect the next many generations to come. Thomas Jefferson’s claim more than four centuries ago that ‘every generation needs a new revolution’ still holds true. But the revolution for the current generation is an entrepreneurial one, in which the combination of individual creativity and economic dynamism is spreading all over the world.¹²

With business being one of the most dominant institutions of this century, understanding the implications of the current changes is just as important for future generations as it is for the future survival and growth of businesses’ bottom line.

This is the reason why I have, for the past seven years, specialized in working with social business trends with the purpose of guiding and inspiring individuals and organizations to explore and engage in innovative and sustainable practices that generate both human and economic growth.

This has led to exciting work on committees and boards, involvement in grassroots projects and social ventures, the development of new business strategies for corporations as well as speaking engagements for thousands of people from ministries, companies, NGOs, unions, public institutions, business schools and universities.

Business school students, for example, want to develop their professional skills to serve a higher purpose. Ministries want to develop new policies that encourage companies to integrate corporate responsibility and social innovation as part of their core business. NGOs want to partner with corporations to create more social value. And businesses want to create a workplace that can attract the new generation on the labour market as well as products and services that meet their customers’ needs in new, sustainable ways.

In short, they want to understand the implications of the current changes in business and society – and they want to develop solutions to meet the new