The Makings of a Responsible Business

During a recent trip to Washington, DC, I had the pleasure of serving as a panelist at the Global Social Entrepreneurship Forum hosted by the Carey International Business Career Club at Johns Hopkins University. Moderated by James Calvin, Ph.D., Associate Professor at the Johns Hopkins Carey Business School, my fellow panelists included Drew Durban, Co-Founder of Anza Technologies, Neelima Grover, Founder and Chairman of The QED Group, and Barbara Moller, President and Founder of Paper to Pearls. I enjoyed the conversation with the attendees and my fellow panelists and while several good points were made during the course of the forum, there are a few worth mentioning in this blog.

As a result of the difficult economic climate, many business students are considering starting their own business ventures upon graduation. While it may be obvious to most people, it is important to focus a business on an area where the entrepreneur is passionate and finds motivating. Many people have the misconception that business is not personal. They are grossly incorrect. When you immerse yourself in your venture by working 16 hours a day, seven days a week and sacrifice your time with your friends and family, business IS personal. An entrepreneur will fail if they cannot find the passion and motivation to sustain their energy, efforts, and carry themselves through the tough times (and there will be a lot of rough spots where you question the reasons for starting your venture, finding value in your efforts or managing the stress caused by unforeseen viability and success of the venture).

Since the focus of the forum was on social entrepreneurship (I prefer the term “responsible business”), the panelists were asked about the challenges of doing business in developing nations, some of which have serious corruption problems and lack of governance or physical infrastructure. The panel uniformly replied the importance of a vast knowledge of the local culture and unique nuances. I have conducted business worldwide and I learned early in my career that every country possesses an uniqueness about it. As an entrepreneur, my operational strategy, product or service and value proposition must take the unique cultural nuances into consideration.

The financial bottom line is not always the primary focus of doing business in developing markets; social return on investment (SROI) often takes an essential role in defining the value of a business venture. The Wikipedia definition of SROI “is a principles-based method for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts) relative to resources invested. It can be used by any entity to evaluate impact on stakeholders, identify ways to improve performance, and enhance the performance of investments.” While businesses adhering to responsible practices are mindful of the SROI, they tend to neglect the financial ROI. In other words, businesses, for-profit and nonprofits alike, must establish a revenue model that will produce a steady stream of cash flow to sustain operations and promote business growth.

A key mistake many businesses make is their failure to differentiate themselves from the competition or invest in a comprehensive branding and marketing strategy. I am in the early stages of launching a business venture where there currently exists little competition. However, I have to assume the marketplace will see an influx of competitors and I will need to convince my customer that my service is superior. This cannot be done through innovation alone. It is essential to create brand value and effectively market this brand to current and potential customers alike.

Lastly, it takes a highly motivated and well-organized team for any venture to succeed. From my experiences with for-profit and nonprofit ventures, I learned the importance of having the right people involved who believes in the business mission, supports the objectives, assists in the creation of the product or service, and understands the value proposition. In addition to leading the right team, it is essential to have good mentors and advisors whom an entrepreneur can receive feedback to their ideas or provide objective advice that will help the entrepreneur succeed. Furthermore, in my ventures, not only have I learned to utilize my strengths, it is equally important to realize my weaknesses and find people (mentors, managers or support staff) that will provide a unique value to the business team.

I invite you to contribute your own ideas or share your experiences in the comment section below.

“Global Challenge” Competition to Reward Graduate Students for Developing Business Solutions that Support International Development

College students worldwide are receiving an education not to solely benefit financially in a future career, but to make a social difference as well. Aspiring business leaders are reevaluating success not on the basis of a financial return on investment, but on the social return on investment and the impact on the environment and surrounding communities. And more than ever are we seeing the need to understand the critical role of the private sector in international development. The Global Challenge, a collaborative effort by the University of Maryland’s Robert H. Smith School of Business and the U.S. Agency for International Development (USAID), will reward graduate students from across the United States to employ their creativity, research skills, business acumen and passion for seeking solutions that advance growth and reduce poverty.

According to a press release dated January 28, 2010, the Global Challenge is “a first-of-its-kind competition that challenges teams of MBA (Master of Business Administration) and other graduate students to develop business solutions that support international development. Teams will be tasked with devising a new public-private alliance that allows a private enterprise to meet its long-term business goals while contributing to international development initiatives in a specified region.”

G. “Anand” Anandalingam, dean of the Robert H. Smith School of Business, said, “We invite MBA and graduate students from across the nation to employ their creativity, research skills, business acumen and passion for seeking solutions that advance growth and reduce poverty. It is our hope that future business leaders balance profit-making with social impact and take all stakeholders into account when making decisions, values we are committed to fostering at the Smith School.”

In describing the format of the innovate competition, the Smith School’s announcement explains, “In round one of the competition, teams will submit written proposal in response to a specified Global Challenge prompt, then up to eight groups will be invited to compete in the oral presentation final-round competition at USAID’s headquarters at the Ronald Reagan Building and International Trade Center in Washington, D.C. on April 23, 2010. Judges will include representatives from USAID, industry-leading private sector companies, and academia.”

Teams will compete for $8,500 in cash prizes: $5,000 for first place, $2,500 second place, and $1,000 third place. Furthermore, students will have the opportunity to establish relationships and receive guidance from business leaders, international development experts, and other students. Winners of the Global Challenge will have their work published and distributed to international development professionals worldwide. Teams may register online through February 5, 2010.

The Global Challenge is sponsored by USAID’s Business Growth Initiative and the Smith School’s Center for International Business Education and Research (CIBER) and Center for Social Value Creation. Launched in 2009, the Center for Social Value Creation’s mission is to engage students in courses and experiential learning programs to enable them to become global leaders who understand how to use business as a vehicle for both economic prosperity and transformative social change, and to support faculty research in related areas.

Apply Now for 2010 University of Washington Global Social Entrepreneurship Competition

I participated as a judge in the 2009 Global Social Entrepreneurship Competition (GSEC) organized by the University of Washington's Global Business Center at the Michael G. Foster School of Business. According to its website, GSEC "engages creative minds around the world to encourage bolder and less conventional business solutions to global poverty." I am pleased to announced that applications for the 2010 competition are being accepted until November 11, 2009. I encourage you to share this information to those who may be interested in applying for this innovative social entrepreneur competition. (Photo courtesy of the University of Washington)

GSEC explains, "Students from around the world—and across fields of study—are invited to find innovative, commercially-sustainable business solutions to problems of poverty in the developing world. GSEC plans are judged on the quality of life in the developing world, financial sustainability, and implementation feasibility." GSEC plans must clearly demonstrate the Social Return on Investment (SROI) in addition to the financial return on investment. In addition, GSEC plans must be for a low or lower-middle income country and need to address poverty alleviation in the developing world.

The application deadline consists of an executive summary and team registration. Executive summaries must conform to the executive summary format as detailed in the GSEC Submission Requirements. Applications go through two rounds of reviews to determine the semi-finalist GSEC teams. In mid-December, semi-finalist teams are selected from the applicant pool and are invited to attend GSEC Week, March 1-5, 2010 at the University of Washington in Seattle, Washington. Once semi-finalist teams are confirmed, they are paired and work with mentors to develop the full business plan. GSEC teams are required to submit a full business plan draft by January 19, 2010 and the final full business plan by February 16, 2010.

During GSEC Week, teams attend exclusive company visits, receive feedback on their presentation and pitch their business ideas to judges as they compete for prize money totaling up to US$17,000. SROI includes the social good of improved health and, in addition to the GSEC grand prize, two prizes in global health will be offered. Please refer to the GSEC global health plan guidelines for more information.

In the 2009 competition, 14 teams from around the world presented their business ideas to judges and the UW community where they competed for US$20,000 in prize money. The 2009 GSEC team members came from nine countries and 15 different academic institutions. Their double-bottom line business plans seeked to create commercially sustainable solutions to issues of poverty in the developing world. The 2009 business ideas included water sanitation in Nepal, solar ovens in Africa, networks for NGO donors, microfinance in Ghana, healthcare and biofuel programs in India, education in Rwanda, and pedal-powered phones in Nicaragua.

Rewarding Social Entrepreneurship

Today, March 10, 2009, The Seattle Times published an editorial about the 2009 Global Social Entrepreneurship Competition (GSEC) organized by the University of Washington Michael G. Foster School of Business' Global Business Center. This blog post follows from my entry detailing my experience serving as a GSEC judge (see Supporting Social Entrepreneurs).

"UW Global Business Center rewards social entrepreneurship," an editorial by The Seattle Times:

A BUSINESS plan to sell meals for less than 10 cents each to the poor of Mumbai, the city shown in the Oscar-winning movie "Slumdog Millionaire" — that's worth a prize.

University of Washington's Foster School of Business has awarded a prize for just such a plan at a ceremony in Seattle last week. It was $10,000, donated by Microsoft.

The winners, four students from the Narsee Monjee Institute of Management Studies in India, designed an 800-calorie, ready-to-eat meal using rice, lentils, unrefined sugar and vegetables, including vegetable peels that food processors have been throwing away. The meal could be sold profitably for 5 rupees — 9.6 U.S. cents — a lifesaving bargain.

Another prizewinning plan aimed to defeat counterfeit pharmaceuticals — some of them worthless and even dangerous — through the use of code numbers on sealed pill bottles, cellphone texting and a central computer registry. The team, from Princeton University and Ghana, West Africa, calculated that the labels and verification service would cost 6 cents per bottle of pills — an investment in counterfeit suppression that would pay handsomely for the producers of legitimate drugs.

These and other business plans are examples of social entrepreneurship — business with a social goal. We salute the winners and the Foster School's Global Business Center for holding the annual competition, which has the potential of doing so much good.

Supporting Social Entrepreneurs

On February 27, 2009, I had the honor of serving as a judge at the Fifth Annual Global Social Entrepreneurship Competition (GSEC) is organized by the University of Washington’s (UW) Global Business Center at the Michael G. Foster School of Business, with the support of Microsoft (GSEC Grand Prize sponsor) and the UW Department of Global Health (Global Health Prizes sponsor). (Everyone involved is very appreciative of all GSEC 2009 contributors.) The "GSEC unites the business, non-profit and academic sectors in learning about and supporting innovative and financially feasible solutions to global poverty."

14 teams from around the world presented their business ideas to judges and the UW community where they competed for $20,000 in prize money. The 2009 GSEC team members came from 9 countries and 15 different academic institutions. Their double-bottom line business plans seek to create commercially sustainable solutions to issues of poverty in the developing world. The 2009 business ideas include water sanitation in Nepal, solar ovens in Africa, networks for NGO donors, microfinance in Ghana, healthcare and biofuel programs in India, education in Rwanda, and pedal-powered phones in Nicaragua.

GSEC plans must clearly demonstrate the Social Return on Investment (SROI) in addition to the financial return on investment. In addition, GSEC plans must be for a low or lower-middle income country and the plans are evaluated on three criteria:

1. Effect on the quality of life and poverty alleviation in the developing world;
2. Financial sustainability; and
3. Feasibility of implementation

GSEC plans may cover a broad range of subjects such as healthcare, education, the environment, energy, information and communication technology, social services, agriculture, and manufacturing, and plans may be entirely private or a public-private partnership.
For the preliminary round, judges were assigned to evaluate a number of grouped teams. My group judged the following entrants:

• Youth Education Farms for Swaziland (University of British Columbia; Face of Today Foundation, Vancouver, British Columbia, Canada) is a project that will develop farm land near schools in rural areas. Local students will work alongside full-time farm employees on a part-time basis throughout their elementary to high school tenure. Profits from the sales of farm produce will be used to fund the students' tuition fees and fund university tuition or local business initiatives created by the students. The plan's vision is to provide an environment for the sustainable development of idle orphans and communities in rural Swaziland through farming, while funding their future education and endeavors;
• Aahar: Meals for Poor at 10 Cents (Narsee Monjee Institute of Management Studies University, Mumbai, India) whose mission is to provide full nutritious meals to slum dwellers at 10 cents in a ready-to-eat packet consisting of rice, pulses, and vegetable peels. Each of these packets provide 800 calories. In addition, this business will empower local women by hiring them to compile these packets while providing a higher wage rate and food packets for their family at no cost;
• SolarCycle (Brown University, Providence, Rhode Island, USA), whose mission is to respond to the need for alternative cooking technologies in Africa by manufacturing and distributing, at cost, simple and sustainable solar ovens made from locally available waste materials. A variety of solar ovens are already in use in a patchwork of locations across Africa; however, these ovens are too expensive and their distribution too localized to address the massive scope of the energy problem in rural Africa. Their ovens contain two principal innovations, one structural and one material, that will allow Solar Oven Systems to provide a sustainable and scalable solution to this challenge; and
• Bright Credit Bright Credit (University of Washington, Seattle, USA) is a Seattle-based non-profit organization that offers secondary education loans to the children of micro-finance beneficiaries in Ghana. Their mission is to leverage the microfinance industry to instill the value of secondary education to loan beneficiaries and their families. By utilizing advanced social networking tools, Bright Credit connects members of the developed world directly to Ghanaian children in need of funding for their education.

The five teams who emerged from the preliminary round and competed in the final round were Youth Education Farms for Swaziland, Text for Health, Aahar: Meals for Poor at 10 Cents, MiNGO, and SolarCycle. Here are the 2009 winners:

• GSEC Grand Prize ($10,000): Aahar: Meals for Poor at 10 Cents;
• GSEC Global Health Grand Prize ($5,000): SolarCycle;
• GSEC Global Health Second Prize ($2,500): WAPGrid; and
• GSEC Investor’s Choice Award ($2,500): WAPGrid.

This was my first experience participating in the University of Washington Global Social Entrepreneurship Competition. I found the experience very rewarding, personally and professionally. I enjoyed the experience of meeting my fellow judges who hold a myriad of experiences in sustainable global development. In addition, I greatly enjoyed interacting with many of the team members (social entrepreneurs) who have a vision to make a measured and sustainable difference in the world. I look forward to participating in future GSEC events.