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Making of the Social Entrepreneurs: Story of a B-school Elective Course Madhukar Shukla XLRI Jamshedpur Many years back

, the late Nobel Laureate Milton Freidman had made his famous statement: “The business of business is business” – that is, the primary purpose of business is to make profits for the shareholder and to serve its customers. According to him, and many others, any other “social responsibility” by business is not only a deviation from its basic agenda, but would also go against the interests of its primary stakeholders. Times have changed since then, and there are a number of reasons to have a re-look at this definition of the purpose of business, and the role of management professionals in society. One reason, of course, is that in an increasingly complex and interconnected world, business organizations are no longer stand-alone entities; they are also a part of the larger society, and get impacted by it. A few months back, in an interview at Wharton University, KV Kamath, the CEO of ICICI Bank, was asked about what unforeseen factor could adversely impact the business in the coming years. His response was, “...in the Indian context, I would say something that is unforeseen, like social strife, because we are living in a world of haves and have-nots. And there is a divide… To me, this is the single most important thing which could impact business.“ A more important reason to think of “business beyond business”, however, is that, besides their economic role, businesses are also social institutions – and have an institutional role of contributing to the society. This need for a deeper, more proactive and responsible interface with the society is even greater in a country like India, where barely 6-7% of the economically active work-force is in the “organized sector”. In contrast, a huge manpower works in the “informal sector”, which is inadequately skilled, lacks access to resources and is not adequately productive (even though it accounts for 60% of India’s GDP, 68% of income, 30% of agricultural exports, and 40% of manufacturing exports). In fact, according to Vision 2020 prepared by Planning Commission: "‘The public organised sector has been and will continue to shed jobs. Although the private organised sector will contribute significantly to the growth of the economy, its contribution to the overall employment generation will be quite modest, since total employment in this sector currently represents only 2.5 per cent of all jobs. Even if this sector grows by 30 per cent per annum, over five years it will contribute less than one per cent to the growth of the workforce.’ ... an in-depth examination of employment potentials makes it evident that the largest share of new jobs will come from the unorganised sector.” Thus, a sustainable and equitable socio-economic growth can be possible only if the managerial talent moves beyond the corporate boundaries and gets involved in adding value to the “unorganised sector” - by creating and improving livelihoods, and by helping it become more productive. And lastly, being “socially relevant” is an essential part of being a “professional”. The doctors or lawyers, for instance, remain their professional selves, even when they are out of their chambers. The reason is that, not only they possess a specialized set of knowledge/skills, but also that these skills remain socially relevant even outside their workplace. By the same logic, a manager/B-school graduates can really be a called "professionals" only when they can create social/economic value on a sustainable basis outside their corporate roles, e.g. when, - the HR Manager can use his skills to empower the de-empowered in the society - the Sales Manager can use his skills to open up a market for the village artisans - the Corporate Strategist can turnaround a school or a hospital - the Finance Expert can find a solution to the 'cash-flow' problem of a vegetable

vendor ...etc. It is against this backdrop, this year, a new elective course on Social Entrepreneurship was offered to the final year students at XLRI Jamshedpur. The following is the narration of the course, its design, roll-out and learning for developing social entrepreneurship among management professionals. Background XLRI Jamshedpur is a premier business school which was founded by the Jesuits in 1949. Since then, besides providing the regular business education, it has strived to inculcate social sensitivity among its students. For instance, as a part of their induction, students spend 3 nights in remote villages in small teams, interact with the people, and come back with plans for managerial interventions to help those areas; the institute encourages students’ societies such as Social Initiative Group for Managerial Assistance (SIGMA) to take up projects to the marginalized sections of the society; it has also adapted two villages in Jharkhand, and students are encouraged to take up pilot projects for their economic upliftment. As a continuation of this effort, in this academic year, we introduced a new elective on “Introduction to Social Entrepreneurship” for the second year students. The need for such a course was felt because often some students would like to consider the social sector as a career option, but would also feel illequipped to make the choice. Also, many often viewed social entrepreneurship as a “by charity/ for charity” venture, and not as a financially sustainable entrepreneurial activity. The aim of the course was to provide the students a more structured exposure to enable them to consider this field as a viable career option, or as the course announcement mentioned: “The purpose of this course is not to make people aware about "social entrepreneurship" (SE); if out the class of 30, even 3 people decide to take this forward and join this sector, the purpose will be served... that is, to become a social entrepreneur.” The response to the course was more than anticipated. For a class size of 30, almost 60 students subscribed. The final selection of 33 participants was made on the basis of their write-up on “where does social entrepreneurship fit into the scheme of things in your life?” Their responses were also an insight into the talent, energy and idealism that focused on “making a difference”, but which normally gets completely ignored in the conventional b-school curriculum. A few excerpts from their write-ups: · …Having had many domestic helps over the years - and seeing the torture they have to put up with - got me thinking that what is it I can do in my capacity to help them? One does not even have to go to a village to see the real India, it's very much there in the city slums… · …I have lived in Kharagpur, IIT campus… A temple of learning, surrounded by some of the most uneducated people of rural Bengal; an Institute flush with funds, surrounded by some of the most poverty-stricken people; a place enjoying uninterrupted power supply, surrounded villages with no electricity …one day, I would like to return there with some idea on how to make a difference… · …individual’s success does not come in isolation. Society plays major role in helping the individual to reach where he wants to. As an obvious consequence, I would measure my success not only in terms of materialistic possessions but also in terms of what I can contribute back to society. As…. B-school students, we should try to make a difference rather than thinking only in terms of bottom lines. · …The first and foremost reason is my unwillingness to settle abroad. Now, how is that related? I feel I should stay in India and give back to the society my bit. I realize that not just rural India but also parts of urban populace, which are unorganized and need a lot of managerial support… I think a lot can be and needs to be done to the Indian population…we, as responsible citizens, should come forward.

· …The village trip that we had in the first year where we had no electricity, no school in a radius of 6 kms and my own musings over the necessity of entrepreneurs to invest more in villages and towns has made me a more convinced person… a career by itself makes little sense unless a person strongly relates oneself to his or her own society meaningfully. The Roll-Out The design of the course was aimed to provide as far as possible, within the time constraint, a realistic, hands-on and experiential understanding of the SE field. Four pedagogies were used to facilitate learning: 1. Moderated Discussions: The purpose of these was to sensitize the participants to various social issues and the meaning of social entrepreneurship. These were often facilitated through small exercises. For instance, in one session, unknown to them, each half of the class was given two very different, but factual, descriptions of the Indian society/economy. One described India in terms of its growing GDP, exports, its prowess in IT and space technologies, its large technically qualified manpower, increasing FDI, etc., while the other described the country in terms of proportion of people living below poverty line, agricultural indebtness and farmer suicides, malnutrition, lack of basic health, education or sanitation facilities, etc. When both groups were asked to discuss where the country was heading to, based on the data they were given, it surfaced the issues of the wide socio-economic divide in the country. Some discussions were stimulated by showing the video clips of Ashoka Fellows and other social entrepreneurs. One such discussion helped the participants appreciate the similarities and difference between the business and social entrepreneurs, viz.: · Like any business entrepreneur, social entrepreneurs also find gaps and create a venture to serve the unserved 'markets'. · The primary difference between the business and the social entrepreneurs, however, is the "purpose" for setting up the venture. While the business entrepreneurs' efforts focus on building a business and earning profits, the SE’s purpose is to create social change. While a business entrepreneur may also create changes in the society, but that is not the primary purpose of starting the venture. Similarly, a social entrepreneur may generate profits, but for him/her that is not the primary reason for starting the venture. Profitability - not 'profit-making' - however, is important for the SEs. Being 'profitable' helps self-sustainability of the venture, and also works as a mechanism for self-monitoring. · Another key difference between the social and the business entrepreneur is in the meaning of "wealth" creation. For the business entrepreneur, 'wealth' is same as profits. For the social entrepreneur, however, wealth also encompasses creation/sustenance of the social and environmental capital. Therefore, to be viable, a social entrepreneurship venture must show a positive Social and/or Environmental ROI. 2. Case Studies of Social Entrepreneurship Ventures To develop an inductive appreciation of social entrepreneurship, as well as to stimulate thinking in direction of becoming a social entrepreneur, the course also required the participants to work in small groups, and develop and present cases of six real-life social enterprise (The six enterprises selected for the purpose were: Aravind Eye Healthcare, Basix Bank, Ekal Vidyalaya, Grameen Bank, Sri Grameen Mahila Udyog (Lijjat), Narayan Hrudayalaya, and SEWA). In addition, during the course, they also had the opportunity of interacting with some local social entrepreneurs. These exposures helped them to gain an understanding into four critical aspects of social entrepreneurship:

1. Opportunity Identification & Innovation: Social entrepreneurs are innovators who create change. What innovative insight did the entrepreneur bring to identify an opportunity to create change? How did s/he create and spread this innovation and change? 2. Value Creation & Impact: What new value was created by the enterprise/ entrepreneur, and how? What can be the conceptual tools to measure/assess the impact and effectiveness of the social enterprise? 3. Sustainability: How did the social entrepreneur make the venture sustainable –financially, organizationally, and in terms of continuity of the venture? 4. Leadership & Personal Qualities: What were the characteristics of social entrepreneurs’ leadership? What personal qualities (background, skills, values, beliefs, etc.) helped the entrepreneur to succeed in creating value? The participants found this intervention quite useful, since it exposed them to the nuances of starting and running a sustainable social enterprise. It also helped to note the similarities across diverse social ventures and entrepreneurs in different fields, and derive their own understanding of the field. More importantly, by getting exposed to how each of these social enterprises had evolved over a period of time, it helped them to appreciate that, as one of them wrote in feedback for the course, “how big ideas actually start as small ventures.” 3. Developing a Project Proposal for a Social Enterprise The 3rd learning element of the course was the requirement to develop a “business plan” for a social venture project. Based on their insights from the course, the participants’ groups were required to identify one opportunity for social value creation, and develop a project proposal for building a sustainable social enterprise. The “theoretical” underpinning of these projects was an insightful observation that was made by Prof Mohammad Yunus of Grameen Bank: "You take the best seed of the tallest tree from the most fertile forest, and plant it in a small flower-pot. The seed does not grow into the tall tree... not because the seed was bad, but because it got planted in the wrong place.” Likewise, people and groups in the society remain marginalized because the social system does not allow them access to “nutrients”, i.e. access to resources, information, markets, credit, social equity, etc. The project proposals were to follow this simple wisdom: For the seed to grow into a healthy tree, the “ground”, where it is planted, needs to be changed. Similarly, for people and groups to realize their potential, the social entrepreneurial venture must change the “ground”, i.e., aim to change the social dynamics that denies them access to their “nutrients”. For developing these project proposals, the groups were formed on the basis of their common interest and the sectors they were enthused about. The topics ranged from ‘providing micro-finance to rural Jhakhand’, ‘providing market access to rural producer’ etc. to ‘providing low-cost education to slum children’, or ‘rehabilitating the platform kids’ etc. As potential social entrepreneurs, these groups were asked to do two things to develop their project proposals. Firstly, they were required to develop their “theory of change”, i.e., to study and articulate their understanding of the “vicious cycle of the ‘system’” which keeps people and groups excluded from resources and opportunities – and what interventions are required to break out of this cycle (Figures 1 & 2 exhibit an example of the process). This also implied that besides the secondary sources, they had to directly interact with the beneficiaries of their ventures to develop their understanding of the problem and possible solutions. Figure 1: Example of Vicious Cycles of the “System”

Figure 2: Example of Breaking the “Cycle”: The Theory of Change Secondly, they were required to develop a plan which covered the entire “social impact value chain” (see Figure 3), i.e., the project proposal should encompass · the “inputs” ( what resources, organizational arrangements, partnerships, etc.) that will go into the venture · the “primary activities” of the venture (what would the social venture will do to convert the “inputs” into desired outputs, and how) · the “measurable outputs” – or the social indicators - of the venture’s activities, and · the monitoring mechanisms that ensure that the “measurable outputs” are aligned to the desired goals of social change. Figure 3: Social Impact Value Chain For the participants, this part of the course was one the most engaging, exciting and value-adding activity. It provided them with an opportunity to develop their ideas and vision into concrete form. Moreover, it “forced” them to get to know and understand the beneficiaries of their efforts from a first-hand experience. The presentation of project proposal was done as an “open house”. We also invited three social entrepreneurs to give comments and suggestions on the proposals. A few of the participants have continued working on their projects even after the course is over. 4. SWOT of Oneself as a “Social Entrepreneur” Self-assessment and developing a realistic action plan for oneself is a key prerequisite of becoming a social entrepreneur. The last component of the course addressed this aspect. At the end of the course, the participants were asked to write a “personal learning paper” summarizing their understanding of the qualities needed by a social entrepreneur, and how they would assess themselves on those qualities. Based on the cases and other readings they had done during the course, they were required to identify the KSAs (knowledge, skills and attitudes/motivations) needed to be a social entrepreneur. They were also asked to their own SWOT (strengths, weaknesses, opportunities and threats) as a potential social entrepreneur. This helped them to identify the gaps in their own development and to build action plans to fill those up. Learning from the Course The course offered numerous learning, not only for the participants, but also for us as an academic institution. Some of the significant ones were: · A significant number of b-school students possess the social sensitivity and enthusiasm which normally remains untapped in the typical curriculum and coursestructure. By offering relevant exposure, they can be nurtured into more socially responsible professionals. · Even if they don’t opt to become social entrepreneurs, the b-school students can make a meaningful contribution to the sector in small, but significant, ways. For instance, often the village producers lack knowledge about market, or SHGs need simple book-keeping skills to make them viable, etc. Even an average b-school student possesses these skills/knowledge to make a difference. · There is a dearth of a body of knowledge about this sector in the business schools. For instance, there were few well-documented case-studies that could be used to derive lessons from. Similarly, it was only as the projects developed that one kept discovering new sources of funding, or government schemes that could

support the project, or information about similar projects which one could partner with. · We also discovered that the conventional management theory does not offer solutions to many of the issues that are unique to SE field. For instance, while there is much literature on ‘competitive strategy’ in traditional management field, the social entrepreneurship relies heavily on building collaborative partnerships with a variety of stakeholders. There is no framework which can guide a budding social entrepreneur about how to build such partnerships. · In the absence of the above, we found that the best source of learning about SE is through cases/ stories of social ventures and through live interactions with social entrepreneurs. *****