Case in Point

Not sure how to implement a social entrepreneurship class at your school? Here’s a look at two very different classes with wide-reaching impact. Ian MacMillan of the Wharton School describes the exercises he uses to help students formulate realistic, sustainable social ventures, while dt ogilvie explains how the Rutgers Business School has exported a successful community outreach entrepreneurship initiative.
Case in Point

The Wharton School
Reality Check

BY IAN MacMILLAN

Undergrads and MBA students in my societal wealth venturing class know they’ll be forming teams to create ventures aimed at addressing a pervasive societal problem. They know they’ll be studying the details of what worked and what didn’t in the Wharton Societal Wealth Program, which is field testing social entrepreneurship projects in areas like Zambia and Botswana. But they aren’t always prepared for the kinds of analysis and refinements they’ll be asked to do as they move their plans from pie-in-the-sky idealism to practical, sustainable, profit-seeking businesses. They aren’t always prepared for reality.

As a key part of the class, I help students think through what benefit they want to deliver, who they want to deliver it to, and what kinds of obstacles they’ll face. For instance, students might have proposed a plan for encouraging more people in a developing nation to receive inoculations at a clinic.

I ask them, “How will the people get there? What’s the transportation system? If you have vaccines, how will you keep them cold? Do you have a refrigeration system? What makes you think you’re going to have power? And, by the way, if you have a refrigerator, do you realize you’d better weld it to the floor or it might get stolen?” There’s a lot they’ll have to think about before they go into challenging environments.

Moreover, I ask them to consider what happens if their businesses are really successful. Even as they’re helping some people, there will be others who are disadvantaged by their success. I tell them, “Those people aren’t your friends, and if they have contacts in high places, you could be shut down.” So among the exercises I have them do is a political analysis.

I call this “thinking through the last yard of delivery” when planning in uncertain environments. It’s also simply a reality check. Students are working on ventures that are highly uncertain, and sometimes it becomes increasingly apparent that they won’t be able to accomplish their initial target outcome. So I have them think about how they can keep redirecting and refining their plans.

Some students also struggle with the notion that even ventures designed to do good need to generate sustained funding, so I constantly emphasize the themes of self-sufficiency and profitability. The sheer discipline of having to think about how to make a profit really forces students to drive down costs and increase potential revenues.

Even if students get to the end of the program and realize they can’t make profits on their ventures, any project they launch nonetheless will use far fewer resources.

The fact is, nonprofit organizations and governmental aid initiatives have poured a great deal of money into trying to combat poverty, and the impact hasn’t been encouraging. Now social entrepreneurs are starting to address the world’s problems. However, let’s be clear that the challenges are immense. After all, if the solutions were obvious, someone else would already be employing them.

To teach social enterprise, we know we must attack these problems with a formidable array of weapons: cutting-edge research, deep intellectual insight, and committed students. There are many in today’s generation of students who say, “I was lucky enough to be born smart, and I’d like to devote some of my time and ability to helping others.”

These passionate students have helped set off the wave of social entrepreneurship programming that is sweeping across business schools worldwide. They’re also taking the lessons they’ve learned in classes like Wharton’s and launching their own businesses.

However, it’s not always apparent at the beginning of class that a successful idea will result from any of the plans. When students first propose their businesses, they’re often clearly unworkable. For instance, students might decide they want to address the AIDS problem in Africa by encouraging condom use—even though, for thousands of years, most of the population of Africa hasn’t even known what condoms are. I often have to bite my tongue to keep from saying something cynical. But these students bring a great deal of intellect, talent, and energy to class, and I don’t want to discourage them.

Once students start applying some of the business tools and planning methodologies they learn in class—once they start becoming more realistic—their ideas start to get redirected. Often what they end up with is fairly different from their original idea. They might find themselves helping different people than they planned, and helping them in a different way. To be frank, I don’t care who is helped and how, as long as help is delivered.

Rutgers Business School
Social Entrepreneurship at Home and Abroad

BY dt Ogilvie

Recent surveys at Rutgers Business School have shown us that up to 80 percent of our students across all disciplines are interested in becoming entrepreneurs. Ten years ago, business students wanted to become the next Jack Welch; today their heroes are Facebook’s Mark Zuckerberg and Google’s Sergey Brin and Larry Page. But a growing number of them want their new businesses to be socially minded enterprises that address pressing needs and turn a profit.

All around them, they see examples of social entrepreneurs. For example, Greyston Bakery in Brooklyn, New York, hires local residents who are typically considered “unemployable” to sell brownies and other baked goods. Another Brooklyn-based company, IceStone, addresses environmental ills by creating countertops from 100 percent recycled glass.

We have developed a three-pronged approach to social entrepreneurship that incorporates research, teaching, and community outreach. As part of our teaching efforts, for instance, we’ve developed an entrepreneurship minor open to any student at the university. But one of our most successful programs is a community outreach initiative—and we’re so excited about it that we’re looking for ways to take the program overseas.

Serving the Community

At Rutgers, we’ve become convinced that social reform is not being successfully addressed by the traditional methods of welfare, low-income housing, and job training, so we’ve developed a program called the Entrepreneurship Pioneers Initiatives (EPI).

We believe that we can use our entrepreneurship expertise to help people establish and expand local businesses that will, in turn, create local jobs. EPI was created by The Center for Urban Entrepreneurship & Economic Development (CUEED) at Rutgers Business School in partnership with The Institute for Entrepreneurial Leadership, the Greater Newark Business Development Consortium, and the Rutgers-Newark Small Business Development Center.

To find participants, we advertise the program in various media and ask interested parties to apply. There are a number of criteria: The businesses must be at least three years old, owned by first-generation business owners, and located and operating in New Jersey. They also must have at least four employees and possess the potential to grow.
Each EPI class is made up of about 35 participants, who pay $200 to enroll. The rest of the costs are funded by grants from PNC, our inaugural sponsor, and Prudential.

Classes are taught by multidisciplinary faculty focused on urban entrepreneurship and economic development. Because we wanted to take a broad approach to dealing with the problems and opportunities small businesses face, we recruited faculty with expertise in law, supply chain management, marketing, sociology, engineering, economic geography, creativity, and business strategy.

EPI offers mentorship and peer counseling as well as business training. Members of the initial EPI class have begun doing business with each other and requested additional training sessions from us. Since graduation, they have formed an alumni group that organizes conferences, seminars, and speakers, and now includes the second class of EPI graduates.

There have been dramatic individual success stories. For instance, Utterly Global, a company that provides anti-bullying programs to schools, parents, and civic groups, not only saw its revenues jump by more than 150 percent, but also recently won a $62,000 contract from the New York City Family & Youth Services. The owner of storage company Box Butler used his newfound knowledge to obtain a loan that increased his revenue and allowed him to add more than 15 jobs last year. Other business owners have learned how to run more efficient operations, renegotiate leases, create productive networks, fund the purchases of new equipment, and expand to additional locations.

Exporting the Program

Now we have an opportunity to take EPI beyond New Jersey. Recently, after I gave a talk at the Melbourne Business School in Australia, we were asked to consider implementing a similar program in that country. We’ve joined forces with MBS and began working with Ian Williamson, director of the Asia Pacific Social Impact Leadership Centre and the Helen Macpherson Smith Chair of Leadership for Social Impact.

Williamson and his colleagues want to adapt the EPI model to foster entrepreneurship within Australia’s indigenous communities, which are often pushed to the edge of the economy. The challenge is to help them create skill sets and opportunities that will offer them a path into Australia’s economic mainstream, and entrepreneurship is one way to do this. At the beginning, we expect the program to be taught by both Rutgers and MBS professors, with additional instruction offered by community service providers. Rutgers will be involved until the program is running on its own.

We have also been invited to help develop EPI programs for communities in Africa, Brazil, and China. We consider it essential to partner with universities for these programs, because universities bring a set of resources that are critical to a community-centered wealth development program.

We realize that we can’t just lift a program from America and install it as-is anywhere in the world without evaluating the culture, business practices, and local conditions. As we set up the program in other countries, we might need to offer additional training in soft skills that increase self-esteem and self-sufficiency. As we did in Newark, we will draw on the support of community groups to help us understand the best way to implement the EPI program, and we will rely on EPI program members to help us deliver needed services. With adjustments, we believe that the basic program can be transplanted to many other communities.

We will also bear in mind that nothing is sacrosanct. Our No. 1 job is asking, “What will work best here?
What new tactics should we integrate? Can we tweak our program, or do we need a brand-new model?”

But that’s the very basis of social entrepreneurship. It starts with the talents and resources, however meager, that are already available, and uses them to create wealth, foster economic growth, and ameliorate social ills.

Ian MacMillan is the Dhirubhai Ambani Professor of Innovation and director of the Sol C. Snider Entrepreneurial Research Center at the University of Pennsylvania’s Wharton School in Philadelphia.

dt ogilvie is associate professor of management and global business at Rutgers Business School in Newark, New Jersey. She is also founding director of The Center for Urban Entrepreneurship & Economic Development at the school. More information about EPI can be found at www.business.rutgers.edu/cueed/in-the-news.