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A Conversation with Professor Dutch Leonard

How long have you served as faculty co-chair of SEI? How did you first get interested in Social Enterprise and involved in SEI?

I became Co-Chair of the Social Enterprise Initiative in 2004, when I was asked to take a joint appointment at HBS, bridging from the work I was doing at Harvard’s Kennedy School (HKS) on nonprofit and other social sector organizations to join with the work on social enterprise, social entrepreneurship, performance management, and social sector leadership that was ongoing at HBS.  And I mean “bridging” literally – on most days, I cross the bridge over the Charles River between HBS and HKS at least once in each direction – and on many days more than once.  Part of the purpose of this joint appointment is to bring efforts focused on the social sector in different parts of Harvard University together and make them add up to more than the sum of their individual parts. 

What are your key areas of research/interest?

The main areas I focus on concern the challenges of leadership and strategy for social mission-driven organizations (SMDOs).  In my view, the critical differentiating factor for social organizations is not their tax status (whether they are nonprofit or for-profit, whether they are exempt from property and/or income taxes, or whether contributions to them are tax-deductible).  Those features can make an important difference, but the central element that makes social organizations different is that they are focused on trying to advance a social mission.  Everything else is secondary to that – and derives from it.  For example, an SMDO should be organized as a nonprofit or as a for-profit depending on which form of organization will best allow it to advance its social mission; it should seek to finance itself through revenues earned in a marketplace if (and only if!) that is the best way to propel its mission forward.  I believe that organizations whose central purpose is to advance a social mission are and should be fundamentally different from organizations with other purposes – in the way they develop their strategies, in how they mobilize their workers and supporters, in the way they think about pricing, and in a myriad of other ways.  When the mission is the center, everything else follows (and has to follow!).

Because performance is such an important part of successfully developing SMDOs, a good bit of my research and teaching focuses on the challenges faced by social organizations in defining the outcomes and impacts they are trying to produce.  This includes mapping the links between their inputs and activities, on the one hand, and their intended impacts, on the other, and developing ways of measuring all along the causal chain so as to be able to monitor, learn about, and improve the effectiveness of their efforts.

In today’s increasingly complex world, we often find that a single organization working on its own cannot reasonably take responsibility for “solving” a complicated, multi-faceted problem; progress on such issues may require the collective action of many organizations.  Accordingly, work on the performance of SMDOs now includes a focus on the challenge of changing a system of organizations working on different aspects of related phenomena, and developing perspective on and tools for “system-level” leadership and change has thus become part of our research as well.

What do you most enjoy in teaching about social enterprise?

The best part of teaching at HBS – by far – is the students and executive program participants in our courses.  They are smart, creative, and dedicated to making a difference in our world, and it is inspiring to work with them and hear their thoughtful and insightful analyses and recommendations in the cases we explore.

My teaching in both our degree and executive programs focuses on leadership – and, especially, leadership for innovation – in the social sector.  What I most enjoy from the standpoint of the curriculum is the development, through cases and class discussions, of a framework in which we can discuss strategy for SMDOs.  Of course, it begins with mission – how is the mission chosen?  Is this the right mission?  How do we know?  If it is the right mission, is this the best way to state the mission?  But the mission is not self-executing.  Beyond the mission, the organization needs to develop a “theory of change” that explains its beliefs about how its actions will produce the benefits – outcomes and impacts – that it is trying to create.  The theory of change speaks to how the activities and actions of the organization can be expected to advance the mission.  But even that is not enough – in addition, we now need an organizational structure through which those activities can be effectively carried out and within which they can be supported with the necessary knowledge, skills, and resources … that is, we need a “business model” for how the operations are going to be carried out and sustained.  This combination of mission, theory of change, and business model have to be mutually coherent – they have to fit together and, in the best of circumstances, they positively reinforce one another.

What I most enjoy in teaching about social enterprises is examining, in case after case, the wonderful variety of missions, theories of change, and business models … and whether and how they fit together … and how they can be improved.  This is endlessly varied – and creative – and inspiring.  The students and participants are constantly coming up with new ways to look at these issues and with new suggestions about strategies and approaches – so the conversations are continuously being refreshed and renewed.

What is one positive future trend you see for the social enterprise sector?

I see a combination of a challenge and an opportunity.  The challenge is that there is a lot of critically important social-purpose work that is not being effectively addressed.  Educational systems consume vast resources but produce results with which no one is satisfied.  Rapid evolution in the economy leaves workers whose skills are no longer needed unemployed while new jobs are created demanding skills not enough workers can provide.  Unhealthy behaviors generate a burden of chronic disease for which an increasingly expensive medical system is not the best way to provide a resolution.  While much progress has been made, it seems an increasing set of challenges loom ahead … for which we need resources, new thinking about approaches, and perhaps new organizational forms.  And this, of course, is the opportunity – the chance to devise new solutions.  So the positive trend I see is the need for – and generation of – leadership for innovation in the social sector.  In the broadest sense, that is the central work of the Social Enterprise Initiative at HBS.