How long have you served as faculty co-chair of SEI and what courses do you currently teach?
I joined the faculty of Harvard Business School in 1983 as a professor in the marketing department. In 1994, I was lucky to have the opportunity to be a co-founder of the Social Enterprise Initiative with Professor Jim Austin. Since then I have taught courses on Corporate Social Responsibility and Business at the Base of the Pyramid.
What is the purpose of the new research initiative called Impact Co-Laboratory?
The Impact Co-Laboratory (Impact Co-Lab) is an exciting research initiative which we hope will influence impact investing fund managers and social entrepreneurs. Unlike most research at HBS, which is at the level of each individual faculty person’s research and teaching interests, and funded individually, the Impact Co-Lab is comprised of a social enterprise faculty group that pools its resources to gain scale and represents a new way of doing research at HBS. Collectively we can take on bigger topics that impact practice more directly than what we could do individually. We call it the “co-laboratory” because the research is done in collaboration with field level practitioners, be it fund managers, social entrepreneurs, or leaders of social enterprise organizations. The Impact Co-lab is investigating two topics:
We are exploring the field of impact investing; specifically how fund managers raise the funds, how they articulate the goals of the fund, how they define financial and social performance, and how they manage the portfolio over the life of the fund. We have plans to study approximately 10 funds and roughly 100 of their portfolio companies to get an insight into how the leading practitioners strategize and execute the craft of impact investing.
Transformative Impact at Scale
We started our project about transformative impact two years ago in collaboration with The Bridgespan Group, a leading nonprofit consultancy that was founded by HBS alum Tom Tierney (MBA 1980). Bridgespan CEO Jeff Bradach (PHDOB 1992) and his team assembled approximately 20 social enterprises from around the world, which all had successfully established their version 1.0 of their operating model: they had been successful in raising money, establishing their operating model and demonstrating tangible results from their interventions. Their challenge was how to extend their success; how would they scale their operations for even more impact, in order to have a transformative change on the eco-system in which they were working? We hosted two major multiple-day forums at HBS, where leaders and board members from these organizations came together and in small groups, brainstormed their challenges, and developed plans for scaling. In addition, the HBS Impact Co-lab research team developed a total of six field cases from among the organizations invited to the forum. These case studies explore in-depth the dilemmas and opportunities that these organizations face in scaling, and the perspective of their leaders as they strive for transformative impact.
Can you give some examples of transformative scale from this casework?
Consider for example Akshaya Patra, an Indian NGO which encourages school attendance and participation by providing free nutritious mid-day meals to 1.65 million school children from low-income families every day. Its superb operational efficiency at its 25 centralized/industrial kitchens help serve children in 12,800 schools at the cost of 13 cents a meal. Only about a third of that is subsidized by the government. In 5 years it wanted to reach 5 million children a day!
Closer to home is the case study of Year Up, founded by HBS alum, Gerald Chertavian (MBA 1992), with the goal of providing employment opportunities for some 5 million young men and women who have a high school diploma, but no jobs. The one-year boot camp program developed by Chertavian and his team involved both soft skills training (behavior and presentation) and hard skills (such as computer skills, accounting skills etc.) funded by corporate sponsors, such as State Street, and JP Morgan, who hired Year Up graduates into their workforce. Having succeeded in its initial years, Year Up chose to scale the program by partnering with community colleges, which reduced costs and simultaneously expanded reach. With operations in 16 cities and partnership with 8 community colleges, Year Up had expanded to serve 3,000 youth. Not satisfied, Chertavian is eyeing strategies to scale to 10,000 students in 5 years.
What are your key learnings from your research on transformative impact so far?
First, many of them do not think of scale linearly. That is, they don’t necessarily think of more of the same as the most effective way to gain scale. Several of the entrepreneurs we studied moved in a complementary direction to influence government policy, and undertake advocacy to stimulate the eco-system to accelerate the change effort. But, of course, that did not mean abandoning their original path; what it meant was moving in multiple directions, simultaneously, to gain a disproportionate increase in scale. That’s what you would expect of restless social entrepreneurs who are trying to achieve transformative change. But what comes with the move in multiple directions is the real threat of entering into activities and partnerships that challenge the resources of the organization, its capabilities, and mission focus. Our research reveals that balancing the linear and nonlinear paths is not an easy task. Social entrepreneurs stumble, and over-adjust in one or the other direction. The better ones retreat, reflect, and reorganize before advancing again. It is through such a zig-zagging process that great social entrepreneurs and social enterprises advance in their goal to have transformative impact.