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Innovation and Scaling for Impact forces us to reassess how social sector organizations create value. Drawing on a decade of research, Christian Seelos and Johanna Mair transcend widely held misconceptions, getting to the core of what a sound impact strategy entails in the nonprofit world. They reveal an overlooked nexus between investments that might not pan out (innovation) and expansion based on existing strengths (scaling). In the process, it becomes clear that managing this tension is a difficult balancing act that fundamentally defines an organization and its impact.
The authors examine innovation pathologies that can derail organizations by thwarting their efforts to juggle these imperatives. Then, through four rich case studies, they detail innovation archetypes that effectively sidestep these pathologies and blend innovation with scaling. Readers will come away with conceptual models to drive progress in the social sector and tools for defining the future of their organizations.
This case introduces the Institute of OneWorld Health (IOWH), a company dedicated to producing drugs for neglected diseases and the first non-profit pharmaceutical company in the world. Founded in 2000 by Dr Victoria Hale, IOWH took expired and donated patent compounds and developed them through all the stages of clinical testing and approval into drugs to fight the world's most destructive diseases, usually occurring in Third World countries where perceived profitable markets did not yet exist. By 2004 IOWH was at the stage of presenting its first Phase 3 Clinical Trial results for Paromomycin, a drug developed for Visceral Leishmaniasis, which kills as many as 200,000 people each year in India, Bangladesh, Sudan, Brazil, and Nepal. Its next task was to form partnerships with other organisations to manufacture and distribute the drug; the case focuses on Dr Hale's strategy for IOWH going forward, with particular reference to its core competencies and mission. The case encourages students to consider other models with similar aims and to observe how social entrepreneurs such as Dr Hale endeavour to overcome the market failures that exist for basic health care in the world's least developed countries.
This case portrays a complex set of circumstances that frames Sekem's decisions to further grow and develop the initiative along its historical path of holistic development in the social, economic and cultural spheres. The case documents the history of the initiative and lays out the major constituents and their internal and external relations. Sekem was founded by Ibrahim Abouleish, an Egyptian who had been living, studying and working in Austria prior to his return to Egypt in 1977, the year he established Sekem. Literally starting from nothing, ie, a piece of desert land north of Cairo, Abouleish showed tremendous resourcefulness, creativity, and perseverance. Driven by a strong belief in his personal mission, Abouleish built up the Sekem initiative that in 2003 consisted of three main parts: the Sekem group of companies, the Egyptian Society for Cultural Development and the Co-operative of Sekem Employees, together employing more than 2,000 people. Sekem was also a hub managing a large network of associated farmers and companies within Egypt and abroad. It also ran a medical centre for the local community, a kindergarten, primary and secondary schools, an adult training centre, special needs education programmes, and an academy for applied arts and sciences. In 2003, Abouleish won the Right Livelihood Award, also known as the 'Alternative Nobel Prize', in recognition of Sekem being the blueprint of the organisation of the 21st century. Abouleish has also received an award as an 'outstanding social entrepreneur' from the Schwab Foundation of the World Economic Forum. Abouleish's objective was to heal Egyptian society from the wounds of the past and to initiate holistic development able to create economic, social and cultural value in a sustainable manner.
The term “social entrepreneurship” (SE) is used to refer to the rapidly growing number of organizations that have created models for efficiently catering to basic human needs that existing markets and institutions have failed to satisfy. Social entrepreneurship combines the resourcefulness of traditional entrepreneurship with a mission to change society. One social entrepreneur, Ibrahim Abouleish, recently received the “Alternative Nobel Prize” for his Sekem initiative; in 2004, e-Bay founder Jeff Skoll donated 4.4 million pounds to set up a social entrepreneurship research center; and many social entrepreneurs have mingled with their business counterparts at the World Economic Forum in Davos. Social entrepreneurship offers insights that may stimulate ideas for more socially acceptable and sustainable business strategies and organizational forms. Because it contributes directly to internationally recognized sustainable development (SD) goals, social entrepreneurship may also encourage established corporations to take on greater social responsibility.
In many developing countries those living in poverty are unable to participate in markets due to the weakness or complete absence of supportive institutions. This study examines in microcosm such institutional voids and illustrates the activities of an entrepreneurial actor in rural Bangladesh aimed at addressing them. The findings enable us to better understand why institutional voids originate and to unpack institutional processes in a setting characterized by extreme resource constraints and an institutional fabric that is rich but often at odds with market development. We depict the crafting of new institutional arrangements as an ongoing process of bricolage and unveil its political nature as well as its potentially negative consequences.
Social entrepreneurship. The contribution of individual entrepreneurs to sustainable development
(2004)
Social entrepreneurship is a phenomenon that has resisted attempts to establish a clear definition. A focus on organizational structures and/or what constitutes a worthy social cause has created a diverse set of terminology. Observing the positive social impact of entrepreneurs catering to basic needs, this paper recognizes their unique role in efficiently contributing to the achievement of sustainable development goals. From this perspective, the term social can be much better defined. The frameworks proposed in this paper should guide much-needed further research and facilitate decision making about more focused support from a financial as well as a learning perspective.
Over the past two decades, social entrepreneurship as a phenomenon has gained increased momentum and is widely recognized for its potential to address social needs or problems that too often fall through the gaps of our market and governance systems. This article presents social entrepreneurship as a powerful tool to shape and change institutions and ultimately to inspire the commercial and public sectors. It is conceptualized as a process involving innovation on two levels: (i) the innovation of a new type of product, service, or structure that is created to fulfil unmet needs; and (ii) the innovation of envisioning and enacting alternative institutional arrangements. We contend that the dual nature of this type of innovation is what makes social entrepreneurship more effective than existing solutions and distinguishes it from conventional entrepreneurship. Two case studies are examined to show how social entrepreneurs kick start change by challenging taken for granted ways of doing things and demonstrating how new strategies can make a real impact. They illustrate that more sustainable solutions are possible and often provide “proof of concept” leading to the creation of new markets, new policies, and even new behaviors and attitudes.
Organizational closure competencies and scaling: A realist approach to theorizing social enterprise
(2014)
Purpose
Social entrepreneurs create novel approaches to social problems such as poverty. But scaling these approaches to the dimension of the problem can be a difficult task. In the social enterprise sector, the subject of scaling has become a key dimension of organizational performance. This chapter advances the scholarly literature on the scaling of social enterprises, a literature which is currently in an embryonic stage and characterized by conceptual ambiguity and fragmented perspectives.
Methodology/Approach
We engage realist philosophy of science to develop mechanism-based causal explanations of the scaling performance of social enterprises. We also develop a coding scheme to guide systematic empirical analysis and highlight the explanatory power of counterfactuals. Counterfactuals have been largely neglected in empirical research as they represent mechanisms that are enabled but remain unobservable – in a state of suppression or neutralization of their effects.
Findings
We question the ability of organizations to “socially engineer” desired outcomes and introduce a new construct – organizational closure competence. Anchored in realism, this construct provides a basis for productive approaches to social engineering. We elaborate on the importance of organizational closure competencies for scaling, derive a series of propositions, and develop ideas for future research and for practice.
Research, Practical and Social Implications
Applying a realist lens allows us to add empirical rigor to research on social enterprises and scaling. Our approach constitutes a move from rich narratives to causal models and informs the way we design and evaluate efforts to address important societal challenges.
Originality/Value of Chapter
This chapter demonstrates how to operationalize realist philosophy of science for causal explanations of complex social phenomena and better utilize its theoretical and practical value.