SES Story of Impact: Chris Steinbach, The Newberry Group

April 15th, 2014 by under Social Enterprise Symposium. No Comments.

I’m planning to bring some big news to my upcoming All Hands staff meeting.  As President and CEO of The Newberry Group – an IT firm based in Columbia, MD & St. Louis, MO – I typically present on past performance, our forecast, and our plans for achieving those forecasted results.   But this time my plans are far from business as usual. I intend to propose that The Newberry Group align its vision more closely to that of a true social enterprise.

SES Human Capital

I was inspired to make this pitch after attending the Center for Social Value Creation’s Social Enterprise Symposium (SES). Honestly, I didn’t attend SES with the hope of being inspired. I showed up mainly out of personal interest, given the strong encouragement from my son, a staff member at the Smith School of Business. Though it didn’t take long to discover just how relevant much of the content was to strategic questions I faced within my own company.

In a panel titled “Models for Impact: Reforming Capitalism” I listened to Jeff Cherry, Executive Director of Conscious Venture Lab, discuss the importance of having a clear company mission – both as an internal guidepost and as an external indicator of company value. I considered how a stronger mission could be a rallying point for all of The Newberry Group stakeholders; this was thought provoking.

After the first round of sessions, I connected with Tom Decker, a leader in the cooperative business movement, and discussed the advantages of more democratic corporate structures. I realized that, as an employee-owned company, The Newberry Group was well positioned to embrace many of these advantages. That was disruptive.

Finally, I attended a boardroom discussion led by Cheryl Kiser, Executive Director of the Babson Social Innovation Lab, on “Managing Human Capital in Mission Driven Organizations”. I found my own management and development philosophies so aligned with Cheryl’s that I wanted to finish her sentences. I began to see the dots connecting between my own practices at The Newberry Group and the abstract definition of a mission driven organization. That was motivating.

Before I left for the day, I connected with my son, who was managing SES. I had so much to say, but, head spinning, all I got out was, “I have a lot to think about.”

Over the weeks that have followed SES, I’ve done a lot of thinking. I’ve begun to understand that much of the value The Newberry Group provides for its employees remains currently untapped and if captured, would have a profound collateral impact on Newberry’s clients. I foresee making greater investments in internal community building, representative of the employee’s interests of the company. I also plan to implement a more democratic management strategy. My new working mission for The Newberry Group is - to improve the quality of life of its employees every year. And the business case for all of this? Lower turnover; greater diversity of ideas; improved talent and client acquisition.

I have a long way to go and still a great deal to explore, but I’m more committed than ever to having the interests of my entire company at heart in whatever direction I go. In this way, the Social Enterprise Symposium has inspired me to develop a truly mission driven organization.

Chris Steinbach

Chris Steinbach, Chairman & CEO, provides overall direction for The Newberry Group and presides over the implementation of the corporate strategies, the implementation of best practices, and the profitable growth of the company. Prior to The Newberry Group, Mr. Steinbach worked at CSC where he started as a Senior Human Factors Engineer and eventually became the first Vice President of Operations for CSC’s $1.3 billion Enforcement, Security, and Intelligence Division. Successfully serving in this capacity, until he took the role of CSC’s Corporate Security Operations Executive wherein he served until his acceptance of The Newberry Group’s President & CEO position.

 

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Profit and Competition: the Keys to Social Change?

July 10th, 2013 by under Career, Social Impact, Social Value, Sustainability. 2 Comments.

Written by Aaron Czinn, BS 2013

On multiple occasions I’ve had conversations with those older and more experienced than I about the power that business has to create change in the world. And on multiple occasions I’ve been faced with the same critical response: “It’ll never happen. Businesses only care about the bottom line.”

Maybe I’ve spent too long on a university campus that prides itself on social entrepreneurship, but if there’s anything I’ve learned in business school it’s that profit and competition rule the business world. And while members of an older generation may point to those two concepts to refute the notion that business can create social change, in my eyes these concepts do nothing but strengthen the case.

Of course, an economically sustainable business cannot exist without turning a profit, but why can’t making a profit and making a difference go hand in hand? In today’s world of Clip Art Profitgreenwashing and excessive cause marketing it is hard to identify which companies are truly trying to create social change. However, it is clear that there are, in fact, a number of large companies who are genuinely interested in making a difference. Starbucks and Whole Foods are two companies that pride themselves on sourcing materials in an environmentally and ethically responsible manner. Both carry strong brand names and are perennially listed on the Fortune 500. Ben & Jerry’s and Method cleaning supplies are examples of other companies that were founded on the basis of doing good, yet maintain strong financial performance. I could go on and name more, but these companies have proved time and again that making money and making a difference can truly coexist.

Knowing that companies can be profitable while making social impact is the perfect ingredient to vouch for the impact of the second important component of business – competition. The beauty of competition is that it drives innovation. Just look at today’s smartphone market. Many experts in the field now believe that the Samsung Galaxy S4 is a far greater phone than the iPhone 5. But imagine a world in which Apple never created the iPhone. Would Samsung have ever even thought to create a phone with touchscreen technology, let alone one that would be as good as what the Galaxy is today?

Now imagine if the forces of competition were used for the sake of creating social change. Imagine if a car company created a car with zero fuel emissions causing a competitor to make an even better and more affordable one. Imagine if a real estate company found a way to build affordable housing for the homeless causing another company to find an even better way. Imagine the social impact that could be created through social innovations inspired by competition!

Fortunately, many of today’s most successful businesses are already taking a genuine interest in creating social impact. If my business education is correct the competition is sure to follow, and pretty soon we might be living in a much better world.

 

Aaron-headshot2Aaron Czinn graduated from the Robert H. Smith School of Business at the University of Maryland in May 2013. He hopes to blend his Marketing and Information Systems majors into developing digital marketing strategies for socially conscious businesses in the real world.

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Entrepreneurship, Opportunity, Competition, and Hope. Observations and insights in Troilo, Nicaragua

April 24th, 2013 by under Entrepreneurship, International, Social Impact, Social Value. 2 Comments.

Written by Professor David Kirsch
Mar 31, 2013

Over spring break, my family and I participated in a week-long service trip to Nicaragua run by the Yale Alumni Service Corps, a recent creation of the Association of Yale Alumni. I am not a Yale alumnus, and though my wife went to Yale Law School, she has had almost no connection to Yale in the 20+ years since she graduated. The principal criteria for choosing the trip were (1) it fit into our schedule, (2) it would allow our kids to spend a week with Spanish speakers who did not also speak English, (3) it would open our kids’ eyes to the realities of life in the developing world, and (4) it was time to spend spring break doing something other than sitting on a beach talking about doing something.

By all these criteria, the trip was a success, but it also succeeded in a very unexpected way. My own efforts as a member of the “business consulting” group involved meeting with and advising small business owners in the village of Troilo. While other subgroups staffed a medical clinic or put a new roof on the community center or taught in the local school (all activities with immediate, obvious and tangible benefits), I was initially concerned that our “service” was designed to occupy the few of us who were unable to contribute in any other (read: productive) way. But after a week of intensely personal conversations with a dozen local entrepreneurs, I came to see that our efforts may have been more valuable than I had expected. In particular, the experience stimulated me to contemplate some fundamental questions about the role of business in society that I elaborate upon below.

First, a word about the setting: The village of Troilo is located in the rich, volcanic lowlands west of Leon, about halfway between the city and the Pacific Ocean. Typical of many such villages, most of the men in Troilo work in the sugar cane fields where they earn approximately $4/day, 6 days/week. The work is backbreaking and is associated with chronic, unexplained kidney disease (CKDu). The sugar cane industry regularly tests employees’ kidney function and dismisses field workers at the slightest sign of the disease to avoid being held responsible when the men ultimately fall ill and die. As a result, adult men are scarce, and Troilo is a matriarchal society. Though signs of grinding poverty abound, upon closer inspection, we saw that Troilo had benefitted from several years of work with our group’s local development partner CEPAD. The village had a health post that was staffed during the week. Two deep-water wells for drinking had been installed by the NGO Living Water in 2010. And, of greatest importance from the business standpoint, the central market of Leon was only 8 miles away, reachable by daily bus or even an occasional taxicab. Each morning our group of 70 volunteers, translators, and local staff boarded our buses at our hotel in Leon and bumped along a dusty, rural road through cane plants that towered over our vehicles. In Troilo, our group of five “business consultants” gathered in our “office,” the open-air church in the center of the village. Each day presented new challenges, as villagers came to talk to us about their businesses, their challenges and their hopes.

Entrepreneurship and development. How important is entrepreneurship in the development context? While the medical team was saving lives (literally, in several cases), what were we business consultants doing to help the people in the village of Troilo? Our contribution began to come into focus after our first meeting with a young mother named Maria. She was a seamstress and had been making simple skirts using a sewing machine that had been handed down in her family. She bought fabric by the yard in Leon, made a skirt or two and sold them to a reseller in town. Carefully, we talked through the economics of her fledgling business. We discussed the cost of the fabric, the thread, the needles, the buses to and from Leon, and everything else we could think of. We totaled the costs on one side of a page of paper: after ironing out some lumpiness, it worked out to 115 Cordobas per skirt. And then we asked Maria how much the reseller was willing to pay for the finished product? Before she could even get the words out, tears began to well in her eyes as she realized the implications of our analysis: 110 C. The reseller would only pay 110 C for a finished skirt. She was losing money on each one! Over the course of the week, as we continued to work with Maria, we were able to help her identify higher value-added skirts that used more fashionable fabrics or newer designs. And to reduce costs, we encouraged Maria to try to buy fabric in larger quantities and take fewer but more productive trips into Leon. To do so, Maria would need a microloan totaling $75 that she would be able to repay in as little as 3 months. And so it was for many of the people with whom we met in Troilo. When we combined basic business analysis with access to very modest amounts of capital, almost all of the clients who came to meet with our team were able to identify profitable opportunities.

Is the work of identifying and developing these opportunities more important or more valuable than the work of the medical team? Surely not. As we know from Maslow’s “hierarchy of needs,” basic access to healthcare is more fundamental than putting a few hundred extra Cordobas in the pockets of a handful of Troilo families. But over the long run, as basic needs are (hopefully) met by a responsible government committed to establishing a basic social safety net, these aspiring entrepreneurs may prove to be the people upon whom the future of a new Nicaragua will most depend. The gradual enrichment of these families will both allow for greater Maslowian “self-actualization” and create demand for more complex and valuable goods and services and grow the tax base for future government programs.

Nature of opportunities. In my courses on entrepreneurship, I frequently try to convey the idea that opportunities are neither equally distributed nor equally perceived. Some people have access to better opportunities, while others are simply better at perceiving the opportunities available in a given setting. In Troilo, we saw both effects very clearly over the course of the week: the women who showed up to meet with us on Monday morning included a small shopkeeper and several women who were interested in various aspects of pig farming. Though the opportunities available to each of these women differed (some already owned pigs or had more or better experience with various aspects of the process), each had somehow perceived that our arrival represented an opportunity. As the week wore on, several additional people interested in pursuing the same kinds of opportunities also appeared. Perhaps these latecomers heard about us from the early birds, or perhaps they directly observed us offering advice and decided that they too should seek our help. Regardless, our team noticed that the latecomers were decidedly less energetic, less knowledgeable and, in our opinion, less likely to develop successful businesses than the first arrivals. How did the first group learn that we were coming? We did not survey our clients, so we cannot know, but through whatever multiple information channels exist in Troilo, the early birds both became aware of our arrival sooner and judged (hopefully correctly) that working with us represented an opportunity to improve the prospects of their businesses faster than did their late-coming neighbors. In Troilo, the early bird gets the pig.

Competition, growth and inequality. Because opportunities are unequally distributed and perceived, our team faced an ethical dilemma: How could we help the village of Troilo without hurting some of its villagers? This question came into focus as we compared the operations of several local pulperias, small shops that sell snacks, drinks and other supplies. The first shop was owned by Tomesita: She ran a tight ship, and by 11:00 a.m. Monday morning, she already had us buying cold drinks from her shop, which was a short walk from the center of the village. She described her twice-weekly runs into Leon for inventory, which markets there had the best prices, and how she decided upon what to buy and sell. She also showed us her well-kept record of receivables; she offered 15 day-money to those she knew and trusted. Later, we returned to analyze the gross margins on Tomesita’s various products. Just like at home, some products were low margin necessities that she needed to carry like toilet paper, while it turns out that buying eggs by the gross and selling them individually is quite profitable (on a percentage basis). She appreciated our help and quickly saw the benefit of thinking about relative profitability of different types of products.

Contrast this to our visit to Roger’s shop, located a little bit further from the center of the village: Knowing the prices that Tomesita paid for her inventory, we noticed that Roger’s cost of goods was higher across the board, and his prices were either the same or lower. Where Tomesita’s margins were healthy, Roger’s were anemic, at best. His lower profitability led to greater working capital tied up in inventory, smaller and more frequent trips to town, and, ultimately, to a sputtering business. Not surprisingly, Roger, like two other pulperia owners, didn’t show up to meet with us until Wednesday afternoon.

Could we help Tomesita’s competitors? Yes, and we tried to do so without divulging the proprietary information that Tomesita had shared with us. But what are the prospects for these businesses? The hard truth is that not only was Tomesita’s shop more efficient and productive than her competitors today, she was also better positioned to benefit from our advice and therefore to further extend her advantage. This inequality is one of the driving forces of entrepreneurial capitalism, and it operates in a village in Nicaragua just as surely as it does in any other market context. Up to a point, advantages and disadvantages both cumulate, and while we might be able to postpone Roger’s day of reckoning, eventually, the actions of the market would seal the fate of his pulperia.

And here arose the ethical question: because of Tomesita’s advantaged position, we were effectively helping her more than her competitors. Were we, therefore, accelerating the market pressures that had thus far spared the owners of the less competitive pulperias? Surely our purpose was not to hurt any of the business owners in Troilo, but by their very nature, entrepreneurial actions create disequilibrium, and by encouraging and sharpening these actions, we were increasing the rate at which these changes would be felt in the community.

Observations and insights. Finally, I will share three brief vignettes from our time in Troilo that capture unique aspects of the experience.

Luis and Jeff. Jeff, one of our consulting team members, had recently retired from a senior position in a major, multi-national consumer products company where he had overseen sales for the entire Latin American market. Luis, one of our clients, was a craftsman who made bracelets, rings and other trinkets that he sold to resellers in Managua. He was referred to us by the health clinic where he had presented with mild depression and signs of possible repetitive strain injury. He seemed talented but was incapable of earning enough money to support the extended family for which he was responsible. Under the circumstances, who wouldn’t be at least a little depressed? Our team met with him over the course of several days, carefully teasing out the economics of his business. He needed $150 to buy a machine that would both ease the pain of his work and increase his productivity three-fold. The economics favored a micro-loan, but the amount was twice what we had been contemplating with the other villagers. Then, in a stroke of inspiration, Jeff invited Luis to offer his products to our group members after lunch. While Luis was getting ready, Jeff asked what various items would cost, and Luis quoted him the wholesale prices that he was used to receiving from his buyers in Managua. Jeff’s second insight saved the venture: You are selling to individuals so charge retail prices. Luis grossed over $100 in a single hour, committed to save $75 of it towards the purchase of his machine (the rest will be provided via microloan), and went home a much happier man.

Two observations struck me: First, I couldn’t help but marvel at the sight of Jeff helping Luis, the global sales executive with vast knowledge and experience acquired across decades and continents providing simple actionable advice to this struggling craftsman. I didn’t ask, but privately I estimated Jeff’s consulting fees at $15,000-$25,000 per day, yet here he was in Troilo helping Luis. Variations upon this moment were repeated time after time during the week, but in this instance it seemed especially poignant, and it spoke volumes to me about the members of this Yale Alumni Service Corps group of volunteers and about the broader merits of service.  Second, I noted that the critical source of revenue was our own groups’ pocketbooks. We all paid a little more than the market required (after all, Luis was prepared to sell at his wholesale price), but importantly, we did not simply collect $100 and hand it to Luis. I suspect that had we started handing out small bills, chaos would have ensued, much as it did when Abbie Hoffman famously threw a wad of bills from the observation deck at the New York Stock Exchange. But with Luis selling his goods, the act of exchange transferred wealth in an orderly process. The magic of the market created value for all involved.

Our better selves. Among the less competitive pulperias that we advised, two were located in or directly in front of the elementary school. As with all of the clients who came to talk to us, we first asked each of the proprietors to tell us about her customers and the products they buy. In these cases, both pulperias sold snacks and sodas to the school children. As we looked at all the “empty calories” available for the youngest kids to buy with an extra Cordoba or two and tried to imagine how to increase sales for these women’s shops, I thought about how long and hard-fought the battle had been to get sugary soft drinks removed from school cafeterias in the U.S. Could we possibly have encouraged the women to offer healthier choices? Could the kids have afforded alternatives to sugar and salt? On the one hand, citizens of both Nicaragua and the U.S. face the challenge of “food sovereignty,” the ability for a community to determine sustainable relationships to the production of food. But let’s face it: this challenge is much easier to address with resources than without them, and seeing hungry children spending scarce resources on processed, packaged snacks brought this point home.

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Micro-consignment. My final observation concerns the commodification of networks through social marketing. Community Enterprise Solutions (CES) is an NGO whose Nicaraguan field director (Tim) visited Troilo at our invitation. CES’s development model is an extension of microfinance whereby the NGO provides business training and fronts would-be entrepreneurs inventory of socially beneficial products. If the entrepreneur sells the reading glasses or the solar lamp or the safer cooking stove, she keeps a fraction of the purchase priced and pays CES for the products sold. If no sales occur, the entrepreneur can return the inventory and owe nothing. Unlike the typical microfinance arrangement, if the villager receiving the training fails to generate sales, she doesn’t owe anything more than the original, unsold inventory. Greg van Kirk, founder of CES, calls the model “micro-consignment,” and though I was initially a little skeptical, the women of Troilo were gaga for the idea. To a one, they loved the socially beneficial products that Tim described and wanted to both buy them for their own use and sell them to their neighbors. Even the usually reserved leader of Troilo was excited about micro-consignment. As I thought about social marketing programs in the U.S., from Tupperware to Avon to Herbalife, I also realized why this approach might reasonably appeal to the villagers of Troilo. While in the U.S., we worry about people commodifying too much social capital, in Troilo’s more traditional setting, villagers have more social capital than they need, with few opportunities to exploit it.

All told, spending a week in Troilo challenged some of my assumptions and reinforced others. Development is a lumpy, painful process that necessarily creates winners and losers. In the long run, the sum total of the businesses we helped will only provide small amounts of additional income to the struggling villagers of Troilo. But if these advantages cumulate, as they should, then over time, benefits should accrue to future members of the community, in turn creating greater opportunities for subsequent “business consultants” to help them exploit.

 

DavidKirshDr. David Kirsch is Associate Professor of Management and Entrepreneurship in the M&O Department at the University of Maryland’s Robert H. Smith School of Business. Dr. Kirsch is a friend and ally of CSVC and recently advised a team of MBA students enrolled in the Social Venture Consulting Practicum. Dr. Kirsch was also featured in the recent CSVC Winter newsletter.

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Hult Prize Competition: Competing In Global Social Entrepreneurship

March 11th, 2013 by under Social Impact, Social Value. No Comments.

Photo courtesy of Jessica Galimore

Photo courtesy of Jessica Galimore

Smith students Blake Carlton (1st Year MBA/MPP), Jessica Galimore (1st Year MBA), Masha Saunders (1st Year MBA) and Will Swaim (2nd Year MBA/MPP) ventured to Boston to represent the Smith School of Business at the regional finals of this year’s Hult Prize Competition over the weekend of March 1, 2013.

The Hult Prize is an annual international social entrepreneurship competition. It is centered around solving an issue facing impoverished populations around the globe and is supported by a partnership between The Clinton Global Initiative and The Hult Business School. The competition was an opportunity for the team and the Smith community to participate in one of the world’s largest student movements for social impact while contributing to a current global social challenge.

This year’s social challenge to be addressed throughout the competition is world hunger. Hundreds of business schools from all over the world applied to participate during the competition’s entry round. Based on their one-page proposal, the Smith team was selected as a regional finalist at the Boston location. Other regional locations included Dubai, London, Shanghai and San Francisco. The team that ultimately wins the multi-round competition will be awarded $1M to fund their project proposal.

Team Smith was pleased to discover that their initial proposal, focused mainly on private-public partnerships, positioned them well to address the case they faced at the regional competition. The case study, released to participants only after submitting their initial proposal, can be found here: http://www.hultprize.org/en/prize-2013/case-study/. For a list of team Smith’s competitors, please click here: http://www.hultprize.org/en/prize-2013/regional-finalists/.

Upon arriving in Boston, team Smith and the other regional finalists participated in Q&A sessions focused on the format of the competition and judges’ rubric, food security, and social entrepreneurship. After devoting the remainder of the evening and early hours of the following day to perfecting their business model and presentation, team Maryland presented their business plan before four judges.

After their assigned presentation time, team Smith took a break of just a few hours while they waited for the other eleven teams presenting in room “Atlantic” to finish their presentations. In the early evening, all contestants reconvened at the Museum of Science, located within walking distance of the Hult Business School. There, four teams were announced as the winners. From team Smith’s group, Harvard was declared the winner.

Each of the four selected teams did a second presentation of their business plan, this time in front of all sixteen judges. After all teams presented, the judges left the room for deliberation. The audience was entertained by the Berkeley College a cappella group Pitch Slapped until the judges returned. At that time, McGill University, located in Montreal, Canada was declared the winner. Their idea, involving the mass production of crickets for consumption, was certainly unique. Many applauded their willingness to present an idea that could have easily been considered too far-fetched. They will compete against the other regional finalists in New York City in September.

Despite their loss, the Smith team was excited by the opportunity to compete and represent the values of sustainability and social entrepreneurship, espoused by The Smith School of Business. They were particularly excited to utilize the business principles they learned throughout their first year in the MBA program to develop a business plan addressing a social issue. Their participation in this competition served to both build their own skills and to promote the Smith brand. They were all pleased with their experience in Boston. Not only were they proud of their business plan and presentation, but they were thrilled with the educational, networking and fun experience they shared.

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Can Organizations That Do Good Teach Us Something About Good Business?

December 10th, 2012 by under Leadership, Social Impact, Social Value. No Comments.

Written by: Drew Bewick
Managing Director, Tree House Ventures / CSVC Social Entrepreneur in Residence

The Washington region has a growing number of resources and networking events for would-be entrepreneurs, innovators, business professionals, and future leaders. Advice is particularly valuable when developing a business plan, attracting capital, or expanding services into new markets. One leadership challenge, however, often underestimated, but very important to achieving competitive advantage in a knowledge economy involves improving workforce engagement and motivation, especially to sustain creativity, performance, and problem-solving capacity to think “outside-the-box”.

Engagement & Motivation

Contrary to conventional wisdom, recent social science research, including research by the Federal Reserve Bank of Boston (FRB) in 2005, suggests traditional incentives – such as goals set by managers or rewards in the form of monetary bonuses – actually dull employee creativity and problem-solving and are not effective motivators alone for newer 21st century tasks often associated with knowledge work.

Dan Pink, whose 2009 Ted Global-London presentation about the “Puzzle of Motivation” is captured on YouTube, suggests a key driver of motivation of individuals engaged in knowledge work may be influenced more on the basis of allowing individuals to develop more autonomy, mastery, and purpose, instead of assigning goals and rewards. Social enterprises, organizations that borrow and adapt the logic of the private sector to address issues that have traditionally been beyond its scope, excel at achieving higher levels of workforce engagement and motivation and can provide valuable insights about workforce engagement and motivation in the broader context of improving local business productivity and competitiveness. Allowing individuals to find personal meaning and purpose in the work they do, especially in tasks that require creativity, problem solving, and thinking, can be a winning strategy.

Successful Local Social Enterprises

ACTion Alexandria, for example, is Alexandria’s online platform for community change. It connects neighbors and local organizations to share ideas, create action and make an impact. Launched in February 2011, ACTion Alexandria has already made a measurable impact on the community in-part because it enables volunteers and collaborators to find personal meaning in supporting their community. Highlights achieved in just 18 months:

•    $559,654 raised in community investment (counting playground grants & online fundraising);
•    2,542 community members = 1.82% participation rate by total population;
•    3,920 items donated for Alexandria nonprofits (medicine, books, food, diapers, etc.);
•    437 actions taken on the site by Alexandria citizens to support local nonprofits;
•    229 ideas submitted by citizens in idea challenges; and
•    6,393 votes cast during community idea challenges by approximately 2,000 people.

Building-To-Teach is a program of the Alexandria Seaport Foundation with a mission to create a more competent and competitive American workforce by training instructors and engaging volunteers to help students learn and use math through hands-on building projects and exercises. Launched in March 2012, the growth of the Building-To-Teach (B2T) instructor training program in the first 6 months exceeded expectations:

Online Training
•    145 instructors involved in training
•    86 organizations participating
•    28 states, DC + Chile and Canada represented

In-Person Training
•    60 instructors trained
•    35 organizations participating
•    15 states represented
•    1,500 (est.) students served within 12 month

Empowered Women International, established in 2002 with offices in Alexandria and Rockville, provides a 3-month intensive Entrepreneur Training for Success (ETS) course along with ongoing business coaching, networking and support services that have trained hundreds of disadvantaged women to launch new jobs and small businesses. EWI’s impact, made possible by the motivation and engagement of its volunteers, is noteworthy:

•    58% of graduates increased their production level after completing ETS;
•    34% plan to hire additional employees next year;
•    49% of graduates increased their personal incomes after completing ETS, on average between
$20,000-$29,000;
•    90% of graduates volunteered with a local organization;
•    83% donated money or goods to charitable organizations; and
•    Unemployment among EWI clients decreased by 34%

Underpinning the success of these local social enterprises doing good are highly engaged and motivated workforces designed deliberately for the purpose of sustaining creativity and innovation to make a difference in people’s lives. In today’s knowledge economy fueled by out-of-the- box thinking and innovation, a highly engaged and motivated workforce is becoming a necessary ingredient to improve business productivity and competitiveness. For those who seek to improve business performance and productivity, local social enterprises might have as much to teach us about the importance of motivation and engagement as doing good.

 

Drew Bewick is a Social Entrepreneur-In-Residence at the Center for Social Value Creation within the Smith School of Business at the University of Maryland. He brings more than 20 years of experience involving the most challenging issues where technology and innovation intersect. As Managing Director of Tree House Ventures, LLC, Drew serves as an advisor to multiple companies and non-profit organizations assisting visionary innovators launch successful ventures by discovering opportunities and using entrepreneurial principles to organize, launch, and manage a successful venture to make an impact.  For more information on how to take your socially driven idea to reality, e-mail csvc@rhsmith.umd.edu.

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Are you ready to Change The World? (Part 2)

December 1st, 2012 by under International, Leadership, Social Impact, Social Value, Social Venture Consulting. No Comments.

Written By Amadou Cisse

Are you ready to change the world?
We still are.

Joanna and I returned from Ibarra (in northern Ecuador) just a couple of weeks ago, and while there witnessed firsthand how the Institute for Self-Reliant Agriculture (SRA) is making a difference in the lives of others.  Thankfully, Joanna spoke Spanish fluently and was familiar with the Andean culture, which made it really easy on us. The staff in Ecuador was fantastic and so welcoming that we never felt out of place. We accomplished everything we set out to do, and more.

One of our first stops was the SRA demonstration farm. The farm is located within 26-hectares (64 acres) of land set aside by the local university, and it’s where the SRA hosts local families to help them get a better sense of the 19-month program. During the program participants learn small-scale agricultural techniques that enable them to provide sufficient and balanced nutrition to their families. The farm was clearly well maintained and more productive than the rest of the land under the care of the university.

After the farm visit we headed to the office to talk program strategy and opportunity. The SRA has a unique model that includes agro-pastoral activities in addition to basic hygiene and nutrition lessons, which is key for communities with low education levels.  They have partnered with a university (Universidad Technical del Norte) to obtain free land, labor, and research, and also have a dedicated, knowledgeable staff that cares tremendously about the families they educate.

We focused on understanding recruitment efforts and program retention, and were surprised to learn that a total investment of only $1,500 is needed for a family to become self-sufficient for the rest of its life! We also devoted our time to the development of a marketing plan, with emphasis on the telling of unique and appealing stories that would attract individual donors.

Once we completed our assignment, we had the pleasure of touring some of the best parts of Ibarra.  I have to admit, I had no clue what Ecuador was like since it was my first visit in South America, but I fell in love with the country and the people.  I am from the Sahel and a meat eater de facto, so I really enjoyed all the parillas (local BBQ).  We learned about the Quichua culture as well as the Caranquis, all descendants of the fearless Inca warriors.  We also got to visit Cayambe (the mountain that eats clouds) and its volcanic lake.  We even stopped by Otacache, the capital of leather, to see some incredible work from the local artists.  A last, we got to straddle the elusive equator line and were very close from the center of the world, at least from a GPS perspective with coordinates 0°0’0”.

Joanna and Amadou straddling the equator line.

Overall, I was very impressed by the government investment in infrastructures to allow the economy to prosper.  We were too far from Guayaquil and Esmeralda (two other major cities) for a visit, but I heard they attract a lot of our compatriots for retirement. Quito, the capital city, was bustling with people and everywhere we went we saw new construction.  Miguel, the animal specialist at SRA, invited us to his parents’ house for lunch and we had a wonderful time.  He then proceeded to give us a tour of Quito where he grew up.

Honestly, Joanna and I could have stayed there a semester and learned a lot more but duty and family called us back to the good old US of A.  Now, we are putting the final touches on our marketing plan and will present it to the client by the end of December.  We will always cherish our time in Ecuador and be forever grateful for the opportunity to change the world. We came back with fond memories of great people and with more resolution than ever to continue to work in improving and changing the lives of others.

 

Amadou Cisse, originally from Mali, is an EMBA candidate currently working as a contractor in the federal government providing program management services.  He has an environmental engineering background and has dedicated his career to programs focused on strategic planning and maintaining community sustainability.  Amadou’s long-term goal is to become one of the world leaders in sustainability and development by implementing sound natural resources management and capacity building to address urban and rural poverty.

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Social Finance Education: Taking Matters into Our Own Hands

November 29th, 2012 by under Impact Investing, Social Impact, Social Value. 1 Comment.

Written By Ryan Steinbach

In my last post I discussed whether social finance should be included in the classroom. I asked this question to Professor Sue White, undergraduate finance professor at University of Maryland Smith School of Business. She explained that there is already one social finance course offered at the graduate level. But why just one? Student demand. If and when demand increases, so too will the social finance course offerings.

I would argue that there is more to it than that. The way a school markets and positions its courses affects the interests of its students. Perhaps if the university took a more proactive step in developing social impact courses, it would attract more student interest, especially at the graduate level. In fact, a growing number of universities across the country are doing just that by expanding offerings in social impact. For the Universities that haven’t, perhaps the pressures of budget cuts and a tough job market are limiting their ability to take the first step off the beaten path. In this case, I think students will be the ones to drive forward the adoption of social finance in college curriculums.

Building a new college program may seem overwhelming, but a lot is already being done. Students all over the country are taking the initiative to pursue their passion for social finance on campus. Here are just a few examples:

Responsible Endowment Initiatives: while students generally have little net worth to their name, many have realized their unique position to leverage a vast sum of capital – college endowments. Through collaborative committees representing students, faculty, and community members, college endowments are being screened for unethical investments. In some cases, portions of the endowment have been allocated solely to socially responsible or community efforts.

An inspiring example of this is Georgetown University’s SIPS fund. Over the last 2 years the Georgetown University Student’s Association (GUSA) has worked to repurpose Georgetown’s student activities endowment into the Social Innovation and Public Service (SIPS) Fund. GUSA envisioned using the money to support innovative student ideas that would do good in the community and around the world by providing them with grants and/or loans. After a pilot project over the last school year, $1.25 million from the endowment was allocated to the SIPS fund and formal operations began July 25th 2012. For those of you interested in learning more about responsible endowment initiatives and how to start your own, check out the Responsible Endowments Coalition.

Microfinance and SRI Clubs: students at schools all over the country are also taking a more direct approach and starting clubs around microfinance and socially responsible investing. These pioneers see a need and aren’t willing to wait for a full time job to do something about it. Cornell’s Microfinance club is one such example. They raise money through donations and events to provide small loans through partner organizations. They also strive to educate the Cornell community by holding events on campus.

Another example is the socially responsible investment club (SRIC) at University of Pittsburgh. The SRIC was created in 2007 to teach students about investing and prove the SRI model. Students wrote an investment policy and standards, and then selected 30 companies from the S&P 500 for their portfolio. After years of outperforming S&P 500 by 0.5 points to 1.5 points each quarter, they aren’t just be proving the viability of investing in an SRI portfolio anymore; they’re actually doing it. The university has allocated $100,000 for the club to actually invest in their portfolio this fall.  Want to learn more about microfinance and SRI clubs across the country and how to start your own? Check out MFI connect.

You can also engage right here at Smith by participating in the Stanford University weekly Simulcast Series, brought to you by the Smith MBA Net Impact chapter and the Emerging Markets Club. Next week’s simulcast is the last of the series for the semester, but don’t worry – this is an annual engagement and will begin again next fall, thanks to the ongoing support of the Center for Social Value Creation.

What I hope you take away from these examples is that college students are having a tangible, positive impact through social finance, and their respective universities are noticing. Through a combination of proof-of-concept and proof-of-demand, students are leading their universities to develop and sponsor more social finance events and initiatives. This is the first step to bringing social finance into our classrooms, but we need students at more universities to get involved. Does a responsible endowment committee screen your schools endowment portfolio? Is there a microfinance or SRI student club? If not, I hope the examples above inspire you to take matters into your own hands.

 

Ryan is in his last year of undergrad business school at the University of Maryland-College Park, majoring in Marketing and Management. He is also the online manager of UnSectored and a social media intern at the Newberry Group. Formally, Ryan worked as a New Media intern for Calvert Foundation. When not immersed in social media, Ryan explores and writes about social innovation and his millennial generation. If he were to ever pursue a career (wait, what’s that?), it’d be in writing, brand management, and/or digital marketing. Twitter handle: @R_Steinbach

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A New Line of Social Enterprise

November 18th, 2012 by under International, Leadership, Social Value. 1 Comment.

Written By Sonaly Patel (Smith Alum ’12)

I had a recent realization – many emerging social enterprises are coming out with similar products and services designed to create the same impact as their preceding counterparts.  Many of these new “innovations” are competing only to add marginal benefit.  This insight makes me stop and question whether creating social enterprise after social enterprise with similar value propositions is the best way to create social impact.  Perhaps what we need is not an influx of social enterprises engaged in similar work, but new social enterprises with an alternative focus that provides a boost to those that already have stable footing.

The idea already exists in the for-profit business world.  Elastic Inc., a company featured in the Co-Exist article “Changing How We Sell Things, To Make Companies More Successful,” is one of many companies that has found market opportunities through this principle.  The company provides a holistic option for other companies to outsource a portion of their sales function when their growth plateaus.  Essentially, Elastic Inc. thrives off of filling in the gaps in existing companies.

A similar orientation is needed in the social enterprise space where a portion of new social enterprises should focus less on competing along similar offerings and refocus on boosting the success of existing social enterprises.  Riders for Health is one of the few social enterprises that has adopted this perspective.  The company provides logistics and transportation solutions to organizations focused on improving healthcare in Africa.  Instead of simply creating incremental change by entering as another healthcare organization, Riders for Health has a multiplying effect that creates widespread impact by the simple addition of its service.  Riders for Health’s story is just one example of the potential social impact this refocused orientation can create.

Social enterprises solving unaddressed social problems are indispensible, but social enterprises like Riders for Health are an essential support in helping them create widespread social impact and are largely missing in this space.  Think about it and maybe you will discover that your next social enterprise opportunity lies along this new proliferating perspective.

 

Sonaly Patel is a recent graduate of the R.H. Smith School of Business. Through her involvement with the Center for Social Value Creation, she worked as a strategy consultant for a livelihoods initiative for cacao producing communities in Ecuador’s rainforests and a communications consultant for Liberty’s Promise, a local nonprofit serving immigrant youth.  At Maryland, she was a founding member of Students Ending Slavery, a leader in the AshokaU campus initiative, and a proud resident of Language House Spanish Cluster.  During her undergraduate years, she also interned at the Grassroots Business Fund in DC and studied abroad in Barcelona, Spain. Upon graduation, Sonaly moved to India to live and work in Mumbai through the IDEX Fellowship in Social Enterprise.  She will be in India until May 2013.

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Are you ready to Change The World? (Part 1)

November 5th, 2012 by under Career, International, Social Venture Consulting. No Comments.

By: Amadou Cisse, EMBA

Are you ready to change the world?
We are.

As if I did not have enough to do in a very challenging yet rewarding Executive MBA Program at Smith, I volunteered for an opportunity of lifetime.  The Center for Social Value Creation presented me a chance few students get while in school: making a difference in the life of many.

Entering its seventh year, the ChangeTheWorld.org Social Venture Consulting program pairs business students with nonprofit organizations.  The students, including yours truly, work over several weeks to provide advice in areas such as finance, marketing, operations, and strategic planning.  The projects feature opportunities to assist with issues ranging from green business marketing in Bethesda, MD to agriculture in Ecuador.  Since I have a great interest for the latter, I submitted my application and was selected on the team with Adrian and Joanna, two Part-Time MBA students.

Image care of the Institute for Sustainable Agriculture

We will assist The Institute for Self-Reliant Agriculture (SRA), an international nonprofit organization that teaches families small-scale agricultural techniques to provide sufficient and balanced nutrition to their families.  The organization is expanding, and with its sole emphasis on major gifts from large donors, SRA needs assistance in fundraising and marketing for the next five years.

As part of our discovery process Joanna and I traveled to Ibarra (in northern Ecuador) from October 25th to 29th to fine tune the messaging of the story of SRA, with the goal of making it more appealing to potential donors. We’ll be working on crafting a story of healthier children and families, university and local government support, and the difference SRA makes in the lives of others. What kind of impactful account will we witness? Stay tuned for our progress…

 

Amadou Cisse, originally from Mali, is an EMBA candidate currently working as a contractor in the federal government providing program management services.  He has an environmental engineering background and has dedicated his career to programs focused on strategic planning and maintaining community sustainability.  Amadou’s long-term goal is to become one of the world leaders in sustainability and development by implementing sound natural resources management and capacity building to address urban and rural poverty.

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Does Social Finance Have a Place in the Classroom?

October 20th, 2012 by under Career, Social Value. 2 Comments.

Written by Ryan Steinbach

Two weeks ago I took this question for granted: should social finance be incorporated into the business curriculum?  To me the answer was yes! Social finance is an emerging approach to managing money that delivers a social and/or environmental return in addition to an economic return. Why wouldn’t we include such an offering in the curriculum? After spending two weeks talking with professors and industry professionals as to why social finance isn’t more prominent in college education, I’ve come up against some serious reality checks. Here’s what I learned:

The majority isn’t convinced: When you get as caught up in the hype surrounding social finance like I have, you tend to forget it actually represents a tiny piece of the total finance market. The most optimistic reports estimate the near-term market potential of social finance at $650 billion which is 2.5% of the $26 trillion investment management industry in the U.S.

When I asked the Director of the Masters Program in Finance here at the Smith School, Michael Faulkender, if social finance is a topic of discussion in graduate level classes, he explained that it’s brought up anecdotally when discussing unique investor needs, but the simple fact is that an understanding of financial markets based on maximizing long-term shareholder value is what is required for an overwhelming majority of finance.

They aren’t hiring us:  Last week I attended an impact investing panel with representatives of some of the biggest names in social finance, thinking I would find a nice counter argument in favor of social finance in college education. Wrong. When asked what job opportunities there were in social finance for future graduates, the panelists politely explained that they were looking for experienced deal makers with strong affiliations to target emerging economies. Basically, there are no formal entry level positions.

Well this sucks! Not only is social finance a nonfactor in most situations, but the places where it is a factor aren’t even hiring college students. So how can we possibly justify social finance in college education?

Millennials are convinced: While today’s investors expect companies to maximize financial return, the millennial generation is proving to be far more socially conscious. As the percent of total investments shifts toward the millennial generation, the expectations of firms might also shift. Even Professor Faulkender admitted that the success of companies with a double-bottom-line or triple-bottom-line is conditional on investors having a duel objective or a triple objective. Social finance is small but there is evidence it’s growing rapidly.

We’re more hirable: I can’t speak for everyone, but it seems the traditional corporate 9-to-5 job is not what college students have in mind. More and more are fascinated by jobs in hybrid business models, start ups, and social ventures. While these opportunities are exciting and different, most are small scale operations constrained by traditional funding. Alternatives for seed, scaling, and growth capital are needed. Some options already exist, but they are hard to find and current employees often don’t have the time or understanding to pursue them. I don’t know about you, but that sounds like a huge opportunity to get your foot in the door to me.

Understanding the options and models in social finance won’t just make you more appealing to start-ups and social ventures. Everyone needs money, and growing interest in social financing could fundamentally shift how companies are financed in the future. I’m not saying that one day the stock market will be based on hugs and smiles, but I do think that social financing options will become a critical consideration for any company looking to grow or develop.

While we shouldn’t get ahead of ourselves, it is important that colleges recognize this space for what it is – an opportunity. But is that opportunity still too far in the future to be spending tuition dollars on? What do you think?

 

Ryan is in his last year of undergrad business school at the University of Maryland-College Park, majoring in Marketing and Management. He is also the online manager of UnSectored and a social media intern at the Newberry Group. Formally, Ryan worked as a New Media intern for Calvert Foundation. When not immersed in social media, Ryan explores and writes about social innovation and his millennial generation. If he were to ever pursue a career (wait, what’s that?), it’d be in writing, brand management, and/or digital marketing. Twitter handle: @R_Steinbach

 

 

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