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Understanding Our Social Impact: 25 Years of Social Enterprise At UNDERSTANDING OUR SOCIAL IMPACT 25 YEARS OF SOCIAL ENTERPRISE AT HBS INSPIRING LEADERSHIP FOR GOOD CHANGE IS OUR BUSINESS IDEAS THAT HAVE SHAPED THE FIELD PAGE 2 NETWORKS THAT CHANGE THE WORLD PAGE 22 OUR FOUNDATION AND THE FUTURE PAGE 38 INDEXING AT 25 PAGE 52 THE IDEAS SEEMED RADICAL. The Social Enterprise Initiative started as an experiment at HBS. The dean told a donor to wait two years before he would accept a $10 million gift. As a reflection of the norms at that time, junior faculty members were advised that their research interests might amount to “career suicide.” HBS stepped into the void. Today, we see how those actions helped shape the practice of managers seeking change for good across the globe. It is the courage and vision of these pioneers that helps us navigate our own path forward in a world in need of leadership. OUR JOURNEY 25 YEARS OF SEI 1991 1993 1995 2000 2003 2006 2011 2014 2015 2018 John C. Whitehead (MBA The Social Enterprise Initiative The Strategic Perspectives Student leaders hold the HBS commences the MBA The Business at the Base of The Forum on Social Impact The Business for Social The new Public Developed out of SEI’s 1947) writes to Dean John H. (SEI) launches under the in Nonprofit Management first annual Social Enterprise elective on Entrepreneurship the Pyramid MBA elective Investing pursues an action Impact Forum convenes Entrepreneurship MBA Impact CoLab research McArthur encouraging HBS to leadership of faculty cochairs (SPNM) executive education Conference (SECON). in Education Reform and launches as does a custom research agenda, hosting 100+ practitioners and elective addresses issues project, the Investing start a nonprofit management James E. Austin and V. Kasturi program is offered following Within a year, SEI initiates the Public Education executive education program multiple research convenings academics focused on the including “flexibility in the for Impact MBA elective program. He offers a founding “Kash” Rangan and director the first iteration of the a track within the student Leadership Project (PELP) for leaders in microfinance. on impact investing and global role of business in face of bureaucracy” and examines the spectrum gift of $10 million. Bob Burakoff. Entrepreneurship in the Social New Venture Competition. with the Harvard Graduate venture philanthropy. creating social change. “speed amidst uncertainty.” from market returns to Sector MBA elective course. School of Education. concessionary approaches. Today, it’s truly a two-way street—businesses learn as much from leading mission-driven organizations as nonprofits do from leading business models. As explored in a March–April 2019 Harvard Business Review article by Professor Julie Battilana, et al., dual-purpose companies THE INTELLECTUAL AGENDA provide insight into what it takes to balance the two. THE DUAL-PURPOSE PLAYBOOK IDEAS THAT HAVE SHAPEDThe formation of the Social Enterprise Initiative’s intellectual agenda over its 25-year history has been informed by, has helped shape, and has adapted to the changing landscape surrounding social impact and innovation. The intellectual ideas and frameworks have been developed, tested, and refined through interactions with practitioners. This interconnectedness has enabled the spread of ideas to advance the way managers understand, think about, and respond to the challenges THE FIELD and opportunities that confront them. ARAVIND EYE HOSPITAL From their earliest research endeavors, Social Enterprise Initiative (SEI) faculty members have focused on understanding what it takes to achieve meaningful social change across different business models, legal structures, and funding sources. One of SEI’s first cases, “Aravind Eye Hospital, Madurai, India: In Service for Sight,” by Professor V. Kasturi “Kash” Rangan, has sold nearly 100,000 copies. 2 3 From the outset, the faculty and administrative team established a broad intellectual focus. Understanding the unique aspects of management INCLUSIVE BUSINESS and leadership within the nonprofit sector was simply a starting point—one that would enable an exchange of knowledge across sectors, embody a BUSINESS FOR mission-driven focus, and provide a global reach. HYBRID SOCIAL IMPACT ORGANIZATIONS CORPORATE CITIZENSHIP IMPACT INVESTING NONPROFIT BUSINESS AT THE BASE OF THE PYRAMID BUSINESS LEADERSHIP IN THE STRATEGY AND SOCIAL SECTOR GOVERNANCE INVESTING MICROFINANCE VENTURE PHILANTHROPY FOR IMPACT SOCIAL INNOVATION SOCIAL ENTREPRENEURSHIP AND SYSTEMS CHANGE PUBLIC K-12 EDUCATION ENTREPRENEURSHIP 4 SECTION 1 IDEAS THAT HAVE SHAPED THE FIELD 5 230,000+ COPIES OF SEMINAL SNAPSHOT: PUBLICATIONS SOLD WORLDWIDE NAACP: THE EVOLUTION OF A STRATEGIC SHIFT UNDERSTANDING THE SECTOR Identify the Nonprofit, 1995, In 1997, SEI embarked on a shared journey with the Herzlinger RE/Hilgenkamp RK NAACP—one that would change both organizations. Within the NAACP case study and collaboration, the team Lofty Missions, Down-to-Earth Plans, explored nonprofit governance issues inherent in leading 2004, Rangan VK through crisis. From there, an eight-year relationship Note on the Nonprofit Sector, 2008, ensued during which SEI faculty co-led the NAACP Grossman AS/Greckol-Herlich N annual board retreat on campus. Professor Jim Austin reflected, “The partnership strengthened the NAACP’s governance capacity and deepened our understanding of RESULTS-ORIENTED NONPROFIT the complexities of addressing civil rights challenges.” MANAGEMENT Jumpstart, 2001, Grossman AS/ STRATEGY AND McCaffrey A Nature Conservancy, 2003, STRATEGIC FRAMEWORKS Grossman AS/Wei-Skillern J/Lieb KJ GOVERNANCE Harlem Children’s Zone: Driving WITH INCREASING LEVELS OF MANAGERIAL SOPHISTICATION Performance with Measurement and Prior to the Social Enterprise Initiative MISSION-DRIVEN FOCUS AMONG NONPROFIT EXECUTIVES, BOARD MEMBERS, AND Evaluation, 2003, Grossman AS/ FUNDERS, MANAGERIAL FRAMEWORKS HAVE ENABLED LEADERS Curran DF (SEI), a handful of faculty members AS A CASE WRITER, PROFESSOR KASH TO WORK WITHIN AND BEYOND THEIR ORGANIZATIONS TO conducted research on the nonprofit RANGAN SPENT MANY HOURS WITH DR. Playgrounds and Performance: Results BRING PEOPLE ALONG, GUIDE STRATEGIC DECISION-MAKING, Management at KaBOOM!, 2005, sector—primarily focused on GOVINDAPPA VENKATASWAMY, THE FOUNDER AND RESPOND TO EVER CHANGING ENVIRONMENTS. AMONG Leonard HB/Epstein MJ/Winig L OF ARAVIND EYE HOSPITAL. “IT WAS health care, religious, and educational THE TOOLS THAT FACULTY HAVE INTRODUCED TO THE MORE THROUGH MY LATE NIGHT CONVERSATIONS institutions. Some notable highlights THAN 7,000 NONPROFIT LEADERS AND 3,400 MBA STUDENTS WITH DR. V. THAT I BEGAN TO APPRECIATE STRATEGY, GOVERNANCE, served as precursors to the future WHO HAVE TAKEN SEI NONPROFIT-FOCUSED COURSES ARE THE THE IMPORTANCE OF MISSION IN ENABLING AND GROWTH FOUR-STEP STRATEGY PROCESS, THE VALUE-CAPACITY-SUPPORT development of SEI’s first intellectual THIS ORGANIZATION TO ACHIEVE ITS GOALS,” Aravind Eye Hospital, Madurai, India: MODEL, AND THE NONPROFIT COHERENCE FRAMEWORK. pillar of focus: RANGAN REFLECTED. “THE CENTRALITY OF In Service for Sight, 1993, Rangan VK MISSION IS A LESSON THAT THEY TAUGHT United Way of America: Governance 1985: A young 1991: An assistant ME.” THIS INSIGHT WOULD HAVE A PROFOUND in the Nonprofit Sector, 1993, marketing professor professor teaching INFLUENCE ON SEI’S ONGOING AGENDA. Lorsch JW/Watson AH developed the case entrepreneurship Mt. Auburn Hospital, 1996, “Population Services wrote “Note on McFarlan FW/Elias J International: The Starting a Nonprofit Managing Multi-Site Nonprofits, Social Marketing Venture.” In 1994, 2001, Grossman AS/Rangan VK Project in Bangladesh.” Professor Greg Dees It would go on to developed SEI’s Strategic Planning at NFTE, 2002, sell nearly 34,000 first MBA elective, Grossman AS/Austin JE/Curran DF copies worldwide. Entrepreneurship A PERFORMANCE ORIENTATION Endeavor—Determining a Growth Later, Professor Kash in the Social Sector, Strategy, 2003, Sahlman WA/ Rangan would be a continuously THE ISSUES UNCOVERED THROUGH Roberts MJ tapped by Dean John evolving course that SNAPSHOT: CASE WRITING INCREASINGLY POINTED H. McArthur to help has been taught NONPROFIT GOVERNANCE Manchester Bidwell Corp., 2006, launch SEI. every year since. TOWARD THE COMPLEXITY OF MEASURING Heskett JL SOCIAL IMPACT, LEADING TO A BODY OF SEI attracted faculty members from the Dana Hall: Funding a Mission, 2006, Accounting & Management, Organizational WORK FOCUSED ON RESULTS-ORIENTED McFarlan FW/Leonard HB/Tritter M Once launched, SEI served as a Behavior, and Technology and Operations MANAGEMENT. AMONG THE CONCEPTS “magnet” to enable faculty members Management units to explore the arena of AND TOOLS DEVELOPED WERE THE SOCIAL nonprofit governance. Through decades of NEW MODELS AND MARKETS to focus on topics that had historically SECTOR BALANCED SCORECARD TO ANALYZE direct service, intellectual frameworks, and ApproTEC Kenya: Technologies to been deemed as beyond the scope of the teaching of thousands of nonprofit leaders, CAUSE-AND-EFFECT, “QUESTION ZERO” AS A TOOL TO ACHIEVE INTERNAL AGREEMENT Fight Poverty and Create Wealth, the work of a business school. Professor F. Warren McFarlan shaped the 2002, Rangan VK trajectory of numerous nonprofit organizations. WITHIN ONE’S ORGANIZATION, AND More than 25,000 copies of his nonprofit “AUDITABLE AND ASPIRATIONAL CLAIMS” Opportunity International: governance cases have been sold globally. AS A TOOL TO BUILD CONSENSUS AND Measurement and Mission, 2006, Leonard HB/Epstein
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