Rob Wilson, UK Director of Ashoka, explains why the private sector should be working with social entrepreneurs to learn how to make a positive difference, while still achieving their commercial goals.
Google is only the most recent firm to be criticised for not paying enough tax. This story reminds us that companies are now expected (by politicians, customers and, above all, employees) to demonstrate their social value to the societies in which they operate. Merely creating jobs and making profits – which may be banked in another country – is no longer enough.
Private sector executives often struggle to understand how to respond to these demands, given that they are complying with the law and (in their view) can hardly be expected to pay more than legally required. But it comes down to a wider issue of balancing their right to make money with their responsibility towards those they are making it from.
New ways of doing business
Finding ways to demonstrate that responsibility goes well beyond the issue of tax – it requires that firms think about new ways of doing business. The organisation that I run in the UK, Ashoka, has some ideas about how they might go about doing that.
For 35 years Ashoka has pioneered the concept of social entrepreneurs – individuals innovating to solve societal problems. Our founder, Bill Drayton, coined the term and began a global search for extraordinary people dedicated to changing the world. To date, we have elected 3,500 Ashoka fellows in 88 countries, including two Nobel Peace Prize winners, and we calculate that half of our fellows have changed national laws and policies within three years of their election.
But in recent years we have gone further, trying to encourage schools and colleges around the world to teach what we call “changemaker values”: the ability to thrive as an individual and make a positive contribution to society in an increasingly fast moving world.
We recognise that fundamental skills such as empathy, entrepreneurship, teamwork and leadership are as essential in today’s world as secondary school level literacy and numeracy. If there was more empathy in the boardroom our society might look very different.
We have therefore deepened our relationship with business. Ashoka has never shied away from the private sector – indeed many of our fellows have embraced the market to make changes to their societies, often developing commercial businesses to support their ‘not for profit’ endeavors. Over the years we have also been supported by a host of extraordinary companies and successful individuals.
But now we are trying to help build a world in which businesses grow because they have placed social impact at their core – from the supply chain to their interactions with consumers. We believe that commercial companies can facilitate positive change in areas beyond the reach of public policy makers and the third sector, and that (just as importantly) they can make money from doing so. We see a virtuous circle in which firms are financially rewarded for doing the right thing by society.
As Paul Polman, chief executive of Unilever and a longtime supporter of Ashoka, puts it: “If we focus our company on improving the lives of the world’s citizens and come up with genuine sustainable solutions, we are more in sync with consumers and society, and ultimately this will result in good shareholder returns”.
Many of Unilever’s household products require consumers to have clean running water, or freezers and reliable electricity at home for their ice cream. It is therefore in the interests of Unilever to help consumers access these essential services because ultimately they will sell more products.
Several partners over the years have helped us build a widening network of supportive businesses, including the law firm Hogan Lovell, and we have now agreed a three-year, wide-ranging financial and pro bono package of support with the communications company freuds. They are explicitly backing us because they believe that all organisations need a purpose beyond profit, and that enlightened self-interest means that helping to change society for the better is the route to commercial success.
Freuds is supporting a number of our fellows. Over the past few weeks, they have helped Tristram Stuart – whose organisation Feedback campaigns to end food waste in the system – to launch his new beer brand, Toast. This is rather unusual beer because it’s brewed from wasted bread collected from bakeries and sandwich firms. Toast has the backing of Jamie Oliver and I can personally attest that the product passes the taste test. However, Tristram understands that if he’s going to make fundamental changes to the system he not only needs a great idea, but also a commercially viable concept. Maximising publicity is also vital.
Learning from social entrepreneurs
We believe that organisations we work with have learnt from their partnership with social entrepreneurs. Companies need to become more innovative to survive as the commercial pace of change accelerates. Social entrepreneurs can help them learn these skills.
Of course, there are limitations to all this. Some firms are still more self-interested than enlightened. Others would like to make changes but the short-term demands of the stock market limit their freedom for manoeuvre. But the basic principle with which we approach the private sector – that firms are now expected to demonstrate their social value to the societies in which they operate – seems more obvious by the day.
Social entrepreneurs are well placed to help companies adapt to their new world. Those that fail to do so will not thrive (or even survive) in the long term.
Rob Wilson is the director of Ashoka UK. Prior to joining Ashoka, Rob founded READ International – a Tanzanian-based, university student-volunteer-led organisation which to date has provided over 1.5 million books to schools and created close to 100 school libraries.