SOCIAL BUSINESS LAB
ESPM // SAO PAULO APRIL 23 & 24 // 2012
OVERVIEW
The idea of social business as defined by Nobel Peace Prize Laureate Prof. Muhammad Yunus is a growing movement globally. Within this movement, universities play a significant role to further spread the idea. But universities nowadays have more than an educational and research function. They play an active role in society as incubators for fresh and innovative ideas and many universities around the globe are already very active in the field of social business. In Brazil, ESPM in collaboration with The Grameen Creative Lab organized the first Social Business Lab on April 23rd and 24th 2012. This unique event took place at ESPM São Paulo bringing together students, academics, business professionals, representatives from NGO’s, and practitioners in order to explore social business, share perspectives and best practices, and develop concrete social business ideas.
This report will provide a summary of this inspiring event. We will share with you the great social business ideas, which have been developed during the workshops and will give more impressions from the Social Business Lab for all who have not been able to participate this time. We are looking forward to welcoming you to one of the upcoming Social Business Labs, which will take place in many different countries all around the world. Read it with joy! Your ESPM and GCL Team
// AGENDA // Monday, April 23rd 03.00 pm 04.30 pm 05.30 am 06.00 pm
Introduction to social business and Q&A Session Socials business best practices Brainstorming session on social problems Networking get-together
Tuesday, April 24th 09.00 am 10.30 am 04.30 pm 05.00 pm
Short wrap up & social business best practices Breakout session social business ideas I Presentation of results Wrap up and closing remarks
// WHAT IS YOUR WISH // // Every journey starts with a wish. At the beginning of the Social Business Lab participants had time to think about their wishes and to share them with the group //
YOUR WISH “Our wish is that people start thinking and acting less selfish, by helping each other in simple ways” ”Provide conditions to people so they can discuss their value and potential" ”We wish people take into consideration other aspects such as social, environmental development rather than only being concerned about making money” ”Respect diversity” ”More social and economic balance" ”We wish to make a difference in people’s lives" ”To help people in order to improve their lives in many ways"
”Less corruption, less indifference" ”More opportunities" ”Work on something that brings at the same time self realization and collective well being” ”To participate in social business" ”More bikes on the streets” ”Our wish is to have a positive impact on the Brazilian society by supporting women through education, professional opportunities, psychological support and decent health care"
YOUR WISH “Change in growth & development index to include social and environmental factors” ”A safe place for everyone" ”Change in the political and economical system" ”Increase opportunities for social inclusion" ”Love earth as our home” ”Stimulate an innovative educational system focused and based on peace, cooperation, creativity and social awareness" ”We wish to work daily in a job that really means something" ”Better education"
”Take active part in the social, economic and cultural transformation of Brazil" ”Open data for global solutions” ”Better distribution of basic resources" ”More engagement models for social change” Better use of public resources in order to provide more and equal opportunities to the entire population” ”Change the world"
// SOCIAL PROBLEMS // // During this brainstorming session, participants identified the most prevalent social problems in Brazil, Latin America and globally //
SOCIAL PROBLEMS
• Corruption
• Obsolete Educational System with low quality • Inadequate social & political structures to fight poverty with a long term view • Lack of access to healthy and affordable food • Lack of tolerance for different people • Gang violence • Lack of craftworks in rural areas -> Lack of employment opportunities lead to migration to urban areas • Addiction to crack and cocaine • Lack of access to adequate healthcare • Non-hygienic infrastructure creating health issues • Dilapidated urban areas -> bad environment for youngsters • Unsustainable use of natural resources and waste
// BREAKOUT SESSIONS // // During the breakout sessions, participants had time to develop and refine concrete social business ideas //
THE BREAKOUT SESSIONS 1) Social Business against Corruption
2) Social Business Center at ESPM
3) Holistic Social Business Movement of Caldas / Colombia
4) Open Topic – Your own Social Business Ideas
// 1 // SOCIAL BUSINESS AGAINST CORRUPTION //
New Pic? Better quality
// 1 // CORRUPTION
Social Problem Corruption is a wide and complex problem within our society. In Brazil the lack of punishment creates a feeling that if you are honest you are the only one not taking advantage. In Brazil corruption can be perceived not only in massive corruption scandals in the government but moreover in our day-to-day routine. It became a cultural and educational issue. You are almost considered dumb if you are totally honest.
At the same time society complains about governors. But each one who is complaining forgets that corruption has nothing to do with the size of corruption. One cannot complain about governors if on a daily basis he or she uses e.g. false student identification to pay half price for movie theaters or concerts. Brazil was graded in 2011 as number 73 over 182 countries within the Corruption Ranking developed by Transparency International, an NGO coalition that fights against worldwide corruption.
Social Business Idea S贸 de Sacanagem - eu vou ser honesto (Just to tease - I will be honest) S贸 de Sacanagem, Eu vou ser Honesto, is a social business that will impact our default thinking regarding corruption, attacking the mini-corruption we all do in our day-to-day routine. Transforming honesty in a fashion and cool behavior. The name of the company was inspired on a poem that the singer Ana Carolina pronounced during one of her concerts and recorded live for her CD with Seu Jorge. It says that she is really tired of all corruption cases and because of that, as revenge, she would become even more honest. Just to tease. The company will put together artists and models to create quotes and images. From that it will create fashion T-Shirts and a movement through social networks as facebook. The idea is to distribute just a few of those cool T-shirts for opinion makers and transform it in a desired piece to wear, but rare to find. (benchmarking = Rio eu amo, eu cuido.
// 1 // CORRUPTION
Social Business Idea After one year, after becoming really a ‘must’ for consumers and after having a proofed strong demand, the company will start to sell licensing of So de Sacanagem brand to fashion retailers in Brazil. Those brands will create their customized ‘re-lecture’ from the So de Sacanagem movement and will sell their creations to final consumer. Vision:
To be the movement which engages the most people in daily anti corruption practices in Brazil. To turn honesty behavior into fashion.
Goal:
Engage 2 million people (1% of the Brazilian population) in 1 year
Business Model 1
2
3
Customer Segments
Value Proposition
Channels
1.Has awareness but is not yet engaged 2.“Slack activists”
1.tools to connect this consumer to social movements against corruption 2.self expression
1.Partnership with retail brands 2.E-commerce
4
5
6
Customer Relationships
Revenue Streams
Cost Structures
1.Companies and retailers: “recycling credit” 2.Consumers: environmentally responsible alternative
1.product sales 2.income: license brand
1.Branding 2.People 3.Digital marketing 4.PR
// 2 // SOCIAL BUSINESS CENTER AT ESPM //
Social Business Center
// 2 // SOCIAL BUSINESS CENTER
The Idea and Vision & Mission Despite robust Brazilian economical growth over the last decades, Brazil has a large amount and variety of social issues. There is a lot of work to be done by the Brazilian government, NGOs, the private sector and civil associations already established. But as it happens in many parts of the globe, there is one part missing within the economical framework in Brazil: the introduction of social business as a “new� part of the economy, as a new career path and as a new type of enterprise.
Social Business Idea ESPM will create and develop the first Yunus Social Business Center in South America in order to be an important player in building this new concept within the Brazilian economy. ESPM will create a social business center focused on 3 areas: research, teaching and incubation. Besides the three areas, ESPM will dedicate time to promote social business among students and among business society in Brazil through events and start-ups competitions. The Social Business Center at ESPM will be financially sustainable itself, generating revenues from social business teaching programs and sponsorships. Vision:
The Social Business Center at ESPM as a self-sufficient business organization
Mission:
Be a renowned center of research, generation, articulation and dissemination of knowledge and practices, helping to create a culture of social business to contribute to poverty eradication
// 3 // HSBM – HEALTHCARE //
// 3 // BEM NASCER
Social Problem Brazil has a very high child mortality rate with an under five mortality rate of 21 per 1,000 live births in 2009 according to the United Nations Statistics Division. Brazil is ranked 89 of 196 countries regarding child mortality rates with a rate twice as high as countries like Argentina, Russia, Botswana, Uruguay, Costa Rica and Bosnia. The principal cause of such a high mortality rate among children is the lack or bad quality of pre natal care among low income women. Despite significant progress in the last two decades much more remains to be done. Although child mortality rates in south-eastern states such as Rio and SĂŁo Paulo decreased massively, child mortality rates remain high in the poor north and north-east of the country.
Social Business Idea Vision:
Reduce the amount of children born with chronicle diseases and health issues due to lack of pre natal care in low income communities.
Mission: Provide healthcare, education and prevention for mothers before, during and right after pregnancy. Bem Nascer is a health social business company focused on providing healthcare, education and prevention for mothers before, during and right after pregnancy. The prevention service will work through a network of “Dindas� (godmothers) and through mobile health centers that will visit poor communities. The Dindas will be trained to work as local pregnancy educators within communities and will be paid by local women. The health care center will provide pregnancy exams and medical appointments
// 3 // BEM NASCER
How they do it
What they do
// 4 // WASTE //
Pic?
// 4 // GRAMEEN LIXO ZERO
Social Problem Brazil produces 195,090 tons of urban solid waste (garbage) a day according to the “Overview of Solid Waste in Brazil in 2010” published by the Brazilian Association of Sanitation and Special Waste Companies (ABRELPE). Only 13% of this amount is recycled, according to the Brazilian NGO Business Commitment to Recycling (CEMPRE). Moreover only 14% of Brazilians have recycling included in their trash collection services.
The damage caused by improper disposal of recyclable waste is not only environmental, but it also affects the Brazilian economy in a negative way.
Social Business Idea Provide an alternative for the disposal of recycled waste through incentives to consumers. The Grameen Lixo Zero social business is a collection center for different types of recyclable waste . The Center offers discount vouchers for individuals as an incentive to recycle. The Centre will distribute the recyclables to the actual recycler who will therefore pay a fee to the Center. Vision Efficient use of 100% of the São Paulo’s city recyclable waste in 2050. Mission Create and manage incentive models to develop and leverage the whole chain of recycling waste.
// 4 // GRAMEEN LIXO ZERO
1
2
3
Customer Segments
Value Proposition / Products
Channels
1.Companies 2.Retailers 3.Grocery stores 4.Electronics manufactures
1.Collection center of different types of recyclable waste that offers discount vouchers for individuals 2.Companies will need to achieve recycling rates, more and more (waste law)
1.Partner companies 2.Industry 3.Recyclers 4.Related agents
4
5
6
Customer Relationships
Revenue Streams
Key Resources
1.Companies and retailers: “recycling credit� 2.Consumers: environmentally responsible alternative
1.Retailers and Companies: will provide/pay for the discount voucher to attract/retain customers; 2.Selling the recycled material to cooperatives and recycling companies
1.Site/space 2.IT/computers 3.Administrative, commercial, educational marketing teams; 4.Operational staff (social inclusion of vulnerable)
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8
9
Key Activities
Key Partnerships
Cost Structures
1.Awareness campaigns 2.Build and implement discount models in partnership with retailers and industries 3. Identify and sell to recyclers
1.Companies 2.Retailers & grocery stores 3.Electronics manufactures 4.Municipality/Government 5.Media.
1.Rent 2.HR 3.IT 4.Equipment 5.Marketing
// 4 // EDUCATION //
// 4 // EDUCATION //
Social Problem Brazil has enormous and historical problems of public education, quantitative and qualitative, from elementary to university levels. The group decided to focus on elementary public education, attacking specifically the problem of teacher’s formation and motivation to educate children.
Social Business Idea The company will have the ultimate mission to amplify and add value to the elementary teacher’s role. The new education company will create a network among teachers, providing a rich global education content, co-created content, forum, and job opportunities in order to enrich their capacity as educators, to connect them to the newest worldwide methodologies and to motivate their career as a professor despite low salaries from government. This exclusive content and rich network will be distributed through two channels: web based and through a road show among poor communities with limited internet access. The revenue generation will be through: • Partnerships with technology companies – selling tablets and internet access • Internet advertising • Special sponsored projects • E-commerce • Membership club
// IMPRESSIONS //
ACADEMIA MEETI N G SOCIAL BUSINESS
// QUESTIONS & ANSWERS //
YOUR QUESTIONS
Q: Is it possible to start a social business to solve any social problems? A: Every social business starts with a social problem first. A social business is not limited to solving the problem of poverty. A social business could address many social problems such as malnutrition, lack of education, lack of health services, severe illnesses, etc. Nevertheless, some social problems might be easier to address through a social business than others. Once you have identified a relevant social problem which you would like to address, you then need to develop a good business model in order to make your social business financially self-sustainable. Q: What is the difference between NGO and social business? Is it possible to turn a NGO structure into a social business?
A: A social business is a new type of business. It is a non-loss, non-dividend company with a social goal. It is created because its founders identified a social problem that they wanted to address, and wanted a long-lasting, financially selfsustainable way to do so. Usually, a non-profit organization is not 100% financially sustainable, they do not cover all of their costs by selling products, but they have to rely on other sources of income (e.g. donations). Nevertheless, a non-profit organization could be transformed into a social business, if they become fully financially sustainable. The NGO needs to identify ways to generate revenues for their products and services, which will cover all of their costs. Q: What are the biggest challenges to establish a social business? A: Just like any other business, a social business should be prepared to solve many challenges along the way. The first challenge is of course to find the right and applicable business model which allows you to solve the social problem in a financially self-sustainable way. Receiving funding and the necessary investments is in many cases a challenge as well. During the lifespan of the social business, be prepared for many operative challenges just as in any other business.
YOUR QUESTIONS
Q: Why is not possible to give back a fixed small percentage of dividend just for increasing investors? A: Social business as defined by Prof. Muhammad Yunus does not offer any dividends on its investments. This protects the social business from never losing sight of its over-arching goal; the service or solution to a social problem that it has been founded to address. A social business is also about a moral commitment to a clear focus on solving social problems. Q: How to build a business plan and make a social business work? A: Once you have defined your business model, you need to develop your business plan and a comprehensive financial plan. Here a seven tips, which we identified to be relevant: • Start small, but think big! • Be innovative and creative • Don’t go it alone • Listen to your customers • Do it with excellence • Measure your results • Do it with joy! Q: If social business investors only get the investment amount back, who are these investors? (“no loss/no dividend”…) A: Investment funds can come from anywhere: companies, institutions, individuals etc. As you know from the examples, many big multinational companies have made investments into social business joint ventures. In addition, first Social Business Funds have been set up, with both institutional and individual money from philanthropists.
YOUR QUESTIONS
Q: If it must be environmentally conscious it must count on the consciousness of the population. Is there an educational role played by the companies? A: A social business has a significant educational role to play. Being environmentally conscious is one of the seven principles as defined by Prof. Yunus, therefore any social business has an obligation to create a maximum positive impact for the environment. In addition, education plays an important role regarding the products and services of the social business. The social business in many cases needs to educate potential customers about the positive effects of the products and services. In the case of Grameen Shakti, the employees needed to educate the customers about the innovative solar energy solutions, not only about the technology aspects, but moreover about the financial benefits customers will have in the long run. Q: What is the major reason for big companies to get involved in social business? A: Prof. Yunus is often asked the question, "Don't you worry that these businesses are just using you?“Prof. Yunus answers, "Well but I thought that I was using them" (to spread the concept of social business). The point might be less what their intention is, but more about the potential effect they could have on fighting poverty and social issues worldwide, and offering solutions previously unavailable to the poor and marginalized. Big multinational companies can bring extensive expertise in a variety of topics for the good of society and social business is the ideal model for this.
// SOCIAL BUSINESS //
SOCIAL BUSINESS
With the idea of social business, Prof. Muhammad Yunus has introduced a new dimension for capitalism: a business model that does not strive to maximize profits but rather to serve humanity’s most pressing needs. Thus, the first motive of a social business is not profit, and second, it does not pay its investors dividends. Instead, it aims at solving social problems with products and services at affordable prices, or giving the poor and marginalized people ownership in a business and therefore allows them to share in its profits.
A social business pays back only its original investment and reinvests its profits in innovations or further growth that advance its social goals. Although the social business is pioneering in its aims, it is traditional in its management. Its workforce is professional and paid according to market wages. This type of business may or may not earn profit, but like any other business it must not incur losses in order to be able to sustain itself. In every sense the social business is sustainable: in its direct environmental impact, its impact down the value chain, and critically, in its financial independence. This is a key difference between social business and charity. Once its initial investment is repaid, the social business aims to be financially selfsustaining, giving it the independence and security to focus its efforts on the long-term improvement of the lives of the disadvantaged.
Thus the social business is a new type of company and "social business entrepreneurs" (SBE) are a new type of entrepreneurs who are not interested in profit-maximisation. They are totally committed to making a difference in the world. They want to give a better chance in life to other people and they want to achieve this objective through creating and supporting sustainable business companies. Social business follows 7 principles, which serve as its defining elements. The seven principles of social business: 1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access and environment) which threaten people and society; not profit maximization. 2. Financial and economic sustainability. 3. Investors get back their investment amount only. No dividend is given beyond investment money. 4. When investment amount is paid back, company profit stays with the company for expansion and improvement. 5. Environmentally conscious. 6. Workforce gets market wage with better working conditions. 7. ‌do it with joy.
SOCIAL BUSINESS
// INTERACT //
// INTERACT //
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// CONTACT // The Grameen Creative Lab Leonhard Nima Leonhard.nima @grameencl.com www.grameencreativelab.com