Post #3. Social entrepreneurship

How would you define a social entreprenur? can we all be one of them?? what are its limits?

I found a very interesting article at the Standford Social Innovation Review that help us to address this questions and to understand in deep the challenges that this sector faces.

I give you some main ideas that highlights the key messasges of the article:

Quiete a mess. “The definition of social entrepreneurship today is anything but clear. As a result, social entrepreneurship has become so inclusive that it now has an immense tent into which all manner of socially beneficial activities fit”

seeing opportunities in where everyone sees problems . “Regardless of whether they cast the entrepreneur as a breakthrough innovator or an early exploiter, theorists universally associate entrepreneurship with opportunity. Entrepreneurs are believed to have an exceptional ability to see and seize upon new opportunities, the commitment and drive required to pursue them, and an unflinching willingness to bear the inherent risks”

– The entrepreneur is inspired to alter the unpleasant equilibrium; thinks creatively and develops a new solution that dramatically breaks with the existing one; takes direct action; demonstrate courage throughout the process of innovation; possess the fortitude to drive their creative solutions through to fruition and market adoption.

-The difference between entrepreneurs and social entrepreneurs relies in the motivation.

– Social entrepreneurship is different from social service provision and social activism. In the first case the difference is in the outcome and its impact. “Social service ventures never break out of their limited frame, their impact remains constrained, their service area stays confined to a local population, and their scope is determined by whatever resources they are able to attract”

. In the second case, the difference relies in the actor’s action orientation. While social entrepreneurs take direct action activist attempts to create change through indirect action, by influencing others – governments, NGOs, etc.

Find the document at:

Roger L. Martin & Sally Osberg. Social Entreprenership: the case for definition. Standford Social Innovation Review. 2007. http://www.ssireview.org/articles/entry/social_entrepreneurship_the_case_for_definition/


Post#2. Social entrepreneurship

How to transform ideas into actions? This is one of the main concerns and challenges for social entrepreneurs. It is necessary and urgent to find ways that allow an efficient transit from ideas into concrete plans, actions and business.

In this sense is key to have a complex understanding of the problems that one want to address. Alliances and dialogue with locals will help to extend the view and the mind towards the problem.

Organization and planning are also a require step. Even innovation is what characterizes the social entrepreneurs, it is necessary to know what one want to achieve and the basic guidelines to do it. The “how” is something that in the majority of the cases is forgotten; still it is more than fundamental.

It is important to have in mind that innovation is not synonymous of improvisation. The social change we all want, will only be achieve if passionate and committed people, taking advantage of what has been done work together, knowing and understanding the dynamics of this world. To remove the obstacles for human development, is necessary coordination, collaboration and action.


Post#1: Social Entrepreneurship

Social entrepreneurship is one of the most known ways to be a social innovator. Our contribution to social change requires of commitment, innovation and action.

It is crucial to open our eyes and mind; to identify the problems and translate it into opportunities, then into ideas, and those into plans, actions and deliverables.

Values (transformed into ways of being), such as collaboration and It could sound quite ambitious, but at the end everything in life is about commitment, perseverance, passion and responsibility.

Passion guides the first step in this challenging and wonderful never-ending journey.


Case study: Apple Inc. and the challenge of a social responsible management

Nowadays, one of the main objectives for most of worldwide companies is to be recognized for its responsible management and ethical performance. On the one hand, citizenship seems to demand more from the private sector in terms of their responsibility to society. On the other, the globalization of information, supported on the development of new ways of communication, allows to know rapidly and without geographical limit.

In this sense, the achievement of a responsible management should be understood more as a process than as a result. Integrate CSR into the strategy of a business, requires a never-ending process of understanding, improvement, and monitoring (as in every strategic issue). And here is where not only companies fail, also society do.

Sometimes company’s just look for the result, it means to be recognized for its CSR (awards, reports, participation of indexes, standards, etc.) and sometimes society just look to specific problem (resulting from a business operation) asking for specific (sometimes simplistic) solutions.

I said all this to point out the complexity that, a case as Apple, brings when analyzing its performance in a doing good business perspective.

Apple is one of the most important worldwide companies; not only due to size (market, assets, etc.), but mainly because its contribution to the creation of a whole new industry with new products and services. Innovation is the biggest assets that Apple has and gives to society. It is the driver for the sector development and the basis for the economic development.

Furthermore, Apple created last year around 514.000 jobs in the US (1) , jobs that could be created in a different place under cheaper costs. This is a huge commitment to the local economy.

Because of its particular business model (the whole production is outsource) and the characteristic of its products, the main material issues for Apple could be summarized in two categories: environmental impact and supply chain management. These two issues are the focus of Apple’s efforts (and reports) and seems the base for the understanding in terms of CSR.

The environmental impact of their products is measured, managed and reported. Carbon footprint is the main tool used to identify where are major sources of emission in product’s life cycle and what actions should be taken, in order to improve efficiency, reduce cost and minimize negative impact. This is how a carbon footprint becomes a management tool for companies.

Moreover, the products are design to minimize its environmental impact, such as less energy consumption, small packages, recycling, etc. However, the responsible selection materials even it is state as a very important issue in which Apple is hardly working, there are many critics related not only to the danger of some materials used for iPads or iPhones, but also to the risk (and environmental and social impacts associated) to the extraction of raw materials use for the production. In this regard, Apple doesn’t mention anything.

In relation to supply chain, the challenge is huge. Apple has everything very well in paper. Their policies towards an ethical performance along the whole supply chain are very well explained, but less effectively achieve. The concerns go further the Foxconn scandal. The lack of good governance and strong institutions in where their operate added to the difficulty of control thousands of suppliers, relies high risk for Apple in terms of abusive labour practices and non compliance with law (the minimum).

It is true and fair to recognize the actions taken, such as trainings and audits, most of them done by a third-party (the Fair Labour Association) for the identification of gaps and comply with their policy. Nevertheless, there is too much work to do, especially in relation to the commitment and empowerment of the problem, reflected in a better management system for the supply chain.

Apple has the policies (the frameworks), the information and comprehension about their impact on society. The main challenge (to not say problem) relies in the management of that impact. Using Porter’s definitions, Apple seems to have a “responsive CSR”; it means, “acting as a good corporate citizen, attuned to the evolving social concerns of stakeholders, and mitigating existing or anticipated adverse effects from business activities” (2 ). In fact, Apple’s initiatives concerning the supply chain obey to the high-risk associate to its operation and also to the scandals and problems that the lacks of management result in. And this is essential for a responsible business.

Apple could have integrated CSR into its strategy. They are working on it (they are in the process), under this understating. It doesn’t mean that there are no challenges and things to improve.

In fact, they don’t seem to have CSR as add on, in the sense that they don’t develop any “social or environmental programme” outside from their business.
In this point, and before finishing, I want to point out a difference (appropriate to the case) between having CSR integrated into the strategy and strategic CSR.

There are many other issues outside the spectrum presented by Apple. For example, what is Apple’s social purpose? What makes Apple different from the other competitors besides very good-looking products and creative design? Integrating CSR into the strategy require not only a comprehensive and integral management perspective, also entails doing things different from competitors and create social value (strategic CSR). Maybe Apple gains in the product (result) differentiation (what we could see), but still be the same in the “hidden part” (social value of the product) than the rest of actors.

How to potentiate Apple’s products to promote social change? I mean to give to an iPad, for example, a different value, besides being a good for consumption. Technology is a vital tool for social change, for education and empowerment. What Apple can do about it? How to integrate these issues into their core strategy? Is it possible? Absolutely! If they could address this kind of questions; they could really make a revolution in the “CSR” arena as they did in the “consumption” arena. And here sleeps their main challenge and opportunity.

footnotes:
(1) Source Apple’s web page: www.apple.com/about/job-creation/
(2) Porter & Kramer. “Strategy and Society. The Link Between Competitive Advantage and Corporate Social Responsibility”. Harvard Business Review. December 2006.


SME’s post 2

Successful policies (or initiatives) towards a better place to work, should consider the needs and context of each groups of employees. Is no the same being a parent than an intern. The commitment and performance of employees will depend also on how a company considers their needs and situations.


Post: CSR in SME

“There are no healthy companies in ill societies”. Consider this and in the “why” and “how” of doing business, ensures not only a responsible behavior in order to achieve a successful business model, but also the love and admiration of your most valued assets: employees and clients.


Movilidad y gestión socialmente responsable

La movilidad es hoy uno de los principales temas de las agendas urbanas. El acelerado proceso de crecimiento demográfico aunado a la tendencia de extensión y dilatación de las ciudades, acrecienta el reto de crear un sistema sostenible de movilidad.

Afrontar este gran reto requiere, además de una sólida institucionalidad pública, de la proactiva participación de todos los ciudadanos, entiéndase por estos los de a pie y los corporativos. No sobra decir que la construcción de ciudad –democrática- es una tarea compleja en la que todos los que hacemos parte de ella tenemos responsabilidad. La movilidad, entendida como aspecto sustancial de la misma, no escapa a tal tarea.

Ahora bien, ¿hasta qué punto las empresas pueden incidir y actuar al respecto? Más de lo que se suele creer. El llamado a una gestión más eficiente, principio rector de la actuación empresarial, se convierte en el punto de partida para abordar el tema. Las medidas de eco-eficiencia pueden comprender aspectos de la gestión administrativa, recursos humanos, medioambiental, todas ellas con implicaciones financieras. Las iniciativas comprenden desde los criterios de proximidad y conectividad que podrían incidir en la ubicación misma de la empresa, hasta mecanismos de trabajo flexible que disminuirían el número de desplazamientos de los empleados. Una de las medidas que mas me han llamado la atención, ha sido la política de reubicación de empleados (mayormente comerciales) de las oficinas de un banco, de acuerdo a criterios de cercanía del lugar de vivienda. El impacto de estas iniciativas redunda en mejoras de la calidad de vida de los empleados y en aumentos de la productividad, lo cual, como es evidente, supone mejoras en la eficiencia de la compañía.

Asimismo, desde la perspectiva medioambiental, los efectos en reducción de emisiones son un más motivo para adoptar medidas más eficientes. Por ejemplo, la priorización de desplazamientos (intra-urbanos y viejas de negocios) haciendo uso de las tecnologías disponibles (videoconferencias), así como la adopción de mecanismos car-sharing (idealmente con vehículos más limpios), son algunas de las iniciativas pioneras.

El sector privado está, igualmente, llamado a participar activamente en el debate y diseño de políticas públicas entorno a la mejora de la movilidad en las ciudades siempre con el horizonte y la base del bien común. Más aun, aquellas cuyos negocios tienen incidencia en el sector transporte. El reto acá trasciende la mera incidencia; apunta a la ética y al primacía del interés público, de la sociedad de hoy y de mañana.

Existen diversos mecanismos para medir, gestionar, analizar e incluso reportar estas iniciativas, que en la mayoría de los casos hacen parte de las estrategias de responsabilidad corporativa. Sin entrar en el debate que esto pueda suscitar, es vital contar con unavisión estratégica (por lo general a largo plazo), que trasciende la mera reputación, alimentada con acciones concretas en el corto plazo.

El Global Reporting Initiative provee herramientas (guías) para la misma decisión de materialidad sobre la posibles estrategias de movilidad que una empresa puede adoptar. Igualmente, aunque no existen indicadores concretos en el tema, debido a la complejidad e interrelación que éste tiene con otros aspectos, es posible adoptar indicadores “primos” que permiten comprender y analizar el avance (o incluso necesidad) de tales medidas.

Por ejemplo, cabe resaltar entre los indicadores de desempeño ambiental los referentes a los materiales utilizados que soportan la actividad, incluyendo combustible (EN2), al ahorro de energía debido a la conservación y mejoras en la eficiencia (EN5), a iniciativas para reducir el consumo indirecto de energía (EN7); y a iniciativas y mediciones en la reducción de gases de efecto invernadero por tipo de fuente(EN16 y EN18). También, y de manera más específica, existe un indicador relativo al impacto ambiental más significativo del transporte de productos / personas así como las actividades para mitigarlos (EN29).

Igualmente están todos los indicadores referentes a los beneficios otorgados a los empleados en pro de mejorar su calidad de vida (LA3), así como los relacionados con salud ocupacional y prevención de riesgos (LA6), aspecto clave de incidencia de mejoras en la movilidad (menores riesgos, menos enfermedad por stress, etc.)

El Global Compact, mediante la Comunicación de Progreso de los diez principios que todas las empresas signatarias deben cumplir y reportar, incluye iniciativas a favor del medio ambiente (desde preventivas hasta nuevas tecnologías). Todas éstas pueden tener una lectura desde la perspectiva de la movilidad (ver principios 7,8 y9)

Llámese como se llame como dentro de las empresas, la implicación en temas de movilidad hace parte de la responsabilidad en la gestión propia de los negocios y su base para desarrollarse. Y más aún, pueden contribuir no solo a mejorar problemas concretos que los empleados pueden tener entorno a sus desplazamientos, sino y sobre todo, en la creación de incentivos para cambiar usos y hábitos en los consumidores. Este es un paso necesario para la construcción de ciudad, hábitat del 80% de la población mundial.

Referencias:
Global Reporting Initiative, G3.1 Guidelines. https://www.globalreporting.org/Pages/default.aspx
Pacto Global de las Naciones Unidas. http://www.unglobalcompact.org/languages/spanish/los_diez_principios.html


#3CC. Transmilenio CDM Case

The implementation of an organized and efficient public transport system was, and still is, an imperative for Bogota, considering its size (7 million inhabitants) and extension (urban area around 300 km2). With TransMilenio the City experienced a huge positive change, not only due to its public infrastructure, but mainly on the quality of life.

TransMilenio is an integrated public transport system based on a Bus Rapid Transit (BTR). It consists in several interconnected lines for large capacity buses, with fixed stops in exclusive elevated stations, that allow pre-boarding ticketing. Also, the System integrates “feeder buses”, small units that connect neighborhoods or other areas of the City with the main stations.

This project, developed under a public – private partnership, has being designed by phases (I-IV), that responds to different lanes around the City. The first and the second have been already implemented; the third one is in construction phase and will consist of 3 additional trunk routes.

The implementation of a more efficient and safe public transport system had benefits not only the urban mobility , but also on the environment thanks to the reduction of the pollution’ levels. For this reason, TransMilenio was tackle as a huge opportunity to reduce GHG emissions, and in 2006 became the first CDM project in its kind. The UNFCCC approved the methodology proposed by the CAF (Development Bank of Latin America) to measure the GHG emissions reductions for the transport sector, which could be use on other public transport system around the world.

The estimated total amount of emission reduction for the crediting period 2006 -2012, is 1.725.940 tones of CO2 (eq). This reductions are being caused by the renewal of the fleet, an increased capacity of buses and an improved operating condition for buses. The technology used by buses is considered Environmentally Sound Technology (EST), that permits a significantly lower level of emissions compared to the conventional buses. Moreover, changes in consumers preferences (from private to public) also play an essential role to achieve this goal.

In addition to the “environmental” benefits, TransMilenio have contributed to Bogota’s development. Besides the employment creation (more than 1.500 for unskilled workers), and the positive impacts on human’s health and wellbeing, Transmilenio helped to improve the intra-connection of the city, beneficing, mainly the poorer population. The system’s design privilege the poor areas located in the periphery of the city, improving the interconnection of the poor people among the city, at low cost. In addition, the System contributed to the recuperation of some deployed and unsafe areas, thanks to the creation of public space and people’s circulation.

In spite of all this positive aspects, over the last years TransMilenio had being facing one of the most terrible corruption scandals ever in Bogota. For that, the former major of the City ended in jail and the Phase III was stopped and delayed for almost 2 years. This had serious implications on the crediting period renewal and on the credibility for future CDM projects.

However, no one questions that Transmilenio is one of the most important projects of Bogota. Its urgency and relevance are not in doubt. But due to its public necessity, it is quite difficult to understand if in fact this kind of projects could apply as a CDM, meeting the additonality criteria demanded for all CDM projects.

The project design document argues as unviable the alternative to implement the project without CDM, due basically to three main barriers: (I) investment barrier (high investment for phase II, superior than phase I); (ii) political barrier (limited interest in investing of the new administration); and (iii) resistance of existing transport sector (buss owners thus fear to loos income, specially the informal transport). The impact of a CDM registration could solve all the obstacles that impede the project development. Financial transfers resulting from the sale of CERs, international commitments and employment opportunities are advantages of the registration that could drive and solve the problems.

Nevertheless, it seems complex to determine what is true additionallity and what isn’t. In this case, the implementation of TransMilenio transcendend the CDM option. It was under a public policy commitment. And it is important to take into account that Colombia is a medium – high income level country; its GDP percapita is around 9.800 USD PPP (WorldBank, 2010). So, the question behind relies on the necesity, accuracy and efficiency of allocating TransMilenio as a CDM project. Mechanismis to towards Climate Change should move forward to market options to asure better efficiency result. Also, it should consider the possibility to limit the countries that can apply for CDM resgitration to those that really need it (the less developed), in which colombia , as it is obvious, does not appear.

References:

CAF & Grutter Consulting: “BTR Bogota, Clombia: TransMilenio phase II – IV”. PPD CDM. Version 02, July 1, 2004.

Corporacion Andina de Fomento, CAF. Consulted on 20 february 2012. http://www.caf.com/view/project_popup.asp?id=20604&ms=12

Det Norske Veritas: Validation Report: BTR Bogota, Clombia: TransMilenio phase II – IV”. PPD CDM. Report No. 2006 – 1321.


RD. The idle speculation

As always in a crisis, there are winners. The food price crisis has led speculators play and wins in the commodities exchange. However, is financial speculation the major factor towards the agricultural commodities prices increases and volatility? Seriously, I have my doubts.

What it is behind the surge of food prices requires a more deep analysis and understanding, than point the finger to speculation activity. The usual claim (that it’s all about speculators) falls short to the complexity of the problem and it causes. Don’t forget the financial crisis.

It is true that too much non-commercial participation can cause distortions and erratic price changes, but only in the short term. But also it is true that to little speculation results in tow liquidity and potentially in large seasonal price swings (Gilbert, C.L. (2008)). Since for every buy is a sell, prices could not be driven up for a long period of time (The Economist, 2011). In fact, there is little empirical evidence that investors cause a more than fleeting distortions to commodity prices. The failure seems to be more complicated.

Food prices have risen between 40% and 60%, not only grains but also to sugar and other products. For example, the high prices of corn have an effect on other foods, because corn is used to feed cattle and chicken as well. According to the global food import bill (FAO 2011), 2010 registered the same picks of 2008, year of the worst food crises ever.

This situation represents a huge burden for the poorest countries to continue buying food from the global market at these high prices and with a depreciated dollar. The increase is not only in the prices; the vulnerability to poverty is threat for poor consumers. Last year, more 40 million people were move into poverty and 1 billion reach the status of malnourishedand hunger.

Data suggest that we are facing a huge global harvest failure (Krugman, 2011) which effects have being intensified by a growing world population, changes in habits, weather conditions, and low stocks and agriculture productivity.

Production is going down, meantime the challenge to feed an increasing world population is getting bigger. By 2050 the world’s population will reach about 9 billion and the demand for food will increase by between 70% and 100% (FAO 2011). This is enough to exert pressure on commodity prices. Besides, it is important to consider that demand for basic food (grains) are highly-price inelastic, it means people will not consume less even if prices are higher.

In addition, most of the decline of wheat and grain production occurs in Russia, Ukraine and Kazakhstan in were weather didn’t help too much, against all expectations. Canada also experienced weather related low yields for several crops. So, sever weather events have affected agricultural production. The Russian extreme heat, the dry weather in Brazil, and La Niña, El Niño produce droughts and floods. The unexpected changes in weather not only affect the production, but also create a cascade effect with strong market reactions and soaring prices. As a response of the harvest failure, responded with exports restrictions and close markets for exports. This created panic on importers, especially on North Africa and Middle East, regions that depends on Russia supply.

Nevertheless is well known that this protectionist measures, at least in the US, does not respond as a defensive mechanisms. Subsidies are raising the price of corn and diminishing the amount of grain for food. The real objective, hidden under the claim to protect small farmer, is to promote ethanol production in the benefit of some other “farmers” (big, very big in these case). This subsides at end encourage the inefficient use of global land, and makes pressure in the commodities prices.

Among all these causes, there is a common denominator. The main market failure relies in the lack ethics foundations (agreements and rules). Ethics not as an abstract morality, but as practical rules. Even regulation can’t correct the whole problem, could have an important role in avoiding abuses and perverse incentives. Agricultural commodities are not the same as other financial assets. What is in game is people life. Transparency and control (with positions limits for example) in transactions of agricultural commodities. Initiatives as the one leader by the World Development Movement should be listen, yet they focus just in one cause of the problem. It is necessary to understand the problem, create awareness and demand our rights, in a solidarity basis.

References:
The Economist: “The future of food. Crisis prevention. What is causing food prices to soar and what can be done about it?” Feb 24 2001. From the print edition. http://www.economist.com/node/18229412

Krugman, Paul: “Soaring Food Prices”. Blog NY times, Feb 5, 2011. http://krugman.blogs.nytimes.com/2011/02/05/soaring-food-prices/

Krugman, Paul: Droughts, Floods and Food. The opinion pages. The New York Times. February 6, 2011. http://www.nytimes.com/2011/02/07/opinion/07krugman.html

FAO Food Price Index. http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/

Gilbert, C.L. (2008): “How to understand high food prices”. Paper presented at FAO expert’s meeting on Policies for the Effective Management of Sustained Food Price Increases. Trade and Markets Division. Rome. 10-11 July 2008.

Javier Blas, What’s driving food prices? Financial Times. Nov 8, 2010. http://video.ft.com/v/679555154001/What-s-driving-food-prices-

Financial Time. Why are food prices rising? Ft.com/Global Economy. http://www.ft.com/intl/cms/s/2/f5bd920c-975b-11dc-9e08-0000779fd2ac.html?from=textlink#axzz1mf0FXt3n

Worthy, Murray: “Broken Markets”. World Development Movement. Chicago, September 2011. http://www.wdm.org.uk/sites/default/files/Broken-markets.pdf


Open and lead user innovation

Innovation. This word refers to a wide range of meanings. Nowadays, it seems to be a new imperative for business success. However, innovate is a unique human’s capability and it has been par of our whole history, and for so of the business’ history.

Nowadays, the challenges have change. Business should know how to take advantage of the spectacular informational network that has been created, thanks to the social media and technological advances. At the same time, companies should find the way to differentiate from the competitors, in a way that they could create and add value to consumers. And here is where innovation comes to the main stage.

A business can innovate at every stage. Innovation could be understood as a process, as a management approach, as cultural values, or just as the final product. Among different approaches, there are two that deserve our attention.
The lead User Innovation takes advantage of what is done; it helps to create new ideas (using existing products, services or process), to solve problems. “Lead users are users whose present strong needs will become general in a marketplace months or years in the future” (von Hippel 1986). In fact, lead users “job” is to give solutions to problems (or necessities) with higher impact, using products that already available. In some cases, they develop new products that attend their own necessities, so the become innovators. This method allows a better understanding of the customers’ necessities, expectations, and preferences. “Products that lead users develop often become the basis for important commercial products when lead user needs become mainstream.”

The Open Innovation is a method related to the break of boundaries; to “open” and “listen” what the others can say about your business, including, the competence. “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology” (Chesbrough, 2003). The idea is to accelerate internal innovation through openly sharing (in both directions) knowledge, research, between companies. The collaborative sprit is potential zed with this approach.

There are many business cases about open and lead user innovation. For example, FINISH is an initiative that believes that financial inclusion could improve sanitation health. Their aim is to innovate in the sanitation technology in a way that address and solve the health problems in most of the developing countries. They use the Open innovation method to identify ideas, potential partners, etc., based on the ideaken platform. See the video! http://www.youtube.com/watch?v=sWB1IbmNcdw

References: (all consulted by 10/02/12)

Chesbrough, H.W. (2003). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press

Revised paper published as: von Hippel, Eric (1986) “Lead Users: A Source of Novel Product Concepts,” Management Science 32, no. 7 (July):791-805.

http://leaduser.com/
http://www.finishsociety.com/



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