Social entrepreneurship was once a niche area of business but the practice is gaining traction around the world. Research shows that a third of startups globally are now aiming to do social good, which is a response to corporate scandals and ills such as climate change and global inequalities.
However, much more needs to be done to improve access to finance and to scale these companies and to measure their social impact. That is where executive education comes in. A business school course can support social entrepreneurship so that it can generate sufficient economic impact and ensure its survival.
“Social challenges represent some of the most difficult problems for leaders and require cutting edge management tools — just like other industries,” says Rob Zeaske, director of Harvard Business School’s Social Enterprise Initiative.
“Nonprofits and the social sector have unique features,” he says, citing funding, impact measurement, legal structure and partnerships. “Some focused study allows leaders to be more successful in their non-profit roles and drive greater impact in their communities.”
Harvard, which founded its Social Enterprise Initiative more than 25 years ago, says demand for courses that deal with social topics are generally rising. “Interest in careers related to social enterprise fields are near all-time highs,” Zeaske says.
Pointing to one driver of growth, he adds: “Among business leaders, there is anecdotal evidence that they are seeking more management tools and data to navigate the rising interest in environmental, social and governance (ESG) investment.”
Harvard offers several related executive education courses — including Strategic Perspectives in Nonprofit Management. The seven-day program taught in Boston focuses on the strategic perspectives, practical frameworks, and leadership skill that improve organizational performance and societal impact.
It’s one of a range of course offerings at several academic institutions, including Columbia Business School in New York, which puts on the Senior Leaders Program for Nonprofit Professionals over four months.
How do you measure social impact?
In most ways, the concerns of non-profit leaders are similar to those of their for-profit counterparts, says Zeaske. “They need to effectively lead people and organizations, manage their budgets, earn revenue, market their work, and navigate legal and institutional boundaries.”
In several important ways, however, their issues are quite different. “The value of a social enterprise must be much more aligned with its impact. Strong revenues do not necessarily indicate effectiveness,” he says.
The measurement of non-financial impact is a key focus for other executive education programs in this area. One example is Step Into Impact, an online course delivered by Northwestern University’s Kellogg School of Management. It introduces business leaders to the wider social sector, including social enterprises and nonprofits.
More than just profit
INSEAD, a global business school, runs the Social Enterprise Programme. Launched in 2006, it covers how maximizing impact requires a more rigorous approach than good intentions.
According to Jasjit Singh, professor of strategy at INSEAD, disproportionate attention is being given to scale as the main indicator of the impact achieved.
Breadth is important, but so is depth. “Evaluating depth involves seeking clarity on which people or issues are being served, how underserved are they, and how valuable your unique contribution is,” says Singh, director of the INSEAD Social Entrepreneurship Programme.
Participants on the course examine a variety of business models for addressing different kinds of societal issues. “Market-driven economic growth has raised living standards worldwide, including lifting over one billion people out of extreme poverty in recent decades, but society still faces critical challenges like climate change and rising inequality,” Singh says.
“Rather than considering profit maximization as a defining characteristic of business, social entrepreneurship involves employing business as a tool that prioritizes addressing important but neglected societal issues,” he adds.
The hope is that many of the new models will ultimately be broadly adopted and scaled. But in the process of doing so, some failures are inevitable — so building a tolerance for failure is important in any social entrepreneurship course.
“Ventures often fail to scale up or even survive as, in their excitement for doing good, they fail to ensure their financial viability,” says Singh.
“Some instructors fall into the trap of just teaching about success stories and not about instances of failures,” he adds.