More On My Social Entrepreneurship Twitter for @SocialEdge

It was an offhand remark, made in reply to a twitter from the Skoll World Forum. What we now call “social entrepreneurship”, I wrote in reply to @socialedge, should eventually just be business as usual.

If it hadn’t been an offhand remark, I might have put it differently. But that’s how conversations usually get started, online and off — a casually dropped remark raises more questions than one bargained for; interlocutors offer their own rough approximations, and (with luck) the thing goes forward, not necessarily toward resolution, but broadening its scope, picking up other questions, and inviting more people to participate. And since I’m not at the Skoll World Forum, where I could have this conversation in person, or with many people, I thought I would try to put together a few thoughts about what my remark was supposed to mean, what it could, or must, mean.

First, a little context. My exchange with @socialedge grew out of his coverage of a big theme at this year’s Skoll World Forum, on the teaching of social entrepreneurship. “‘Social entrepreneurship,” he wrote, “should be an adjective that describes entire business schools, not a department within them.”

It would be hard to take issue with the point, even if you are bothered by the fact that social entrepreneurship is not an adjective, even if you hold no brief for social entrepreneurs.

The current economic crisis has generated its own crisis of faith in, and within, the business schools, and MBA programs in particular. Business Week recently held a debate on the question whether “Business schools are largely responsible for the U.S. financial crisis”; and though that was meant to be a provocative statement, it’s actually quite guarded and misses the point altogether, because it confines the scope of the crisis to finance, when we are obviously witnessing a social and political crisis that arises from, or emerges in the form of, a financial crisis.

That is a point too often overlooked, even now: this is a political and social crisis as well as a financial crisis.

That it took a crisis of this proportion for Business Week and other business media to question the jargon-ridden theoretical twaddle and pseudo-scientific bombast that in many quarters passes for business education is astounding. It’s tempting to agree with Henry Mintzberg, Professor of Management Studies at McGill, who says that MBA programs teach only arrogance, and recommends that we “close them all down, period!” By and large, though, most people writing and talking about this subject are just hoping for a better way to go about things. And obviously the teaching of social entrepreneurship can help to re-orient business education, take it to the field, broaden its scope, and make it about something other, something more, than mere financials. (So, for that matter, can teaching history, languages, and philosophy; but that’s a subject for another day.)

This gets us closer to the heart of the issue, because the trouble is that “mere financials” are never really mere financials, and they are best understood from perspectives that business schools currently don’t, by and large, provide. Social entrepreneurs have a fresh perspective on this issue; and integrating that perspective throughout the business curriculum would require students and faculty to revisit, and re-think, the relationship between financial instruments and the human ends they serve, or business and society, in very broad terms. Teach social entrepreneurship and you teach not just concepts but context and contextual thinking.

It’s always good, in any conversation as well as any educational endeavor, to go back to basics. How business creates wealth; by what means, and to what end; what counts as wealth – these are all questions that social entrepreneurs must confront, in one way or another; and they confront them not as theoretical constructs or “case studies,” but as practical problems on which the success of their enterprise depends and which require an immediate and real-world solution.

Of course, our current problems extend far beyond the four walls of the classroom, and in the real world these basic questions have acquired a new urgency. And that, I suppose, is what prompted my offhand remark in the first place. Anyone who thinks that we are going to recover from this crisis and then return business to business as usual is suicidal, a sociopath, or not very bright.

Some on the right in America are ranting about socialism, or making dire forecasts about the United States turning into old Europe; but even they don’t have the faith or strength to advocate a return to the way we were.

Things are not going to return to normal. We are now entering “the new normal,” as Ian Davis puts it in the most recent issue of McKinsey Quarterly; and though Davis confines himself to a few boardroom bromides – capital outflows to Asia, less leverage, more government intrusion – he manages to hint that the old model of how business gets done, what business is, what business does, has run its course. It’s spent. The old normal has exhausted its social capital.

It won’t be enough for businesses to jump on the “social” bandwagon and preach “social responsibility” (too often a byword for lax regulation); and it’s a bad idea to demand that businesses effect “social change.” The past six months of Ponzi schemes, bank failures and bankruptcies, market dives, bailouts and rising unemployment numbers have proven, once and for all, that doing business always effects social change, and that social change is not a good in and of itself.

We now have a unique opportunity – or an urgent imperative — to rewrite the social charter of business and finance. Of course that’s not going to happen through some great constitutional convention held by some international body like the World Economic Forum (or the Skoll World Forum) or even through the backroom dealings of Tim Geithner, Ben Bernanke, and a group of their closest friends. Good policy can help, but real change is going to come about through entrepreneurial adaptations to new norms, trial and error, through a process of discovery, risk and failure.

And maybe that’s where the social entrepreneurs come in. Social entrepreneurial activity is now generating new ideas of wealth and how to create it, new kinds of credit and transactions and new business models, the likes of which the Fortune 500, with their industrial legacy, could never come up with. Why not, then, imagine that social entrepreneurial activity will eventually generate alternative models, or at least some useful guidelines, for how to scale, up or down, how to do mergers and acquisitions, where to make investments and to what end, how to effect meaningful, and sustainable organizational change, even how to have conversations about strategy or set governance?

And why not? Social entrepreneurs already remind us of what we should have known all along: that every enterprise has social consequences, intended and unintended, every business must raise social capital as well as investment capital, and every entrepreneur is a social agent, even if he’s got an MBA.

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