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Pamela Hartigan | A new chapter opens up for B-school students

Pamela Hartigan | A new chapter opens up for B-school students
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First Published: Mon, May 11 2009. 08 46 PM IST

Changing culture: Hartigan says social businesses have to build capacity, and that is why there is a need to build such talent at business schools.
Changing culture: Hartigan says social businesses have to build capacity, and that is why there is a need to build such talent at business schools.
Updated: Mon, May 11 2009. 08 46 PM IST
The economic turmoil across the globe is also influencing academic curriculums at some of the world’s leading universities. At Saïd Business School, University of Oxford, social entrepreneurship is now part of the curriculum for management students.
Changing culture: Hartigan says social businesses have to build capacity, and that is why there is a need to build such talent at business schools.
This is in response to what academicians such as Pamela Hartigan, director of Skoll Centre for Social Entrepreneurship, who also leads the programme at the Saïd Business School, believe is the changing culture and focus of management students.
Hartigan was earlier the managing director of the Schwab Foundation for Social Entrepreneurship, a Swiss-based organization focused on advancing the practice of social entrepreneurship globally.
She has also been an adjunct professor at the Columbia Business School and is the co-author of the book, The Power Of Unreasonable People: How Social Entrepreneurs Create Markets That Change The World.
In an interview, Hartigan explains why management education across the globe must acquire a more inclusive perspective. Edited excerpts:
What are the factors driving the focus on social entrepreneurship in management schools?
In my interactions with business school students across universities such as Harvard (University), Columbia Business School and now at Oxford, I see a massive changing culture of the MBA. There is a new breed of students who are particular about where they make money and where they can do good. These students are not looking to give back to society at age 50; they want to do it now. And as more people and cultures question the established economic order, young people are saying, “Hang on, there is something wrong and we have a chance to influence change and fashion a new, more inclusive way of doing things.”
Do you see this as a reaction to the ongoing economic turmoil, a reaction perhaps to the fact that conventional businesses are going through uncertain times?
As current ways of doing business begin to be increasingly questioned, more people are asking if there is a way to combine profits plus principles. There are gaps in ownership of wealth, including stocks, bonds, home ownership; in some markets the top 1% of the population grew their wealth by nearly 63%, while the poorest amongst them actually saw their money decline by 44%. This gap can’t be bridged by charity alone, there has to be a different way of doing things. Young people are seeing this as a fascinating time, one when they can influence change (and) reach out.
Are we moving from a model of philanthropy to one of for-profit businesses that also focus on social good?
Bridging inequality will not happen through charity alone. Really, nobody likes to be the recipient of charity. But yes, philanthropy has a place in areas such as actually providing education. And when a social entrepreneur starts a new venture, he will need initial investment akin to an angel investor; philanthropists can fill that role. Social enterprise needs that kind of investment.
Capital need: It’s very difficult to be a social entrepreneur, says Hartigan.
What role will corporate social responsibility, or CSR, play in this new model?
Social entrepreneurship is not another term for CSR. When companies make profits from their core business and then use part of it to do good, it is a different model. Business and CSR can actually support a social enterprise. For instance, by supporting fair trade in coffee and tea, Starbucks Corp. is making a difference. Alliances between different interests are required. It is good to align the business with social good. There has to be a change in mindset; businesses must not look at social enterprises as recipients of charity—the engagement has to be on a different level.
What are the challenges that social entrepreneurs face in markets such as India?
India is at the cutting edge in terms of this change—there is investment in information and communication technology, and innovative business models in the social enterprise space already exist here, such as (the) Aravind Eye Care System and Gram Vikas (a rural health and environment programme) in Orissa. But there is (a) need for a lot more to be done, such as legal reform that creates a legal framework for social ventures.
Access to capital for social entrepreneurs must improve. There should be opportunities to train and improve skills in the social enterprise space; it is very difficult to be a social entrepreneur—even more than being a business entrepreneur.
Is this the gap that management schools hope to fill by introducing social entrepreneurship as a discipline?
Social businesses have to build capacity and for that, a visionary entrepreneur can’t work out of a paper bag. That is why it is important to work with students in areas such as marketing and human resources. There is (a) need to build such talent at business schools.
What is the role that you see for governments in the growth of social enterprise?
I am allergic to government involvement in social enterprise. Sure, government has a role in providing (the) legal framework, taking the innovation and scaling it. But the problem with government is that it always wants to control, not support. And also, there is a basic difference; entrepreneurship is about innovation, government is not about innovation. Government should make sure that it does not penalize not-for-profits; that is why I say there has to be appropriate legal reform.
Access to capital is one of the challenges you mentioned social enterprises in India will face. As markets become more volatile, will access to funds become more difficult?
India is actually a lucky country (as) there is extremely good capital flow. The number of people who want to invest in businesses that focus on social good is on the rise. It is also because there is a belief that returns from this sector will be good, so you have the social venture funds from the US, the UK, Western Europe, all of whom are looking to invest in India.
This includes funds such as the Acumen Fund, Bridges Community Ventures (a privately owned venture capital company in the UK with a social mission) and others. But really, a lot more needs to happen in this space. It is going to get tougher to raise money, so there is (a) need to have more understanding of this space.
You spoke earlier of the need for social enterprises to build scale to be effective. What are the challenges in this space?
Social entrepreneurship is a movement, you need to scale it up. I feel we are at a moment in history where we are seeing something different emerge. If you look at history, there is the women’s movement or the election of Barack Obama; they all signalled change. One can’t rely on the corporate model of scaling up a business if one is building a social enterprise. When investors attempt to do this, it gets tough.
Therefore, investors have to approach social enterprise investing with their philanthropic hearts; sometimes they have to leave their business brains at the door. These are aspects we are discussing, how investors have to educate themselves and understand that this (is) not charity. This is what we want to do—influence the leaders of tomorrow, so that they begin to question.
So what is the model of social entrepreneurship that you see emerging from this process?
We are actually laying the tracks as the train is moving—as in all innovation, we must allow for mistakes. Societies that don’t tolerate failure, in cultures where failure is anathema, it will be difficult. But in others, there is a whole new model that can be built in areas such as education, healthcare, employment generation and skill building—these are areas that social entrepreneurs must focus on.
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First Published: Mon, May 11 2009. 08 46 PM IST