MBA Programme: Class 2013J Period 4 March 2013 FBL Social Entrepreneurship and Innovation Professor: Filipe Santos filipe.santos@insead.edu Office EAC 1.71; Ext 4538 Assistant: Isabelle Seyrig isabelle.seyrig@insead.edu Office EAC 1.64; Ext 9204 Course Objectives This course is valuable for participants who want to understand the key trends and innovations shaping the field of social entrepreneurship and innovation globally. It is also a call to action, engaging participants as potential social entrepreneurs, impact investors, policy-makers or corporate partners in the social enterprise sector. The course provides a toolkit for social entrepreneurs and innovators and allows participants to discuss their own ideas for value creation in society, as well as improving their positioning for a rewarding career in social impact. Given the engagement required to follow this course, auditors are not allowed. The course aims to create an enriching and engaging platform for sharing ideas and experience among the participants. (Note: Auditors not allowed) Summary of Course Content Social entrepreneurs are the new and unlikely heroes at the World Economic Forum meetings in Davos. They are becoming a driving force for societal change and business innovation, leading the rising field of social enterprise. The GEM 2009 survey found that close to 5% of the European active population are potential or current social entrepreneurs. What does it mean to be a social entrepreneur? What do social entrepreneurs do that is unique and why do they succeed in addressing profound societal problems in areas where governments, markets and charities have failed? Social entrepreneurship is an approach to solving problems in society that is focused on value creation instead of value capture. It can occur in different organizational contexts and touches upon different fields, raising several interesting questions. For example: - Microfinance rose from an experiment in the 1970s piloted by social entrepreneurs to an industry moving billions in credit lines for poor people throughout the globe and still growing at 30% a year. What business model innovations were at the origin of this success? Will the Microfinance industry be able to address poverty at a global scale? How can organizations balance the generation of profits with a social mission? 1
- Some of the most impactful social innovations in the last 20 years were launched in developing countries such as India and Brazil and often involve low cost scalable solutions to deeply embedded societal problems. What can established organizations and governments learn from these initiatives? How will business and markets in developed countries be affected by these transformations? - Many business-oriented people, including MBA graduates are becoming social entrepreneurs by launching hybrid ventures: for-profit social mission businesses. How does one manage a hybrid venture what are the challenges and opportunities? Can one really make profits while on a mission to directly improve the world? And how do multinational corporations engage with social impact businesses? - Following the emergence of hybrid ventures, private equity players and high net-worth individuals have jumped in and are creating venture philanthropy funds to support the scaling up of social ventures. Will this new field of impact investing be effective in transforming the social sector? How do these new trends affect the fields of venture capital and the financing of innovation? And, importantly, how can social entrepreneurship contribute to your personal search for a more meaningful career and a positive impact in the world? These questions are the focus of this course on Social Entrepreneurship and Innovation. Description of readings and case material: The course is built on research and cases developed by the instructor after working with more than 400 social entrepreneurs over six years. It also uses a collection of short articles that discuss key ideas in social entrepreneurship. Assignment and Grading: Grading is on a 1 to 4 scale (Satisfactory to Outstanding) based on the following: Component Type Weight Deadline Submission 1- Class Participation Individual 30% In session In-class 2- Reflection Assignments Individual 30% Day before Online 3- Social Venture Concept or Reflection Paper : 3pages Team or Individual session by 10pm 40% April 8 by 10pm By e-mail sei.fb@insead.edu Class participation grade is based on a combination of regular attendance, preparation and quality of contributions to the group learning Reflections assignments are due the day before each session by 10pm. They should be about half page long (unless noted otherwise) and posted directly on 2
the course platform so that everyone in the course can benefit from them. Plan to read the submissions of your colleagues and like them after 10pm. These assignments are mandatory and fundamental for good session preparation. The use of the course online platform is an essential tool to create a network of learning and experience sharing among class participants. All course students will be enrolled in the networking platform in a group dedicated to the course ahead of the first sessions. The readings and cases will be distributed from the platform. The Social Venture Concept or Reflection is a 3 pages elaboration of either a social venture idea (in teams of max 3 or individually) or an individual reflection about one of the class topics / discussions. Please send to sei.fb@insead.edu by 10pm of April 18. About the Instructor Filipe Santos is Associate Professor of Entrepreneurship at INSEAD. He is the director of the Rudolf and Valeria Maag INSEAD Centre for Entrepreneurship and the academic director of the INSEAD Social Entrepreneurship Initiative. Filipe teaches the Social Entrepreneurship course in the INSEAD MBA program, as well as entrepreneurship and social entrepreneurship programmes in the EMBA and Executive Education. He won the GEMBA 2008 award for the Outstanding Teacher in non-core Courses. He was a finalist for this same award for the GEMBA 2009, 2010 and 2011 Classes and received the Dean s commendation for Excellence in MBA teaching in 2010. Filipe s research lies at the intersection of strategy, organization theory, and entrepreneurship. He is particularly interested in understanding the processes through which entrepreneurs construct new firms and markets. He is also interested in the growth and scaling up processes of new ventures in order to maximize economic and social impact. A related focus of research is on business model innovation and social entrepreneurship. A native of Portugal and a former entrepreneur, Filipe holds a Ph.D. in Management Science and Engineering from Stanford University, with a focus on entrepreneurship. He also holds an MSc. Degree in Industrial Strategy and Management from Lisbon Technical University, and an Economics degree from Lisbon New University. He was the recipient of the Lieberman Fellowship at Stanford University, an award recognizing outstanding scholarship and institutional contributions. He also received in 1996 the award for best MSc. student. His doctoral thesis "Constructing Markets and Shaping Boundaries: Entrepreneurial Action in Nascent Markets" was finalist for the Heizer 2004 Entrepreneurship Award. Filipe speaks regularly on topics of entrepreneurship and innovation from both a commercial and a social perspective. He also mentors entrepreneurs and advises venture investors. 3
Course Sessions Preparation: Please read all cases and readings ahead of each session and develop your position/answers to the reflection questions in advance (about half page) and post them on the platform the day before the session (by 10pm). You can also develop a reflection that is a reply or complement to one of your colleague s reflection. Session 1: March 7 What is unique about social entrepreneurship? This session will introduce the uniqueness of social entrepreneurship and how it is different from other forms of business. Optional Reading: A Positive Theory of Social Entrepreneurship, Filipe Santos (2013), Journal of Business Ethics Reflection Assignment: Who is for you the most inspiring social entrepreneur or social entrepreneurship initiative? Submit it in the platform, point to a web-site or video, and explain in a few lines what seems unique about this individual and/or initiative? (Note you cannot choose Yunus or any other social entrepreneur from a case or reading in this course that would be too easy and the goal of this assignment is to enlarge our pool of social entrepreneurs and get us inspired ). You can also like your colleagues submissions. The ones with more likes will be discussed in class. Session 2&3: March 9 Business Model Innovation: The Case of Microfinance Microfinance is the most impactful social innovation of the last 30 years. In this session we analyze the fundamental innovation underlying the business model of Microfinance and develop a framework to design innovative business models for addressing neglected societal problems. Readings: Social Entrepreneurship: Creating new business models to serve the poor, Seelos and Mair (2005) Framework: Business Model Innovation Workbook, Filipe Santos, INSEAD 2012 (distributed in class) Reflection Assignment: Please submit in the platform, in under half page, the basic concept of a new social innovation that meets a societal need. This could be a new product, a new solution, a market-based platform, an organizational innovation, a new business process, or a financial innovation. In addition, please review other people s innovations and vote the ones you like. The ones with most likes will be pitched to the class in under 90 seconds and receive feedback. 4
Session 4: March 12 The Trade-offs between Social and Commercial Missions The successful 2007 IPO of Compartamos Bank took the microfinance industry by surprise and highlighted the growing tension caused by the commercialisation of microfinance. It prompted a passionate debate between the proponents of a commercially oriented, profit-seeking model and defenders of the socially oriented model that had been at the origins of microfinance. This session will re-enact that discussion in the tradition of the Great Debates. Case: Social vs. Commercial Enterprise: The Compartamos debate and the Battle for the Soul of Microfinance, INSEAD 09/2009 5627 Reflection Question: Based on the case, please take a position on the following issue by submitting a post in the platform. You can also express your opinion by commenting on someone else s submission: Do you believe that the most effective way to alleviate poverty on a global scale is to increasingly transform microfinance into a commercial proposition or to maintain the social mission that characterised microfinance s origins? What central arguments support your position? Be prepared to argue your position during the session debate. Session 5: March 14 How Corporations engage with social impact initiatives This session will discuss how large corporations are increasingly engaged with social entrepreneurship what motivates them, what initiatives are being developed, how are they managed and what are the main challenges and opportunities. We will also discuss the motivation and role of social intrapreneurs. Reading: tbd Guest Speaker: Michael Fuerst, Manager of Integrity and Corporate Citizenship at Novartis AG 5
Session 6 & 7: March 19 Managing Hybrid Ventures This session will discuss the challenge of building and financing a hybrid venture to commercialize a social innovation. We will also discuss the emerging sector of Impact Investing. The cases focuses on the experiences and learnings of Sameer Hajee, an INSEAD alumnus who became an award-winning social entrepreneur and who is a finalist for the award of entrepreneur of the year by the Association of MBAs. Case: Nuru Energy (INSEAD, 2012) Reflection Assignment: Please submit in the platform your answer to the following question: If you were Sameer Hajee, what would you do and why? (Note: I am not interested in knowing what Sameer should do, but rather what would you do if you were in Sameer s situation in November 2010? Session 8: March 22 The Rise and Challenges of Impact Investing This final course session will discuss the emerging field of Impact Investing. Reflection Assignment: Please submit in the platform a half page description of a financial innovation for social impact that you have identified or come up with an suggestion of a new investment product, instrument or service that has the ability to address neglected problems in society. 6