Thursday, February 28, 2008

In Praise of Unreasonable People

A Book Review from Ode Magazine, March, 2008

John Elkington and Pamela Hartigan's new book, "The Power of Unreasonable People."

Spot the similarities. The Childline India Foundation offers a free hotline for the countless street kids of Mumbai, India. Sekem, a cluster of Egyptian companies that produce organic food and medicines, among other things, reported joint profits of $1.7 million in 2005. These initiatives appear to have little in common. The first is a charity run by volunteers and funded with donations; the second, a financially strong, profitable business that operates on the world market. Yet both fall into the category of “social entrepreneurship,” a broad term that encompasses organizations that offer goods and services­ of benefit to society.

Both Childline and Sekem (which reinvests its profits­ in the companies as well as in services for local communities) are described in The Power of Unreasonable People (Harvard Business School Press, 2008) by John Elkington and Pamela Hartigan, a chronicle of this emerging blend of activism and entrepreneurship.

It’s a fascinating look at the achievements, challenges and limitations of a relatively new field both authors know quite well. Elkington was one of the first and most prominent corporate sustainability advisers, while Hartigan is the managing director of Schwab Foundation for Social Entrepreneurship, which has been active for 10 years selecting and supporting the most effective social enterprises.

The book’s title refers to an aphorism by Irish playwright George Bernard Shaw: “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” In that context, the social entrepreneurs portrayed in the book are clearly unreasonable. They are unreasonable because they want to change the system, because they are insanely ambitious, because they aren’t guided by reason but emotion, because they think they know what the future will bring, because they will not listen to “no.” And that’s precisely why they’re so successful.

Elkington and Hartigan’s book offers an image of social entrepreneurs that is at times lyrical, then sobering. They can’t shower enough praise on the non-profits for their idealism, but claim the greatest impact comes from combining forces—at the very least—with the commercial sector. The authors believe the ideas that can be carried out and repeated on a large scale come from social enterprises that are allowed to make a profit. This explains the recent expansion of the Indian telephone support line to include the organization Aflatoun, which teaches children about their rights and how to handle money. The alliance with banks is meant to ensure that this strong model can stand on its own financially.

Surely such an approach would meet with the approval of Muhammad Yunus, founder of the Bengali microcredit institution Grameen Bank and winner of the 2006 Nobel Peace Prize. In his new book, Creating a World Without Poverty (Public Affairs, 2008), Yunus dreams of companies that come up with profitable products or services that address social problems—and use the profits to combat those problems elsewhere. His vision includes an economy in which social value is as highly regarded as financial value. He also sketches the contours of a social stock exchange­ and a Social Wall Street Journal.

Yunus’ book refers to the recent collaboration between Grameen Bank and the French food giant Danone. Women can take out a small loan from the bank and use the funds to buy containers of vitamin-rich yogurt from the factory, which they then sell door-to-door or on the street. When the women repay their loans, the factory reinvests the profits to build new plants elsewhere in the country.

Yunus’ enthusiasm is infectious, and the thoroughness with which Elkington and Hartigan have researched the field makes for a hopeful perspective of capitalism with a human face—the faces of lots of unreasonable people.

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