It would be going too far to say that Ian MacMillan has it in for good Samaritans. The Dhirubhai Ambani Professor of Innovation and Entrepreneurship has been studying and supporting mission-driven social entrepreneurs for more than a decade. But he does wish that do-gooders bound for failure would learn how to fail more quickly and cheaply—and at the end of the day, more productively. So along with James Thompson, director of the Wharton Social Enterprise Program, he has written a book to help them do that.
The Social Entrepreneur’s Playbook, which is being published in a somewhat novel two-phase process by Wharton Digital Press, aims to change the way mission-driven enterprises are started and funded, and how they cope with the consequences—positive and negative—of their own success.
Both men hail from South Africa, which has made them all too familiar with the uneven record of earnest people who set out to do good.
“Having been African, I’ve watched NGOs and aid initiatives for years—some more effective than others, some very ineffective,” says Thompson.
His elder countryman has watched the same parade of isolated successes interspersed with frequent disappointments, and has come to think that the noble impulses behind them too often substitute for due diligence.
“The first thing that trips them up,” says MacMillan about aspiring social entrepreneurs, “is they think that if their intentions are good, it’s going to work. Many of them simply want to go out and do good, without really thinking about what is it going to take to do good.”
MacMillan and Thompson have spent a lot of time figuring out what it takes.
“We spent the last 12 to 13 years doing field research and trying to understand what hampers these enterprises and entrepreneurs, and what works,” Thompson says. “The book is what we think is the first book out there [that codifies] what we think is a useful approach, based on what we’ve learned, to operating in these environments, which are very uncertain.
“That is one of the distinguishing aspects of social entrepreneurship versus just any entrepreneurship,” he adds. “The level of uncertainty is much higher.”
For instance, says MacMillan, “a fundamental flaw when you’re working not just in Africa but in any economy that’s evolving and developing, is that the kinds of things you take for granted as being available—like reliable transportation or honest government officials or a whole bunch of other things with respect to governance and infrastructure—they’re just not there.
“For example, it’s very hard to raise chickens it you haven’t got little chicks,” he continues, bringing up the case study of an innovative Zambia-based chicken-feed plant the book examines in fine detail. “So you can’t go out there and start a feed plant without thinking about whether the chicks are going to be delivered reliably. And is the feed going to be delivered reliably? Is the feed that you ordered going to be the feed that you get? There’s a whole host of things that ingenuous people just don’t want to think about—that is, insufficient attention to appropriate detail.”
The Playbook combines field research with a series of checklists that social entrepreneurs can use to “pressure-test” their ideas and business plans. In a way, much of the book’s value lies in lessons gleaned from projects that never got off the ground.
One instance of due diligence done right in the social-entrepreneurship realm concerns a proposed fish-farming project in Malawi, which would have created a centralized distribution system to increase the number and profitability of small producers.
“We were there with the entrepreneur who proposed this,” Thompson recalls, “And one of the producers was sitting there and looking at this project—there was a blueprint for the plan for what it would look like on the ground—and he just said, ‘No.’ … He said, ‘That’s concrete, and it’s in the ground. If I’m successful, the chief is going to come and take it—so you need to make it mobile, because then I can take it at night and put it somewhere else.’ And that broke the whole economic model.
“Had we not done that due diligence, on the ground, before this entrepreneur had made the investment, we probably would never have got that information,” he says. “But going and asking these questions—about, ‘If it works, if you assume success, what are the likely consequences, positive and negative?’—is critical.”
It may feel a little strange to celebrate the abandonment of a nobly intentioned plan that seemed to make sound business sense. But MacMillan argues that tough love is especially imperative for social entrepreneurs.
“Here’s one of my problems,” the professor says. “You have these well-meaning people: bless them for their noble, good intentions. But they go out and collect resources and go charging off to do something that is vainglorious. It’s glorious, but it’s vainglorious; all those resources could be deployed by somebody else who’s done a more thorough job.”
“This touches on a critical aspect of the book,” Thompson adds. “Most folks who want to do this kind of work have choices. Their idea is not the only idea they’re ever going to have. So our mindset is: learn quickly and learn cheaply whether or not what you have in mind can work. If it can’t, do something else. It’s not that you stop trying to have positive social impact. But don’t just pick one.
“In academia they call it path dependency: you put all these resources into this thing with a preconceived solution, and the more you’ve invested, the harder it is to change direction or evolve what you had in mind,” he adds. “I think that’s one of the fundamental distinctions of our approach versus the traditional ‘how to solve the world’s problems’ approach. We sort of learn our way into a solution—if it exists—rather than invest in a preconceived notion of what the solution will be.”
That mindset extends to the production of the book itself. The first third of the Playbook was published as a beta version in June, and given away for free as an e-book. (Gazette readers may download a copy HERE.) The aim was to “pressure-test” the content of the book itself, by inviting early readers to help to shape an expanded second edition, to be released in November.
“The whole idea is we want to do crowd editing,” MacMillan says. “Get the people out there who are in a position to weigh in, to weigh in—to fix the book before it goes out there and we find that we’ve missed opportunities … We have no particular illusions that we know everything. There’s a lot more people out there who know more than us. Let’s use it.”
“We’re practicing what they preach,” says Steve Kobrin, executive director of Wharton Digital Press. “We thought we’d come out with a free e-book, with a couple of objectives. One is to help with selling the full version when it comes out in November. But two is to get some feedback from the social-entrepreneurship community. To start small, which is what they preach. To limit our expenses, which is what they preach. And we’ve asked people to join an advisory board to provide feedback, and a substantial number have.”
The deadline for that feedback passed in July, to give MacMillan and Thompson sufficient time to implement it ahead of the November publication of their expanded version. They hope the end result will serve to hold more social entrepreneurs to a standard as lofty as their intentions.
“What we’re hoping,” MacMillan says, “is that people will come to these funding agencies and say, ‘Have I got a great idea for you!’ And the funding agencies will say, ‘Before you go any further, here’s your book, go out and do your due diligence, and until you’ve done that we’re not going to give you any money.’
“So that’s where we see the value being: The NGOs who put huge amounts of money into projects that end up on the scrap heap could be diverted into ones that really will work.” —T.P.