It was a cold snowy January evening when I first met Nobel Peace Laureate Muhammad Yunus at the World Economic Forum in Davos, Switzerland. We had dinner together with one of his colleagues who works for Grameen America in New York. We discussed social business in depth and its potential to solve many social and environmental problems facing the world today. I was taken aback by Professor Yunus’ humble manners and his warm vocal tone. I was very nervous to the point that I remember my left eye began to twitch! Something that rarely happens to me. He made me feel at ease. Still it was the first time in my life I was dining with a Nobel Peace Laureate and, without comparing or judging, to me he was and still is one of the most brilliant minds the world has ever known working hard to bring peace on our planet alongside Nelson Mandela, Archbishop Desmond Tutu, Aung San Suu Kyi, His Holiness the Dalai Lama and others. Surely the fact that I always held him in very high esteem and I have profound respect for him contributed to making me even more nervous that evening! Very few people in the world have had the social impact he had in poverty eradication. His microcredit model has been replicated in over 60 countries around the world. In Bangladesh alone Grameen Bank’s microloans benefit 40 million people.
I had prepared well and read with great interest all the books and other literature published by Dr. Yunus. I felt in awe to be sitting next to a man who had worked relentlessly all his life and made many sacrifices from a young age to find effective ways to improve the conditions of poor people in Bangladesh and the world over. I was enthusiastic about his pioneering concept of social business and from that first meeting I knew I would become an active player in social business. It took me two years to take the big step and start my own organization, Social Business Earth, which has the mission to spread and implement social business in Switzerland and the world.
The company was established as a social business, the first of its kind on Swiss territory, in June 2011, in Lugano, Switzerland, and is officially recognized by Professor Yunus. It is a non-dividend company of social utility and at the moment we are an all-women team with the exception of Sabri, the Bangladeshi intern who assists us with translations into Bangla language and is based in Bangladesh. Currently our team is made of six committed and bright young women who strongly believe in our mission in social business. We are still looking for seed capital for the company start-up in case someone out there wishes to invest in our company! Our activities do not allow us to be sustainable yet but I am confident that patience, hard work and determination will see us through and the company will become profitable. It takes time. Social business is an innovative sector and if it was already widely spread there would have been no point in establishing Social Business Earth. Our job is to encourage and facilitate stakeholders to create new social business projects.
Our activities include offering consultancy and expertise in social business and incubating social businesses. In addition, we organize events to raise awareness on this concept such as the annual meeting of the Social Business Conference which is held every year in the month of May in Switzerland. Our vision is poverty eradication globally. People regard it as an impossible vision but if more of them decided to focus on the problem it could be solved. If you think that the tragedy of 9/11 killed 2,976 people, that 2.5 million people died in wars justified by 9/11 and a staggering number of 91.5 million died from hunger since 9/11, it is clear that the focus at the moment is not on poverty eradication. 9/11 was indeed a dramatic event but the tragedy of 25,000 daily deaths from poverty and hunger goes unnoticed every day. Take all the money the US spends on wars and other military related actions, and you could feed all of those people many times over.
So what is “Social Business” according to Professor Yunus’ definition and why is it so important? In simple terms, social business is a non-dividend company that is created to address and solve a social problem in sectors such as healthcare, education, poverty eradication, environment, housing for the disadvantaged etc. Once the investors have gradually recouped their initial investment they cannot take any dividend beyond that point and all profits are reinvested in the company for its expansion and to achieve the social objective. No personal gain is desired by the investors.
Social business is an important means to solve many social and environmental problems by utilizing creative economic tools that are financially sustainable as opposed to charity and donations. By that we do not mean that charity is not useful. Of course it is. In emergency situations such as earthquakes, climatic disasters, tsunamis, hurricanes and so on, donations are needed to provide food, water, medicines and shelter to people hit by natural calamities or affected by wars like refugees. However, if we want to build an infrastructure for people, a long-term solution that will allow them to have jobs and solve other social problems affecting their community, then charity can no longer be the answer. It is time to start using business to solve problems and not just to maximize profit, and this is what social business is all about.
Professor Bob Doppelt, Executive Director of the Research Innovation Group, eloquently stated that the roots of our difficulties are simple, yet for many business and political leaders completely hidden from view. The activities of most firms, and the goals and structure of the economy as a whole, have been shaped by fundamental misjudgments about how the planet functions and what it means to live a good life.
To resolve today’s challenges, our leaders must overcome the erroneous perspectives that created the predicament. At the most fundamental level, this requires moving from a “linear” way of thinking – where we focus on quickly fixing the most visibly broken parts of what isn’t working – to a “systems” perspective that brings thought and behavior into line with the natural laws of sustainability. Despite years of talk about systemic thinking, few companies or governments actually practice it. This is due, in part, to the lack of a simple framework to guide the implementation of a systems perspective.
I will be writing on social business every month. Thank you to Diaforlife Director, Sharda ten Hove, for the opportunity. Stay tuned for more info and news on social business!