Rob Katz

Conference Report – Innovation for the Third Sector

Brazil conference pictureGuest blogger Ben Powell is Managing Partner of Agora Partnerships. Last week, he traveled to Sao Paolo, Brazil, to attend Innovation for the Third Sector: Sustainability and Social Impact, and filed this report. Read below for Ben’s observations of the rapidly growing Latin American social enterprise sector – including some poignant success stories as well as potential hang-ups.

Rob Katz asked me to report on the goings on of a major social enterprise conference that just concluded in Brazil – and because I’m a big fan of Rob’s and of, I agreed. As it turns out, the conference deserves some publicity in the US because what it accomplished was both remarkable and important.Last week, nearly 300 people from 100+ civil society organizations (mostly South American, European, and American)? descended on Sao Paolo for three days of networking and learning. The conference was sponsored by the William Davidson Institute at the University of Michigan and GESC, a Brazilian think tank. For those who don’t know WDI, they have quickly established themselves as a premier think tank for a range of global development and sustainability issues. They deserve a lot of credit for pulling off an incredibly complex, ambitious conference.
Innovation for the Third Sector: Sustainability and Social Impact was videotaped , translated into three languages, and can be found in its entirety on the web. The site contains archives of all the sessions and will be live for the next 4 months. I would especially encourage people interested in hearing directly from Latin American social entrepreneurs to check it out and see for themselves.

Big conferences like this one cost an enormous amount of time and money, and so it’s fair to ask what of the conference lingers after the participants have all gone home. While mulling over this question instead of just sipping a caipirinha (thanks, Rob), I came to a few observations about what I really liked about the conference and where I think the sector – and its conferences – is still struggling.

What I liked best was that the conference celebrated the business approach to social enterprise in a region where the sector has enormous potential but is still driven largely by personality and serendipity instead of by organizations and strategy. My own view is that mission-driven organizations should be ruthlessly efficient, operating like a well managed business and not as a vehicle for personal self-fulfillment or expression. This was the message of the professors and students from Michigan – and their Brazilian counterparts – who led dozens of panels providing technical assistance on how to write a business plan, develop partnerships, apply strategy, implement governance best practices, and apply business tools for identifying and capturing opportunity.

So how did this now- familiar message of U.S. business schools fly in Brazil? I think fairly well with the younger generation, but and I am not so sure about the older generation. This was the general consensus, based on at least from the conversations I had and my discussions with a very sharp and energetic group of Michigan Business School students. There appeared to be general agreement (especially from the Brazilians who know their sector best) that, despite a lot of progress, the Brazilian social sector – the largest and most dynamic of any in Latin America – is still a long way from reaching its potential. Why?

I think the reasons that came out in the conference are very similar to the reasons why small business entrepreneurs struggle so hard as well in this region.

1) Vision – I heard so many courageous, hard working social entrepreneurs tell incredible stories of overcoming adversity to create social value in their community, stories that proved their leadership ability and moral authority, and yet they still had a fairly limited or localized view of the value they could create. Helping this new generation of leaders to have the confidence and skills set to think big is a huge challenge and one that the conference clearly helped address.

2) Trust – As the head of the Brazilian think tank and co-cost GESC noted in the concluding speech, Brazilians, like many in Latin America and Africa tend to be distrustful when it come to partnering with other organizations or sharing resources and information. This is a huge barrier, one that trust building exercises like the conference or hearing successful Brazilian case studies can help overcome.

3) Management education and expertise – There is not a large pool of trained managers to run mission-driven organizations and it is incredibly hard for managers to find the time to focus on executive education or to write a business plan. This is just another reason why business school students should consider a career in social entrepreneurship since their skills are so desperately needed and highly leveraged in this field.

One thing I appreciated was that funding was not constantly brought up as the major determinate for success. As the entrepreneurs I met demonstrated, money is great but if there simply is no money, as is often the case, the true entrepreneur figures it out and bootstraps and makes it work because they are obsessed with attacking their social problem.

Finally, I was struck by how many entrepreneurs in the panels I attended wanted to express themselves, their story and values and the world they were trying to create – and not in good way. I appreciate this tendency, all the more so in Latin America where I take my hat off to any one trying to solve a social problem – they represent true courage and it is a lonely road, one that often requires considerable personal sacrifice. But I do think the leaders in the sector need to move beyond justifiable pride in their own accomplishments to take a hard look at whether they are doing every thing they can to fulfill their mission and to communicate their mission to people in a position to provide resources.

“Many of the non-profits seems to have not yet made the transition from entitlement to creating value.” Andy Hastings, a student at the Ross Business School at Michigan told me. “Borrowing a line here, the nonprofits I met are worth more than they think they are and instead of being on the receiving end of a check in a zero-sum game, they need start thinking more about how they can actively generate new value beyond the simple ’good’ of serving those in need.? That shift, as you well know, will do more for those in need.” ?

At the end of the day, social entrepreneurs are engaged in building effective organizations. As the field evolves, the unit of analysis needs to focus more on the organizations themselves and less on the founding personalities. The panelists and participants who will become true leaders seemed to understand this dynamic. Judging by the packed business plan sessions, the future is promising.

But others seemed to be dynamic leaders in great danger of under-delivering on their potential. I sat through some panels and had no idea what problem the entrepreneur was trying to solve or how they defined success or what they wanted me to learn from their presentation. Perhaps something was lost in translation, but I found myself growing a little impatient – too many stories about what people had done, and not enough about what they learned, what they planned to do and why. This is certainly not a criticism of the Brazilians – this is a problem with our entire sector, but things are changing and we should accelerate this change.

This impatience is a good sign. It means the sector is growing up. In Brazil as in the US, expectations are higher now as to what social sector leaders can and should be able to accomplish. A soul-enriching world view and a good story is wonderful, but they alone are not sufficient anymore. WDI and its Brazilian partners sent this message by hosting this conference. Bring us your heart, soul, passion and courage like you always have, but take management excellence seriously, reach out to new partners, be clear on your mission and strategy, do not be afraid of failure, give back to the field, and realize the incredible power you already have to create a high performing enterprise. I think that is a message that is worthy of a lot of time, money and ongoing support and an extraordinary effort that deserves, in the Brazilian fashion, a big thumbs up.