The Social Business

Social innovation Grameen style: “Look at ice-cream. The cones are edible.”

I’ve been in Nottingham this morning for a breakfast event hosted by Capital One with Professor Muhammad Yunus, the man often described as the Godfather of Social Business.

Prof. Yunus is best known for Grameen – who in turn are best known for offering banking services to poor women in Bangladesh. He’s in the UK for a couple of days – with Friends of Grameen President Liam Black by his side – to talk with a wide range of people – including the UK Government – about social business and, more specifically, the problems the bank is currently facing thanks to the unwelcome intervention of the Prime Minister of Bangladesh.

Prof. Yunus made it clear, with the answer to Liam’s first question at this morning’s event that he didn’t want to “waste time” talking about Grameen’s current problems. Instead he wanted to focus on social business – so that’s what I’ll do here too.

It’s easy to feel a bit starstruck in the presence of someone who has achieved as much as Muhammad Yunus. He’s an interesting mix of zen-like calm and steely determination. This isn’t an ivory-towers academic who’s dipped his toe naively into the world of business. I get the impression you wouldn’t mess with Professor Yunus. But his generosity, warmth and humility are immediately apparent too.

Liam introduced Prof. Yunus as a man who’s “best known for asking questions that turn things on their head.” This for me was the theme of the talk, and something that in my own little way I try to bring to my work too. Many of his questions, of course, concern poverty and its causes. “Poverty isn’t created by poor people. It’s externally imposed. It comes from outside.” A statement such as this challenges – and immediate invites questions. Who/what is imposing poverty? How do we respond?

An illustration of the conversation between Muhammad Yunus and Liam Black

An illustration of the conversation between Muhammad Yunus and Liam Black

His social business journey began in 1976, as an academic who, in his words, was “growing tired of teaching theory whilst people died outside.” He looked around in Bangladesh – and saw big problems with high-interest moneylending. So he decided to be begin lending money to the poor – the poor who most people believed (still believe?) aren’t worthy of banking services.

From those humble beginnings, Grameen now runs more than 50 social businesses – many in collaboration with multinationals – Danone, Veolia, Pfizer, Tesco and more – in a range of markets from microcredit to mobile phones to yoghurt. One of the things I find most fascinating about the Grameen approach is that none of the businesses distribute profit – yet many are run in collaboration with some of the world’s most successful profit-generating corporations.

That challenges me in a number of ways – with regards to my attitude towards who our business collaborates with – and some of my thinking about profit. Yet I’m not saying that Professor Yunus’s attitude towards taking dividends from social business (he suggests business is either selfish – profit maximising – or selfless) isn’t problematic either. But it’s a useful challenge….

He talked quite a bit about Grameen’s collaboration with Danone – a relationship I know a fair bit about having spent a couple of days with Danone at an Innovation Lab in Paris a few years ago. Together, Grameen and Danone sell high-nutrition yoghurt – with the double benefits of “health through food” (Danone’s mission) and plenty of jobs for people selling the yoghurts.

He told a story of product development. Execs arrived from Paris with sample products – in, of course, plastic pots. Cue one of Professor Yunus’s questions.

“Why is the pot plastic?”
“Because that’s what we sell yoghurt in around the world.”
“We haven’t set up a social business so that we can litter Bangladesh with plastic pots.”

They went away, and came back three months later – pleased with themselves of course – with a biodegradable, corn-starch pot. Professor Yunus looked at it, and asked another series of killer questions:

“Is it edible?” No? Why is not edible? People are paying good money for this product – why can’t we produce a pot they can eat? We eat ice-cream cones – so why not yoghurt pots?”

That’s innovation in action, right there…..

But is he – and Grameen – being used by multinationals hungry for good CSR stories and access to bottom-of-the-pyramid markets? Markets that are easily accessed by partnering with a social business with the incredible reach that Grameen has in countries like Bangladesh? Yunus responds to this question – which is asked all the time – primarily by journalists – with mock surprise. “They’re using me are they? Well, I never knew. I thought I was using them….” He’s delighted to be “used” – if being used means that a social business is developed that helps people out of poverty. But as I suggested earlier, Yunus is no naive Professor – I doubt you’d get far if your aim in collaborating with Grameen was purely selfish.

Too soon it was all over, and I had to dash to get my train to London, to catch the second half of the Empty Homes Conference and for a series of meetings to help us to develop Leeds Empties – an enterprising, collaborative approach to tackling the waste of empty homes so that more people have somewhere decent to call home. I travel down inspired by Professor Yunus’s indefatigability (to borrow a mis-used term). Fifty social businesses later, he’s still hungry for the next start-up. These final words stick with me:

“Social business is problem-solving business….. Every time I see a social problem, I set up a business to solve it.”

Inspiring stuff for all of us trying to make a difference through social business.

Categories: Business, Climate Change, Food, Grameen, Green homes, Microcredit, Social change, Social enterprise, Social entrepreneurs, Social Justice

A day with Bristol Together and Triodos » « Leeds Empties – plans for the next few months

1 Comment

  1. Rob, As yo may know Grameen isn’t the only non dividend distrbuting social enterprise. I offer a seasonally flavour anecdote of our own in which Grameen partner Este Bank is part of the story. As you may see, through duplicity they are coopted into denial of a human rights issue.

    http://world.maidanua.org/2012/social-enterprise-in-ukraine

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