Large federations such as Habitat for Humanity, Girl Scouts, and the Red Cross have very entrepreneurial chapters and non-entrepreneurial chapters alike, sometimes in contiguous districts.

In turn, large, multi-purpose organizations such as Chicago’s Heartland Alliance, Minneapolis’ Project for Pride in Living, and New York’s Environmental Defense may have a blend of entrepreneurial and non-entrepreneurial activities underway at any given time. In addition, long-established organizations such as CARE International can change directions under new leaders such as Peter Bell, while others such as the Nature Conservancy may stop entrepreneuring for a time as they face external pressures such as the recent congressional investigation of land conservation policies.

Consider, for example, a simple two-by-two table that compares the level of support for social entrepreneurship with the intensity of commitment at the individual, group, organizational, network, and/or community level. As Table 2 suggests, such a classification scheme would allow for empirical investigation of what moves individuals and organizations upward toward the highest level of entrepreneurship, and what might explain movement downward toward slowdowns and pauses:


TABLE 2: COMPARING INTENSITY AND SUPPORT FOR ENTREPENEURSHIP






It may be, for example, that rebellious entrepreneurship despite organizational resistance is an essential first step toward full organizational commitment or a future spin-off, that false entrepreneurship not worth the trouble, let alone the funding, encouragement, or training, and that top-down diffuse entrepreneurship can ignite an organization toward great social impact, especially given the resources that a large organization might invest. Understanding movement within such a classification scheme requires analysis of the markets in which entrepreneurs operate, as well as the barriers to success.

Some researchers are already engaged in just such work. As Jeffrey A. Robinson (2006) argues in his emerging work on markets and institutional barriers, the field will not advance beyond “journalistic accounts” until it confronts the economic, social, and organizational structures that surround entrepreneurial opportunities:

First, social entrepreneurship opportunities are different from other types of opportunities because they are highly influenced by the social and institutional structures in a market/community.

Second, social entrepreneurship is not only a process by which social problems are solved using entrepreneurial strategies but it is also a process of navigating social and institutional barriers to the markets/community they want to impact. Social entrepreneurs are successful because they are able to execute and navigate. The ability to do both well is part of what makes social entrepreneurs and social entrepreneurship so special.

Third, social entrepreneurs find opportunities in areas and under circumstances they understand. I argue that an interaction takes place between the personal experiences and/or work experiences of the social entrepreneur and the characteristics of the market/community they are attempting to enter. This navigation process is one that is not understood by entrepreneurship scholars but is clearly an essential step toward the establishment of the venture (p. 14-15).

Such patterns will not emerge until scholars collect enough cases and conduct the needed histories to sort social entrepreneurs appropriately. Assuming that such a sorting can be done, one can easily imagine how the resulting knowledge might lead toward the development of signposts of impending change, and appropriate hedging and shaping actions that might help social entrepreneurs choose the right strategies to achieve the hoped-for pattern-breaking impact.

This sorting would also help answer the kinds of questions that Alvord, Brown, and Letts (2004) posit in their study of the seven well-established social entrepreneurships, including “when or how strategically timed financial support can make a pivotal different to the emergency of a successful social innovation” and “what contextual patterns encourage or hinder the emergence of different kinds of innovations…” (p. 280).

Alvord, Sarah H., L. David Brown and Christine W. Letts. (2004). “Social Entrepreneurship and Societal Transformation: An Exploratory Study.” The Journal of Applied Behavioral Science, 40:3, 260-282.

Robinson, Jeffrey A. (2006). “Navigating Social and Institutional Barriers to Markets: How Social Entrepreneurs Identify and Evaluate Opportunities.” draft chapter to be published in J. Mair, Jeffrey. A. Robinson, and K. Hockerts, eds., Social Entrepreneurship, London: Palgrave.

Social entrepreneurship may be the most exciting and frustrating field in public service today.

On the one hand, it offers the excitement of breakthrough thinking, compelling life stories, and potentially dramatic progress against daunting global problems such as hunger, poverty, and disease. It also offers the kind of research opportunities described above.

On the other hand, the field offers few evidence-based insights on how social entrepreneurs can improve the odds of impact. Given few tools for separating the wheat from the chaff, social entrepreneurs are left with long menus of advice. As a result, they often reinvent the wheel as they struggle to discern lessons from a relatively small number of exemplary peers.

By often defining social entrepreneurs as a rare breed, advocates may have created a self-fulfilling prophecy in which these rare breeds toil in relative isolation and obscurity for decades hoping for scale-up and full impact. Although entrepreneurs can find plenty of colleagues at international meetings such as the Skoll World Forum on Social Entrepreneurship, the supply of high-quality research base has not kept up with the demand, in part because the demand has accelerated much faster than research rewards such as academic recognition and tenure.


Toward a Broader Definition of Social Entrepreneurship

It is not yet clear whether there is more social entrepreneurship in the U.S. and the world today than one might assume given the contemporary focus on a relatively small number of exemplars. What is clear is that past exemplars have mostly been solo entrepreneurs who launch, nurture, and grow a programmatic innovation into full impact.

One way to broaden the number of exemplars is to expand the definition of social entrepreneurship to expand the locus of socially-entrepreneurial activity, while being more explicit about the kinds of activity that qualify as entrepreneurial.

The following definition attempts to do both:

A social entrepreneur is an individual, group, network, organization, or alliance of organizations that seeks sustainable, large-scale change through pattern-breaking ideas in what and/or how governments, nonprofits, and businesses do to address significant social problems.

This definition contains eight basic assumptions about the sources, goals, and strategies of social entrepreneurs, the socially-entrepreneurial organizations they either build or inherent, or the less-entrepreneurial organizations they change to full-blown socially-entrepreneurial purposes.

1. Social entrepreneurs do not have to be individuals—they can also be small groups or teams of individuals, organizations, networks, or even communities that band together to create pattern-breaking change. This assumption moves the field away from individual-centered study, while expanding the number of potential social entrepreneurs that might already exist.

2. Social entrepreneurs seek sustainable, large-scale change. This assumption, which adopts the prevailing goal-oriented nature of the contemporary debate, nonetheless moves the field away from questions about who becomes an entrepreneur to what they seek, while again expanding the number of potential social entrepreneurs that might exist.

3. Social entrepreneurship can involve pattern-breaking ideas in either how or what gets done to address significant social problems. This assumption moves the field toward a broader definition of social entrepreneurship that includes organizational and administrative reforms, as well as “using old stuff in new ways.”* It also embraces Dees definition of “enterprising social innovation” as a blend of the social enterprise (or market-driven) school of thought with the “social innovation” school presented in this volume.

4. Social entrepreneurs exist in and between all sectors. This assumption opens the discussion beyond nonprofits to include other sectors and multi-sectoral entities. Social entrepreneurship may be more difficult to launch and sustain in government, for example, where the penalties for risk taking are immediate, but it exists nonetheless. Again, it also embraces Dees and Anderson’s notion of “sector-bending” organizations that use elements of nonprofit and for-profit thinking.

5. Social entrepreneurs need not engage in social enterprise or use market-based tools to be successful. This assumption breaks the necessary-but-not-sufficient relationship between social enterprise and social entrepreneurship by rendering earned income as one of many possible means to a social-purpose end. As Dees (2004) recently writes, “Successful social entrepreneurs will use the most effective structures, strategies, and funding mechanisms to achieve their social objectives. Social entrepreneurship should not be seen as a funding strategy, and it should not be tied to the idea of business ventures….At its heart, entrepreneurship is about establishing new and better ways to create value” (p. 17). It is important to note that Dees’ more recent work suggests that the use of market-driven tools such a micro-finance may be a way of distinguishing between different types of social innovation.

6. The quantity of social entrepreneurship can vary greatly across individuals and entities. Some social entrepreneurs will be very entrepreneurial compared to others, while others may restrict their entrepreneurial activity to a particular program or unit. This assumption allows for comparisons across individuals and entities that are very, fairly, or only somewhat entrepreneurial, which may yield valuable knowledge on the conditions that might permit greater activity, as well as the conditions that might make lower levels of entrepreneurship quite appropriate.

7. The intensity of social entrepreneurship can and does ebb and flow over time as circumstances change. This assumption allows further study of the economic, political, social, and organizational conditions that might explain stall points, pauses, stops, and restarts in socially-entrepreneurial activity. Under this assumption, social entrepreneurs can occasionally look very non-entrepreneurial as they consolidate, retrench, or respond to inevitable external pressures. Challenge the conventional wisdom, and the conventional wisdom will almost always challenge back—that is, after all, how the conventional wisdom survives.

8. Social entrepreneurs sometimes fail, though at as-yet-to-be-determined rates. Much as they may seek to create pattern-breaking change, they face serious barriers to success, not the least of which is the tendency of the status quo to push back against pattern-breaking change. That is, after all, the way the status quo endures.


It is easy to see how this definition might produce a longer list of both successful and less-successful cases. Not only does the definition assume social entrepreneurship occurs in many places (governments, nonprofits, businesses, and in between), it is also quite explicit about the potential role of technical innovation such as low-cost, wireless, crank-powered computers for citizens in less developed countries through partnerships between nonprofit funders and for-profit businesses.

* This term was invented to describe some forms of government innovation, and is discussed in Mary Bryna Sanger, and Martin Levin, “Using Old Stuff in New Ways: Innovation as a Case of Evolutionary Tinkering,” Journal of Policy Analysis and Management, vol. 10, no. 4, Fall, 1991.

Dees, J. Gregory. (2004). “Putting Nonprofit Ventures in Perspective.” In Sharon M. Oster, Cynthia W. Massarsky, and Samantha L. Beinhacker. Generating and Sustaining Nonprofit Earned Income, 3-18. San Francisco, Jossey-Bass.

Many of the definitions discussed above contain either implicit or explicit lists of management skills for successful entrepreneurship, including the ability to activate the public, raise capital, negotiate results, and manage the difficult transitions involving scale-up to full maturity. Although skills cannot create ambition and perseverance, for example, they can lower the thresholds governing just how much ambition and perseverance are necessary for success.

Despite relatively little research on which skills matter most to success, there is tantalizing evidence that skills can be both defined and taught, thereby raising the possibility that social entrepreneurship need not be so rare in the future.

There is equally tantalizing work in the field of business entrepreneurship where scholars are increasingly interested in the relationship of social skills to financial success. According to Robert Baron and Gideon Markman (2003), both professors at the Rensselaer Polytechnic Institute’s Lally School of Management, social competence in interacting with others was an important predictor of success in two very different industries, cosmetics and high-tech. This work is less about who becomes an entrepreneur, and much more about why some entrepreneurs are more successful than others. Hypothesizing that “all other factors being equal, the higher entrepreneurs’ social competence, the greater their financial success.”

Baron and Markman surveyed 230 entrepreneurs using a questionnaire containing 30 items designed to assess mastery of four different skills:

1. social perception (e.g., “I can usually read others well—tell how they are feeling in a situation.”)
2. social adaptability (e.g., “I can adjust to any social situation,” “I can talk to anybody about anything.”)
3. expressiveness (e.g., “What I feel inside shows outside.”)
4. impression management (e.g., “I’m good at flattery and can use it to my advantage.”) (p. 49).

The research suggests that social perception is a significant predictor of financial success in both industries, while social adaptability was only significant in the cosmetics industry and expressiveness only significant in the high-tech industry. Social adaptability was an insignificant predictor in both industries.

The importance of social skills is echoed in the Panel Study of Entrepreneurial Dynamics. Looking at the range of data generated by the huge sample of entrepreneurs and non-entrepreneurs, Baron (2004) found that accuracy in understanding others, the “fine art of looking good,” persuasiveness, and influencing the emotions of others are all significant predictors of entrepreneurial success. Baron also suggests that existing training programs might be modified to help “entrepreneurs avoid the costly social errors that can result in failure even when their ideas are sound and their motivation, talent, and experience are high. Given the importance of entrepreneurs in creating wealth for their societies as well as themselves, this would appear to be a highly desirable outcome and one with important social benefits” (p. 231).

This kind of exploratory research is particularly important for building the field of social entrepreneurship, especially given the burgeoning number of undergraduate and graduate programs. Social skills can be taught, as can entrepreneurial behaviors. So can financial and managerial skills such as fundraising, results-based evaluation, continuous improvement, and strategic planning. Even if the number of contemporary social entrepreneurs is as low as Drayton and others suggest, the number of future entrepreneurs may be quite elastic as the research and training base expands.

As Gillian Mort, Jay Weerawardena, and Kashonia Carnegie (2003) caution, however, skills alone do not make the entrepreneurship. Instead, social entrepreneurship resides in the intersection of a Venn diagram that combines virtuousness (life experiences?) social opportunity recognition (demographics and identity?), judgmental capacity (behaviors?), risk tolerance (biases?), and innovativeness (skills?). Opportunities cannot yield social entrepreneurship absent judgment and virtue, just as risk tolerance cannot yield social entrepreneurship without innovativeness.

Baron, Robert A. and Gideon D. Markman. (2003). “Beyond Social Capital: The Role of Entrepreneurs’ Social Competence in Their Financial Success.” Journal of Business Venturing, 18:1, 41-60.

Baron, Robert. (2004). “Social Skills.” In Gartner, et al. (Eds.), Handbook of Entrepreneurial Dynamics, 220-233. Thousand Oaks, CA: SAGE Publications.

Mort, Gillian Sullivan, Jay Weerawardena, and Kashonia Carnegie. (2003). “Social Entrepreneurship: Towards Conceptualization.” International Journal of Nonprofit and Voluntary Sector Marketing, 8:1, pp. 76-82.

Frustrated by the lack of progress in identifying stable personality characteristics that might explain business entrepreneurship, researchers have turned to cognitive biases as a source of entrepreneurial energy (e.g., the tendency to underestimate risk, over-rely on small samples of exemplars for inspiration, and avoid counter-factual thinking that might weaken confidence).

Building on very large samples of entrepreneurs and non-entrepreneurs, this research has provided some of the most promising insights to date on what makes the entrepreneurs different. As Daniel J. Forbes summarized the research in 1999, scholars had already produced a number of important insights on how entrepreneurs think.

First, Forbes notes that business entrepreneurs do, in fact, base their decisions to act on real information about perceived feasibility. Contrary to the conventional wisdom that entrepreneurs are born, not made, the literature actually suggests that educators, civic leaders, and investors can strengthen the demand-side of entrepreneurship by increasing the odds of success.

Second, Forbes concludes that entrepreneurs prefer informal sources of information, which may explain why some may never apply for awards and fellowships, or seek management assistance. The lonely life of the social entrepreneur could be made far less lonely by building stronger networks among entrepreneurs through events such as the Skoll World Forum.

Third, Forbes finds that entrepreneurs use a distinctive set of thought processes to interpret data, some of which may lead to self-destructive behaviors. Business entrepreneurs tend to interpret equivocal situations favorably, for example, and under-estimate risk. Entrepreneurs also overestimate their chances for success, and over-use what scholars call the representativeness heuristic, or rule of thumb, by relying on small sample sizes to inform decisions and simple extrapolations of past experience to predict the future.

These biases can be corrected by training and more structured decision systems, but may be essential for taking the first step toward social impact. It is little wonder, for example, that entrepreneurs might under-estimate risk or avoid second-guessing. If they were truly rational about the odds of success, social entrepreneurs might never launch their efforts at all.

Similarly, if social entrepreneurs actually engaged in aggressive counter-factual thinking, they might discover so many threats that they would never launch.

Forbes, Daniel P. (1999). “Cognitive Approaches to New Venture Creation.” International Journal of Management Reviews, 1:4, 419-439.