Professor Stuart Hart, Keynote June 2, 2011

CECP

12 Jul 201106:13

Summary

TLDRThe speaker discusses an ongoing transformation akin to the 19th-century industrial revolution, emphasizing the pivotal role of corporate philanthropy in driving change. They argue that traditional philanthropy alone cannot solve global issues, but strategically invested corporate funds can catalyze innovation. The speaker calls for a shift towards inclusive models, leveraging clean technology to lift the base of the pyramid and advocating for 'embedded innovation' that involves co-creation with marginalized communities for sustainable business development.

Takeaways

🌟 We are in the midst of a significant transformation that will change how we conduct business, similar to the shift to the industrial model in the 19th century.
🔍 This transformation has profound implications for the mission, vision, core strategies of companies, and the role of philanthropy.
💰 The scale of investment needed to effect change is in the trillions, not billions, indicating the magnitude of the challenge ahead.
🚢 The analogy of bailing out a boat with a teaspoon is used to illustrate the insufficiency of current philanthropic efforts to meet the scale of global challenges.
🔄 Despite the paradox, philanthropy is more important now than ever, but its effectiveness hinges on how funds are utilized and the role it plays.
🌱 There's an opportunity for corporate philanthropy to act as a catalyst for change, particularly in facilitating and protecting experimental spaces and pilot projects.
🌍 The human population's growth and its impact on the planet underscore the urgency for fundamental changes in environmental and social practices.
📈 The concept of 'base of the pyramid' suggests a shift towards more inclusive models, which is key for the future of clean technology and social upliftment.
💡 The idea of 'green leap' is introduced, which involves marrying clean technology with value-oriented strategies and starting with piloting in underprivileged areas.
🔄 The concept of 'reverse innovation' or 'frugal innovation' is highlighted as a potential path forward, emphasizing the need for new approaches to innovation.
🤝 The importance of co-creation is stressed, where companies engage with local communities to build trust and develop business concepts together, starting from the ground up.
🛠 The need for new skills in business development, particularly in engaging with marginalized groups and establishing deep dialogues for mutual learning and innovation.

Q & A

What is the transformation being discussed in the script?
-The transformation discussed is a shift in the way business is conducted, akin to the move to the industrial model in the 19th century, with fundamental implications for company strategies and the role of philanthropy.
Why is the speaker suggesting that philanthropy is more important now than ever before?
-The speaker argues that philanthropy is crucial today because of the unprecedented scale of global challenges that require more than just billions but trillions of dollars in investment.
What is the paradox the speaker refers to regarding philanthropy?
-The paradox is that while philanthropy is extremely important, the scale of the world's problems is so vast that traditional philanthropic efforts alone cannot solve them.
What role does the speaker see for corporate philanthropy in this new era?
-Corporate philanthropy is seen as a catalyst, facilitator, and enabler, particularly in supporting experimental spaces and pilot projects that can lead to transformative change.
What does the speaker mean by 'base of the pyramid'?
-The 'base of the pyramid' refers to the large, low-income market segment that has been traditionally underserved and represents a significant opportunity for inclusive business models.
What is the 'green leap' concept mentioned in the script?
-The 'green leap' concept is about combining clean technology with value-oriented production strategies to create new, environmentally friendly solutions, starting with the base of the pyramid and then scaling up.
What is the speaker's view on the current approach of Western companies to new markets?
-The speaker criticizes Western companies for having a closed value proposition, where they market and sell predetermined products rather than co-creating solutions with the communities they aim to serve.
What is the term 'co-creation' in the context of the script?
-Co-creation is the process of developing products or services collaboratively with the target community, leveraging the company's core competencies and the local knowledge and needs of the community.
What is the importance of 'embedded innovation' as discussed in the script?
-Embedded innovation is important because it involves deep engagement with marginalized groups, building trust, and creating business concepts that can scale from the ground up, ensuring sustainability and relevance.
Why does the speaker emphasize the need for direct personal relationships in business development?
-Direct personal relationships are essential for deep dialogue, two-way knowledge exchange, and the co-creation of business concepts that neither the company nor the community could have developed independently.
What challenges does the speaker identify in the current business development approach?
-The speaker identifies the lack of imagination in commercialization strategies and the neglect of the needs of the two-thirds of humanity that have been left out, which represents a blind spot in the clean tech community.

Outlines

00:00

🌟 Transformative Era of Business and Philanthropy

The speaker discusses a significant 15-28 year transformation in business models, akin to the shift to the industrial model in the 19th century. This change has profound implications for corporate missions, visions, and strategies, as well as the role of philanthropy. The speaker emphasizes the inadequacy of tens of billions of dollars in philanthropy to effect global change, suggesting that trillions are needed. Despite this, philanthropy is crucial in its new role as a catalyst for experimental initiatives. The speaker sees a rare opportunity for corporate philanthropy to facilitate and protect innovative spaces, especially in clean technology and lifting the 'base of the pyramid.' There's a call for inclusive models and a focus on co-creation and reverse innovation, starting with piloting green technologies at the base of the pyramid and then scaling up.

05:02

🤝 Direct Engagement for Embedded Innovation

The second paragraph delves into the necessity of direct personal relationships for competitive imagination and innovation. The speaker argues that NGOs and on-the-ground personnel are indispensable for establishing these relationships, which are essential for the co-creation of business concepts. The speaker introduces the concept of 'embedded innovation,' where philanthropy plays a dual role in providing early-stage support and learning experiences for businesses. This approach allows businesses to apply usual metrics after an initial incubation period. The speaker stresses the importance of this method for engaging with marginalized groups and building trust, which is crucial for the development and scaling of business concepts from the ground up.

Mindmap

Keywords

💡Transformation

Transformation refers to a profound change in form, appearance, or character. In the context of the video, it denotes a significant shift in the way business is conducted, akin to the industrial revolution of the 19th century. The speaker suggests that this transformation has fundamental implications for corporate strategies and the role of philanthropy, indicating a need for a new approach to accommodate the changing landscape.

💡Philanthropy

Philanthropy is the act of promoting the welfare of others, typically through the donation of money or resources. The video emphasizes the importance of philanthropy in the current business environment, suggesting that while billions of dollars are insufficient to create global change, the role of philanthropy, particularly corporate philanthropy, is more crucial than ever in facilitating and enabling innovative solutions to societal challenges.

💡Catalyzing

Catalyzing means to accelerate or intensify a process. The speaker argues that philanthropists have a rare opportunity to act as catalysts, facilitating and enabling the development of new ideas and initiatives. This concept is central to the video's theme, as it suggests that philanthropy can spark change and innovation, particularly in the realm of clean technology and inclusive business models.

💡Base of the Pyramid

The term 'Base of the Pyramid' refers to the largest but lowest-income segment of society, often overlooked by traditional business models. The video discusses the importance of shifting business thinking towards more inclusive models that consider this segment, emphasizing the potential for economic growth and social impact by lifting this base through clean technology and innovative business strategies.

💡Clean Technology

Clean technology, also known as green technology, refers to products and services that reduce environmental impact through sustainable practices. The video highlights the need for clean technology to be a central part of future agendas, particularly in the context of addressing global challenges such as overpopulation and environmental degradation.

💡Reverse Innovation

Reverse innovation is a concept where innovations are first developed for and launched in low-income markets and then adapted for high-income markets. The speaker mentions this term to illustrate a shift in traditional innovation paradigms, suggesting that starting with the needs of the 'base of the pyramid' and then scaling up can lead to more sustainable and inclusive solutions.

💡Co-creation

Co-creation involves a collaborative approach where multiple parties contribute to the development of a product or service. The video emphasizes the importance of co-creation in the context of business development, particularly when engaging with marginalized communities. It suggests that by combining the core competencies of a company with the needs and insights of the community, more innovative and relevant solutions can be created.

💡Embedded Innovation

Embedded innovation refers to the process of integrating innovation deeply within an organization or community, ensuring that it becomes a part of its culture and operations. The speaker discusses the importance of this concept, suggesting that philanthropy can help embed innovative practices and technologies within communities, particularly at the 'base of the pyramid', to create sustainable change.

💡Business Process

A business process is a set of activities that produce a specific output for a particular business or organizational unit. The video suggests that the challenge of incorporating clean technology and inclusive models is not just about marketing or technology but fundamentally a business process challenge. It involves engaging with marginalized groups, building trust, and co-creating business concepts from the ground up.

💡Deep Listening

Deep listening is the act of fully concentrating, understanding, and being present with the speaker to grasp the complete meaning of what is being said. The video emphasizes the importance of deep listening in the context of business development, particularly when engaging with different communities. It suggests that true understanding and co-creation can only be achieved through a two-way flow of knowledge and information.

💡Capacity Building

Capacity building refers to the process by which individuals, organizations, or societies gain the abilities, knowledge, and skills to perform functions, solve problems, and set and achieve objectives effectively. The video mentions the role of philanthropy in capacity building, particularly in enabling the development of new skills and capabilities that can drive innovation and sustainable business practices.

Highlights

We are in the midst of a transformation that will completely shift the way we think about doing business.

This transformation is comparable to the shift to the industrial model in the 19th century.

Fundamental implications for the mission, vision, and core strategies of companies and corporations.

The role of philanthropy is changing significantly in this new business environment.

Tens of billions of dollars in philanthropy are insufficient for the scale of change needed.

Philanthropy and corporate philanthropy are more important than ever, but the focus must be on how the money is spent.

There is a rare opportunity for philanthropists to be catalysts, facilitators, and protectors of experimental spaces.

The human population has grown significantly, and the planet's capacity to support current activities has been surpassed.

Fundamental changes are needed both environmentally and socially to avoid a collision course.

The concept of 'base of the pyramid' thinking is introduced as a more inclusive model.

Clean technology and lifting the base of the pyramid are key to the future agenda.

Corporate philanthropy can play a key role in catalyzing new developments in clean technology.

There is a lack of imagination in commercialization strategies, especially concerning clean tech.

The idea of 'green leap' is proposed, combining clean technology with value-oriented product strategies.

The concept of reverse innovation or frugal innovation is suggested as the way forward.

Western companies often come with a closed value proposition, which may not be effective.

The need for co-creation in business development, involving deep dialogue and mutual learning.

The importance of establishing direct personal relationships and deep listening for business development.

The idea of 'embedded innovation' as a new skill for companies to acquire in their philanthropic endeavors.

The necessity for companies to be on the ground, building trust, and co-creating business concepts with communities.

The role of philanthropy in providing the learning experience and early capabilities for business embedding.