Professor Stuart Hart, Keynote June 2, 2011
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
🌟 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.
🤝 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
💡Philanthropy
💡Catalyzing
💡Base of the Pyramid
💡Clean Technology
💡Reverse Innovation
💡Co-creation
💡Embedded Innovation
💡Business Process
💡Deep Listening
💡Capacity Building
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.
Transcripts
we are I believe in the midst of were
maybe 15 years in 28
transformation that will shift the way
we think about doing business completely
and it will be not unlike what happened
in the 19th century right when we move
to the industrial model and it has
fundamental implications it has
fundamental implications for the mission
vision and stret core strategies for
companies and corporations and obviously
it has fundamental implications for the
role of philanthropy let's face it tens
of billions of dollars are not going to
shift the world they're not we need
trillions of dollars of investment right
in the coming decade or two tens of
billions isn't going to get it done
right it's kind of like trying to bail
out the boat with a teaspoon it's just
not going to happen so on the one hand
this isn't going to make it right on the
other hand I will argue and this is the
paradox part of it that never has
philanthropy and corporate philanthropy
been so important as it is today but its
importance is it's a question of what's
the role right kind of what how is the
money spent and so what a large what
I'll argue is that you guys have a rare
opportunity to really be the catalyst
facilitators and enablers protectors
really of the experimental space the
white space the pilots I really do
believe that we stand at a crossroads
that this is a one of those rare times
where things everything changes in my
lifetime the human population has grown
from two to six point seven and if I
live to be a ripe old man you know knock
on wood I could see eight or nine
billion people on the planet I think we
know as a statement of fact that we we
have already surpassed the capability of
the planet to support what we're doing
but yet population continues to grow and
footprint continues to expand it's a
collision course it's never going back
the way it was and unless we make some
fundamental change in course both
environmentally and socially it's not a
pretty picture looking forward so it's
time to really shift our thinking toward
more inclusive models that's really what
the base of the pyramid we're thinking
is all about and so I think beyond
meaning which is getting to what comes
next in terms of clean technology and
lifting the base of the pyramid is the
agenda for the future there's enormous
opportunity there and we and we need to
get on with it and I'm absolutely
convinced that corporate philanthropy
can play a key role in catalyzing that
there hasn't been a lot of imagination
in my view when it comes to
commercialization strategy and there
certainly hasn't been much attention in
the clean tech community given to the
two-thirds of humanity that have been
left out so to me that's a blind spot I
think this idea of green leap how do we
marry clean technology and vop
strategies together create this
convergence and start by by piloting and
incubating new green technologies first
in the base of the pyramid and then
trickling them up right so the popular
phrase these days is reverse innovation
or frugal innovation you know that that
I think is the way forward unfortunately
our problem for most Western companies
our tendency is to come with a closed
value proposition where we've already
decided what it's going to be and now
we're marketing and trying to sell it to
you in other words we can't just go in
there with a completely open mind and no
idea about what's going to have we need
to come in and be able to represent what
are our core competencies what skills do
we have what technologies but not coming
with a final closed value proposition
product in other words a partially
composed symphony which can then be
completed together that's called
co-creation to me that's what we need to
learn how to do and you guys can help
your company's learn to do that the
problem is they won't do it on their own
because it's not going to follow the
same time horizon as conventional new
product development right as as a just
geographic expansion of a current
business it needs some time to incubate
and become embedded you know so it's
going to operate on a different time
horizon you guys can enable at that
Knable you can enable that to happen I
think it's enormously important so I
think Bo p is not just a marketing
problem you know about sachets it's not
just a technology problem about you know
well we need the killer app it's really
a business process a business
development challenge so it's about
engaging with marginalized groups it's
about
being on the ground building trust it's
about marrying the company's
capabilities with those in the community
and Korea and co-creating a business
concept and then scaling it from the
ground up right that that's a new skill
which can be acquired it's about
entering into a deep dialogue that
implies two-way flow of knowledge and
information not just one way collection
of data which is deep listening where
you could actually expand imagination
and mary capabilities together to create
businesses that and concepts that
neither could have on their own right
that that's where the competitive
imagination piece comes in and the only
way that happens is through establishing
direct personal relationships you can't
outsource at all the NGOs people from
the company actually have to be on the
ground right that that's what this
requires that takes new skill once again
we've already talked about that so I
think I think of this as embedded
innovation I think that's it's hugely
important as we move forward I think you
you know you're in a position to keep
that safe in other words it's still
philanthropic while at the same time
really providing the learning the
experience and the early capability and
the embedding necessary for the business
then to come in and really kind of take
it pick it up and run with it and it can
then apply all the usual metrics but you
can buy it the first couple to you know
a couple three years to really get the
thing off and running I think that's the
crucial take home
you
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