Running Business as if the Future Matters

This post was written by Barbara Dyer, President and CEO, The Hitachi Foundation, on behalf of the Case Foundation:

The Case Foundation creates powerful partnerships and vibrant networks designed to address many of today’s greatest social challenges. Read about how one of our partners, the Hitachi Foundation is sparking change within the entrepreneurial sector through its creative new programming.

The Long Now Foundation’s Interval Café is a place for conversation about long-term thinking. Nestled in a concrete warehouse at San Francisco’s historic Fort Mason, the Interval was a fitting watering hole for the nearly 2,500 participants in the recent Social Capital Markets (SOCAP) gathering. SOCAP’s annual pilgrimage to Fort Mason brought together innovators, investors, foundations and social entrepreneurs to “build a world we want to leave to future generations.

But drive an hour south from Fort Mason to Silicon Valley and you’ll be reminded that short-termism is deeply embedded in our business culture. This epicenter of tech start-ups is defined by a business development norm of launch, scale and exit. Investors are more likely to ask, “What’s your exit strategy?” than “What’s your long-term vision?”

Today’s young business leaders came of age in the era of “short-termism” where companies enter and exit in five to ten year cycles and compete in a world where workers average 11.3 jobs during their careers. Dramatic disruption in the 1980s due to globalization, recession and technological change gave way to financial markets’ relentless push for short-term gains. Jim Collin’s 1994 book Built to Last: Successful Habits of Visionary Companies may have been a last bow to long-term business thinking.

Entrepreneurs dedicated to creating social value, and even impact investors seeking social returns are caught in the collision of short-term norms and the reality that progress requires a long-term strategy.

We’ve witnessed this tension as we’ve gotten to know early stage businesses and investors involved in our Entrepreneurship @ Work program’s new initiative – SOURCE: Solutions from Our Country’s Entrepreneurs. SOURCE, a partnership between The Hitachi Foundation, Village Capital and Investors’ Circle, connects entrepreneurs with the investment capital, mentoring, and support needed to grow their businesses. In this inaugural year, SOURCE is focused on four specific problem areas that affect low-wealth individuals – health, energy, financial inclusion and agriculture.

Through SOURCE, I’ve had the privilege of spending time with dozens of entrepreneurs and investors. One common theme from the entrepreneurs – each dedicated to creating social and economic value – is that they seem to struggle to imagine their businesses 10 to 20 years out. As impact investors push the ventures to define their scale-up and exit strategies – with less focus on social returns – it demonstrates the real challenges ventures face at the intersection of measurable financial returns and monetized social returns.

“Even with attractive margins and tackling a serious problem, an exit strategy remains critical to secure investment,” says Jason Hill, co-founder of Benevolent Technologies for Health, whose venture is part of the SOURCE health cohort. “As we work to build the next generation of prosthetic and orthotic devices, if we don’t include an exit scenario, they don’t take us seriously. We would reframe our offering and business plan if more investors were focused on our impact or job creation plans.”

There are exceptions to the “scale up and sell” norm. Our Good Companies @ Work program provides another view on the mature business economy as we’ve discovered nearly 100 businesses in manufacturing and healthcare that have maintained social and economic returns over the long-term. These companies, which we call Pioneer Employers, take a sustainable approach to their businesses, aligning the interests of customers with investments in employees and operations strategies that create strong results for shareholders, workers and entire communities.

SIPI Metals, for example, started as a scrap metal business in 1905 with a horse and buggy on Chicago’s west-side. For more than a century, SIPI Metals has endured despite the economy’s steep ups and downs. SIPI’s business is noteworthy for a number of reasons, including their strong pay and employee incentives. Production floor employees become expert in multiple tasks and machinery thanks to SIPI’s commitment to on-the-job training. SIPI is also committed to developing future leaders from within the company because as senior executives retire, their replacements likely will come from within their ranks.

The Hitachi Foundation looks across the business landscape for firms that solve social problems and compete successfully in the marketplace. We focus on both early-stage ventures and more mature companies in order to understand what it takes to run a business as if the future matters. From the start-ups we gain insights about the power of unbounded imagination dedicated to solving pervasive social problems. From the mature businesses we capture the wisdom and experience of businesses that generate long-term value at the intersection of people and profit.

It’s about building good businesses and building them to last – right from the start.

The Long Now Foundation is building a clock designed to tick for 10,000 years. How long will your business last?

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Barbara Dyer is president & CEO of The Hitachi Foundation and Senior Lecturer at MIT’s Sloan School of Management. Ms. Dyer shaped the Foundation’s focus on the role of business in society with an emphasis at the intersection of people and profit.

Reimagining our cities: the Techonomic future

There are few settings more appropriate than Detroit for a conference focused on the intersection of technology and the economy – and its effect on the way we live in cities in the US and around the world. Detroit has, of course, seen its share of challenges over the past few decades, but as the city comes out of bankruptcy, there is a palpable energy amongst individuals across the business, nonprofit and public sectors who are all playing a key role in reimagining Detroit’s future – a future in which data, new technology and innovative new approaches will be critical.

It is because of that energy that we were excited to return to Detroit for the third annual Techonomy Detroit conference, which brings together a group of influencers and thought leaders from across sectors to “better understand how to move the U.S., and the world, into an urbanized, technologized, inclusive future.”

We were proud that our CEO Jean Case was invited to participate in a fascinating discussion alongside Rip Rapson, CEO of the Kresge Foundation, about the ever-changing role of foundations in cities; moderated by Nolan Finley of the Detroit News. The Kresge Foundation is known for its leading role in several initiatives focused on building for Detroit’s post-bankruptcy future, as part of its $25.5M Re-Imagining Detroit portfolio. When the foundation decided to take the risk and new direction of stepping in where government could not, Rapson shared that not everyone was sold on the idea: “what push back didn’t I get?” he joked.

Channeling our Be Fearless campaign, Jean reflected on the need for foundations to take risks and shared more about our role in creating catalytic initiatives and cross-sector partnerships that we hope will build the foundation for innovating when it comes to solving our big social challenges. (You can watch the full video of the session here).

The day also featured sessions with a range of thinkers and doers all playing a role in rethinking the way we get around, how we pay for goods and services, what and how we share (information and physical assets), how we improve the connections between government and the citizens they serve, and how we unlock value from the wealth of data available to us.

It’s probably not surprising that the last point was a constant throughout all of the sessions. Local governments are leveraging data to improve civic services; data is a key driver for sharing economy companies to appropriately allocate resources and assets; and citizens can tap into data to evaluate the performance of public officials/services and companies.

But not everyone is so bullish on data. In a passionate and provocative talk, TechCrunch’s Andrew Keen, author of the book “The Internet is Not the Answer,” shared his view on the dangers of sharing so much information and data for free. He warned about the intentions of companies who are collecting our data, reminding the audience that these organizations are ultimately in the for-profit business, a point that was countered in an engaging discussion between Detroit CIO Beth Niblock and Jack Dorsey, co-founder of Twitter and CEO of Square. Jack shared more about his current endeavors at Square, which is focused on providing crucial access to capital for merchants, and noted his company’s vested interest in helping small businesses – crucial to growing and maintaining a strong economy – as a social impact that is baked into their business model.

When asked what keeps him coming back to Detroit, Dorsey said it was “the energy, the soul, the fight” he sees in the city. That beautifully sums up our excitement about the future of cities like Detroit – a future that will be driven by technology, transparency and an “all oars in the water” approach that brings citizens, business, government, academia and philanthropy together.

Curious to see more? A recording of the full Techonomy Detroit conference can be found here.

Welcome Sheila Herrling: Our New Senior Vice President of Social Innovation

There’s a lot that I’m proud of from the Case Foundation’s seventeen years of work: helping to generate billions in new funding for hundreds of nonprofits to elevate their programs; developing public-private partnerships that have brought significant attention to and traction/scale to issues ranging from national service to growing entrepreneurship and job creation at home and abroad; and putting citizens at the center of innovative solutions to the world’s most pressing problems. But more than anything, I’m proud of the team we have that leads us through these challenges and inspires us to have impact in all that we do.

Through the years, we’ve chosen to maintain a lean organization comprised of some of the best and the brightest in the field. Together we bring passion, an entrepreneurial spirit and fun to all we do and we genuinely enjoy the privilege of working together to change the world. When our Senior Vice President of Social Innovation, Michael Smith, left last year to head the Social Innovation Fund for the White House, we began a search for a very special talent to fill this important role at the Case Foundation. After many months, hours and rounds of interviewing, we have tapped an outstanding executive to join us — today we are announcing that on September 22, Sheila Herrling will join our team as our new Senior Vice President of Social Innovation.

Sheila comes to us with more than twenty years of experience in international development and U.S. foreign policy. She joins us from the Millennium Challenge Corporation (MCC) – an independent U.S. foreign aid agency that uses an evidence-based approach to invest in economic growth and poverty reduction in well-governed poor countries—where she served as the Vice President for Policy and Evaluation for the last four and a half years.

Throughout Sheila’s career—including at the Center for Global Development, the U.S. Department of the Treasury, as a U.S. representative to the African Development Bank, and as part of President Obama’s Transition Team—she has consistently found ways to build coalitions for action to put fresh thinking into practice. She has the ideal combination of smarts on substance and savvy on strategy to come up with and move big ideas. I couldn’t be more excited that she will bring her talents to our work at the Foundation. And she’s no stranger to taking big bets. At MCC she staked her career on insisting that the $3 billion in investments made on her watch yield a rate of return in terms of increased income for the poor, on raising the bar on how the impact of those investments were measured, and on putting the agency’s results data into the public domain in order to maximize global learning on what was — and, perhaps more importantly — what was not working in the field.

When I asked Sheila what she was most proud of at MCC, she said, “I’m so glad that our team at MCC pushed the envelope on learning from evidence-based evaluations and on being named the most transparent donor organization in the world. And I was most excited when U.S. taxpayer dollars leveraged real impact – like the doubling of incomes of dairy farmers in El Salvador or the $4 billion in private investment in Ghana, or inspired governments like Cote d’Ivoire to change laws to give women the same rights as men to participate fully in the economy. But, like you, I am most proud of the amazingly smart, mission-driven, fun team I had the honor of leading. And I can’t wait to work with and learn from the equally amazing team at Case Foundation.”

So if it isn’t obvious, today’s announcement is a celebration for our team here at the Case Foundation. As Senior Vice President she will lead the Foundation’s Social Innovation team, which works collaboratively to develop and implement mission-driven domestic and international initiatives, partnerships and a robust portfolio of social and impact investments. Specifically, she’ll focus on continuing and growing the great momentum our team has already established around moving the impact investing field from niche to mainstream; look for new opportunities to bring the Be Fearless principles from inspiration to action in the philanthropic sector; re-energize our efforts in supporting entrepreneurs who create jobs and healthy communities at home and abroad; and explore new opportunities and issue areas in need of urgent, innovative solutions.

Our team is excited about the future and the potential, working closely with partners here at home and around the world, to enact fearless change in communities both near and far. We warmly welcome Sheila to the Case Foundation and we have no doubt she will be a driving force on this journey. Please join us in welcoming her to the team.

Leading Philanthropy with Your Head and Heart in Mind

Our nation is experiencing some of the greatest challenges in a generation – from a skills gap, to global poverty, the digital divide, striking homelessness in our urban centers, to a widening education gap in our inner cities – but it presents a time of great opportunity for us as practitioners. This month I was surrounded by empowering philanthropists, progressive thinkers and foundation executives of color at the three day Head and Heart Philanthropy summit in Martha’s Vineyard who are focusing on some of these very issues.

The cohort opened with a panel juxtaposing the economic state of African Americans from 50 years ago to today. The conversation, led by Joy Ann Reid of MSNBC’s The Reid Report featured Tonya Allen, President of the Detroit-based Skillman Foundation who shared “we tend to focus on beating the odds versus changing the odds through our work.” She was joined by Charisse Lillie, Vice President of Community Investment and President of the Comcast Foundation. Lillie detailed the company’s efforts to align with President Obama’s ConnectED Program, intended to connect nearly every student in the United States with high-speed internet service over the course of the next five years. Comcast has invested $165 million in digital literacy initiatives nationally and provided 300,000 families with low cost internet service and has provided 23,000 low-cost computers in communities across the U.S. to help meet this goal.

On day two I had the pleasure of joining Tanya Jones, Program Manager at the Barr Foundation, and Aleesha Taylor, Deputy Director of the Open Society Foundation, for a panel on “Inside the World of Foundations – Communications and Grantmaking”. I focused on the evolution of philanthropic media and how the Case Foundation has embraced a fearless approach to philanthropy, while my fellow panelists espoused on how we can be better grantmakers and why there was a need for “chaos and creativity” in philanthropy.

Also joining the conversation was Michael Smith, director of the Social Innovation Fund (and former Senior Vice President of Social Innovation here at the Case Foundation) who moderated a panel on “Innovation, Impact and Kids of Color: How My Brother’s Keeper is Tapping Social Innovation to Transform Lives” with Dr. Freada Kapor Klein and Mitch Kapor of the Kapor Center for Social Impact and Trabian Shorter, Founder and CEO of BMe. Smith shared “we have to disrupt the status quo and not do the same thing over and over again”, while the Kapor’s detailed their initiatives to invest in human capital and why it is the best thing a business can do to change communities of color. Other speakers included Michelle Gadsden-Williams, Managing Director and Head of Diversity and Inclusion at Credit Sussie who spoke on the intersection of corporate America and philanthropy, Alix Cantave, a Program Officer with the W. K. Kellogg Foundation, Pierre-Andre Noel, a Director at the Boston Foundation and The Haiti Relief Fund who together discussed global philanthropy and investment opportunities that are creating a sustainable economy for Haiti.

The Head and Heart Philanthropy Summit proved to be an exceptional convening of philanthropists and practitioners centered around the best practices and initiatives that are of importance to communities of color. I was honored to join this cohort on the Vineyard and invite you to learn more about the Summit at www.headandheartphilanthropy.com.