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  • 08.06.09

Good Cause, Good Ideas, Good Money

When I pull up to the village in which my mother grew up in Bangladesh, I feel like I’m on the set of a cowboy movie. Two long streets cross in the center, each bordered by a well-planned lineup of storefronts. From this intersection, you might think this is a city, with concrete walls, paved roads, and running water. But peer beyond the intersection of storefronts and there is nothing more than a patchwork of small farm plots, separated by dirt pathways and grass-roofed huts.

When I pull up to the village in which my mother grew up in
Bangladesh, I feel like I’m on the set of a cowboy movie. Two long streets
cross in the center, each bordered by a well-planned lineup of storefronts.

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From this intersection, you might think this is a city, with
concrete walls, paved roads, and running water. But peer beyond the
intersection of storefronts and there is nothing more than a patchwork of small
farm plots, separated by dirt pathways and grass-roofed huts.

My mother’s village is but one of hundreds of thousands of
such villages that dot South Asia. Most persist without water, electricity, or
waste services. While roaring globalization and technological advances are
transforming other parts of the world at discombobulating speed, these villages
remain still.

But an unlikely duo is shaking awake towns like these across
India. Chip Ransler, from America, and Manoj Sinha, from rural India, met while
attending the MBA program at University of Virginia’s Darden School of
Business. Now the they run Husk
Power Systems
, which is bringing light to rural
poor people by using locally grown rice husks to create electricity.

During my interview with Chip, I was struck again by this
new breed of ethonomic business thinkers. No longer are the days when doing
good could only come from non-profits. Today Chip and Manoj are making a
positive difference in the world while also making money. Husk Power Systems is
attracting the support of a diverse group of financial backers, and over the
next week, I will dissect the patterns that it employs to be successful and good.

Be Good to All
Stakeholders

When Manoj and Chip first started discussing the idea, Manoj
had already formed a philanthropic foundation dedicated to bringing electricity
to rural parts of India. This seemed a natural decision. If you have a passion
to help others, then you move almost without thinking toward the world of
non-profits.

But these 31-year-old social innovators revisited the
obvious and came up with a different answer. As Chip explained to me, “What
we are doing is good and this is the way it should be done. There are thousands
of people who need this. So we thought ‘how to do we get this to them quickly?’
In the end, the answer was for for-profit, not non-profit.”

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The two men adopted the strategy of “being good to all
stakeholders.” That means Husk Power Systems works for everyone–the shareholders, the local
community and the environment.

A growing number of innovators are reaching the same
conclusion because they are adopting a new view of competition. They see the
world as void of clear black and white, good and evil, cause and effect. They
see that social organizations can do bad things and for-profit businesses can
do good.

Freed by preconceptions that limit many of us, this new
breed of innovators are solving today’s problems by following what Nobel Peace
Prize winner, Mohammad Yunus,
has termed the “social business enterprise,” a for-profit business that exists
to achieve social ends.

So when Chip and Manoj formally started Husk Power Systems,
they decided it would be a for-profit entity.

The decision has been paying off. They can now appeal to a
far broader selection of financial backers than they could if they had followed
the path of non-profits. Husk Power Systems has received backing from traditional donations,
business investments and grant applications.

This year Husk Power Systems won a major grant from the Shell Foundation.
This money will be used to help Husk Power Systems scale up its operations to the point that
it can be profitable and attract more traditional investors. It has also raised
money from a number of socially focused venture capitalists. As Husk Power Systems grows, it
will reach the point where it can prove a return on investment that will
attract purely profit-seeking investors.

In other words, Husk Power Systems is pursuing a strategy of being good to
everyone–to the poor without electricity, yes, but also to those who are just
out to make money.

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Ask yourself the
questions below to see how you can be good to all stakeholders while also
turning a profit.

1.
Do I
see a need within my company or within my community that I can assist with?

2.
What
would be the financial impact of this “good” service?

3.
What
would be the community relations impact of this “good” service?

4. How can I combine the two to create a clearly ethonomic business strategy?

About the author

Author of Outthink the Competition business strategy keynote speaker and CEO of Outthinker, a strategic innovation firm, Kaihan Krippendorff teaches executives, managers and business owners how to seize opportunities others ignore, unlock innovation, and build strategic thinking skills. Companies such as Microsoft, Citigroup, and Johnson & Johnson have successfully implemented Kaihan’s approach because their executive leadership sees the value of his innovative technique.

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