Want to Be an Effective Social Entrepreneur? Become a Tri-Sector Leader.

alden zecha

This post was written by CASE Executive-in-Residence and Sproxil Co-Founder Alden Zecha in June 2016. He has over 25 years of experience in more than 35 countries and has founded several companies, including SEAD Innovator Sproxil, Inc., a social venture that provides a consumer SMS and app product verification service to help consumers avoid purchasing counterfeit products.

I’m often asked what skills I think a social entrepreneur needs to be successful beyond the obvious ones such as passion and grit. To me a clear one is the ability to communicate effectively, no matter who the other party is. Social entrepreneurs straddle historically separate spheres – business and impact – and often need to operate across many sectors interfacing with nonprofits, for-profits and government. Regardless of the enterprises’ industry, geography or financial structure, to be successful a social entrepreneur has to be a tri-sector leader who can communicate with counterparts in any of those arenas.

Investors expect the entrepreneur to speak about financial returns as if the enterprise is a more traditional for-profit, while donors may want to hear about social impact as if the enterprise were an NGO. At the same time the customers or clients being served largely care about value of goods or services and governments want to know about avoided costs and improved quality of life. To succeed the enterprise needs to effectively satisfy that range of information demands and ideally without too much effort. That’s a very difficult task.

Some organizations tackle this by having a set of designated individuals to communicate with each constituency. The CFO might work with investors, while a measurement and evaluation specialist interfaces with donors and a government relations officer interacts with government officials. Each person knows and is responsible for their sector of expertise. That model can certainly work, but requires a certain amount of resources to be able to maintain those people. Many social enterprises don’t have the scale to be able to do that. Plus, to succeed with a team model, the CEO will still need to understand those various efforts in order to oversee and coordinate them.

Another model is to have one or more members of the leadership team be a tri-sector leader – someone who can comfortably move amongst the different sectors and switch communication styles and vocabulary on the fly. That individual can be much more cost effective than the team approach and also more operationally efficient by eliminating organizational layers, both of which are critically important, especially in the early days of any venture.

This was the approach we used at Sproxil where I often called upon my varied experiences as a government employee, for-profit entrepreneur and business consultant to interact with diverse counterparties. For example, late last year I visited an African country, which I’ll call X for confidentiality reasons, to evaluate if Sproxil should establish operations there. During the one-week trip I met with officials from both the US and X’s national government, potential donors and NGO partners, telecomm executives, trade associations and potential clients – both local and multinational. Rather than sending three people – one each for partnerships, sales and operations – by leveraging my understanding of the various parties’ perspectives and their vocabulary and cultures, I could communicate the overall value Sproxil would deliver to each. During the trip I was able to generate sufficient interest across the board that after detailed follow-up discussions involving other team members, Sproxil should be launching in X within the next year.

However it’s taken me 30 years to get to that level skill and the world shouldn’t have to wait that long to develop social entrepreneurs. We need to develop people faster. Here at CASE we’ve recognized that need and are working to train these future tri-sector leaders. Through a variety of means Fuqua students experience working with people from the various sectors so that they can better understand the different motivations and thinking and learn the vocabularies. Our practicum courses allow students to work with a private non-profit or for-profit enterprise on a real-world, hands-on project to move that enterprise forward. Through Fuqua on Board students can serve on non-profit boards to learn and impact the strategies and operations of those organizations. Most importantly though, the diverse community of students, faculty and staff serves as the best means of exposing students to new sectors.

People learn from those around them whether through lectures, projects, casual conversations or friendships. By having a group of people whose backgrounds include non-profit, for-profit and government experience, the overall community strengthened and each individual is exposed to a more well-rounded set of resources from which to learn. That approach will foster the growth of more successful, future, social entrepreneurs.