Socialpreneurship offers individuals and organizations, regardless of size, an opportunity to shift their focus towards broader societal impact. It involves leveraging one’s expertise and resources to benefit the community. Unlike traditional entrepreneurship solely driven by profits, socialpreneurship is about making a profit while also making a difference. While business management and entrepreneurship have been extensively studied, with well-established business process management and performance metrics, the rules of the game in social entrepreneurship are still being defined. The central question revolves around how social impact organizations and socialpreneurship can effectively generate meaningful impact. Which strategies and processes prove effective, and how can we measure their impact accurately?

Jim Collins, author of the popular Good to Great: Why Some Companies Make the Leap… and Other’s Don’t, discusses the challenges the social sector faces in his monograph, Good to Great and the Social Sector: Why Business Thinking Is Not the Answer. He prefaces his arguments with “We must reject the idea—well-intentioned, but dead wrong—that the primary path to greatness in the social sectors is to become “more like a business.” Amongst the key challenges, donor retention and acquisition remain  key challenges for social sector.  Another challenge is the difficulty in evaluating impact, as social enterprises often struggle to measure and demonstrate the outcomes of their work.

Secret Sauce of Entrepreneurial Success: Right Timing, R & D, and the Right Team

Joseph Schumpeter, hailed as one of the most remarkable intellectuals of the 20th century, is renowned for his seminal work “Capitalism, Socialism, and Democracy,” published in 1942. He is credited with not only introducing the concept of entrepreneurship but also analyzing its economic role within capitalism. His monumental contribution, ‘Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process,’ first published in 1939, has become the cornerstone of modern thinking on entrepreneurship, innovation, and economic evolution. His thesis, which asserts that entrepreneurship is the guiding force behind creative destruction, advancing new products, technologies, and production methods and catalyzing change, has gained momentum.

Furthermore, Research and Development (R&D) emerges as a pivotal catalyst for fostering innovative and competitive business practices, particularly in industries characterized by constant evolution. As highlighted in the McKenny paper, one of the key challenges facing R&D strategy lies in establishing a strong connection between R&D efforts and customer needs. This challenge can be effectively addressed through close collaboration among R&D, commercial, and corporate-strategy functions.

Responding to my question about the secret sauce of his entrepreneurial success, Arjun Malhotra chuckled, “If I could pinpoint it that easily, well, I’d be writing a book. And you know, everyone would be eager to read it.”

Malhotra continued to elaborate, recounting his early days at DCM, where he found himself in a unique position as the sole electronics engineer in the company as it ventured into the nascent calculator industry. Despite his relative lack of experience, he was entrusted with significant national responsibilities, a rarity for someone just a year out of college. This opportunity arose as the electronics industry was in its nascent stages, not only in India but also globally.

Facing stiff competition from smaller, more agile competitors, DCM sought to distinguish its products, particularly calculators, in the market. Recognizing the need to innovate, Malhotra and the DCM team invested in research and development (R&D), incorporating customer feedback to enhance calculator functionality. By adding features like EPROM functions and tailoring products to specific user segments such as statisticians and scientists, they were able to offer a more sophisticated and valuable product. This strategy allowed DCM to command a premium price for their calculators and carve out a substantial market share. Malhotra underscores the importance of integrating R&D with marketing efforts, emphasizing how this approach facilitated product differentiation and market success.

In the final analysis, he said “Our success stemmed from the exceptional individuals who dedicated themselves daily to the company’s growth, going above and beyond to make things happen. This commitment served as our insurance, with the secret sauce comprising technology, innovation, timely execution, and effective marketing strategies.”

Fountainhead of the IT revolution: HCL’s pioneering  journey from Hardware to Software and Services

While most people attribute India’s economic success to the economic liberalization policies of 1991, the fountainhead of the IT industry goes further back.

As noted by Rajeev Asija in his book “HCL Lore: Recollections and Reflections from My Rollercoaster Ride of Nearly Three Decades,” HCL embodies an amalgamation of entrepreneurial spirit, passion, pioneering leadership, and management, representing the culmination of numerous contributions by individuals over an extended period. Tracing its origins to six young men, including Shiv Nadar, who, driven by their success with programmable calculators at DCM, embarked on a journey of innovation. Faced with restrictive government import policies on finished products, they leveraged their strong R&D capabilities at DCM to develop a desktop programmable calculator and a proprietary 16-bit computer capable of running COBOL and FORTRAN.

However, hindered by legal advice and government regulations, DCM did not take the plunge and hence they decided to forge their path, founding Microcomp in 1975 and later establishing Hindustan Computers Limited (HCL) in August 1976. Initially focusing on niche markets such as engineering research, HCL introduced its first product, the Micro 2200, based on a four-bit microprocessor from Rockwell. Supported by a robust R&D team, HCL successfully fulfilled orders and met critical deadlines, laying the groundwork for its subsequent expansion.

In June 1977 (same year and month that Apple introduced), HCL unveiled the 8C, an eight-bit microprocessor-based computer, taking advantage of favorable market conditions following IBM’s departure from India. Among its notable accomplishments was the development of HCL’s proprietary Operating System (OS) and its foresight in recognizing the 5 1/4-inch Floppy drive as the emerging standard, establishing HCL as a pioneer in the personal computing arena. The integration of the operating system (OS) with the hardware marked a pivotal achievement leading to the creation of HCL 8C, which can be considered one of the earliest personal computers, though IBM and Apple may dispute this claim.

HCL not only pioneered personal computing but further solidified its position through the development of Relational Database software named CIRUS and its Networking Operating System, released in India ahead of competitors like Oracle and Novell. 

By 1987, HCL achieved significant revenue milestones. HCL consolidated its market position by 1991 when India liberalized its economy to provide a level playing field for foreign players and forged joint ventures with HP and others. It emerged as a leading player in the IT industry, driven by a steadfast commitment to R&D, innovation, market understanding, and embracing new paradigms across hardware, software, training, and services.

In response to my question about his role in the HCL journey, Malhotra shared insights. Despite being only a few years older than many recruits, he was expected to have solutions to their problems, prompting him to think creatively. While Amit Dutta Gupta, handled marketing, Malhotra focused on field operations, ensuring effective implementation. They simplified technical concepts for customers, emphasizing the importance of technology. Transparency was key in HCL, fostering trust among employees. As we grew, we pondered whether to alter our approach, but we recognized that many valued working with us for that reason. So, we maintained it and endeavored to embed it in our culture—a sentiment that resonates with former HCL employees,” he said.

Malhotra attributes HCL’s success to the trifecta of technology, transparency, and teamwork, with timing as the icing on the cake.

Corporate Social Responsibility to Social Impact: The Shifting Paradigm

Corporate social responsibility (CSR) has garnered attention from businesses and stakeholders since the 1960s. CSR has been referred to by several other terms, including “corporate sustainability,” “sustainable business,” “corporate conscience,” “corporate citizenship,” “purpose,” “social impact,” “conscious capitalism,” and “responsible business.” While it began as an internal organizational policy or strategy, like the current concept of Environmental, Social, Governance (ESG), some argue that it has now moved beyond CSR to the business of social change, positing that social change isn’t the responsibility of business; it is the result of business.

Since the seminal article in 2002 and subsequent book “The Fortune at the Bottom of the Pyramid” by C.K. Prahalad and Stuart Hart, there has been a profound shift in how entrepreneurs and business leaders perceive underserved markets. Investing in and engaging with economically and socially disadvantaged segments of society not only presents opportunities for growth and profit but also holds the promise of significant contributions to humanity. Prahalad and Hart advocated for inclusive capitalism, urging multinational corporations to adopt innovative business models tailored to low-income markets, thereby addressing social issues while pursuing profitability. This paradigm shift underscores the potential for businesses to drive positive change and create value for both shareholders and society.

Since the last couple of decades, the language has shifted to social impact. In simple terms social impact means making a positive difference in people’s lives and the world around us. Broadly speaking, social impact companies are organizations that prioritize doing work that consciously, systemically, and sustainably serves or attempts to solve a local or global community need. The goal of social impact companies differs from the typical corporate social responsibility approach in that making or supporting positive social change is prioritized in all of social impact company’s work, while CSR tends to be a secondary organizational value.

A number of companies that are breaking the mold—they are moving beyond corporate social responsibility to corporate social innovation. These companies are the vanguard of the new paradigm. 

In response to my inquiry about his involvement in the social impact sector and the disparities between the corporate and social sectors, Malhotra offered his insights:

Malhotra first highlights the need for a distinct approach in the social impact sector, acknowledging that impact measurements are often subjective, and resources limited. He emphasizes the importance of adopting a different mindset compared to the corporate sector, where targets are often time-bound and financial constraints less stringent.

Malhotra then delves into his belief in the transformative power of technology, particularly in sectors like education and healthcare. He notes how the pandemic accelerated the adoption of technology in these areas, creating opportunities for innovation and improved outcomes, especially for the economically underprivileged.

Malhotra cited the example and experience with PARFI. The IIT alumni organizations, Pan-IIT Alumni Reach For India Foundation (PARFI), identified a looming shortage of skilled workers in India amidst an abundance of MBAs and engineers. To address this, PARFI established a skilling program guaranteeing job placement, focusing on essential trades like carpentry, plumbing, and nursing. They collaborated with organizations like NABARD to provide loans, ensuring commitment from participants. Their success led the state of Jharkhand to seek their assistance, resulting in a successful PPP model for skill development, with refurbished buildings used for training nurses and other essential workers. This model expanded across Jharkhand, with plans to replicate it in other states like Madhya Pradesh and others expressing interest in similar partnerships.

He also mentions another example in Bangalore of a project to revive ancient water bodies built during the Chola era, which had become silted over time, disrupting farming practices. By partnering with companies, they desilted these tanks, using the silt as fertilizer. The Chola dynasty some 1500 years ago, ruling the surrounding Deccan Plateau for five centuries and built a sprawling, self-sustaining network of irrigation lakes. They ensured community involvement, especially among small farmers, and leveraged technology, including ISRO data, to optimize water flow and ensure year-round water access for farmers. This initiative gained momentum with the Prime Minister’s scheme to rejuvenate 75,000 ponds and lakes, showcasing the impactful role of technology and community engagement in sustainable development efforts.

He provides examples such as the Antara Foundation’s work in healthcare, which leverages technology to address issues like infant mortality and maternal health. Similarly, he discusses efforts to cater to learning disabilities in education, highlighting the potential of digital content to accommodate diverse learning needs.

Malhotra underscores the importance of government partnerships and community involvement for scalability and sustainability. He emphasizes that successful social initiatives require collaboration with the government, as they often possess the infrastructure and resources necessary for widespread impact. Additionally, he stresses the need for community engagement to ensure that initiatives are culturally relevant and accepted, particularly in rural areas.

Overall, Malhotra’s insights emphasize the pivotal role of partnerships and community engagement in driving effective and lasting social change, particularly in times of crisis such as the COVID-19 pandemic.

Navigating Challenges and Embracing Opportunities in the Social Impact Sector

In the social impact sector, one of the most significant challenges is accurately measuring success and failures. “Measure impact” has become a mantra for creating social change.  Claims about making a difference are no longer sufficient; evidence of how much difference you’re making is now required. While it is a welcome trend, we need to be realistic about measuring impact.

Malhotra elaborates on the challenges of measuring social impact. He said: unlike in the corporate world where success is often quantifiable in terms of profits and market share, success in the social sector is multifaceted and can be challenging to measure. Targets are often set based on projections and estimations rather than concrete data, making it difficult to assess progress accurately.

Based on his experience with Antara Foundation’s work in healthcare, he noted that initiatives aimed at reducing infant mortality or improving maternal health may struggle to demonstrate immediate results. Success in these areas is often measured over the long term and can be influenced by various factors beyond the organization’s control, such as government policies and societal norms. Furthermore, traditional metrics used in the corporate world may not adequately capture the complexities of social impact. For instance, the impact of preventive measures like maternal health programs may not be immediately apparent, making it challenging to justify continued funding to stakeholders.

However, despite these challenges, there are reasons for optimism in the social impact sector. Malhotra highlights a significant development—the implementation of Corporate Social Responsibility (CSR) mandates. These mandates require companies to allocate a portion of their profits toward social initiatives. This has resulted in increased funding opportunities for social impact organizations, albeit with certain limitations and bureaucratic hurdles.

India stands out as the only country globally with mandated CSR requirements. Corporate Social Responsibility (CSR) emerged to align with the nation’s commitment to inclusive growth. Under the Indian Companies Act 2013, businesses must fulfill specific CSR obligations outlined in Section 135 of the act, including the allocation of funds for CSR activities.

Another positive trend is the professionalization of NGOs and social enterprises. Young professionals, disillusioned with the corporate rat race, are increasingly drawn to careers in the social sector. Their expertise and fresh perspectives are driving innovation and efficiency in social impact initiatives.

Moreover, major donors like Tata Trust and corporate foundations are stepping up their support for social initiatives, recognizing the importance of addressing pressing social and environmental issues. This increased funding is enabling organizations to scale their impact and implement innovative solutions to complex problems.

In summary, while challenges persist in measuring and funding social impact initiatives, there are signs of progress and optimism in the sector. With continued collaboration between public and private entities and a focus on innovation and professionalism, the social impact sector has the potential to drive meaningful change and address some of the world’s most pressing challenges.

Harnessing AI for Social Impact: Opportunities, Challenges, and Responsibility

AI is not a silver bullet, but it could help tackle some of the world’s most challenging social problems, notes the McKinsey Global Institute and to analyze potential applications for social good, compiled a library of about 160 AI social impact use cases. A recent working paper by the Stanford University Human-Centered Artificial Intelligence notes : While AI can lead to operational efficiencies, the promise is to use the tools to enhance mission related outcomes, significantly increasing meaningful community impact.

In exploring the implications of AI deployment in the social sector and organizations, Malhotra delved into several significant aspects. Firstly, AI’s ability to process vast amounts of data, including voice and video, enables organizations to conduct more comprehensive and efficient data analysis. This capability is particularly valuable for social organizations working with extensive datasets related to various social issues.

Although concerns about job displacement due to AI exist, Malhotra highlighted a historical pattern suggesting that technological advancements ultimately create new job opportunities. Drawing parallels with the introduction of computers, which initially raised concerns about job loss, he emphasized that individuals who adapt to AI technologies and acquire relevant skills will likely find new employment opportunities. Additionally, he stressed the importance of vocational training and skill development programs, especially for occupations susceptible to AI automation.

In specific sectors such as healthcare and education, Malhotra posits that AI’s role is envisaged as complementary rather than substitutive to human labor. For instance, in healthcare, AI can assist medical professionals in diagnostics by analyzing medical imaging data or aiding in patient triaging, thereby enhancing efficiency and accuracy. Similarly, in education, AI tools can supplement traditional teaching methods, particularly in remote or underserved areas where access to quality education is limited. By leveraging AI technologies, educators can provide personalized learning experiences, optimize teaching resources, and improve educational outcomes for students.

Despite the potential benefits of AI, Malhotra acknowledged the need for cautious implementation and highlighted the importance of ongoing skilling and capacity-building efforts to ensure that individuals are equipped to leverage AI effectively.  He expressed optimism about AI’s potential to drive positive social change, particularly in addressing disparities in access to healthcare and education.

In conclusion, Malhotra emphasized the collective responsibility of individuals and organizations to harness AI’s potential for social good. By embracing technological advancements, investing in skill development initiatives, and prioritizing equitable access to AI-enabled services, stakeholders can work towards shaping a more inclusive and prosperous future for society.