Monthly Archives: January 2008

Virgin biofuel flight planned

The New York Times reported today that Virgin Atlantic will conduct a test of one of its Boeing 747s using biofuels. The most interesting thing to me is that there seems to have been a lot of thought put into both the sustainability and the business aspects (even though this first step is actually a blend of 20% biofuel and 80% conventional jet fuel).

Sustainability: Virgin spokesman Paul Charles is quoted as saying the company rejected fuels derived from crops like palm oil because of the land that would be needed to cultivate such crops, and that the biofuel production would not compete with food or freshwater resources.

Business: This joint project between Virgin, Boeing, and GE Aviation splits the costs of innovation among several companies, and had smart business requirements. For example, the test plane will use one of GE Aviation’s CF6 engines as a “drop-in solution,” meaning the use of biofuel requires no modification, and will not affect the engine’s performance or range.

I recently read a New Yorker article about Branson and his work with Al Gore to create the Virgin Earth Challenge with its $25 million prize.  I’m impressed that he’s so intent on solutions that are market-driven, commercial, and don’t require major lifestyle changes, as I believe that these are the ones that are truly scalable.  An excellent article that shows that for Branson, business is very personal.  I just wonder whether he’ll consider himself eligible to win his own prize?

Bill Strickland: new book, new blog

Bill Strickland, who I learned about in Greg Dees’ classes at Fuqua and subsequently saw speak (see link for streaming video) when he was honored at the inaugural Annual CASE Leadership in Social Entrepreneurship Lecture (Muhammad Yunus of Grameen Bank was honored in 2004, before his Nobel Prize win), has a new book out, and a new blog on Social Edge. Those unfamiliar with Strickland’s work may want to check out the Manchester Bidwell website.

America Forward Coalition – putting social entrepreneurship on the public policy agenda

In today’s issue of The Enterprising Voice from the Social Enterprise Alliance (SEA), they announce that last month the SEA became a member of the America Forward coalition. This new organization’s stated purpose (taken from their website) is:

America Forward works to connect social entrepreneurs with policymakers to promote innovative solutions and provide a new vision for the role government can play in solving our nation’s social problems.

I’m of mixed feelings on this one. Apparently this group came about as a result of discussions led by New Profit, Inc., a venture philanthropy that I’ve heard and read great things about. However, looking at their list of “high impact organizations” I saw some shockers – organizations that I wouldn’t have typically associated with being particularly innovative, enterprising or entrepreneurial.

I also don’t know about the necessity/efficacy of looking for government to play a greater role. Usually this seems to mean greater regulation of limited funds (or setting aside a portion for specific initiatives), rather than an increase in overall funding for the social sector. This often hits smaller, more entrepreneurial organizations the hardest, as they are often young and without the funding, infrastructure or history to scientifically prove their model. If this group starts to really emphasize the importance of investment in infrastructure and professional development in order to foster organizational sustainability and scaling social impact (as opposed to the push to decrease administrative costs that has accompanied the accountability movement in the last 20 or so years), I might be a bit more enthusiastic. However, looking at their blog page, it seems to be more about individual members working to push their individual agendas on Presidential candidates, often under the aegis of social entrepreneurship or social innovation. In my admittedly quick skim, I only saw one blog post that began to address thoughts on transforming the role of government and funding in the social sector in any meaningful way.

Further, in some ways this public policy approach seems to be antithetical to the market-driven, enterprising ideals of many blended businesses in the “third sector”. I would be surprised to see someone like Pierre Omidyar endorsing this initiative. I know that business, big and small, lobbies government for benefits such as tax incentives, funding of new technology initiatives, IP extensions for developing technologies and much much more – I just don’t know that such efforts are where we ought to be focusing our attention.

I see the value in further disseminating the central tenets of social entrepreneurship through media coverage and a “seat at the public policy table,” but worry that the message will only get through in a diluted form, and social entrepreneurs will become synonymous with social workers. Ambivalence abounds. I guess this is another one of those initiatives that I’ll be on the “wait and see” side (aka the sideline).

McKinsey Interviews: Al Gore and More!

Consulting giant McKinsey & Co has a free subscription service offering a subscription to their business publication, the McKinsey Quarterly. While they do have some articles that are “premium” and require you to purchase full access, a startlingly large percentage of what they put out is free. It’s shocking, but they offer more free content than any of the other business knowledge services I subscribe to (HBS, SSIR, Net Impact) with the exception of Origo Inc’s cross-sector news which is totally free and published less frequently. N.B. All of these services require registration, which means giving out your name, e-mail address and company affiliation, but I find that the information I receive is worth far more than this small amount of personal data. Also, links to each of these services can be found at the right side of this page in the “Social Entrepreneurship Resources” list – no time to create individual links today – sorry!

Today I received an e-mail with the McKinsey Quarterly’s top interviews of 2007. I thought that folks might be interested in one with Al Gore and David Blood on investing in sustainability.

The others from the list that I found particularly helpful and/or interesting were:

Strategy’s strategist: An interview with Richard Rumelt
A giant in the field of strategy ruminates on strategic planning, diversification and focus, and the role of the CEO.

Crafting a message that sticks: An interview with Chip Heath
The key to effective communication: make it simple, make it concrete, and make it surprising.

Promoting growth and social progress: An interview with the president of Chile
Michelle Bachelet discusses her views on the roots of political upheaval in Latin America, and the link between economic development and the fight against poverty.

Leading change: An interview with the CEO of Deere & Company
Bob Lane details the steps his company took to engage the whole organization in an operational and cultural transformation.

night guy vs. morning guy

In college, my friend Jesse and I often discussed the “night guy vs. morning guy” phenomenon. Night guy would say, “I can totally get by on four hours of sleep – let’s stay up.” Morning guy would curse night guy as he rushed to class late and tired.

A HBS Working Knowledge article documents and codifies this type of behavior and provides a link to the PDF of a working paper by Todd Rogers and Max Bazerman. Here’s a brief overview from the executive summary:

Rogers and Bazerman show through four experiments that people are more likely to choose what they believe they should choose when the choice will be implemented in the future rather than in the present, a tendency they call “future lock-in.” They also discuss directions for future research and applications for public policy, an arena in which citizens are often asked to consider binding policies that trade short-term interests for long-term benefits. Key concepts include:

  • Tension occurs between an individual’s immediate self-interest and the interests of all others, including his or her own “future self.” Individuals tend to think that their future selves will behave more virtuously than their present selves.
  • Four studies demonstrated the future lock-in effect, which describes a person’s increased willingness to choose and support a binding “should-choice” when it is to be implemented in the future rather than in the present.
  • Policymakers could leverage the benefits of future lock-in by advocating for reforms that would be decided upon in the present, but go into effect in the future. Future lock-in would encourage citizens to more heavily weight a policy’s abstract merits rather than its concrete costs.

The working paper presents several studies, including one on donation. They find that “the future lock-in effect… suggests changing the structure of the donation such that the prospective donor can commit now to donate in the future.”

This work obviously has implications for development professionals in nonprofits, and also brought to mind another HBS Working Knowledge article from July 2007 (thanks, Gmail, for making email archiving and search so simple!) which was, in fact, also co-authored by Rogers and Bazerman with Katy Milkman. It also chronicles the “want” vs. “should” cognitive dissonance, and study it in terms of grocery shopping and DVD rentals. You can read that article, an interview with Rogers and Milkman, here.

Authenticity over Exaggeration

Yeah, it took an HBS professor to figure this one out. Authenticity is important in new media marketing. This recent article from HBS Working Knowledge looks at the research of professor John Deighton. After a review of the Dove “real beauty” campaign, we get this meaty tidbit:

The new rules

But what does this all boil down to for companies that want to be successful in this relatively new environment? In the working paper, Deighton and Kornfeld discuss 5 aspects of digital interactivity, including

  • Thought tracing. Firms infer states of mind from the content of a Web search and serve up relevant advertising; a market born of search terms develops.
  • Ubiquitous connectivity. As people become increasingly “plugged in” through cell phones and other devices, marketing opportunities become more frequent as well—and technology develops to protect users from unwanted intrusions. A market in access and identity results.
  • Property exchanges. As with Napster, Craigslist, and eBay, people participate in the anonymous exchange of goods and services. Firms compete with these exchanges, and a market in service, reputation, and reliability develops.
  • Social exchanges. People build identities in virtual communities like Korea’s Cyworld (90 percent of Koreans in their 20s are members). Firms may then sponsor or co-opt communities. A market in community develops that competes on functionality and status.
  • Cultural exchanges. While advertising has always been part of popular culture, technology has increased the rate of exchange and competition for buzz. In addition to Dove’s campaign, Deighton cites BMW’s initiative to hire Hollywood directors and actors to create short, Web-only films featuring BMWs. In the summer of 2001, the company recorded 9 million downloads.

These 5 aspects show increasing levels of effective engagement in creating social meaning and identity, Deighton suggests, noting that the first 2 (thought tracing and ubiquitous connectivity) change the rules of marketing but don’t alter the traditional paradigm of predator and prey. In the last 3 (property, social, and cultural exchanges), the marketer has to become someone who is invited into the exchange or is even pursued (as in the case of the BMW films) as an entity possessing cultural capital.