Innovative Enterprises: 3 Ways

Commentary in response to…

The Power of Unreasonable People

by John Elkington

Sometimes, it takes a bit of thinking outside of the box to shift the current paradigm. When things are done differently – and successfully – people take notice. Once change in thinking becomes more established, previously unreasonable people may come to be seen as reasonable people, and the anomaly may integrate into the norm, and thus be an anomaly no longer. But for now, these models for innovation are unusual, inspiring, and worthy of careful consideration. We may all learn a great deal about possibility and opportunity by understanding how unreasonable people have found unusual means to solve formidable problems.

All three versions of innovative enterprises, as described by Elkington, hone in on social or environmental causes that market has not adequately addressed. The way in which they structure their organization or business around these causes varies, as described below:

1: Leveraged nonprofit

This innovative enterprise is supported by outside sources and aids those most in need, driving change that is geared toward creating longer term sustainability, rather than providing a temporary solution. The financial sustainability of these entities is largely dependent upon the contributions of other organizations. This category never moves into profit-making. Once it does, it becomes another type of innovative enterprise, as described below.

2. Hybrid nonprofit

Some nonprofits become integrated into the for profit system over time, as investors and movers and shakers become involved. For these entities, making a profit is not out of the question, and although they receive aid from outside sources, they evolve to create their own financial sustenance. These entities are better able to ensure their continuation because they are not entirely dependent upon the giving of others. They have options that enable them to cycle financial benefit back to themselves, and to the people they serve through their own efforts. These organizations are in a strong position, as they have the option of financial support both from within, and from without.

3: Social business

Social businesses, unlike the previous two, are designed and intended to be for profit from the outset. They create a business model that enables them to investing profit back into the causes they support. Rather than depending upon others for financial support, they manifest themselves as a sustainable, independent business entity. They partner with others in the business world who are, like them, interested in combining financial and social returns. These businesses never operate to create profit for the sake of wealth or decadence. They operate to create a powerful independent force for change that is not subject to the generosity of others. This type of innovative business is generally easier for mainstream people to understand, as it fits into what people know. Because this model is one that businesspeople all over the world are familiar with and comfortable with, they are more likely to become integrated into the dominant, more accepted system through partnerships and collaborations with other for profit businesses.

These three models for innovative conscious enterprises are not static, in that a business or organization can morph from one to another, and skate the areas in between. The common thread between all of these, however is their focus on social or ecological betterment, and the necessity to raise the funding and access the resources required for their basic function, and hopefully, furthermore, for their growth and ultimate success.

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