Yunus and Social Business
Yunus and Social Business
Elegant Roots, an online boutique offering the hottest, design-forward accessories and jewelry For Her, For Him, For Home, begins the process of formally transforming into a "social business", ala Muhammad Yunus' Creating a World Without Poverty.
I just finished reading Creating A World Without Poverty by Muhammad Yunus, the gentleman who created micro-credit and won a Nobel Peace prize for his micro-credit work in Bangladesh. The book is the most inspiring business book I have ever read. Part One, especially, created a one-person think-tank brainstorm in this head.
Dr. Yunus is a visionary AND he's a hands-on practitioner committed to transforming his homeland through outside-the-box thinking, flexibility and effective implementation. Brings to mind a modification of the old Sinatra refrain from New York, New York: "If he can do it there, we can do it everywhere."
Do what? you might ask. Use business to tackle social problems. Micro-credit is an inspired notion and an effective reality. ElegRoo supports micro-credit through the totally great KIVA.org.
But we at ElegRoo are taking a lead from Dr. Yunus beyond micro-credit. In Creating A World Without Poverty, Dr. Yunus proposes the idea of "social businesses", that is, businesses organized as for-profit enterprises, but whose sole goals are to achieve some social benefit. All profits are plowed back into the company. Investors receive no dividends, no profits whatever. They can expect to receive back their initial investment and will still own the company and direct its efforts.
A "social business" must compete head-to-head with ordinary for-profits by dint of the value of its products and/or services.
LuAnne Speeter reports that "[65%] of consumers believe businesses are responsible for having a greater social purpose beyond profit ... that businesses have a shared responsibility to address and solve today’s social and environmental issues through a blending of social initiatives and business operations."
But other attempts at formalizing business commitments to social issues, like B Corporations, are hybrids that attempt to serve two masters -- social benefit and investor profit. Dr. Yunus predicts that, at some point, each of these hybrids will face a choice, and that investor profits will prevail. No such Hobson's Choice can afflict a "social business" -- investor profit motive is simply not present to diverge from the social benefit motive.
100% of the ownership of Elegant Roots agrees with these notions and believes also that the vision and mission for Elegant Roots [to promote social justice and eco-consciousness by providing a market for goods that further these goals] fits squarely within the notion of "social business" propounded by the good Dr. Yunus.
100% percent of the ownership has directed that ElegRoo management begin the process of formally converting Elegant Roots into a "social business." Watch this blog for the ANNOUNCEMENT when the conversion is complete.