THE BLOG

Big Business Can Deliver Big Profits and Big Social Impact

02/27/2013 09:18 am ET | Updated Apr 29, 2013

I sometimes find myself asking if we social entrepreneurs are really living up to the hype that surrounds us. Don't get me wrong, I'm a dyed-in-the-wool evangelist for using business methods to solve social problems. But putting all the hoopla and capitalist kumbaya aside, I still find myself lying awake at night asking myself: If social enterprises live to solve social problems, are they growing big enough to address the problems at the scale they persist?

So much of the talk on scaling in the social sector is just that -- talk. We live in a world littered with thousands of Lilliputian social enterprises trying to address gargantuan problems (and yes, at this stage, Living Goods is one of them).

How many social enterprises can you name that generate over US$ 1 billion in activity? I challenge you to think of more than 10. In the private sector, US$ 1 billion amounts to a small cap. Where are the Wal-Marts, Apples, Googles, Coca-Colas or Unilevers of the social sector?

Rather than hatch more guppy-sized social enterprises, we need to look for ways to grow big businesses that can serve the bottom line and the bottom billion at the same time. I am not a big fan of business books, but I admire Jim Collins data-driven book, Built to Last.

After painstaking research, he found that that companies that way outperform their peers over many years share two vital traits. First, these star performers possess a core reason for being that is more powerful and inspiring than profit. Second, they share a refusal to accept the "tyranny of the or." Inferior companies believe that "you can invest for the future or do well in the short term" or "can have low cost or high quality." Great companies strive for, and maximize, both ends of these seemingly binary propositions.

At Living Goods, we refuse to accept that big business can deliver either big profits or big human impact. We aim to seed, scale and replicate profitable businesses that deliver life-changing products and services at lower prices to the people who need them most; we're seeking nothing less than a disruptive reinvention of distribution in the developing world.

More than a billion people live without access to life-saving medicines, electricity, clean water, safe cook stoves, fortified foods, and many other essential products we in the developed world take for granted every day. Not until we put the power of those products into the hands of the billions of value-conscious consumers at the base of the pyramid can we claim to have built a social enterprise that is truly solving the problem at the scale it persists.

That's why Living Goods seeks to partner with visionary consumer businesses with global reach to help them adapt our model to grow new markets while improving the well-being of people in need at the same time.

Chuck Slaughter is Founder and President of Living Goods.

This post is part of a series produced by The Huffington Post and the Schwab Foundation for Social Entrepreneurship, in recognition of the latter's Social Entrepreneurs Class of 2013. For more than a decade, the Schwab Foundation for Social Entrepreneurship has selected leading models of social innovation from around the world. Today we have 254 from nearly 60 countries, covering renewable energy and sanitation to job training and access to higher education. Follow the Schwab Foundation on Twitter at @schwabfound or nominate a Social Entrepreneur at http://www.schwabfound.org/sf/index.htm. To see all the post in the series, click here.