02/04/2013 08:55 am ET Updated Apr 06, 2013

Will the Trade Offs You Make Pay Off?

Nearly 30 Schwab Foundation Social Entrepreneurs gathered for two days of private discussions ahead of the World Economic Forum's Annual Meeting in Davos. These closed-door meetings create a safe space for social entrepreneurs to share their aspirations and their anxieties, and often spark unusually frank conversations.

This past Davos, much of the conversation explored strategic trade-offs on the road to scale. "We are all facing trade offs," as one social entrepreneur said. "Do we deepen our impact in our own country or expand internationally? Do we focus on developing our core business or add complimentary services as well? There are no easy answers."

Indeed there are not. But as the snow started to fall harder outside, the intimate group discussions taking place inside the cosy, wood panelled walls of the Posthotel in Davos started wading deeper into the thorny, tough, even painful issues that leaders of social enterprises face. And even if clear answers are not easy to come by, those present learned a tremendous amount from this like-minded community of social entrepreneurs, most of whom are wrestling with similar challenges.

Several social entrepreneurs, particularly those based in emerging economies, talked about the tension between developing local human capital and attracting top-notch talent. "I am constantly striving for the right balance between successfully scaling our organization's impact versus investing resources in our staff and helping them learn from their mistakes," as one participant said.

A second topic of discussion revolved around whether and how to scale. "Often we are pushed to scale quickly and are forced to jump to decisions or react too fast to an opportunity, even before it's fully thought through," said one social entrepreneur. "That is so dangeous - you must give yourself and your organization enough time to be successful."

Others pushed back to question whether "increased scale is even the right way to go," and, somewhat counterintuitively, suggested instead that social enterprises should focus more strategically on building the competition. "How do we make collaboration happen?" asked one social entrepreneur. "It's not supported by our board, our staff, or the media, but it's an essential avenue for scaling impact."

Naturally, perhaps, the conversation then turned to the role of the founder and CEO in all of this. Several of the social entrepreneurs present encouraged their peers to think about transitioning from the CEO role to eventually that of the Chairman as their organization matures. "This goes back to the question of balance, of where your passions lie, of when to let go," said one social entrepreneur. "But the core challenge is: how do you inculcate the core mission and values so they stay embedded in the organization even as you let go to pursue other business ideas or larger policy changes?"