People

How Social Entrepreneurs Make Change Happen

Author: Roger Martin & Sally R. Osberg

Who drives transformation in our society and how do they do it? Roger Martin and Sally Osberg argue in their new book, Getting Beyond Better, that the answer is social entrepreneurs, who target unjust and unsustainable systems — or “equilibria” — and transform them into entirely new, superior, and sustainable equilibria. In this excerpt, they tell a story illustrating how vision is the key to successful transformation.

To serious motorcycle racers like Andrea and Barry Coleman, flat-track racing is the most primal, authentic, and thrilling form of competition, harkening back to the origins of the sport at the turn of the twentieth century. The track itself is dirt and configured in the classic oval shape. Motorcycles make 20 or so counterclockwise laps during the course of a race, at speeds of over 100 miles an hour. As the bikes roar around the track, they gradually wear a groove where you’d expect to find it—near the center, just hugging the inside. Along the outside, the kicked-up dirt and dust forms what’s known as the cushion. Throughout the race, riders tend to stay in the groove, avoiding the cushion, where the ride is riskier because the dirt is soft and traction is uncertain.

But sometimes a rider will venture out into the cushion to overtake the competition. Taking to the cushion doesn’t require the rider to be a daredevil. It doesn’t take unnatural bravado. Rather, it requires the rider to have confidence in his experience and skill, and most of all, in the condition of his motorcycle. The bike must be impeccably maintained — oil, gas, gears, engine — and the rider must know it intimately, down to the depth of the tire treads to the millimeter. Taking to the cushion signals a rider’s determination to break out from the pack, to risk failure, and to win.

Social entrepreneurs, Barry Coleman explains, consistently ride in that cushion, where there is plenty of potential to get ahead and just as much to slide out of control. It is a place where guts and determination are required, and where skill and expertise can pay off. Barry should know. He and his wife aren’t just race enthusiasts, they are social entrepreneurs: founders of Riders for Health, an organization that manages transportation systems for the delivery of health care in seven countries across sub-Saharan Africa.

For the Colemans and Riders for Health, winning means nothing less than a new health-care delivery equilibrium on a continent that desperately needs one. Today, on virtually every relevant health indicator, Africa lags. Life expectancy is 10 years shorter than the rest of the world. Child mortality is double the global average. Whereas the United States has 2.4 doctors for every thousand citizens, sub-Saharan Africa has just 0.2. Across the region, some thirty thousand children under the age of five die every day from diseases that are easily treated or prevented with available vaccines and medicines, including diarrhea, measles, and malaria. Immunization programs, even with the massive scale-up in supply made possible by the multilateral Global Fund to Fight AIDS, Tuberculosis and Malaria (“Global Fund”) and a host of NGOs, still fail to reach an estimated 22 million children. Progress remains difficult, despite stated commitments to millennium development goals, decades of foreign aid, and billions of dollars in philanthropy.

The miserable health-care equilibrium in Africa, the Colemans would argue, is kept in place partly by its failing infrastructure. Too often, available medicine and equipment can’t get where they are most urgently needed. Health workers waste hours each day walking and waiting, rather than delivering care. Communities go weeks and months without meaningful access to health care, even in times of desperate need. All of these problems result from gaps in infrastructure, but it was one gap in particular that tweaked the notice of this pair of motorcycle enthusiasts: African health systems were failing because they lacked the underlying transportation systems needed for reliable health-care delivery.

It isn’t the stuff of banner headlines. But in Africa (or, for that matter, anywhere else), if reliable transportation is not part of the health-care delivery system, people die. To Andrea and Barry Coleman, the reality that they encountered — a health-care delivery system hobbled by inadequate transportation management infrastructure — was utterly unacceptable. They envision a very different equilibrium, a future transformed, in which African health ministries are equipped with reliable, affordable, and effective transportation systems that deliver the health-care services their people need, when, where, and how they need them. And it turns out motorbikes have an important role to play.

Vision and the Social Entrepreneur

Much has rightfully been made of the need for a clear and compelling vision in any endeavor. A vision can set direction, mobilize followers, align activities, and galvanize the will required by an individual or team to accomplish something significant. Without a compelling image of the future, and — as importantly — clear steps to achieving it, organizations will drift and quite likely fail. Any winning strategy begins with an aspiration that articulates what winning means for an individual, organization, or endeavor.

Social entrepreneurs, too, must articulate their winning aspirations, and do so in the context of transformative change. They must go beyond simply articulating an improvement to the system. Social entrepreneurs are driven to get beyond better. The social entrepreneur’s vision of winning must be aimed at equilibrium change rather than at the amelioration of current conditions; it must be specific yet systemic in its approach, targeted at a constituency that cannot effect the change alone while also considering the system holistically; and it must be adaptable and resilient in the face of changing conditions.

Andrea and Barry Coleman saw in the existing system an opportunity that was little noticed by others. Most of the attention in global health is on the eradication or effective treatment of disease. By contrast, the humdrum issue of transportation infrastructure barely registers. Andrea notes, “People assume the infrastructure is in place. It isn’t.” The Colemans could see that it wasn’t, and they could also see just how vital transportation was to the operation of the whole system. They were able to do so because they had deep and extensive personal expertise that could be brought to bear on this new context – and this expertise just happened to be about motorbikes.

Andrea had grown up in a family of motorcyclists, and from an early age wanted nothing more than to become a racer herself. “The day I was sixteen, I put my L-plates on, took three months and then passed my test. I just wanted to be out riding motorcycles,” she recalls. And so she did, sharing a love of racing with her husband, Grand Prix racer Tom Herron. In 1979, Herron died in a racing accident, spurring Andrea to develop a passion for safety every bit as intense as her love of riding. Her second husband, Barry Coleman, traces his own interest in motorcycles to his racing beat for the Guardian. It was through this shared interest that the two first met and their relationship began.

Racing also brought them to Africa. Together with their friend, the legendary Grand Prix racer Randy Mamola, the Colemans had spent years persuading their British racing peers to raise money for Save the Children’s African programs. In 1988, Save the Children sent Mamola and Barry to Somalia, to show them how these hard-won funds were being used. The money was clearly being put to good use. Yet what the two men saw in Africa, and what Andrea too saw on a subsequent trip, shocked them: hemorrhaging women being carted in wheelbarrows to the nearest clinic; health workers covering distances of twenty or more miles of tough terrain a day by foot; countless vehicles left to rust by the side of the road or stacked up against buildings, vehicles that would still be operating had they been serviced properly. What good, they asked themselves, was a health-care system without reliable transport? And what good were expensive vehicles that were as mobile as millstones? That, in a nutshell, was the status quo. It became the starting point for the Colemans’ vision for what should change.

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17 Inspiring Women Share Their Secrets of Success

By Bill Murphy Jr., executive editor of TheMid.com

Successful entrepreneurs are usually inspired by other successful entrepreneurs. That means that if people don't have great role models--especially role models in whom they can see themselves--they're at a big disadvantage.

That's among the biggest challenges facing women who want to start new ventures. So, with Women's History Month right around the corner, here are key quotes from 17 amazingly successful women entrepreneurs. Which do you find most inspiring?

1. Sara Blakely

Founder of Spanx, youngest self-made female billionaire in America
"It's important to be willing to make mistakes. The worst thing that can happen is you become memorable."

2. Shelia Lirio Marcelo

Founder of Care.com
"I think in terms of evolutions, not revolutions. Failure is not part of my vocabulary."

3. Wendy Kopp

Founder of Teach for America
"Change is not always a process of improvement. Sometimes it's a process of invention. When Thomas Edison invented the light bulb, he didn't start by trying to improve the candle. He decided that he wanted better light and went from there."

4. Clara Barton

Founder of American Red Cross
"I may sometimes be willing to teach for nothing, but if paid at all, I shall never do a man's work for less than a man's pay."

5. Martha Stewart

Founder of Martha Stewart Living Omnimedia
"My new motto is: When you're through changing, you're through."

6. Anita Roddick

Founder of The Body Shop
"If you do things well, do them better. Be daring, be first, be different, be just."

7. Tory Burch

Chairman, CEO, and Designer of Tory Burch LLC.
"I think you can have it all. You just have to know it's going to work."

8. Arianna Huffington

Founder of The Huffington Post
"Fearlessness is like a muscle. I know from my own life that the more I exercise it, the more natural it becomes to not let my fears run me."

9. J.K. Rowling

Author

"It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all--in which case, you fail by default."

10. Diane Von Furstenberg

Designer, Founder of DvF
"I wanted to be an independent woman, a woman who could pay for her bills, a woman who could run her own life--and I became that woman."

11. Angie Hicks

Co-founder of Angie's List
"I'm going to be the one to make the donuts. I don't consider myself a big risk-taker. I was presented an opportunity by someone I had a lot of respect for, and I took it."

12. Madam C.J. Walker

Early 20th century hair and beauty entrepreneur
"I am not merely satisfied in making money for myself, for I am endeavoring to provide employment for hundreds of women of my race.... I want to say to every Negro woman present, don't sit down and wait for the opportunities to come. Get up and make them!"

13. Elizabeth Arden

Founder of Elizabeth Arden Inc. cosmetics
"Dear, never forget one little point. It's my business. You just work here."

14. Coco Chanel

Founder of Chanel
"May my legend prosper and thrive. I wish it a long and happy life."

15. Estée Lauder

Founder of Estée Lauder Companies
"I didn't get where I am by thinking about it or dreaming it. I got there by doing it."

16. Debbi Fields

Founder of Mrs. Fields Bakeries
"Good enough never is."

17. Rashmi Sinha

Founder of SlideShare
"I think it is going to be hard to trace a specific event that made me want to be an entrepreneur. I like independence. I like to build things. Being an entrepreneur allows me to do both."

How Zara became the world's biggest fashion retailer

By Graham Ruddick for The Telegraph, UK

A rare insight into the story and business model behind Inditex, the owner of Zara, and its founder Amancio Ortega, the third richest man in the world.

A digital mirror that allows you to try on clothes without actually taking them off the shelf sits on one side of the room, next to it is a self-service till where shoppers can pay for their clothing and remove the security tag without a shop assistant. This is the future of retail in front of your eyes.

They stand in a room full of new technology at a large industrial complex in Arteixo, a small town in northern Spain. From the outside, the industrial estate does not appear that different to the standard collection of offices, warehouse and factories typical in the UK. However, it is home to the biggest fashion retailer in the world, a company that has reset the boundaries for what shoppers expect from a high street clothing store.

This is a rare glimpse into the world of Inditex, the owner of Zara – a company that does not advertise, still manufactures products in Europe and relies heavily on its store managers.

Inditex is notoriously guarded and private, a legacy of its founder, Amancio Ortega, who was born in 1936 in northern Spain into humble origins and is today the third richest man in the world.

Ortega and his business partner Rosalia Mera opened their first store in the city of A Coruna, close to Arteixo, in 1975. They wanted to call the shop Zorba, after their favourite film, Zorba the Greek. However, a bar further down the street had adopted the same name, so Ortega and Mera were forced to adapt. Given that the Zorba name was already on the store, they tried to think of a name that would still use most of the letters. They settled on Zara, a brand now present in every corner of the globe.

This flexibility and efficiency has remained at the heart of Inditex, the company built from Zara that now runs 6,500 shops in 88 different countries and includes seven other brands, including Bershka, Pull & Bear, and Massimo Dutti.

The business model built by Ortega is unique. Zara stores around the world receive deliveries twice a week and products designed at the headquarters in Arteixo reach stores three weeks later. This is a staggering pace, helped by the fact that between 51pc and 55pc of clothing is manufactured in what the company describes as “proximity” markets, Spain, Portugal, Turkey and Morocco, instead of Asia.

This model is regularly described as “fast fashion”, but Pablo Isla, chief executive and chairman, insists Inditex is “much more” than that.

“It is too narrow for everything that is Inditex,” he explains. “You see the stores and you can’t imagine what is behind them.”

If there is a secret to Inditex’s success it is the connection between stores, the in-house designers, and its factories.

Twice a week, a store manager will send an order to HQ. This is based on the sales data for the store but also anecdotal evidence from shoppers about what they like and don’t like. The commercial team will then compile the order, adding in new products and balancing out demand with other stores, before sending it to Inditex’s manufacturing hub. Within two days, the order has reached the store.

At the same time, the commercial team is a liaising with the in-house designers, who they sit next to in the offices at Inditex HQ. When sales trends are identified – either from evidence in stores or the catwalk – the commercial team will work with the designers to develop new products to meet the trends. New fashions are then produced in relatively small batches, so flops can be disregarded after their first appearance and hits can be followed quickly by similar incarnations.

The commercial and design teams are vast – covering a large proportion of the 1.7m sq ft of offices at Inditex HQ. The result of this structure is that the product range in Zara stores evolves rapidly. Rather than relying on one product range per season – like Marks & Spencer will for autumn and winter – the retailer will enjoy four or five waves of new products after the initial seasonal launch. A mock high street of Zara stores, built within the headquarters, allows store managers and the commercial team to examine the new ranges.

The influence of the store managers means they are paid more than the average in the industry and can earn 100pc of their salary in bonuses for hitting sales targets. “We are never losing the human touch,” Isla says of their power. “They feel like the owner of the store.”

Every single item of clothing that Zara sells comes through Spain, even if it has been made in China and will ultimately be delivered to a Chinese store. At the vast Arteixo base, home to 6,000 staff from 30 countries, a tunnel network carries a carousel that moves clothing from the on-site factories – which themselves account for 5pc of Zara’s products – to the vast distribution centre. Inside the distribution centre, clothes move along the carousel until they reach their allocated box. This box, earmarked for an individual store, will be packed with different products and reach its destination within 36 to 48 hours.

The flexibility and speed of Inditex has helped the fashion retailer to expand overseas. If clothing is not selling in a particular store, it can quickly adapt. However, Isla says that fashion trends are becoming “more and more global”.

The company is still expanding quickly. In the last few years, like-for-like sales have grown by 17pc and it has opened 11m sq ft of new shop space. Every year, it is opening stores in more than sixty countries.

Isla grow to expand the company’s shop space by eight to 10pc every year for the next three to five years. This includes in the UK, where Inditex has 99 stores and which Isla describes as a “very good environment to do business”. But it also includes China, where Inditex has 450 shops. At the present rate of growth, China could become Inditex’s biggest market ahead of Spain within a few years. “It could be the case, why not,” Isla says.

This highlights how far Inditex has come from its first store in A Coruna, which still exists on a street corner next door to a dentist. However, the company’s methods have remained the same. This is encapsulated by Ortega himself, who still owns roughly 60pc of Inditex. At 78 he has stepped into a non-executive position on the board, but has lunch in the staff cafeteria every day.