Big Levers + Evolution

Give me a lever long enough and a fulcrum on which to place it,
and I shall move the world.

—Archimedes, 280–211 BC

As the anthropologist Margaret Mead once remarked, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” Still, wouldn’t it be nice to have a “playbook” for doing so?

Although that is asking a bit much, there are some powerful levers for producing wide-scale social change. And we can make sense of them by looking through the lens of evolution.

Let’s quickly review the mechanical aspects of evolution, which we explored in the last chapter. But this time, rather than slogging around in the primordial mud, let’s ascend to the aesthetic heights of art—well, at least the kind of art that a computer can produce.
In my teaching, I have occasionally used a free software package called SBART to perform the following exercise in “evolution in silico.” First, I begin with twenty randomly generated computer images, such as these:

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Knowing that these images will “evolve” according to my class’s preferences, I set a target, or goal, for this evolution. For instance, it could be to see if the images can evolve to look more like a spiderweb.

How does such computer-mediated evolution work?

To begin, my students and I look at the starting set of images and simply note how their features vary: by color (greens, purples, grays, blues …); pattern (solid, symmetrical …); complexity (simple, intricate …); symmetry (horizontal, vertical …); and along other dimensions. Some of these features will probably be more spiderweb-like than others.

With this in mind, students vote on which images look most like a spiderweb. Of course, this is nothing more than their opinion. They don’t have to justify their vote in any way.
Based on the images that get the most votes, the program generates a new set of twenty images, replacing the old. These new images borrow features from the images just identified, but they are not exact duplicates: instead, they are variations based on interchanging features of some selected images with those of others, or by introducing some “mutations” (such as changing an image’s colors).

With this new set of twenty images, students again consider their features; they vote on which images are most spiderweb-like, and a third set oftwenty images is generated based on these, with variation again playing a key role in modifying the selected set. And so on.

In other words, we run through the following cycle over and over:
Step 1: Identify   (… “all” important features)
Step 2: Test         (… to see which ones “work best”)
Step 3: Copy        (… the best performers)
Step 4: Vary        (… using genetic “cross-over,” mutation, etc.

This is the basis of the genetic algorithm.

And what is the result?

I used the SBART software package for twenty-five generations, producing the following results.(Here, I am playing the role of my students, so I am doing the voting.) Now, perhaps no self-respecting spider would want to dwell in any of these on a long-term basis. But some images probably look more habitable than the original set of “spiderwebs.”

Of course, these results came after twenty-five generations of computer-based evolution: a mere blink of the evolutionary eye. But this is enough to show us that we are “heading” toward arachno-friendly territory. Just think where we might be after, oh, several thousand generations.

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What else does this show us? First, that evolution is not limited to things that are alive. I did not pour any DNA onto my computer to make these images evolve. Their adaptation simply followed the evolutionary pattern laid out by the genetic algorithm. This is a powerful method that can describe how any conceivable type of evolution takes place: in plants, animals, images—or in business and society (stay tuned).

What else does our evolved set of images reveal? We are beginning to see the emergence of “building blocks”: an emphasis on gray, black, and white over colors; weaves over solids; and patterns that lack complete symmetry. If we could watch a movie of how these images evolve over time, we’d see that each building block might grow in prevalence at a different rate. But, if these patterns are truly to endure: (1) they would likely “take hold” at some point in time and then almost “explode” in prevalence; and (2) they would combine, as we are beginning to see already, into bigger patterns (e.g., black-and-white nonsymmetrical weaves) that themselves begin to “take over.”

There is a comparison to biological evolution that is important, too. In biological evolution, there is a real, honest-to-God environment in which adaptation takes place. (This holds for the “natural” evolution of muds and clays, too.) The environment provides the “test” to determine who is most fit. Animals that must breathe helium or travel backward in time will never come into being—the world is just not like that. This also means that the individuals that do adapt best to the real-world environment, by and large, also get to mate the most (make copies with variation). But they don’t first get to say, “Show me your chromosomes.” An individual’s likelihood of reproducing is correlated with how “fit” it is with respect to its performance in its environment, not some secret, internal code that it shares with potential mates.

In synthetic evolution, on the other hand, humans get to play some part in the way the environment sorts out winners and losers—sometimes the whole part. For instance, to produce the images that I displayed, I provided every shred of feedback from the environment. I was the environment: for an image to perform well, it had to please me. Twenty-four times (or “generations”) I looked at the set of images on display and chose those that looked, to me, most like a spiderweb. Simply by clicking my mouse, I replaced all the drama of individuals competing for food, water, and shelter, fighting off predators, and, for the lucky, producing offspring. Nothing but me, computer circuitry, a color monitor, and a mouse.

In fact, I could have gone even further. The SBART program allows you to look at the “DNA” of any image, take a little section, and insert it into the DNA of another image. (I didn’t do this.) With enough knowledge about how to interpret DNA, this can put evolution on a fast track. Instead of waiting for the right traits to appear so you can vote for them, you can go through the DNA buffet line, selecting what appeals to you.

Even then, there will still be an important role for the environment. As the saying goes, the proof of the DNA copying and pasting is in the pudding (or something like that). Reading the DNA of images is difficult. When you borrow some DNA from one image and include it in another, what you’re really doing is making a prediction that the newly produced image will be what you’re looking for. The environment—the combination of the image-rendering circuitry in my computer and my judgments about the aesthetics of the images produced—still provides the ultimate test of “what’s best.”

Let me be painfully clear. The SBART program has no built-in preference for spiders, spiderwebs, or creepy crawlies of any kind. In using this program, not only can I “cheat evolution” if I want by stealing DNA, but I get to set the target “outcome” I’m looking for (since I provide the feedback). I could just as easily have said to myself, “Let’s see if I can evolve a Picasso instead of a spiderweb.” As we will see, setting the right targets is a key to producing the right kind of societal change.

Pulling Societal Levers

You didn’t pick up this book to learn about mud or computer images. But, as I hope I have convinced you, if those can evolve (to become DNA or spiderwebs), then anything can evolve—and by using the same mechanism we’ve looked at. And if anything can evolve, how about taking advantage of that observation to see how to evolve a society whose inhabitant have a better quality of life and live on a healthier planet?

Before we dive in, though: obviously, society—with all of its problems and opportunities—isn’t some kind of simulation running inside a computer (apologies to die-hard fans of the The Matrix). So is it really instructive to think about some kind of algorithm for societal change? Answer: yes, because each of the steps that we can use to describe, say, computer images that evolve—identify, test, copy, and vary—is going on in a changing society, too. These steps may be happening simultaneously among millions (or billions) of different companies, organizations, or people; they may be taking place out of sequence; and there may be no master “computer brain” making things go or “master accountant” keeping score. And all that is fine, because in truth, systems change according to the tests we provide; new forms arise, influenced by what’s preceded them; they must be “jiggered” to fit their context; and, ultimately, certain “building blocks” will become better suited to the task or problem being addressed, and they will predominate.

In what follows, I may describe something as an attempt to “identify important features.” You might feel that my example is also an illustration of, say, “copying the best.” Again, what is important is that all aspects of societal evolution are happening at once, with some activities in the real world fulfilling the role of two or more steps of our genetic algorithm. The world does not change in lockstep, but it does change along the lines I’ve described.

One more thing. There are parallels—and differences—between how organizations change and how society as a whole changes. Organizations search for new ways to operate, new products and services to sell, and new markets to serve. They steal shamelessly from other organizations, making sure that their Big Picture Design encompasses all aspects of what they do. In addition, they Make It Appropriate by creating variation that modifies a solution to fit the right context. They Make It Stick by testing and measuring to ensure results. And they strive to expand and Make It Bigger.

But organizations do these by design. They make decisions; they are in control—but only of their own actions (even if they try to influence others).

Our attention in this chapter is on societal change. No one can “design” society or single-handedly create societal change. There are a huge number of moving parts, and even more interactions among them. No one is in ultimate control.

But society can—and does—change by evolving, not by the design of a single architect, individual, or organization. It evolves according to the evolutionary processes that we have outlined. Although it is impossible to play God and orchestrate societal movements in exactly the ways we wish, we can understand how evolution produces change. By doing so we can put powerful evolutionary forces to work.

Now, time to dive in.

Step 1: Identifying Important Features

How do you find effective means to address a vexing societal problem? One of the best ways may be to keep your eyes open. By the mid-1990s, Taiwan had become relatively affluent. With its newfound wealth, it wanted to provide health care for its citizens, something completely new to the island state. Newness presented opportunity in the form of a blank slate. Taiwan had no “legacy” health care systems or vested interests in preserving the status quo. It could invent a health care system as it pleased.

Taiwan decided to build its health care system by keeping its eyes open. The government created a committee that examined the best “wealthy country” health care systems in thirteen countries (not including the United States, which the committee decided had no “system,” just a market). By noting the attractions and disadvantages of these systems, Taiwan designed something completely new: a mandatory, national health insurance system to which all citizens have access that requires everyone to join and pay in. There is a choice of doctor, no waiting time for medical care, and competition among providers. And there are no gatekeepers in the system, so citizens can get care whenever they want, including weekends.

The system is also very high-tech. Everyone has a “smart card,” which carries information about your medical history, medicines you’re taking, and even your pattern of using the health care system. Sophisticated technology also dramatically reduces the costs of running the system to less than 2 percent, the lowest administrative costs in the world. The system costs less than half of what the U.S. system costs (6 percent versus 16 percent of national income), though it has experienced financial strain because of the low fees paid by citizens.

The Taiwanese government looked to wealthy countries in creating their health care system, but that is not the only way to keep your eyes open. To identify (and sometimes design) the best features, you must expect to look anywhere, simply because good ideas are everywhere. Anil Gupta, an economist, professor, and social entrepreneur in Ahmedabad, India, provides a tremendous illustration of this idea.

Ahmedabad, and the surrounding state of Gujarat, has pockets of prosperity and industrialization, but many people are mired in poverty. As Gupta is aware, however, poverty does not mean lack of ingenuity: it can mean just the opposite. Because people are poor, they have to do more with less. Gupta has crisscrossed Gujarat and many other Indian states in search of grassroots, innovativeideas for alleviating poverty and promoting a better standard of life. More than twenty times in more than a decade he has led a group of students and other like-minded searchers on Shodh Yatras, or journeys of discovery.

A Shodh Yatra is a weeklong trek, on foot, from village to village throughout a region. Walkers make personal discoveries of what is inside them. But under the bright glare of the sun (Shodh Yatras may cover several hundred kilometers in broiling Indian summers), other external discoveries are made, too: a bicycle with flip-down pontoons to negotiate flooded “roadways” in monsoon season, water sprayers spring-activated by a farmer’s footsteps to provide irrigation, or an attachment for a motorcycle that converts it into a kind of tractor. Shodh Yatras also help Gupta’s team discover, or more precisely, document, various herbs and plants that local citizens use as human and animal medicines.

To Gupta, these discoveries have the potential to change lives on a large scale. For example, an invention that works in one poor village might be shared with another, or it may represent a product that can be manufactured for sale with the possible creation of jobs and income flowing to the inventor’s village. It may even represent the kind of idea, or the “seed” of an idea, that might interest a larger company that can help perfect it, market it, and make it widely available while still rewarding the inventor.

To support these ambitions, Gupta has founded or is associated with a number of organizations that help in various ways, from protecting intellectual property to providing support for improved design, manufacturing, marketing, and so on. Through the Society for Research and Initiatives for Sustainable Technologies and Institutions, the Honey Bee Network, the National Innovation Foundation, and other institutions, Gupta is on a relentless and extraordinarily productive search to identify “best features” and ideas in India, fully aware that those with these insights and the hunger to convert them into a new reality can be found anywhere.

A Shodh Yatra begins a “business journey” that may or may not result in a new product or service reaching the right customers. But sometimes reaching the right customers is the whole point. And that is where innovation markets can be extremely useful.

InnoCentive is an online service linking potential “buyers” of innovative ideas with “sellers.” Originally an in-house service of the pharmaceutical company Eli Lilly, InnoCentive is now an open marketplace for innovation. Solution “seekers” contract with InnoCentive to list a problem for which they desire a solution. Seekers can be companies or nonprofits, and the problems they want addressed can be centered on business, science, technology, health, or other areas. Seekers post detailed descriptions of the problems they want solved as well as the reward they will pay for a solution. Rewards can range from $5,000 to $1 million. Problem “solvers” submit solutions to these problems in hopes of being selected the winner. Seekers judge the solutions submit to determine if the problem is truly solved to their satisfaction, and thus they determine when and to whom they should pay the predetermined reward.

InnoCentive plays no part in these judgments. But they ensure that winning and losing solvers’ intellectual property is protected (until the seeker deems the problem solved and gains property rights to the solution). InnoCentive is compensated by seekers who pay to list the problems they want solved. Solvers offer solutions without paying any kind of participation fee.

InnoCentive typically receives hard problems; otherwise, they would have been solved by traditional methods such as corporate research and development. They are important problems, too, requiring a $35,000 fee to seek a solution, though nonprofits pay lower rates. Solutionsvary in terms of what a seeker wants: Some want a broad range of ideas to provide them with, in effect, external brainstorming. Others want fully developed solutions that can be put into practice right away. And still others require accompanying evidence of a solution’s effectiveness.

InnoCentive has proven to be up to the challenge of addressing difficult societal issues. In the developing world, these include providing efficient, effective means of “mobile banking” to the rural poor; addressing health issues like malaria, tuberculosis, and AIDS; developing bio-latrines; and inventing new means of capturing and storing rainwater. Societal solutions in the developed world have been produced, too, such as increasing public transportation ridership in Chicago to reduce CO2 emissions, and developing sustainable packaging.

InnoCentive has created a robust infrastructure for encouraging a cadre of problem solvers to work on someone else’s important problem. Offering monetary prizes up to $1 million ($4 million has been awarded; $16 million more is still on the table) certainly doesn’t hurt and goes a long way toward explaining how InnoCentive has 170,000 solvers in its system. But another element on which InnoCentive relies is the joy solvers get from working on difficult, meaningful problems and the pride and status that can go along with solving them. Google relied on these very principles to create a society-changing competition as a ten-year birthday present to itself.

The name Google is a misspelling of the word Googol, a number you write by placing a 1 in front of a hundred zeroes. That’s a big number, by the way. For its tenth birthday, Google created its Project 10100 (ten to the hundredth power) challenge. The company that was founded to “do no evil” launched Project 10100 to do the most good. As a company that has transformed our abilities to access information—“Where have I seen that actor before?” Google . . . type … type … click … click. “Oh, yeah, he was the guy in the TV show DIY Medicine who gave himself a spleen transplant”—Google realizes that the world’s toughest problems might be addressed by information that is already “out there.” It could be out there as an idea in a university research lab or in the heads of freethinking individuals who have hit upon the seed of a fantastic idea—even if they don’t know how to bring it about. So Google created Project 10100.

Project 10100 issued an open call to “idea people” around the world. It committed $10 million to be split among five (or fewer) ideas addressing problems related to health, livelihood, environment, education, and other critical areas of need.

Those who submitted ideas didn’t even have to know how to make their idea work—the idea itself was the important thing. By combining online voting with a panel of judges, Google’s intent was to identify the ideas that “helped the most.” This meant that the need was urgent, affecting many people, and that the idea itself could be implemented quickly, cost-effectively, and with lasting impact. The $10 million in prize money was given to the organizations best suited to implement the winning ideas. And the winning submitters? According to Google, they “get good karma.”

Project 10100 is just one way of implementing a prize-based, open competition to achieve a goal that is important to society. (Other notable efforts include a series of X PRIZES and Ashoka’s Changemakers competitions—and I’ll discuss these later.) Similarly, InnoCentive is just one example of an effective innovation market, the Taiwan health care system represents just one example of radical redesign in health care (consider medical tourism), and a Shodh Yatra is not the only way to keep your eyes open by looking anywhere for good, new ideas.

What all these examples show is how you can identify the important features of a solution to a tough societal problem.

At this point, possibly—just possibly—you may be experiencing a mild case of déjà vu. Remember, effective cross-sector hybrid organizations have to master Big Picture Design. Effective organizations “steal” ideas shamelessly as OneWorld Health was able to do with out-of-favor intellectual property and as NFTE did by making entrepreneurship the centerpiece of struggling high schools’ curricula. And Big Picture Design had to take into account all aspects of a problem: having a new drug for the disease VL wasn’t enough; OneWorld Health needed to design ways to deliver, market, and produce it, among other essential requirements for success.

So are we looking at something new?

First: Yes, there are similarities between Big Picture Design and our current focus on identifying all the important features of a problem. Those similarities are not coincidental. Just as successful organizations can change by seeking breakthrough ideas, so can society as a whole. But the scale of change that is possible is quite different.
And creating broad change is the point here: uncovering powerful means of seeking solutions with the potential to create wide-scale improvements in society. That is what we saw with the Taiwanese health care system, which affects nearly twenty-five million people. That is a criterion Google used in Project 10100.

Powerful approaches also acknowledge that intelligence is evenly distributed around the world, even if opportunity isn’t. That’s why such methods, including innovation marketplaces like InnoCentive and Gupta’s Shodh Yatras, make appeals either to an unusually broad or just plain “unusual” set of problem solvers.

Powerful methods recognize that humans respond to a variety of compelling stimuli: money, of course (InnoCentive), but also a desire to make a difference (Project 10100). There is even evidence that creative problem solving is best achieved by fostering autonomy, creativity, and a sense of social contribution. By providing effective incentives, the quest for new features and new ideas can be dramatically accelerated.

Identifying important features of a solution often leads to their immediate application, as when a solution is rewarded for being ready to use right away. Yet sometimes we may also identify solutions that are applicable only in the future, not today. In other words, solution “features” discovered now may get matched with the right problem later.

That is the essence of innovation marketplaces such as Yet2.com that allow intellectual property created by one organization to be listed and licensed by another. It is also what Gupta is doing when he catalogs grassroots innovations and indigenous herbal and plant-based remedies. I remind you that one of the most modern antimalaria treatments, for instance, is based on an herbal remedy identified centuries ago.

By creating a framework for a broad constituency of problem solvers to connect with an equally broad constituency of solution seekers, we have an important lever for creating societal change. But there are three additional aspects, and we consider each in the sections that follow.

Step 2: Test to See What Works Best

Remember our all-at-once, swirling, evolutionary stew of identifying good ideas and features, testing, copying the best, and creating variation? It’s all at once, because the real world isn’t kind enough to slow down and perform a single algorithmic step at a time. It’s evolutionary, because these four processes together create powerful changes. It’s time to look at the second of these processes, testing, to understand the important role this plays in creating societal-level change.

We can think of biological evolution as a game. But a game in which the object is not to win (because that is impossible), but to keep winning enough to continue playing. Calling evolution a game (or process, if you like that better) with a fixed object is like calling the high school prom king and queen the “ultimate winners” in life. In either case, things change, and just as Monsieur King et Madame Queen have moved on since high school—hopefully—living organisms must keep changing, too, to keep pace with a constantly changing environment (constantly changing at least in biological terms). Or recall Darwin’s Galapagos finches with their inferior beaks—the “losers” that became “winners” when conditions changed after a storm, making their beaks extremely well suited to the new plant life on the island.

In creating societal change, we can’t suddenly will a storm to blow in, making new changes possible. But we can create an environment appropriate for change by insisting on new ways of keeping score. New ways of keeping score don’t mean that the home team gets seven outs per inning, a bigger goal to kick into, or jet packs on the backs of their tracksuits. If anything, new ways of keeping score should be fairer than the ways we traditionally keep score.

The deck has been particularly stacked in favor of business—at least certain businesses. Many industrial processes take products from the earth, do some smelting, boiling, or mixing, some molding, hammering, or bolting, and then place new products on shelves or maybe in parking lots. If what they spend for materials, labor, storage, transportation, and so on is lower than their product’s selling price, they’re happy: They’re winners; they’ve made a profit.

Unfortunately for us (and fortunately for them), this way of keeping score is not fair at all. We have more than three-and-a-half billion years’ worth of “stuff” on the planet. This includes all of our forests, rivers, lakes, oceans, soil, air, oil, mineral deposits, grasslands, and tundras—not to mention all the animal and microbial life forms on the planet.

This vast store of wealth has the potential to sustain human and other forms of life nearly forever. Yet in the last fifty years, we have done tremendous damage to this treasure. We have decimated our forests and topsoil, as well as our freshwater and saltwater ecosystems. In the United States alone, the cars and light trucks we drive belch more than 300 million tons of carbon into the air every year. The earth is warming at an alarming rate, up about 1°F in the past thirty years. Highly knowledgeable scientists fear that if this rate of warming continues for another century, there will be “changes that constitute practically a different planet.”

It stands to reason that this kind of damage would count heavily against businesses contributing to it. If you lent a friend your car and he somehow managed to set its upholstery on fire, you wouldn’t expect him to simply tell you he “took a beautiful drive on a country road” when he returned it to you. That kind of “scorekeeping” omits some important details.

Yet business often behaves as if it has taken a scenic country drive: “Our profits are up 15 percent compared with last year. We are thrilled.” There is no mention of the flaming backseat. That’s not how the score is kept. We incur the equivalent of $36 trillion (yes, t) in unreported environmental damages to our “cars’ upholstery” every year.

This oversight has certainly been noticed. Triple bottom line (3BL) accounting has sprung up as an alternative means of gauging a business’s performance. Rather than keeping track of a firm’s financial performance alone, triple bottom line accounting focuses on a firm’s financial, social, and environmental performance. These three Ps (people, profit, and the planet) or three Es (equity, economics, and the environment) provide a set of metrics for better judging the totality of acompany’s performance.

With this kind of fuller disclosure, a (traditionally) top-performing company may no longer look so good. If it pollutes lakes and rivers, or if it neglects the well-being of the communities in which it operates, its products may be shunned, its stock might plummet, and its ability to attract the best and the brightest can be badly damaged. These effects may come from stockholders’ fear of future liability, consumers’ anger and disgust, and prospective employees’ beliefs about how they may be treated. These concerns may reinforce each other, too, creating an avalanche of financial, operational, and reputational problems.

Note: although triple bottom line accounting is better than standard financial accounting alone, Bill McDonough (a leading voice for sustainability) points out that it can mistakenly create the equation: doing less bad = doing good. The real point is not to pollute less, for instance, but to not pollute at all.

At present, there are no uniform, mandatory standards for triple bottom line reporting. But certain voluntary reporting standards are starting to be adopted. The best-known of these are standards issued by the Global Reporting Initiative (GRI). This multi-stakeholder network issues its Sustainability Reporting Guidelines covering companies’ financial, environmental, and social performance. The breadth of contributors to the framework and the number of well-known companies that have voluntarily adopted these guidelines have made them the de facto standard.

The overall standards plus supplemental information gathered by industry cover a firm’s goals, systems, policies, and other 3BL indicators in addition to concrete performance measures covering emissions, waste, labor-friendly contracts, recycling and reuse.

Even though GRI guidelines are used voluntarily, they are being used—by more than a thousand organizations. This by itself creates pressure for other companies to do the same in order to appear “green,” or “social,” or some other commendable adjective. By having multiple stakeholders develop and support the standards, development costs can be kept low, and the GRI can provide a simple-to-follow process that any company can use to report 3BL sustainability. Outsiders who want to compare one company’s sustainability effort with another’s are provided with a means to make apples-to-apples comparisons.

Most important, reporting can lead to action. The nonprofit Coalition for Environmentally Responsible Economies (CERES) helped launch the Global Reporting Initiative in 1997. Since then, it has had an unwavering intent to shed light on the risks and opportunities companies face regarding the environment. In 2009, it persuaded the National Association of Insurance Commissioners to make it mandatory for insurance companies to include in their annual reports the risks they face from climate change and their strategies to meet those risks. By shining a bright financial beacon on this industry, CERES hopes to find new supporters in its effort to curtail the destruction of the environment. By creating a new test for insurance companies to pass, CERES hopes to affect other industries, too.

Indirectly, public reporting of environmental and societal progress and performance may be paving the way for mandatory mechanisms to enforce good corporate behavior. Approximately a century ago, it was recognized that taxes and subsidies might be needed to correct environmental, social, or other damages that companies were not being held accountable for. Not surprisingly, this was never a popular idea with business. The greater willingness today to protect the planet through carbon taxes, or similar mechanisms that penalize a company for emitting carbon dioxide, may be related to companies getting used to opening up their social and environmental books to the world.
There are other methods of testing, too, to try to ensure that scores are kept more fairly, accurately, and transparently. The Forest Stewardship Council, which we took a look at in discussing Home Depot and IKEA, tries to disrupt the logic that a board is a board is a board. No, FSC would explain, some boards are harvested in ways that violate the integrity of our forests, and others are not. As a step toward fairer scorekeeping for consumers (Home Depot) or producers (IKEA), FSC monitoring tracks the way in which forest products are grown, harvested, and manufactured. One final example of how business scorekeeping can produce widespread change: The Dow Jones Sustainability Indexes (DJSI) apply a strict methodology to produce a sustainability performance score for companies. Based on the premise that the value of a company’s stock is ultimately tied to its sustainability, the DJSI considers the top 10 percent of sustainable performers in different industries and ranks them according to their financial performance. By creating this blended means of evaluation, investors can direct money toward the best-performing, most sustainable companies, and move it out of companies that have not taken up the challenge of sustainability.

If businesses need new ways to keep score, then how about . . . nonprofits?   Nonprofits are, in many people’s minds and in some actual ways, the antithesis of for-profit businesses. For-profits seek to make money and are powered by capitalism, and markets, and shareholder value, and stock prices, whereas nonprofits, which seek to provide social good, can be powered by capitalism, and markets, and shareholder value, and stock prices. And, no, that is not a typo.

“Social stock exchanges” provide a new way for nonprofits to keep score. Charitable donors trying to decide whom to donate to have had limited information to guide them. Of course, they might prefer a charity addressing a certain disease or a certain activity such as cleaning up the environment. And they can turn to independent charity ratings or the information that charities disclose about the percentage of their contributions that goes toward providing direct services rather than toward overhead.

But the amount of information available about nonprofits is paltry compared with what is available for public companies. This means that underperforming charitable organizations may be able to hide their lackluster performance and high performers can go unnoticed. Of course, “hiding” and being “noticed” (or not) can have strong implications for how much money they receive from donors.

Wouldn’t you like to know a lot more about which charities are “winning” according to the test of the social value they deliver so that they can “win,” too, in terms of your donations? That is the essence of social stock markets.

Several efforts are under way to explore the very idea of social stock markets. Brazil and South Africa have taken initial steps to raise funds through a market where different nonprofits compete for donor funds. BOVESPA, the traditional Brazilian stock exchange, created a completely separate social stock exchange in 2003 to improve the effectiveness of its charitable activities. This social stock exchange is a portfolio of social purpose projects undertaken by non-governmental organizations (NGOs) focusing on education to benefit poor youth. The portfolio favors innovative grassroots efforts. BOVESPA used its know-how in running a stock market to allow investors to buy “social shares” online in the hopes of creating social returns.

The BOVESPA social stock exchange allows donors to buy shares in one or more social projects, similarly to how others invest in stocks. BOVESPA requires NGOs to disclose information about their operations, performance, and other pertinent matters. Although donors cannot sell their shares or trade them, the exchange is successful, like other stock markets, in aggregating and helping vet information to assist Brazilian and even international investors in making better-informed decisions. Although the absolute amount of money raised through the BOVESPA social stock market has been fairly small, the Brazilian context must be kept in mind. The distribution of wealth favors the rich more than almost any other country. Even so, until recently not much was done to support the poor. Even nonprofit organizations are a fairly recent phenomenon. To make matters worse, charitable contributions are not tax deductible.

In 2006, the Johannesburg Stock Exchange of South Africa launched a similar effort. The South African Social Investment Exchange (SASIX), like BOVESPA, uses an outsider organization, in its case GreaterGood SA, to identify and monitor promising NGOs. After understanding these NGOs’ capacity and potential for impact, SASIX presents investors with a slate of “social stocks.” Here, too, investors cannot cash out or trade shares, but they can carefully follow the progress of the NGOs and the projects they invest it.

Are these efforts fully formed stock exchanges? No—not if all you can do after investing is track your investment. But are these efforts a step toward a stock exchange for social projects? Yes. They provide a level of assurance that any project and any NGO that you invest in is a good one. They help investors understand exactly how the funds will be put to work, too.

Just as important, they help establish a new conception of what is possible. By linking the word social with the concepts of profit, investment, returns, and markets, BOVESPA and SASIX have helped create a culture where online, “open” philanthropy is starting to seem more normal.

These efforts are not without challenges. It is not clear how well these efforts will scale up, especially if they are seen as favoring the donations of individuals rather than contributions from charitable foundations. There is even the question of their survival, given that all administrative costs are now borne by the sponsoring stock markets. And the NGOs and the projects that are listed on the exchanges can be questioned, too. Are they truly the best, or merely the best at data gathering or presenting their performance in quantitative terms?

Despite these questions, these are important efforts. They give real shape and form to the idea of “social business enterprises” articulated by Muhammad Yunus. Yunus, winner of the Nobel Peace Prize for his pioneering work on microfinance, has suggested that there is a false dichotomy between for-profit and nonprofit organizations. What if, he argued, a business were for-profit, but its aim was not to become as profitable as possible—the accepted ambition of a for-profit business? What if it aimed to make only enough money to pay its bills and keep its operations alive and growing while focusing on producing the greatest possible social returns?

Some of the funding for these social business enterprises could come from investors who would receive company stock with the same expectations you would have of any other stock: you could buy it, trade it, or sell it. All the expectations but one—you would be investing and moving your money from one stock to another with the hope of producing the greatest returns for society.

In fact, in discussing the idea of social business enterprises, Yunus suggested that social stock markets could be the very mechanism for implementing his vision. A fully developed social stock market would need some of the trappings of ordinary stock markets (though they might take very different forms): agreed-upon performance metrics, its own Wall St. Journal, analyst reports, brokers, and enough investors and good “social stocks” to permit a true stock-trading market to exist.

BOVESPA and SASIX aren’t that. But they are a step on the path. And efforts are under way to create others, including a more fully functioning social stock market in London.

Even the legal apparatus necessary for social business enterprises to thrive is now available. Low-profit, limited liability corporations, or L3Cs, can be formed in Vermont and Michigan but used to run businesses in any state. As their name implies, these legal entities are not created to maximize profits. L3Cs are particularly attractive to philanthropic foundations, which may help meet their annual legal obligations to disburse funds by investing in them. This is so because the only type of investment that a foundation can make to qualify as a disbursement is in a high-risk, low-return business whose primary purpose is in line with the foundation’s nonprofit goals. And that’s precisely what L3Cs are set up to do, by putting social returns first and financial returns a distant second.

This kind of flexibility, naturally, wreaks havoc with traditional scorekeeping. If LC3s are essentially charities, but they can also distribute after-tax profits to investors, what should we compare them with? How do we know which one is winning? Are we trying to decide which is better, Mia Hamm playing the trombone or Michael Jordan making a soufflé? Maybe we need social stock markets to help us answer these questions.

            Getting Unstuck

We’ve been looking at how the “testing” aspect of identify-the-best, test, vary, and copy can be leveraged in promoting large-scale societal change. But sometimes, the game isn’t fair even if the score is being kept the right way. Imagine, for example, a running race in which, when the gun goes off, your opponent has to run only a hundred yards, while you have to run a mile just to get to the starting line.

That is the problem that many small, underfunded organizations face, especially when they are serving a customer base without much money: they’re stuck way behind a fair starting line. Do you remember KickStart? Its founders knew they had products they could sell to poor people to help them develop or strengthen their own businesses to improve their lives. But a genuine “market” approach was effective only after KickStart was able to develop the products it wanted to sell. The market was not strong enough to attract the investors it needed to raise money for the necessary design and engineering, since the profits KickStart would make later would pay the bills but not make anyone rich. (And most investors are looking to get rich.) What KickStart faced is common to many organizations trying to develop and provide services to the poor—whether shelter, new sources of energy, or medicines. Getting to the starting line is exceedingly difficult. Running the race once you get there is easier.

This is where various kinds of intermediaries can play a huge rule. Financial intermediaries, like the Acumen Fund, the socially oriented venture capital fund, can provide money to help launch or expand promising social ventures. Social marketing firms such as PSI (the former Population Services International) can help nurture and develop markets for “new” products (like bed nets, condoms, and so on) that aren’t sought out regularly enough by affected groups. Organizations such as Anil Gupta’s Grassroots Innovation Augmentation Network can provide technical assistance to transform good ideas into better products.

            The Scoreboard Through the Fog

But let’s say the game is not fixed and the score is being kept the right way, but you still don’t know who’s really winning. Why? There could be a thick fog completely blocking the scoreboard.

Not to despair. “The sun will come out, tomorr . . .” No, we don’t need to wait that long. Today, already, right at this very moment, there are means to clear away the fog and the mental cobwebs we sometimes develop in trying to figure out if a “bad” company is simply trying to “green-wash” us (slick marketing can make “Plunder & Steal” seem like the world’s most eco-friendly firm) and let us see the light of day—and the scoreboard.

For instance, are you interested in doing businesses with companies whose legal DNA mandates that they serve the interests of their employees, the communities in which they operate, or the environment? And, would it appeal to you to know which companies have exceeded well-documented standards for social and environmental behavior—standards certified by an independent nonprofit organization? What about companies that undergo periodic audits to ensure their commendable behavior? Or companies that publicly declare they will use business for societal good and support other companies striving to do the same?

If these qualities are appealing, you may want to direct your purchases toward companies that are legally structured in a new, nontraditional way: as B (for Benefit) Corporations. Or direct your investments toward them.

B Corporations, in truth, are traditional for-profit corporations that have been certified to behave in socially and environmentally responsible ways. They must change their bylaws or articles of incorporation and get a passing grade on an evaluation of their social/environmental performance, which provides feedback they can use to improve in those areas, too. At present there are several hundred B Corporations. B Corporation certification already provides some assurance to “responsible” companies wishing, say, to raise money from outside investors who may later protest that they are not trying to maximize their stock price.

Legal issues surrounding B Corporations may eventually need to be resolved in court if unhappy investors find fault with the company’s societal orientation. But by legally and formally declaring their intentions, B Corporations are armed with ammunition to fend off business takeovers by profit-only suitors or investors.

B Corporations’ new quasi-“legal structure” creates a North Star for companies trying to steer a responsible and profitable course through the fog. But sometimes you just want something gadget-y to “do the math” and give you advice—an aid as nimble in supporting “responsible” buying as a GPS system is in helping you confront a maze of roads in a strange town.

Enter GoodGuide.

GoodGuide is a company—a B Corporation, at that—dedicated to helping consumers make healthful, socially responsible, and environmentally informed decisions. It gathers and stores third-party information on 70,000 products from more than two hundred databases, including life cycle data, product ingredients, and information collected by social monitoring organizations. It uses various sources of expertise about companies and products to evaluate their environmental impact (e.g., tons of carbon emitted into the atmosphere), social impact (e.g., human rights policies), as well as potential health hazards (e.g., possible disruption or interference with the endocrine system). The environmental ratings, especially, attempt to include all aspects of a product’s “life cycle”—from the inputs and process used to make it, to how it is transported, stored, and disposed of.

Various scoring algorithms are used to compute an overall product or company rating that blends social, environmental, and health issues. You can even get an explanation of what data were used, and how, to produce these scores. These ratings are available through the GoodGuide website, and there is also a free “app” consumers can use on their smart phones while shopping (who wants to lug a computer to the mall?) to help them instantaneously with purchasing decisions.

GoodGuide was first developed in the Sustainability Information Lab at the University of California-Berkeley. Other research institutions and organizations are taking different tacks to make it easier for us to make sense of an enormous amount of potentially useful but confusing information. For instance, Massachusetts Institute of Technology is developing a Climate Collaboratorium that allows users to raise issues about the environment, offer potential solutions to address them, and provide evidence in support of or opposition to a proposed solution.

All in an effort to let us see the scoreboard through the fog so that we can get back to playing the game.

Step 3: Copies of the Best

Our adaptive stew now has two of the four ingredients needed to make large-scale, societal change possible: identifying the best features and testing. Let’s look at the next ingredient—indeed, what some might consider the secret sauce: making lots of copies of the best.

We may view this as the “survival” part of “survival of the fittest.” While others wither and fade away, the victorious not only survive but thrive, reproduce, and are imitated. We have already seen how this works within an individual organization. Organizations shamelessly “steal” the ideas of others if it benefits them. They realize that there is no need to reinvent the wheel, even as they tweak it for their own purposes. Good ideas survive and multiply.

Making copies of the best also operates at a larger scale—at the level of society as a whole. To bring about large-scale change, we can resort to several powerful forces.

  • We need to powerfully, persuasively, and conveniently create influence through ideas;
  • we need to empower people with the necessary skills and training;
  • we must marshal the appropriate resources;
  • we must create leverage through major institutions; and
  • we must cultivate a new type of future leader.

Making copies of the best may be understood in different ways—all applicable to our discussion. We might produce (near-) literal copies, say by adding additional branch offices as identical as possible to one that exists already. We may copy a large portion of an idea (since we allow variation, this qualifies as copying) or just its essence (perhaps by letting others know about it and teaching them to adopt something similar). Copying, in these various senses, includes a string of McDonald’s (literal copying), the proliferation of online retailers (copying an essential idea), or a guy with a Beatles haircut (copying the essence, but w-a-a-a-a-a-y too late).

            Powerful, Persuasive Ideas

By the age of thirty-five, Jeff Skoll had already made his fortune. Skoll was the first president and first employee of eBay, the wildly successful company that allows you to sell all your old “treasures” online. He was ready for his next challenge.

He decided to create a positive influence on society by making movies. People who knew the movie business told him it would be impossible for an outsider with no background to break in. Others said there might be a slight chance, but that no one would want to watch the kind of movies that can create a positive influence. Instead, they like watching films starring top actors like Tom Hanks, Julia Roberts, Philip Seymour Hoffman, Jamie Foxx, Robert Downey Jr., Catherine Keener, Charlize Theron, Frances McDormand, Sissy Spacek, George Clooney, Matt Damon, William Hurt, and Amanda Peet.

So Skoll’s movie company hired these actors, among a stable of other well-known stars, to create movies about the global oil industry, women’s rights, a free press, and the Soviet-Afghanistan conflict, among other films.

Still sound boring? Perhaps the names Syriana; North Country; Good Night, and Good Luck; and Charlie Wilson’s War are more appealing. Each of these films, and others, including Murderball, Fast Food Nation, The Soloist, and Waiting for Superman brought a “serious topic” embedded in an engaging story to everyday audiences.

Skoll’s company, Participant Media (originally Participant Productions), hopes to create awareness of the key issues of the day by telling good stories. Once it has succeeded in that, Participant has accompanying social action campaigns to help viewers further explore the issues surrounding a movie and to get involved. To do so, Participant has worked with nearly a hundred nonprofits to reach more than twenty million people. In these ways, it is “copying” important social ideas and spreading them widely.

The film Participant released that may have had the greatest influence in creating increased awareness was the documentary An Inconvenient Truth. Before this film, there certainly was an awareness of climate change and of humans’ role in producing most of the damage, but it was a bit muted and not at the forefront of people’s minds or conversations.

Human activity has been putting dangerous amounts of carbon and other greenhouse gases into the atmosphere since we became an industrial society. The Intergovernmental Panel on Climate Change has been warning since its first assessment report in 1990 that this could cause the earth’s temperature to rise at a rate not seen for ten thousand years. Al Gore had been learning about and trying to stop the effects of global warming for thirty years when An Inconvenient Truth first appeared in theaters.

Although it would be wrong to say the film “caused” a shift in the public’s ideas about climate change or policy makers’ views about what actions to take, it certainly was influential. The film won an Academy Award for the best documentary feature film. (Who said Jeff Skoll couldn’t make movies?)

Although everyone is still not on board regarding global warming, opinion polls have reflected an increase in the public’s concern, understanding of the issue, and belief that there is a consensus of scientists who think global warming is occurring. Unfortunately, we still have the kind of “boiling frog” problem that Gore illustrated in the film, namely that although climate scientists are blaring alarms about the urgency to act, most of us still do not acknowledge the need to do so because changes in the climate are too small and too slow for us to experience personally.

The year after the release of An Inconvenient Truth, Al Gore shared the Nobel Peace Prize with the Intergovernmental Panel on Climate Change for efforts to “build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change.” The Nobel Prize committee added this about Gore: “He is probably the single individual who has done most to create greater worldwide understanding of the measures that need to be adopted.”
An Inconvenient Truth brought people into the theater. It set a near-record attendance mark for a documentary film. After watching the film, more than 28,000 viewers downloaded materials from Participant Media’s website so they could act on the film’s message. Participant claims that it was directly responsible for offsetting more than 106,000 tons of CO2, and indirectly responsible for four climate change bills introduced in the U.S. Congress. (Who said Skoll couldn’t get people to watch movies promoting societal action?)

Participant is waging a war of ideas that leads to action. Richard Dawkins (of mud-to-DNA fame) might call this the propagation of memes. Memes are ideas or small snippets of the culture that get passed on with variation throughout society. As in genetics, “winning” means being copied, and being copied means “winning.” So how can you make a meme win?

In short, memes (ideas) tend to be long-lived when they are memorable and easy to pass on. We might say that our belief that blue jeans are in fashion, the fact that we all recognize the tune “Happy Birthday,” and even our lay understanding that the earth orbits the sun are all the result of successful memes becoming strongly entrenched in society. (Just a thought: why don’t we try to influence memes through movies?)

How do we create memorable memes that spread for the public good? Author Seth Godin suggests that language must play a role. He asks, how can “global warming” be bad when global, warm, and greenhouses (as in greenhouse gases) are all good? Among Godin’s solutions: call our climate problem “atmospheric cancer” or “pollution death.” The nonprofit environmental marketing group ecoAmerica agrees that language is crucial when it comes to exciting people and making a message memorable. They prefer terms such as pollution refund to the technical phrase cap and trade. Their research even shows that the environment is too off-putting a term. Better to talk about “the air we breathe,” or the “water our children drink.”

I’ve heard it said, too, that the idea of something being “sustainable” is also too bland. You wouldn’t brag that your relationship with your wife or kids is “sustainable,” would you?
And how can we ratchet up interest and (action!) when a catastrophic increase of 4oC over the next century is something that none of us would even notice? Godin says we should put CO2 emission meters in all cars and bombard people with disturbing environmental pictures and stories.

He also suggests that symbols and icons are important. WeCanSolveIt.org and Repower America, for example, typeset the adjacent letters we in their names to make them look like an upside-down me, emphasizing the role every individual must play in bringing about clean energy. These groups have splashed ads for clean energy brandishing their logo over the airwaves and “computer” waves. The ads include mainstays of the political left and right disagreeing about almost everything except the need to take action to address our dependence on petroleum-based fuel, as well as holding BP accountable for the oil spill disaster in the Gulf of Mexico.

With the talent and energy marketers have for selling anything and everything—from bottled water (often drawn from municipal water supplies) to poisons (cigarettes), from disturbing movies marketed as comedies (Bad Santa) to “health” products of dubious value (just watch late-night television)—can’t we expect more? If Coke and Pepsi each spend more than a billion dollars a year to get us to drink their carbonated sugar products, is any price too high to preserve the health of the planet?

Of course, there is agreement that shaping people’s aspirations through language is only a beginning. People must more profoundly engage the issues, too, as Participant well understands.

            Empower with Skills and Training

Changing people’s minds is important. Changing their behavior is essential, if we are to make large-scale improvements to society.

No organization represents these ideas better than Ashoka. Ashoka was founded by Bill Drayton, a man with a broad and deep education and a wealth of experience at McKinsey & Company, the influential business consulting firm, and atthe Environmental Protection Agency, where he was a few decades ahead of his time in studying and developing emissions trading programs similar to those being debated today.

Founded in 1981, Ashoka was also decades ahead of its time. Ashoka provides vital support to social entrepreneurs, individuals who, by Ashoka’s definition, tackle society’s most pressing social problems through innovative solutions that have the potential for widespread impact and adoption.

A key to Ashoka’s success is its ability to identify and leverage the talents of world-class social entrepreneurs. Ashoka scours the planet to identify people who are creating innovations with impact in the areas of education/learning, health, economic development, human rights, and the environment. Those individuals whom Ashoka believes it can help nurture to become world-class change makers are awarded Ashoka Fellowships. Today, there are more than two thousand Fellows from more than sixty countries.

The diversity of innovative approaches that Fellows take is impressive. Take the area of learning and education. In the United States alone, we see examples as different as these:

  1. College Summit, a nonprofit organization that creates the appropriate culture and provides the appropriate skills to prepare low-income, high-performing students for college, and that supports colleges in identifying these students.
  2. High Tech High, a charter school that immerses urban students in real-world problems that prepare them for the world of work and simultaneously bolsters their academic performance.
  3. The Center for Inspired Teaching, which offers mentoring and individualized programs to sharpen teachers’ self-awareness and improve their communication and listening skills as a means to improve student learning in public schools.
  4. CEO Women (Creating Economic Opportunities for Women), which helps female immigrants and refugees become more fluent in English and learn how to become entrepreneurs by using educational “soap operas” (not textbooks) focusing on problems and solutions faced by characters similar to themselves.

To be awarded a fellowship, each Fellow must have already demonstrated the power of his or her idea, but not yet on a truly large scale. And impact on a large scale is what Ashoka craves. Ashoka Fellows receive a stipend that frees them to work full time on their ideas for several years. During this time, these social entrepreneurs, most of whom are skilled in areas unrelated to business, continually develop their business models. I once had a conversation with the founder of College Summit, J. B. Schramm, as we traveled together to London. As he shared some of his ideas with me, he had the look of a nonbusiness person whose business plan was going to be examined in every detail by one of the world’s most respected business consulting firms. Which was exactly the case, because he was traveling as part of his fellowship to meet with McKinsey & Co. for one of their periodic reviews of his ideas.

Giving social entrepreneurs such as J. B. Schramm access to some of the best minds in business strategy is one way Ashoka can help take an idea born in the basement of a housing project and make it self-sustaining and national. College Summit currently operates in eleven regions within the United States and is experiencing explosive growth in the number of high school students it serves. The organization generates one-third of its revenue from fees, with the expectation that additional customers, such as colleges who benefit from College Summit’s work, will fund the remaining two-thirds of its budget.

Receiving formal business training is only one way that Ashoka Fellows can perfect their business ideas and influence more lives. College Summit, High Tech High, The Center for Inspired Teaching, and CEO Women have each developed one particular approach to improving the educational lives of students. Yet together their approaches form a larger whole—a more complete mosaic, as Ashoka sees it. Thus, Ashoka encourages its Fellows to engage with each other to influence each other’s practices and adopt those that fit their own programs. At a more powerful level still, Ashoka tries to glean common threads running through the most successful social entrepreneurs’ work in a particular project area. These become captured and made available to social entrepreneurs worldwide working on similar problems. For instance, an observation about many youth-centered activities, including education, is that they lack teachers or other qualified adults to teach or provide training. And you can’t wish, hope, or legislate that away. But there is a “building block” that social entrepreneurs widely employ in response: empower children, and help make them responsible for the teaching and training that takes place. Once uncovered by Ashoka, this building block was shared and then successfully copied by an even greater number of youth-centered organizations.

This element of the mosaic has become the basis for another Ashoka activity called Youth Venture, whose website looks like something from MTV. The aim of Youth Venture is consistent with the Ashoka slogan, “Everyone a Changemaker.”

Through its interactive forum, Youth Venture guides youth in selecting an idea, forming a team to successfully put it into action, and expanding its impact. It may help with start-up funding as well.

Youth Venture operates on multiple levels. Of course, it hopes to produce new social ventures. As important, Youth Venture doesn’t want you to have to wait until you graduate from college before you decide you can become an entrepreneur (okay, so Bill Gates dropped out). Instead, it is directed at teenagers and even younger children who are hungry to create change—now. And, like its more stately big brother, Ashoka’s Fellows program, it links Youth Venturers together using a website that it hopes has the magnetic properties of Facebook. Even more, Youth Venture is attempting to produce a cultural shift—a new mind-set where anyone, anywhere, no matter her background or material wealth, can view herself not only as having the potential but also the ability to effect change: someone who is a Changemaker.

            Marshalling Resources
Having the appropriate supporting resources can allow small organizations to expand and, more generally, to imitate practices of proven social and economic value. The right kind of support may take the form of physical infrastructure (a manufacturing facility, for example), a partnership, new markets being opened, or money.

Ashoka clearly knows the importance of adequate “plumbing” and “wiring” for grassroots social entrepreneurs to flourish. Its “Full Economic Citizenship” program aims to provide the benefits of a market economy to those who have been excluded from its advantages. This initiative links these individuals with partner organizations from the business world and the citizen sector (a phrase that Ashoka prefers to nonprofit or non-governmental organization, since, to Ashoka, these carry negative connotations). These partnerships strive to provide essential services such as health care and housing, as well as the opportunity for poor individuals to improve their income by selling products locally and even globally. In addition to the benefits flowing to low-income populations, this initiative benefits business and citizen sector organizations by strengthening the relationships they have in low-income communities and providing new business opportunities.

The sequence of steps that these three partners take to create and distribute goods draws upon theproductive energy of low-income citizens themselves, the financial and managerial resources of business partners, and the abilities of citizen sector organizations to help gain a better understanding of opportunities and work toward their acceptance. Ashoka’s name for these partnerships? Something that may make us smile: a hybrid value chain.

As Ashoka is aware, lack of access to money is often a barrier faced by poor people striving to improve their lives as well as citizen sector organizations that serve as a catalyst in helping them achieve financial security. Ashoka envisions a new financial sector emerging to serve these needs—not out of charity, but because it makes business sense. New organizations would complement and possibly even extend the efforts of microfinance institutions, but they would be different in their own right.

In fact, new kinds of financial institutions are beginning to appear. One of the most acclaimed is the nonprofit Acumen Fund. Acumen Fund is a very rare breed. It is a venture capital firm that returns no money to its investors and does not try to make the greatest possible profits on its investments. Acumen Fund investors and the Acumen Fund team are driven by a desire to make powerful societal change. They value “societal returns” over financial returns while respecting the value and power of money.

Acumen Fund is a lean firm with offices in the United States, India, Pakistan, and Kenya. It is loaded with talented individuals with degrees from some of the finest universities in the world—ambitious people who could have written their own ticket to jobs of their choosing. And they did, by taking jobs at Acumen Fund.

Acumen receives charitable contributions from individuals, foundations, and other organizations. With the money it receives, Acumen Fund acts more like a for-profit organization by either lending money to other organizations, with interest, or giving them funding in exchange for a financial stake in their business.

The organizations that Acumen Fund invests in address one of several problems that face the very poor: inadequate access to health care, substandard housing, lack of clean water, and nonexistent cheap, clean energy. By targeting its investments to the countries in which it has foreign offices, Acumen Fund is able to better understand a region’s specific needs in these areas and the best organizations to address them.

Acumen Fund invests in both nonprofit and for-profit businesses, helping them grow and establish a sustainable financial footing, ideally within five to seven years. It is not in a hurry for a financial return (it provides “patient” capital), and it picks businesses to invest in that can become long-term partners in serving a region’s basic needs. During the period of its investment, Acumen Fund hopes that each organization it invests in will reach at least a million low-income citizens with the service it provides. But investments may also be made in smaller organizations that are rapidly growing, that have the inclination and capacity to harness market forces effectively, or that are leading the way in providing health, water, housing, or energy services in the region.

Acumen Fund may also help broker complex deals to develop solutions to a region’s particular challenge. You may recall from an earlier chapter that Acumen Fund facilitated an antimalarial bed net campaign in Tanzania. It played a financial role in helping the bed-net maker, A–Z, enlarge its operation and provide a more “modern” bed net. But it also helped put the pieces together so that A–Z worked with the Japanese chemical company Sumitomo, the Tanzanian government, the Global Fund, PSI, and other organizations. Acumen Fund had the, well, business acumen to understand the importance of each of these organizations in creating the appropriate business “ecosystem” not only to manufacture bed nets, but to distribute them, provide financing, and even to ensure that they were seen as something you must use properly to avoid malaria.

Acumen Fund understands that even if an organization that it supports succeeds in helping a million people, it could still take up to four thousand replicates of it to reach all who are in need. (1,000,000 × 4,000 = size of the world’s population living in poverty.) So, like Ashoka, Acumen Fund tries to help others benefit from its success and learn from its failures by providing a library containing multimedia tools and lessons.

A different perspective on raising and disbursing funds to serve those at the base of the pyramid is taken by IGNIA, a Mexican firm that receives investments from private investors, foundations, and others who expect not only to be repaid but repaid with handsome profit. IGNIA invests these funds in entrepreneurs with the potential to deliver much-needed essential products and services (in health care, housing, utilities, and education) to a large number of low-income Mexican citizens. In effect, IGNIA is creating a base of the pyramid “mutual fund”—a basket of companies whose joint success determines the success of the fund—that offers attractive investment opportunities to investors. By having a portfolio of companies that it invests in, IGNIA and its investors are protected against any one investment failing. IGNIA further increases the prospects for success of the fund and the companies it invests in by providing business guidance based on the significant experience of its senior leaders and other advisers.

            Institutions Can Move Markets

If you are old enough to recall the late 1980s but not so old that you can’t remember where you put your car keys, you will recall fast food companies like McDonald’s serving burgers, fries, and drinks in throwaway polystyrene containers. This is the way fast food was always served—at least until the natives of planet Earth began to get restless and agitate for change. Environmental advocacy groups, and sometimes groups of schoolkids, urged McDonald’s to reconsider its choices for packaging, first by waging a war of information. They pointed out that McDonald’s was the largest consumer of polystyrene, buying more than 3.5 billion clamshell containers every year. This was a huge concern for those worried about a material that does not degrade in landfills and is toxic when burned improperly.

McDonald’s responded by asking what difference it made to use paper wrappers or Styrofoam clamshells and cups. “We used to use paper only. We could do it again. It’s not that we can’t, it’s just that we see no reason to change.”

So the anti-polystyrene crowd escalated tactics. They encouraged customers to send greasy clamshells back to McDonald’s headquarters. They also encouraged a boycott of McDonald’s altogether. The Environmental Defense Fund played a large part in getting McDonald’s to change its behavior, too, working with them to understand the best options for dealing with its waste.

The result? McDonald’s replaced polystyrene with paper, eliminating the one billion-plus pounds of polystyrene it was using for its foods and drinks when the protests were taking place. (Alas, some drinks are again served in polystyrene cups.)

A similar sea change is now taking place at Wal-Mart. The world’s largest retail chain store—the world’s largest company of any kind—has made the decision to “go green.” They are, literally, selling hundreds of millions of energy-saving compact fluorescent lights to customers and striving to reduce the energy consumption of other consumer products such as flat-screen TVs by 20 percent. Wal-Mart itself is aiming to eliminate its waste and obtain its entire energy supply from renewable sources. Further, it is putting its suppliers on alert that it plans to grade them on their environmental performance, looking carefully, for example, at how their packaging fares along nine dimensions, including greenhouse gas emissions, recycled content, and transportation.

Of course, more than fifty thousand Wal-Mart suppliers have seen this all before: when Wal-Mart wanted to contain its costs by improving the way it was able to track its inventory and in-bound supplies, it required them to use electronic means such as radio frequency identifiers (RFID tags), lest they become “former suppliers.” As it goes, when the retail giant says, “Jump!” you don’t ask, “Why?” You just put on your sneakers as quickly as you can and ask, “Is this high enough?” Wal-Mart creates legions of suppliers happy to “copy” its dictates.

It’s easy to criticize large dinosaurs like McDonald’s and Wal-Mart. And both have been lightning rods for environmentalists’ scorn. But when they change their mind—and business practices—watch out. The effect is as if the sun were to relocate to a new address: every planet in the solar system would be wrenched into a new position, too (even Pluto, which, let’s agree, is still a planet at the far end of the solar system). That’s how gravity works. And Wal-Mart’s decisions.

So, even if we’re wary of mega-companies such as Wal-Mart and mistrustful of their intentions, we are probably wrong to consider them dinosaurs. Quite the opposite: they provide gigantic levers. If we learn how to grab them and pull, we quite literally can change the world.

Should it trouble us that Wal-Mart is “only” trying to hold down its costs rather than trying to be green because “green is good?” I don’t think so. After all, environmental advocates have been presenting facts and arguments to Wal-Mart for years, trying to convince the company that going green will save it green. At last, and thankfully, that message seems to have gotten through. Wal-Mart and other organizations are realizing that holding down energy costs, reducing expensive material costs, and selling products that help their customers save energy (and money) is better than green-washing. (They still sell tons of, er, “goods,” as leaders of our buy-buy-buy culture—leading to waste and pollution.)

Finally, we must never forget that the institutions we have grown accustomed to will change. By understanding this, and both shaping and harnessing the effects of these changes, we gain another means to change the world.

Let’s think about microfinance one more time. Initially, as we know, no one thought the poor would have the discipline or ability to repay a loan, no matter how small. And even if they did, wasn’t charging them any interest at all a form of usury? But those days are history—all of two or three decades ago.

With microfinance becoming more popular and attracting more funds, new issues are arising and we must ask new questions. In 2000, the Mexican microfinance firm Compartamos changed from a nonprofit microfinance institution to a for-profit company. In 2007 it completed its transformation, selling stock to investors and being listed on the Mexican stock exchange. Many questioned—and may still question—this move, believing that it contradicted Compartamos’s goal at the outset of providing small loans to the poor.
But the situation is not so straightforward. Compartamos has vast reach, serving all but two Mexican states and providing financial services to more than one million customers. Many are rural, far from major cities, and almost all are women who run small micro-enterprises. These women have small loan balances (an average balance of about $450, or about 20 percent below average for Mexican microfinance institutions), but the time and work Compartamos must put into identifying these loan customers and servicing their loans are not reduced just because their loan balances are smaller. So Compartamos has more difficulty covering its administrative expenses from charging interest than if the loans were larger. These facts make Compartamos’s customers a relatively risky and expensive group to make loans to.

Accordingly, because of all these factors—smaller loans, riskier customers, and proportionately higher administrative costs—Compartamos charges higher-than-average interest rates. If we step back and ask if this is the “death” of microfinance, we may come to the opposite conclusion. Slowly, microfinance is becoming more mainstream. People who simply want to make a profit are now interested, not just the socially minded. When Compartamos first issued its stock, it had thirteen times more potential investors than available stock.

Compartamos’s profits and rising stock price have attracted other firms eager to copy it and reap the rewards, resulting in more dollars flowing to more people who can use the money to start or grow small businesses or make other major improvements in their lives. Firms such as Compartamos may ultimately be unable or unwilling to serve the very poorest segment of society. That does not mean those people will remain unserved, however. Nonprofit microfinance institutions, which rely on charitable donations or funding from governments or other nonprofit agencies, can fill the gap.

For us, we should recognize that the actions of Compartamos can be likened to McDonald’s or Wal-Mart. These are big institutions being pushed to change and pulling along others as they do. By working through these institutions—monitoring their actions and influencing their behavior when necessary—there’s the opportunity to create vast, positive change.

Institutions will change, and others will have no choice but to follow. We must make sure that they change in the right way.

            Preparing Future Leaders

If we are lucky, we will dodge a humans-on-Earth-ending climactic bullet. But only if we take the right actions, starting right now, and continue them as a new habit of planetary behavior.

Who provides the best hope of finding, developing, and carrying out such new (to us) and exemplary behavior? Those in the “minor leagues” playing T-ball and three-on-three soccer; riding their bikes, catching frogs, and building mud pies; learning to tie their shoes (okay, Velcro); and discovering their own abilities. For soon they will be in the “major leagues.” They will need to think differently, to be broadly educated, and to see and to act on critical relationships.

Consider this way of thinking and acting differently:

When there is a glut of coffee, its price drops, and coffee farmers’ income plummets. Farmers can’t coax more coffee from their plants, and just 4 percent of the plant (the bean) is sold as coffee anyway, whereas 96 percent of its total mass goes to waste.

The whole idea of even growing coffee seems not to make sense. Unless you think and act differently.

You can plant banana trees to shade the coffee crop. You can plant herbs that attract insects so that you don’t need herbicides. And you now have shade-grown organic coffee that commands a higher price.

You also have the waste from the coffee tree trimmings, which provides a remarkably nutritious environment for mushrooms to grow much faster than normal. The mushrooms growing in this Starbucks-like environment unfortunately create a new kind of waste—I should have said fortunately because it can be fed to livestock. But they create waste, too, and certainly this must be the tail end of nature’s digestive system. But it’s not, if you use it as lunch for bacteria that are part of a bio-digester that can produce natural gas (to create steam to pasteurize the banana waste to produce the environment for the mushrooms to grow, to …). The bio-digester’s “waste” (are you getting the idea that there is no such thing as waste in nature?) issludge that helps grow algae in ponds to purify the water to help support the pond’s fish. Of course, you also end up with dried bananas, and meat or dairy from the livestock.

This hybrid way of thinking comes from a deep understanding of nature—an understanding of its biological, chemical, and ecological properties, but also the way it can help create a vibrant economic system. The underlying science relies on basic principles unknown to most adults, but known to the scientifically literate. And the economics embraces much more complexity than the customary step-by-step, break-it-apart-and-analyze-it thinking that is often taken as the pinnacle of knowledge.

So, who could ever learn to think and act this way? How about … kids!

The Zero Emissions Research Institute (ZERI) was actually involved in a similar transformation of a community of coffee farmers in Columbia in the 1990s. These farmers initially suffered a loss of income by being subject to world market prices for coffee, but ultimately ended up wealthier and better supported by a more robust economic system for generating their livelihood and a more robust ecosystem for supporting their land. ZERI estimates that the earth’s twenty-five million coffee farms together could produce fifty million more jobs if these kinds of practices were widely implemented. They can also generate more than ten million additional tons of food.

ZERI also believes that children—not just honors students in the world’s best high schools, but young children like those living in Brazil’s favelas—can master this kind of thinking. ZERI’s founder, Gunter Pauli, has created a series of fables to teach children. Like Aesop, Pauli’s ambition is to provide students with a moral understanding. But this understanding is based on a deep knowledge of science. His thirty-six fables (in Spanish and English minibooks) contain 1,500 deeply researched scientific ideas—the very kinds of topics that can be used to support new bio-economic systems, including osmosis, gravity and tides, chemical reactions and electricity, water surface tension, and Newton’s third law. Yet these ideas are embedded in stories that any youngster can understand and be interested in.

As early as elementary school, children can begin a ZERI journey of educational discovery. By questioning, receiving answers, and constructing their own (increasingly accurate) scientific models of the world, they build their understanding and stimulate their imaginations. ZERI also encourages a deep emotional connection to its lessons—lessons embracing social and economic justice and an unswerving commitment to the natural world.

By the end of their journey, ZERI-taught students have the knowledge, passion, and commitment to act. Too many people with too little planet and not enough opportunity? Not if you fundamentally change your perspective and believe in radically redesigned economic systems that create jobs and perfect their use of natural resources.

In the next decade or so, let us hope that the number of young leaders with this kind of orientation becomes enormous, that their confidence is grounded in a more complex “systems” reality, and that their ambition for personal accomplishment and gain is channeled by the challenges of respecting and preserving our home planet—socially, economically, and environmentally.

That’s how you create the biggest changes of all.

Step 4: Creating Variation

As I have described already, evolutionary changes in society come from four forces swirling together in an adaptive blend to spew out effective, society-changing ideas: identifying the features of effective solutions; testing them; copying the best; and introducing variation. We have taken a good look at all of these but the last, to which we turn our attention now.

Solutions to societal problems rarely spring into being fully formed, ready to be adopted. Even when we are successful in identifying new ideas that may lead to effective societal solutions, they are likely to reveal themselves as puzzles requiring careful thought and new insights. This is where variation comes in. The impetus for varying the approaches we take in seeking societal betterment can be as different as the profound secrets of nature or kids seemingly puttering about on computers.

            Variation Inspired by Nature

Consider biomimicry. This is the activity of creating designs that mimic nature.

Someday soon shoelaces will be a thing of the past, just as typewriters are today, because who needs to teach a kid to tie her shoes when there’s Velcro? Velcro was invented in the 1940’s by a Swiss engineer, or millions of years ago by nature, if you really want to give credit where credit’s due. Velcro’s hook-and-loop design is a direct imitation of burrs sticking to an animal’s fur. With an ordinary microscope, you can see that burrs look like hooks, and fur creates a series of loops on which the hooks get snagged.

But not all of nature’s designs are so easily understood. Trees miraculously turn sunlight, water, carbon dioxide, and air into cellulose, which binds to become wood. This is an amazing recipe for producing something stiffer than steel or concrete and with better bending strength. Or how about spiderwebs? They are stronger than both steel and Kevlar and are produced by itsy-bitsy critters that do all their work at room temperature. Can our designs touch spiders or trees? Not even close.

But sometimes we can crack a tricky biological code. For example, the lotus flower grows in swamps, yet its leaves are immaculate. Why? The simple—and wrong—answer is to assume that the leaves are so smooth that they act as a repellent. The truth is that, at the microscopic level, the leaves’ surfaces are spiky and jagged. Air between these spikes causes water droplets to hover poised upon the leaves’ surface, where they attract mud and grime. When the leaf tilts in any way or the wind blows, the drops of water carry away the dirt and clean the plant.

And so? And so by cracking this code we can obtain buildings protected by self-cleaning paint (Lotusan) or stain- and bacteria-resistant high-performance fabrics (GreenShield). The benefits we get include a reduction or elimination of many chemicals that are harmful to the environment or hazardous to human health. And we learn that creating industrial variations of exquisitely adapted natural processes can set society on a course in which we live harmoniously with nature rather than opposing it.

A lesson we might take away, too, is that sometimes, deep and specialized technical knowledge is necessary to create appropriate variations. But not always. At least not always in the way you might think.

            Variation Inspired by Outsiders

Remember InnoCentive? Many of the competitions they have run have been won by individuals in fields very different from those of the original problem seekers. For example, an oil tanker that cracks or springs a leak may need to be emptied very quickly. The Oil Spill Recovery Institute feared that this could become an extremely difficult task in frigid Arctic waters as crude oil turned into icy slush. They turned to InnoCentive and got an answer to their problem, but from an outsider—a chemist—whose insight was formed by pouring concrete one summer. Concrete vibrators prevent concrete from setting up too soon and allow it to be easily poured into tight spaces. So why not do something similar with oil?

This is far from an isolated example. A study of InnoCentive revealed that the greater the number of disciplines that attempt to solve an InnoCentive problem, the more likely it is to be solved. And the odds improve as a solver’s expertise gets further away fromthe original problem.

All of which can be great for people with, ahem, “unmarketable” skills. Although InnoCentive relies on a fair number of problem solvers with advanced degrees, relevant outside experience can come from anyone—including computer gamers.

The ability to sequence DNA has led to a massive amount of data. Buried within these data are clues for designing new drugs or enzymes, developing effective biofuels, and cleaning up pollution. DNA sequencing data record how strings of amino acids line up, but they tell us nothing about how these sequences fold into three-dimensional shapes. Yet that is where the “action” of these proteins (folded strings of amino acids) takes place.

Typically, figuring out how proteins fold involves lots and lots of computational power, a fair amount of trial and error, and a good amount of luck. Enter FoldIt—a “computer game” that allows human game players to fold proteins. The premise here is that there are some things that humans are amazingly good at, such as understanding language (three-year-olds are better at this than the most powerful computers) and understanding spatial relationships. And folding proteins is all about spatial relationships.

The FoldIt software takes you through a series of tutorial exercises, teaching you to position partially folded proteins to get a better look at them, pull certain sections, and rotate others. Feedback lets you know how you’re doing according to the actual biology and chemistry of protein folding. (Proteins fold into the most stable configurations possible; the more stable your shape, the higher your score.) Once you get the hang of the software, you can try folding proteins whose optimal 3-D shape is not yet known, which can provide important new scientific information. Ultimately, the hope is to let players design completely new proteins. By understanding and creating folded shapes, medical advances may be made to fight HIV/AIDS (where proteins are involved in attacking human cells), cancer (where proteins fail to properly protect and repair cells), and Alzheimer’s (where snippets of proteins are thought to be left behind, cluttering our brain circuitry).

At this point, the best FoldIt gamers perform quite well. FoldIt lists the winners for every puzzle to give them credit. Winners include a thirteen-year-old, a home security designer, and others with no special biology background. PhD-level biologists, on the other hand, have no special aptitude at FoldIt. Will we benefit from important new discoveries when the abilities of those who are best at “seeing” how to fold a protein are unleashed on the increasingly ambitious protein “games” being developed? The jury is out. But as the magazine The Economist suggests, even the possibility presents a dilemma to parents: “Should they tell their children to stop playing games and get on with their homework or encourage them to continue playing and possibly share in a Nobel prize?”

            Institutions Opening to Variation

As we’re beginning to see, creating variation in a way that has the potential to transform society requires different kinds of institutions. Biomimicry is based on an entirely new conception of how industry should work to design, maintain, and retire planet-preserving products. Competitions such as InnoCentive’s tear down the institutional boundaries between organizations that inhibit a good idea from finding a new home elsewhere. And as the example of FoldIt shows, even the most fundamental problems within a highly technical discipline may remain unsolved unless “membership” in the discipline becomes dramatically more open.

Similar transformations are needed to support the adaptation and adoption of ideas whose origins are in the developing world. Anil Gupta’s Shodh Yatra discoveries are the starting point of innovations with the potential to change society. But identifying new, useful technologies is just one step; something more is required to allow them to take off. To create change on a large scale, many of these innovations require variation: mechanical variation so they work better, physical variation so they’re easier to produce, and variation in the way they are marketed so that they’re more appealing, just to list a few of the changes that can be necessary.

If you remember, Gupta’s work gains support from a number of organizations that help in various ways—from protecting property and providing support for design, to improving manufacturing, marketing, and so on. One support institution, the Grassroots Innovation Augmentation Network, provides just the kinds of variations we are describing. Another, Gupta’s Honey Bee Network, fulfills his ambition to allow grassroots ideas to cross-pollinate so that they spread more widely and borrow from each other more easily.

Even so, Gupta is also keenly aware of the importance of protecting indigenous knowledge (especially knowledge about plants, which large corporations might suddenly try to “copyright” by introducing “new” products) and of providing tangible benefits to those whose ingenuity and effort have led to new inventions. Thus, the suite of institutions supports the protection of intellectual property rights (through patents obtained in India and the United States) and strives to connect these products with new customers and markets by providing technical, business, and financial support.

These various business support and development institutions collect the “germ” of good ideas and try to make them even better. Turning a prototype into a product. From a product, creating a market. A similar attitude—starting with something that is close to what is needed and opening up the design process—characterizes the Open Architecture Network.

The Open Architecture Network sprang from the ideas and wishes of Architecture for Humanity. This nonprofit organization was founded to help provide design and building support to those who couldn’t afford (and were unlikely to ever obtain) high-quality dwellings, adequate schools, decent sanitation, and many of the other things we more or less take for granted. By tapping the expertise of individuals worldwide, the group assists in creating, alongside the affected stakeholders, inclusive designs that help address the deficits in their lives.

The Open Architecture Network is an online community of designers, architects, engineers, and others who produce open-source designs. The network sponsors specific design competitions, including a smart, safe, sustainable “classroom for the future”; transforming one city block in Dallas to “reinvent” the very idea of inner-city America; and addressing the digital divide in Africa, Asia, and South America.

There is tremendous benefit from the ideas generated in response to competitions. But there may be more power generated by losing entries than the winner. Why?

Simply because there are so many of them, and the Open Architecture Network makes sure that all ideas, plans, designs, and other intellectual property it receives can be shared and used by others. The specific problem one designer faces may be addressed by someone else’s design—or a piece of that design—which another party is free to modify or extend. The processes of sharing, commentary, and collaboration actually extend to nondesigners, including teachers, health care workers, or volunteer groups—anyone who might have on-the-ground knowledge of what is needed or suggestions for how to supply it.

In its grandest dreams, the Open Architecture Network would see its electronic repository provide design ideas that the five billion poorest citizens of the planet would access, change, and reassemble like Tinkertoys to make them more appropriate to their needs and situations. Talk about variation on a societal scale! The Open Architecture Network embraces the principles of the open-source movement. This movement itself is a powerful force for producing relevant, appropriate variations intended to address societal needs.
The term open source originally suggested a new means for producing computer software. Traditionally, software companies carefully guard their underlying software code. It is, after all, the way they make money—either by selling the software itself or by selling (or leasing) a service that the software enables.

Open-source software, on the other hand, gives anyone the ability not only to “look inside,” but to change the software if certain guidelines are followed. The major advantage of “going open” is getting hundreds, even thousands, of people to work on perfecting and improving a piece of software. This makes producing software better (more people looking to make fixes and additions), quicker (an extreme division of labor), and cheaper (labor is free). In fact, open-source software is usually free altogether, creating powerful alternatives to “boxed” software requiring a recurring cycle of license renewals (for a fee) or upgrades (also for a fee) without users really getting what they want anyway. There are also vast implications for the adoption of software in the developing world, where the prices we pay are completely out of the reach of the multitudes.

And so others outside the software arena thought, “If ‘going open’ works for software, why not us?” This question heralded a shift in culture and attitudes. The MIT Open CourseWare initiative was among the first in education to allow students and nonstudents—anywhere, and without any formal affiliation to MIT—to receive a large share of the benefits of an MIT education. And all for free. Want to know about linear algebra? (I didn’t think so.) Well, if you did, you could obtain a syllabus, readings, video recorded lectures, quizzes and tests (with solutions), and a variety of other materials—the same materials that students at MIT receive. A similar set of materials is available for almost every course in the MIT catalog. You can even translate these materials into other languages, which is very useful for schools in poorer countries, and modify them by adhering to stated agreements covering modifications. These include not profiting from your actions, giving proper attribution, and enforcing “share alike”—meaning that anyone altering a derivative work that you produce must adhere to the same agreements.

Medicine is “going open,” too, with a boost from an unlikely source—the U.S. government. Electronic health records (EHR) can replace manual systems that hospitals have used to record, store, and transport (and misplace and lose) medical information. Electronic records provide immediate, accurate, and complete access to patients’ charts and histories, clinical test results, X-rays, MRIs, CAT scans, and other data and information. The results: improved care at reduced costs.

EHR systems aren’t cheap. But the Veterans Health Administration (VHA) has been developing an EHR system over several decades. And rather than keeping it under lock and key, they have put it in the public domain, where others can use it, change it, and extend it. This is welcome news to the nearly 98 percent of U.S. hospitals that use such state-of-the-art technology as pneumatic tubes like those at the drive-up window at your bank to shuttle information from one point to another. A set of software developers around the world works on this open source medical system, without compensation, just as software specialists do in other areas.

The VHA’s VistA system is only one notable example of open-source medicine. Other efforts can be found in the developed and developing world, covering advances in hardware and software to support improvements in clinical medicine, public health, health administration, and other areas of health care.

Many of these open-source efforts coincide with increased usage of both cell phones and Web 2.0 technology (greater interactivity over the Web). Together, these have greatly broadened our conception of who is capable of doing what and who should communicate with whom. For instance, the nonprofit organization DataDyne.org has developed an open-source model using cell phones for collecting epidemiological data in very poor countries. Each country can tailor the software for its particular needs and likewise customize any analyses they need to carry out. Perhaps most important, the collection of data can be carried out by some of the two billion mobile phone users now in developing countries where epidemics break out, often far away from urban centers.

The “opening” of systems and processes has had ripple effects throughout institutions. Think again about OneWorld Health’s efforts to combat diseases affecting the poor. A supporting network, the Tropical Disease Initiative (TDI), has sprung up that can boost OneWorld’s nonprofit pharmacy efforts. The TDI does computational experiments to find promising new leads for infectious diseases of the tropics. It explicitly promotes open-source collaborations and provides a drug discovery “kernel,” as they call it, which contains technical information about various drugs and drug categories along with various targets for these agents.

This type of variation—simultaneously a variation on both the drug discovery process and on the original software-only open-source movement—is consistent with the radical remaking of other institutions. For-profit charities? Think Google.org. Nonprofit stock exchanges? Think BOVESPA or SASIX.

As Darwin said, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

Or Andy Warhol: “They say that time changes things, but you actually have to change them yourself.”

With six-billion-plus potential change agents on the planet, maybe we’ve got a chance.