Professor Michael Gordon – Professor Michael Gordon

University of Michigan: Innovation for a Better World

On an old blog of mine, I embedded a TED video. Now, my tech skills are rustier or TED is craftier at preventing people from embedding their content. But this video (about 3 minutes) floated thru my inbox as part of a TED New Year’s series. It’s as good now as it was when I first pointed it out about 5 years ago.

Here’s the video link: Watch it.

What you’ll learn, in a short, amusing video:

1. Leaders are important, but over-rated.

2. Only when there are followers, is someone a leader.

3. The “first follower” is a scary role — you may be following a nut. So, you’ll be viewed as a nut, too.

4. But, once there are 3 of you, you’ve got momentum, building to a movement

It’s never been more important to find your movement than it is now. Things you value and cherish are likely under threat. Someone is starting something in your neck of the woods, on an issue you care about. Follow them!

ProPublica, a nonprofit investigative news organization, presented a very important podcaston a “typology of truth.”

Using Trump’s claims that he won the popular vote because of voter fraud, journalists could say any of the following:

1. Trump claims he won the popular vote, saying 3 million people voted illegally.

2. Trump claimed, without evidence, that he won the popular vote due to voter irregularities.

3. Trump is continuing his blatant disregard for the norm for politicians to tell the truth and respect the institution of truth, this time attempting to undermine our faith in the electoral processes on which the country is founded.

The first can flip into: he said – he said, where one party is Trump, the other the never-to-be-trusted media, or perhaps the Democratic party. This completely misplaces the emphasis on Trump’s claims, making this too matter of fact, and ignoring all evidence to the contrary.

The second is better, by calling out an attempt to blatantly lie, but just barely. Still, it misses the really big issue.

Only the third gets to the hear of the matter: A systematic attempt to mislead, defy, break norms, and undermine the institutions we depend on.

When describing the events we are seeing all too often, journalists must call them what they are — #3: a reckless, dangerous act intended to create a new set of rules without any accountability to the truth.

So must we all.

Daniela Papi-Thornton and I have a piece appearing in the Stanford Social Business Review on university-hosted business plan competitions.

The gist of it is: These competitions reward superficiality by emphasizing business plans and models (and sometimes taking action) at the expense of deeper understanding that comes from truly knowing your stuff. Knowing your stuff means being as aware as you can of the actual lives of people affected by the problem, what has been tried previously to address it, what has worked (at all), what has failed (and why). And very important: knowing who is taking action now so that you might join them rather than start something yourself.

In my book in progress on the lessons social entrepreneurs need to learn (coming soon), I write about business plan competitions hosted outside of universities. They have some problems, too. Here’s a brief synopsis:

I’ve watched them, judged them, and sponsored them. Overall, I’m not a big fan.

Like university-sponsored competitions, it’s easy to enter them without due consideration of relevant background knowledge and efforts. On top of this, there are other problems: Winners too often pocket prize money and never pursue their idea with serious intent. Winners mistake winning what amounts to an academic exercise with being ready to execute. Lavish prizes actually undermine attempts at achieving financial sustainability. A high-profile idea often garners prize money from many competitions, and prevents other business ideas from getting support. Polish is confused with substance. Too much time is spent on preparing for small competitions (interfering with the real work that can and should be done).

Happy to share more when my book appears and give you a free e-book on US social entrepreneurship right now.

Saw the most energetic guy I’ve seen in a while present on TED. Passionate (almost fiery) , well informed with pertinent data. Optimistic about the our potential for the planet. Yes, that Al Gore. This is well-worth watching.

Sorting through my thoughts about Detroit’s bankruptcy (or whatever it turns out to be)

Different ideas about how companies can be organized and run are floating around. What resonates with me are institutions that support communities: “communities” of employees, of local citizens, of people interacting with the natural environment. Too often, though, companies barely acknowledge the importance of these communities while they bend over backwards to better meet the needs (make that wants) of investors.

Many people reflexively respond that the main (or only) purpose of a company is to make money, and that companies must be organized to serve the needs of the “community” of investors. (They don’t). Of course, investors may have no connection to a company at all — they don’t work there, don’t live in the towns where their investments are put to work, they may not even like the products the company makes. Yet to business traditionalists — but not to me — investors’ desire for making money trumps everything else.

I would like to think that when it comes to a real community — I’m thinking of Detroit — that we wouldn’t even need to question whose rights should be considered ahead of all others: the rights of those who call the community home. Other discussions about social issues can take on a moralistic dimension: deficits somehow correlate with lack of character (though empirical evidence indicates it is appropriate to stimulate a stalled economy); poor people don’t deserve to eat; ill-supported (and often mean spirited) advice like that.

But when it comes to a city — a place where people live, raise kids, and shape our future — moralizing or scolding make even less sense. Police, firemen, and other pensioners contributed to the city for years — some for decades. State law says their pensions cannot be reduced. Those not owed pensions are owed essential services, including timely responses by police and fire fighters, working schools, and working street lights. They did not cause Detroit’s decline, but they have suffered greatly from a transformed auto industry and corporations’ decisions to decamp to the ‘burbs, taking with them their tax dollars.

With change, comes the opportunity to reflect upon new ways of doing business. Shifts in population growth and in spending have made companies aware of new markets in the developing world, if not yet in as dramatic a way at the bottom of the economic pyramid. Similarly, in the next several decades, large-scale transfers of corporate ownership provide an opening for a dramatic shift towards inclusive corporations.

And now Detroit is facing bankruptcy. This grim circumstance creates an opening, too. What kind of city does Detroit deserve to be? Most essentially, for Detroit to “work,” people must work. And there is work to be done. With more than a quarter of Detroit’s 140 square miles abandoned, projects to raze and re-purpose these properties are being undertaken. Detroit Blight Authority is taking a lead, appealing for federal funds. This is a perfect opportunity for the government to release funds, contingent upon the training and hiring of Detroit’s idle workforce. What’s more, Detroit can follow the lead of other downtrodden communities, including the South Bronx, to create a green, energy-saving, and even energy-creating city.

Detroit’s schools are the next (if not the first) obvious place to make changes. Detroit Public School’s newly appointed emergency manager can help foster an environment that couples academic rigor with real-life relevance. If you’ve followed this blog, you know how high I am on the Network for Teaching Entrepreneurship“>, a model that creates life-changing educational experiences for low-income students.

Even with ObamaCare, negotiating the healthcare maze will be daunting. Programs like Rebecca Onie’s Health Leads demonstrate how non-traditional health care workers can help cut through red tape to ease the problems faced by the ill, poor, and elderly. Where Health Leads relies on college students to fill “prescriptions” for food, clothing, housing, etc., Onie suggests that local community members themselves can staff similar positions. Such staffing (jobs!) can avoid expensive emergency room visits and head off long term health problems. Suitably structured and financed (possibly with social impact bonds), hospitals can serve more patients, more effectively, and save money.

As Governor Snyder has been saying, Detroit’s problems did not just occur; they’ve been unfolding over decades, caused in large part by a dis-investment in the city. Now at the point of crisis, we can begin to point Detroit in a new direction. Detroit’s resurrection will take time, as did its decline. It will take investment, but investment in, and of, the community. Not investment aimed at making investors wealthy ahead of the needs of the city.

The city that helped more than any other in winning World War II; the city that created a modern society through the automobile industry and industrial efficiency — this city needs our compassion and support. This does not mean our charity: for by re-making a working, well-educated, healthier Detroit, we set the country on a stronger course.

How’s the economy looking to you?

Of course, none of us has ever seen “the economy,” since the term is just an abstraction. But it is an abstraction that covers such a broad range of activities that we probably need a few new words to cover them all.

If you’re poor, the economy doesn’t look too good. Worse, there are many people with power who don’t have your best interests at heart. The US House is flirting with reductions in food stamps of up to $135 billion (while keeping subsidies for already wealthy mega-farmers).

Cynically, state legislatures are denying the poor the opportunity to receive health care coverage under ObamaCare. In Michigan, for example, working parents now must be below 64% of the federal poverty line to receive Medicaid; jobless parents must be below 37%; and childless adults are ineligible altogether. With Medicaid expansion (a provision of ObamaCare that the Supreme Court ruled each state could make its own decisions about), people in each of these groups would be eligible if their incomes were below 133% of the Federal poverty line. Yet the Michigan Senate is unsure if will allow this, although the federal government will cover more than 90% of the cost for the next decade.

On the other hand, the economy looks pretty bright for those with the smarts — make that connections — to benefit. Thomson Reuters has come under scrutiny for packaging the University of Michigan-produced consumer confidence index for the benefit of high-frequency traders who pay to receive it two seconds before it is released more widely — a window in which hundreds of thousands of trades are executed and millions of dollars made by understanding consumer sentiment just a shade in advance of other stock traders.

Legal or not (there is some question), and ethical or not (ditto), this kind of economy has been designed for the exclusive benefit of the wealthy. Despite claims of creating more efficient markets, there is nothing in this kind of activity that resembles the economic activity that benefits, and that we can “see,” on Main Street.

That economy — the real economy — is defined by jobs, actual goods and services, and enduring relationships — not milliseconds. As Marjorie Kelly explains in Owning Our Future, this economy can be structured for sufficiency (genuinely meeting a community’s needs, over a long period) rather than efficiency (trying to make as much money and profit as quickly as possible). The key is developing means of ownership that create genuine wealth, whether that ownership is in the hands of employees, communities, or mission-driven organizations.

Just one example, which Kelly mentions: Evergreen Cooperatives in Cleveland provide jobs and opportunities for low-income residents. Its employee-owned green laundry, solar/energy efficiency, and hydroponic gardening businesses contract with major Cleveland organizations including the Cleveland Clinic, University Hospital, and Case Western Reserve University to provide needed services. The revenues from these businesses stay within Cleveland to create community wealth rather than wealth for absentee owners, mainly supporting residents with household incomes below $19,000 (the federal poverty line for a family of four is $4,500 more than that). An institution that received much deserved recognition at the recent BALLE conference, Evergreen businesses allow employees to purchase an ownership stake in the company after six months of employment (which it helps finance), entitling them to vote on all issues (one vote per owner), to receive health insurance, and to expect $65,000 in equity from profits in eight years of employment.

This kind of economy has many different manifestations. What unites them is the vision of a stable, inclusive community, striving for sufficiency, honoring the needs of people and respecting the natural world. An economy built to endure, not live its life in seconds.

I have found my community — actually, one of several, but a special one.

I attended the BALLE conference (no, not in Bali, but in Buffalo this year), an event focused on more enlightened, more powerful forms of business. BALLE — the Business Alliance for Local Living Economies — emphasizes the primacy of local over global; employment over profit; we over me.

Among the many highlights of the conference, I want to mention this:

Janine Benyus, who is at the forefront of the biomimicry movement, described a type of communitarian “mutualism” in natural ecologies. More simply: A healthy tree requires healthy soil and other healthy plant- and animal-life to survive. Moreover, the only way for a healthy tree to ensure its progeny also have the opportunity to grow and thrive is for their growth to take place under the same, healthy conditions. Thus, through an intricate system involving other plants, animals, and fungi operating in highly mutually supportive ways, a single tree may help restore and replenish the environment of which it is part for its own survival, for the survival of its offspring, and for the survival of the other living organisms that comprise the ecosystem of which it is a part.

I have long admired Benyus’ brilliance, and the ways she combines facts, passion, and beauty to convey her overriding message: Nature has been solving many of the same problems that we are trying to solve in modern society; only it has been doing it considerably longer: 3.8 billion years compared to 200,000 years for us (homo sapiens sapiens). So, it is has developed much better solutions.

Benyus’ description of an ecology of mutualism has gotten me considering how our cities can be similarly oriented. More to the point, how can social enterprises be seeded to provide not only single social benefits (such as better healthcare), but to help provide additional capability to support other social enterprises that are, only apparently, distinct from it?

Benyus described how precise marking and tracing of carbon molecules shows that carbon that is absorbed in the upper canopy of a forest may be found in low-lying plants half a mile away. This movement of nutrients is biologically elegant and its purpose appears clear: carbon that is captured, shared, and redistributed creates a healthier environment for all plant-life in an ecology — including the tallest trees that capture and might otherwise consume it all just to serve its own, immediate needs.

Here’s to cities re-designed to do the same.

Imagine the sound you make when you blow on a long untouched stack of papers, and visualize the cloud of dust you stir up ….

… because, after a days that became months of not writing anything on this blog, starting just before Christmas, I’m back at it.

What’s been going on? A few highlights:

1. Significant progress on my “Wish I Knew” book, based on interviews with 100 plus social entrepreneurs. Amazing people, amazing stories and insights about their work, and incredibly generous in sharing what they’ve learned. With all that they’ve shared with me, the book should practically write itself. More likely, I’ll probably plod forward as I try to pick just the right ~~word~~ ~~adjective~~ adverb, as I often do.

2. Have been working with some students and faculty colleagues on advising three social enterprises. One, Circles USA, holds great promise for alleviating poverty in the US; another Global Fairness, is working to improve the livelihood and the environment for tens of thousands of poor Indian women. The third, Impact Enterprises, is working to bring jobs to Zambia for the dual purposes of tackling stifling unemployment and helping fund a ground breaking educational initiative.