Stanford’s Center For Social Innovation

An interview with Center Co-Director, Neil Malhotra

“Social innovation is an extremely broad phrase that doesn’t exclude anybody, and it’s based on the idea of using organizations to solve social problems for the social good. That can include a number of actions beyond starting your own organization and being an entrepreneur. It could mean working for a non-profit, it could mean working for the government, or for a hospital, or it could mean working for a for-profit on a social problem, such as working for Google or Facebook to solve Internet accessibility.”

If you were to name one school that is synonymous with social impact, Stanford should jump to mind. And it’s not just because the Graduate School of Business embraces a broader mission of looking at business as part of a bigger system. The school’s core philosophy, “Change Lives. Change Organizations. Change the World.,” speaks volumes to the GSB’s approach, which extends well beyond shareholders and investors. That philosophy draws in a whole range of forces that affect the way business is done and the way organizations are run.

As the first business school to include a Certificate of Public Management, and a pioneer in the social impact space, the GSB remains at the forefront of the social entrepreneurship and social enterprise movement. The Center for Social Innovation (CSI), the GSB’s warehouse for all things related to social impact, connects with the rest of the university to offer a rich experience for students and faculty who care about social issues and management. Founded in 2000, the Center encompasses programs designed to include everyone who has an interest in almost any form of social impact, including public or private sectors or a mix of the two. The CSI’s focus is truly on solving social problems, no matter where the organization is on the profit spectrum. And the Center is certainly an attractive and popular option among top-minded business students. In the 2015 school year, almost every MBA either took a course or attended an event sponsored by the CSI.

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We See Genius sat down with Neil Malhotra, from the CSI to learn more about the Center’s current work and future. Recently named co-director of the Center, along with Sarah Soule, Malhotra teaches Disruptive Innovation and Ethics in Management within the GSB. In the robust Q&A below, Malhotra explains why the school chose the name social innovation, why Stanford is such a hotbed for social enterprise and what he tells future social innovators.


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Social innovation is an extremely broad phrase that doesn’t exclude anybody, and it’s based on the idea of using organizations to solve social problems for the social good. That can include a number of actions beyond starting your own organization and being an entrepreneur. It could mean working for a non-profit, it could mean working for the government, or for a hospital, or it could mean working for a for-profit on a social problem, such as working for Google or Facebook to solve Internet accessibility.

We wanted to be an open big tent for everybody; we want to be very, very inclusive. If we called ourselves “social entrepreneurship” or “social enterprise,” what does that mean for the person who wants to manage a hospital system in a developing economy? What about the person who wants to work on the Facebook team providing Internet access in rural India? Or someone on who wants to work on the White House Social Innovation Fund, or for the federal government. These people might feel like this is not the center for them. We want to be very inclusive and realize there are many ways to social impact.

The Center for Social Innovation has been around since 2000, and since Sarah Soule and I took it over in September 2015, we’ve created a new strategic vision. Everything I’m talking about in this interview encompasses what we are doing now and what we are committed to doing from here on out.

The CSI has two constituencies, our faculty and our students. We help our faculty who are working on research in the social innovation space do their jobs better and improve their research output. For example, we help put them in touch with practitioners for interviews or connect them with organizations or companies to run studies–anything they need to make sure their research can flourish. That includes also being the touchpoint for a community of scholars who can learn from each other.

Our second constituency is our students, and that includes our MBA and MsX students who are interested in social innovation careers. This includes people who might just expect to dabble in social innovation or serve on a board, with plans to have a more standard private sector career, all the way to the students who are going to work for pure non-profits. The CSI offers various ways to help them; the community is fortunate enough to have a number of basic scholarship and fellowship programs supporting students financially who are entering the social innovation space. This could include, for example, people who are interested in internships with social innovation organizations. We also have a huge number of coaches to help students select the right classes from the curriculum as well as figure out what they want to do with their careers.

As for courses, we help develop a curriculum of social innovation classes. That involves making sure that those classes are staffed by the right senior faculty or by practitioners and lecturers.

One question we ask ourselves is: Why can’t people just take regular classes in management, why does there have to be classes specifically tailored to social innovation? For example, if you look at the subject of social investing, say, if a pension fund is investing in a social innovation fund, there are important reasons why you should have different classes, not only in terms of business ethics, but there are actual investors’ and managers’ fiduciary responsibilities. If you were to have a regular investment class on portfolio management, that class is not going to be relevant, because the goal is to maximize the returns for your investors given the risk tolerance the returns they want. In the case of investing in a social impact fund, you’re matching the risk and return, but in addition to the risk and return management there’s a social component. The combination of those measures along with a social component requires a different way of thinking, and that requires a separate class.

In terms of touch points it’s a very large percentage of the class. For MBAs in FY15 92% of students have been touched in some way by CSI (took one class or attended one event), 26% earned a Certificate in Public Management and Social Innovation, and 46% participated in a CSI experience.

There are four courses that we consider core to a social innovation experience in the curriculum. Strategic Management of Nonprofit Organizations and Social Ventures, Taking Social Innovation to Scale, Strategic Philanthropy and Foundations of Impact Investing. Strategic Management of Non-Profit Ventures is a corporate strategy class specifically geared toward managing a non-profit organization, which is very different from managing a for-profit organization. The class is now taught by Bill Meehan, director emeritus of McKinsey & Co., and has also been taught by Paul Brest, former dean of the Stanford Law School. The class on scaling social enterprises is taught by a lecturer, Steve Davis, CEO of PATH, the leader in global health innovation, and former global Director of Social Innovation at McKinsey–we believe that’s pretty core. There’s a third class on philanthropy and a fourth class on impact investing.

Impact investing is a really interesting space. A lot of our students are experienced on the finance side, and think that’s how they can make a big impact. Impact investing funds are tricky–you have to balance the fiduciary obligation to both society and investors. This brings up a bigger question: What does impact investing actually mean? Charles Ewald teaches the class, and we’d like to get more of our tenure-lined finance faculty in to provide a little more of the theory side of this subject.

These are the four classes that we make sure are being offered every year. Other classes we view as more elective classes or domain specific, which we try to offer every year for students, but if they aren’t one year it’s not the end of the world because you have two years in an MBA program.

One big thing we are seeing with the Stanford MBA program is an increasing number of dual-degree students who are getting a master’s degree in other fields. Some of the classes that have been very popular are classes on innovations to education. These courses are popular not only because they can satisfy requirements for a dual degree with the School of Education, but because education is a space which has performed poorly for a lot of kids in America in the last several years. It’s a space which is antiquated and open for disruption; there are a few classes, some taught by Ed School faculty like Suzanna Loeb, and some taught by lecturers on market solutions to educational challenges.

Stanford’s social focus goes back well before the founding of the Center for Social Innovation; I think it starts with the public management program and Arjay Miller. Stanford is the first business school to really view stakeholders outside of the firm as very important to how business people should be thinking as managers. This focus was closely related to Miller’s executive experience at Ford. He ran that company during a time when safety activist groups were threatening Ford, and Ford realized they couldn’t just make great cars for American consumers and they couldn’t just have a good town in Michigan for their employees. A bunch of complicated issues raised by activists and political forces converged, and companies had to proactively manage these forces.

We were the first school to offer a Certificate in Public Management as a core part of the business curriculum in 1971. This is a key differentiator of our brand compared to a competitor like Harvard Business School. If you look at what Harvard is doing, they’re trying to do a lot of the same stuff that we have been doing because they know it is important and the students want it.

We’ve mentioned the Ed School, and we also coordinate a lot with the School of Earth, Energy and Environmental Science. The MBA program offers a dual degree for those who want to solve environmental problems; there are classes that are taught in the earth sciences school that we count for our CSI Certificate in Public Management.

A good deal of CSI instruction and mentorship is connected with the d. school in terms of design thinking. We coordinate a lot with the–note that it’s not a school, it’s more like a program. One of the most popular examples is the class that GSB professor Jim Patell invented on extreme affordability; you have mechanical engineering students in that class as well as business students. This course is effective not just because it’s so interdisciplinary, but because it actually creates tangible things. There are very famous products that came out of the class, such as the Embrace Incubator. This product has received many awards—Stanford has dominated those awards for design and for products that have a social innovation impact.

One example is the cellphone charging stove in Africa, allowing people who are cooking to make extra money by allowing neighbors to charge their cell phones in the stove–they are cooking anyway, so why waste that energy?

Another company that came comes out of Stanford’s ecosystem—and I would give more credit to the Center for Entrepreneurial Studies–that’s SoFi. It’s a great example of a for-profit company that is solving the problem of inefficiencies in the student loan market and access to education. They’ve even expanded into mortgages and other financial products.

That’s why we want to be very holistic about what we mean by social innovation. Just because you founded a for-profit finance company, it doesn’t mean that you are not actually solving problems that incumbents like those that student lenders have created. You can still solve these kinds of problems if you’re entrepreneurial—even if you are making a lot of money, which SoFi is.

We have a boot camp for social entrepreneurship; we have various internship experiences where they can work very closely with social startups to see if this is something they want to do, and we have very good relationships with the Center for Entrepreneurial Studies. That’s where we offer basic entrepreneurship training in terms of how to pitch ideas to investors, for example.

In addition to the boot camp, we have a social event to open the school year that gets the students together and advertises all of our services. We also have an event at the end of the year that historically was tied to a social investment fund—that’s where all students would give 1% percent of their summer salary so that students who were in the non-profit space could have a summer internship experience and still make a little bit of money. Because that effort is privately funded now, we’ve changed it from a fundraiser to a place where all the MBA students, not just the CSI students, can learn what their fellow students are doing and working on in this space.

The big thing I focus on with social entrepreneurs is not like, “this is what you should be doing with your life or what you shouldn’t be doing,” but more, “if this is what you want to do, how we can give you the resources, or more importantly, how to guide you to pick the right tools to achieve what you want to do.”

Having said that, one thing we focus on is educating whether the for-profit or non-profit corporate structure matches their strategic goals. Because at the end of the day, the corporate structure is just a tool. Picking the right tool for you is what’s important.

This is something that we are ramping up right now; that is, we want to increase the research footprint of the CSI. My co-director, Sarah Soule, does a lot of research on how social movements affect company behavior, specifically, the effectiveness of activist groups in changing the behavior of companies. I do research on how political activists and the general public react to corporate social responsibility initiatives and programs.

We are now thinking more abstractly on how we define social innovation research. For example, one of our faculty members studies how financial cooperation can help solve the Israeli-Palestinian conflict. If you look through world history you will see that when people were forced to economically engage in trade, they put their ethnic and religious differences behind them. In his study, Palestinians and Israelis were given stock in different Israeli and Palestinian firms. So you give an Israeli stock in a Palestinian firm, and vice versa. It represents a case of being financially invested in another group of people doing well. It’s the same thing as if an Israeli mortgage broker was working with Palestinian clients, you might care less about these religious ethnic cleavages if there’s financial incentives for everyone to do well and you are sharing the same future. In a lot of these wars between military actions, whole sections of the Palestinian economy have been decimated. This research is saying that it’s possible that Israeli citizens would be less likely to support extreme politicians who are belligerent, if there was more financial cooperation between the two sides.

Stanford, itself is a very disciplinary business school, which believes that academic research from the social sciences is the best way to advance learning on management. Stanford is a unique school where any of our departments would be among the top 10 departments in their field, whether it is economics, political science, sociology. We decided to take this approach as opposed to hiring people who study management or strategy. Because we think that the best research is coming out of disciplines.

Together, as relatively new directors of the Center, we’re always thinking about how we maintain Stanford’s socially innovative brand and its associations with the rest of the university and its community through 2025.