The organizational transformation successes of IBM under Lou Gerstner and GE under Jack Welch pale in comparison to some of the successes of social entrepreneurs. Though lacking the resources of corporations these social entrepreneurs have had global impact.

In his new book, How to Change the World: Social Entrepreneurs and the Power of New Ideas, David Bornstein studies these people and their unique methods for driving change.

David Creelman spoke to Mr. Bornstein

DC - How did you get involved in the study of social entrepreneurs?

DB - I had moved to New York to study journalism and was looking for stories. I heard about the Grameen Bank of Bangladesh which loans money to very poor women in villages. These are small loans-like $100 per year. It allows a woman to buy a cow, some bamboo or other materials so she can work. I thought, "This is interesting," so I went to Bangladesh and spent a year there.
Out of that experience came my first book about the bank, The Price of a Dream. It is a great human-resource story. Imagine an organization with 12,000 employees who walk around villages in Bangladesh and manage the loans of millions of poor village women. How do they do it? They have dispersed four-billion dollars and have a very high repayment rate. More than that, they have re-shaped the world of international development.

DC - And this is what I find interesting; a change-management intervention by a small group of people in a remote place who end up having a global impact.

DB - For my new book I went around the world to interview people whose goal was to cause a major social change.
If there is one dominant theme in what makes social entrepreneurs successful it is their creative use of human resources. A good example of this is Childline, the child protection network founded by Jeroo Billimoria in India.

There are millions of street kids in India and the numbers are increasing. Many village kids are forced to go to the city to support their families. There are also runaways who are escaping abuse. Jeroo, a social worker from Bombay, found that when they were injured or beaten up by the police, or got sick or lonely, they had nowhere to turn. So she decided India needed a toll-free hotline for kids. The challenge was how to staff it, how to do the work. Given that she had almost no budget she decided to recruit street kids to man the phones. This creative approach got the project going.

With that start she was able to get organizations from around India, mostly NGOs, to participate in this network. The network has fielded over 3 million calls and is now in more than 45 cities.

DC - It's interesting to contrast that with the resources we'd normally think would be required to handle 3.5 million calls. Where else did you see successful examples of creating change on a tiny budget?

DB - Back in 1995, in Pretoria, South Africa, a 57-year-old nurse, Veronica Khosa, was working in an AIDS clinic. People were coming in every day because they had been rejected by the hospitals, which couldn't do anything for them. Veronica lived in Mamelodi, a very poor township with a population of about 2 million people, many living in little more than corrugated tin shacks. She went around the township to see what people who were sick with AIDS were doing. She saw many of them suffering at home alone. These people didn't even have the most basic care: bed sores treated, catheters managed, feedings, basics comfort given. When Veronica saw this she couldn't go back to treating people in the nice environment of her clinic-she saw that the care had to be brought to the home. So she began thinking creatively about how to do this on a larger scale.

DC - It's hard to see what one person could do about this.

DB - Yes. It is. But South Africa has another very big problem; it has millions of unemployed youth. Veronica realized they were the only human resource available at the scale of the problem.

She created a program that was very quickly replicated to train young unemployed people to become competent home-care attendants. She started with a three-month training program, which was extended to a six-month program and now a year. She has trained thousands of people and they've cared for many thousands of patients. The program was adopted by her provincial government and is now wide-spread.

DC - Where did she get the funding for this training?

DB - She used her retirement savings, all $8,300 of it. She went to churches and got them to donate food, she went to individuals and got them to donate pens and paper, and she got nurses to donate their time for the training. Slowly, she built the organization, and it has been recognized by the United Nations, the World Health Organization and the Government of South Africa.

DC - Given how hard it is to create any kind of change, these examples are truly inspirational.

DB - Yes, and there are many others stories equally remarkable. One organization I write about in the book is Ashoka, which was founded in 1981 by William Drayton, who we can think of as the social entrepreneur of social entrepreneurship. Over the past 20 years, Ashoka has supported more than 1,400 people like Veronica Khosa in 45 counties. Bill had been working with the management consulting firm McKinsey & Co. Traveling around the world he began to see that the most valuable resource are the people whom he called "social entrepreneurs." People who decide in their hearts that they want to effect a certain kind of change and because of the quality of their motivation and their particular brew of talents they actually do go out and build organizations like Childline and Tateni Home Care Services, Veronica's group.

Drayton's insight was that if you want to cause system change, you have to move away from the mentality that we should support projects. Ultimately, the seed for all change is in the heart of a person. His goal was to create a selection system to find this kind of person early in their careers.

DC - What selection system did Drayton develop?

DB - He uses a structured interviewing method to look at four qualities: creativity, entrepreneurial quality, social impact of the person's idea, and ethical fiber.

Creativity is very easy to identify. People don't suddenly become creative at age forty. If it's there, it has always been there. Interviewers ask, "What other organizations have you created? How did you do it?" They ask very specific questions that will illustrate how the applicant solved, or couldn't solve, problems that came their way. Some questions might be hypothetical; let's say a woman in India is starting a helpline, they might ask, "How are you going to deal with the low-level government bureaucrats who get in your way?"

One person might complain, "Low-level government bureaucrats are the bane of our existence in India" and leave it at that. But another person may say, "I've thought about that and I realize that I'll need senior-level people to cut through the red tape, so I've gotten the head of India's premiere social-work institute to accompany me on meetings to lend political clout." That second answer is a good example of the practical creativity Ashoka is looking for.

Entrepreneurial quality is usually related to a deep inner drive, even an obsession. You see in entrepreneurs an intense motivation, a need, to build something, or solve a problem. Usually this can be identified by looking at someone's life history and by seeing how they respond to challenges, opportunities or obstacles. People don't come upon new ideas suddenly. You'll find with the kind of person who is going to build an organization, if you probe, you'll find that the idea has been brewing in the back of the person's mind for a long time. If it's a real intention, it almost always has deep roots.

The third aspect Ashoka looks at is the social impact of the idea. Ashoka wants to identify big impact ideas that can really make a difference in the world. Sometimes there are ideas that are so useful or innovative that others will eagerly adopt them once they are demonstrated. This can be assessed separately from the individual who is behind the idea.

DC - Tell me how Ashoka assesses ethical fiber.

DB - Very few groups have an ethical test. There's a heavy reluctance to apply an ethical standard on another person.

So how do you actually look at a person and decide if you trust them? Well, people do it all the time in their private lives. People actually have a very highly developed sense of whether they should trust other people. How do you know which friends' houses you will allow your children to sleep over at? You look at their parents. Do you trust them? What are the small signs that they may be irresponsible or have poor judgment? In Ashoka each member of the selection panel interviews each candidate independently. Then Ashoka asks the "jury" to essentially decide whether they trust the person. As a test, they are told to close their eyes and imagine something they find fearful, like walking near the edge of a cliff or holding a snake, and then imagine that this person is with you. Do you find yourself feeling uneasy or relaxed? For many, the test provides a sense of whether you trust the person or not. Sometimes it works. Sometimes it doesn't. It's an appeal to the gut, not the intellect.

DC - How do they wrap together the judgments on creativity, entrepreneurial quality, social impact, and ethical fiber?

DB - They generally have three to five people in a jury. After each candidate has gone through individual interviews with each juror, the panelists come together as a group. They score each factor on a three-point scale: one means excellent, two means 'meets our standard,' and three means 'doesn't meet our standard.' They put their scores on a chart and have a discussion about it.

The discussion is not just based on impressions, it's based on the analysis.
All decisions have to be unanimous. There is no voting. Generally speaking they are able to achieve consensus.

DC - Let's get back to how the social entrepreneurs manage to create change with such limited resources.

DB - The number one thing they do is look for resources where businesses might not think to. Take the Grameen Bank in Bangladesh. If you want to create a banking system that deals with millions of villagers who are all taking $100 one year loans it would be too expensive to have fancy branches with high paid branch managers.

Muhammad Yunus, who founded the bank, realized he had to get the villagers to self-organize. He created a system of groups. Each villager joins a group of five, and eight groups of five form a center. The people in the village build a hut where they meet every week to pay installments on their loan.

Each group has a chairman, and the center has a center chief. Each group chairman gets the installments from her group and gives them to the center chief, who gives them to the bank employee. Ninety-five per cent of time everything is normal. Five per cent of time the numbers don't add up and he has to investigate.

Essentially what the bank has done is recognize that 95 per cent of its administration can be managed by its clients: the villagers. This model is so powerful it has spread around the world.

DC - How did Childline find the resources it needed?

DB - In the case of Childline, the presumption of confidence was a key innovation. Jeroo recognized that street kids, given some training, could be very effective as "para-paramedics." They are trained and supervised by social workers but are empowered to go out and rescue fellow street kids and to make quick decisions to help callers.

Most of the social entrepreneurs around the world who are doing things at significant scale have unleashed hidden resources in the communities they are serving.

I'll give you another example. There is a man in Bangladesh who found that there was a big problem in schools in rural areas. Each teacher had 60 or 70 kids in class and the kids just weren't learning. He had no money to hire more teachers but he realized in every class there were a half dozen students who picked things up right away. He divided his class into groups of ten, placing one of the quick students in each group and made them co-teachers.

The co-teacher's job is to help teach their peers and the teacher's job is to go around from group to group and handle the things that the co-teachers can't do well. In this fashion, he multiplied the amount of teaching time in his class by a factor of six or seven.

DC - I like the concept that the resources you need exist someplace and it's not a matter of getting budget approval from the CFO.

DB - Here is another example. There is a human-rights lawyer who represents the Roma (gypsies) in Hungary. He found that one of the most important things in a human-rights case is to have evidence collected at the source. He went into the communities and trained people as quasi-para-legals so that when a human rights abuse takes place they know what kind of information they need to get right away -- for example, photographs and signed documents from witnesses.

He created a network of people around the country who collect this type of evidence and his job is to present this evidence in the courts, even sometimes in the European Court. So he's connecting very poor Roma communities with one of the highest courts in Europe.

I'll give you an example from Brazil. Rodrigo Baggio, who lives in Rio, tried to get the public school where he was teaching to offer better computer classes to the poor kids who live in favelas, the urban shanty towns across Brazil. But the school was too slow so he decided to set up his own computer school. He got a company to donate a bunch of computers and set it up and it worked very well. He began wondering, "How do I do more of this?"

That was in 1995; today he has more than 400 of these schools around the world. Two years ago his budget was only $300,000. So how did he do it? He goes into the community and says, "If you get your act together and send us a proposal for how you're going to run a computer school, we will bring in the equipment and train you." The community has to find a building and get the support of a reputable community group.

By locating the resources inside the community, by assuming that they're smart and competent, he has quickly sparked the creation of many schools.

DC - It's one thing finding the hidden resources, but I see that you also have to organize things so they can scale without building a big infrastructure.

DB - A lot of this comes from the presumption of competence, and being very selective with who you work with. Rodrigo Baggio's organization rejects at least 50 per cent of the proposals it receives. Childline also vets it partner agencies very carefully.

DC - We're running a bit long, but perhaps you can give us just one more example.

DB - The last example I would like to give is a woman in Hungary, Erzsébet Szekeres. She has a disabled son and didn't want to put him in an institution. With this motivation she has gone on to create more than 20 centers for disabled people around Hungary.

What's amazing is how she hires the people in her centers. The staff in institutions in Hungary usually have formal academic credentials. Erzsébet doesn't care about academic background. As a matter of fact, if you've worked in an institution, she'd rather not hire you. She doesn't want that experience. She looks for three things: a strong inner core, flexibility of thinking, and a genuine enjoyment working with disabled people. These are not things that she has ever found on a resume, but these are qualities that you see very quickly on the job, and they are the main determinants of success on the job.

So she tries out people from many different backgrounds. Her best employee previously worked in a bakery. It actually doesn't take very long to see if someone is wrong for the job - sometimes a few hours. She looks for certain things; for example, if a person does something disrespectful to a disabled person, will they apologize? After three weeks, she asks the community if they want to keep this person. Disabled people are very good at recognizing when people have a need to exert power over them. This is very, very different from the way the institutions in North America and around the world hire people who work with the disabled.

There's an assumption in business that experience will make you a better employee. Both the Grameen Bank and Erzsébet Szekeres are very clear that experience in a previous bank or institution may work against you. They prefer to get people fresh who don't already have an internalized sense of how things should be done. When I asked Muhammad Yunus what his strengths were, one of the things he said was, "I knew nothing about banking."

DC - Do you have any final comments for business professionals?

DB - When we're talking about social entrepreneurship we are talking about the emergence of a whole new sector, the citizen sector. Millions of organizations have opened up over the last 10 to 20 years because people all around the world are saying I see problems and I want to solve them.

This is a new market for companies offering services and it is an alternative career path for people who want to do something meaningful with their lives.

David Creelman is Senior Contributing Editor for HR.com. He has also embarked on several new ventures including: --Helping companies value intangible human capital --(Un)consulting to companies who have got bogged down in scorecard implementations --A magazine to help managers lead more meaningful, ethical lives I love email so write me at dcreelman@hr.com to send a comment. Prior to working in HR, David worked in Finance and IT. He has an MBA and an Hons B.Sc. in Biochemistry and Chemistry.

This article was originally published in HR.com, February 25th 2004 issue and is reproduced here with their permission. You must obtain written permission of HR.com in order to reproduce this article.