Corporate Responsibility | October 02, 2008 |
The Visionary Times: The Fourth Sector
(This is the first installment of The Visionary Times, a recurring column focusing on positive-change projects from around the world that stand out for their transformative nature and practical potential.)
How does positive change happen? Some say it’s mainly driven by science and technology——solar power, for instance. For others, the work mostly comes from our inner being. We must, in Gandhi’s phrase, "be the change we wish to see in the world.”
There’s another approach to enacting change -- transforming the systems and processes that determine what can get done, and what does get done, and how it gets done.
Rewriting the rules to favor progress toward sustainability is no picnic. Institutional inertia, red tape, and the politics of ego are just a few of the obstacles that need to be addressed. It requires persistence and patience, and there’s not much glory, but that isn’t keeping cadres of quiet heroes from driving change.
One system that’s attracting special attention is how we organize our, er, organizations. There are currently three institutional sectors——private, public and non-profit. This structure is so embedded in our consciousness that it’s easy to view it as fixed and unchangeable, like our need for oxygen. This is an illusion. "People created our current organizational forms and people can change them too,” says Heerad Sabeti, co-founder and co-chair of the Fourth Sector Network, a volunteer group that has done seminal work in this area.
The need for transformation is obvious. As presently structured, our organizational forms keep people from, to paraphrase the Army, being all they can be. The for-profit form -- especially for publicly traded companies -- requires people to focus solely on profits. Executives can even be sued for subordinating the maximization of profits to a social purpose.
By contrast, the non-profit sector has historically depended on grants and donations, which fosters a mindset that discourages initiative and innovation. As for the public sector, one word says it all: bureaucracy.
People are much more complex and multi-dimensional than these rules of the road allow for. They want to be entrepreneurial and heart-centered. They want to prosper and serve. Our current organizational forms require them to choose Column A or Column B. They deliver half a loaf. Neither people nor the planet fully benefit.
Despite these institutional obstacles, people are rapidly building hybrid organizations that are both profit-driven and have a social purpose.
They have their work cut out for them. "We currently force social entrepreneurs to choose between being a for-profit or non-profit, although this is often a make-do and make-work solution," says Alan Abramson, senior fellow at the Aspen Institute and a professor at George Mason University, This has brought people to a basic question: "why not create a new legal space that has been designed to help social entrepreneurs flourish?"
Momentum is building for a fourth organizational sector that combines the best of the for-profit and non-profit forms, and the potential payoff is immense.
Imagine:
This is the promise of the Fourth Sector.
The concept has gotten surprisingly little press, the one notable exception being a major article in The New York Times. It’s captured lots of underground attention, though, attracting professors, students, lawyers, foundation executives, social entrepreneurs and, yes, the occasional snake oil salesman too.
A wealth of Fourth Sector-related activity is bubbling up in the United States and across the world. Harvard, Stanford, and Duke are among the universities that have established social entrepreneurship centers in their business schools. Venture capital firms for social enterprises are springing up. Certification programs for social enterprises have been launched. Vermont has enacted a statute that confers formal legal status on some types of social enterprise, although the jury is still out on whether there’s steak there or just sizzle.
This boom is growing out of multiple on-the-ground vectors. The trend for businesses to be more socially conscious has been growing. This is reflected in a multitude of new terms: socially responsible business, green business, the "triple bottom line” (financial, social and environmental), and so on.
Meanwhile the non-profit sector has become more business-like in its operations. Foundations are increasingly demanding metrics; more and more non-profits are creating for-profit subsidiaries to fund their operations. A fourth organizational sector comprised of hybrid organizational forms is the logical culmination of these trends. It has the potential to take root across every industry.
This is a hydra-headed movement without a strong gravitational center. If there is a center point, it is the Fourth Sector Network, which has received funding from the Aspen Institute and the W.K. Kellogg Foundation and will be convening the first major Fourth Sector assembly in 2009.
If anyone warrants credit for the Fourth Sector vision, it is Network co-founder Sabeti, who’s been working for years behind the scenes to bring the concept to fruition. Sabeti brings a strong distaste for the spotlight to his work. This is reflected in his views on how best to nurture the Fourth Sector.
"The movement needs to be collectively owned and created,” Sabeti says. "The old models of command-and-control organizing and charismatic leadership will just perpetuate the problems we’re trying to solve. Instead, we need to develop structures that distribute leadership, facilitate massive collaboration, and advance systemic solutions.”
Names have special power: they organize energy around a shared perception. The Fourth Sector is, among other things, a luminous descriptor. It shines a higher-level spotlight on what all the current on-the-ground activity is pointing towards -- a new and sustainability-friendly organizational sector. It helps change agents understand the sea they’re swimming in.
So here’s another spin on how positive change happens. It happens when we can see and understand it. It happens when it gets a name.
Carl Frankel is Senior Writer at Matter Network, and an entrepreneur specializing in sustainability. He is also the author of Out of the Labyrinth: Who We Are, How We Go Wrong, and What We Can Do About It.
(Image courtesy Wikimedia commons.)
Reddit
Digg
Stumble
ShareThis
Post Your Comment