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MSLS 2010 – BTH – Karlskrona – Sweden – November 19 th 2009 Dr. JM Luzarraga Mondragon University [email protected] MONDRAGON COOPERATIVE EXPERIENCE & SOCIAL ENTREPRENEURSHIP Confronting the case to FSSD (Framework Strategic Sustainable Development) with MSLS 2010 tribe

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Session at "Master Strategic Leadership towards Sustainability" in Blekinge Institute of Technology - November 2009 - Karlskrona SWEDEN "MONDRAGON COOPERATIVE EXPERIENCE & SOCIAL ENTREPRENEURSHIP Confronting the case to FSSD (Framework Strategic Sustainable Development) with MSLS 2010 tribe"

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Page 1: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

MSLS 2010 – BTH – Karlskrona – Sweden – November 19th 2009

Dr. JM Luzarraga Mondragon University

[email protected]

MONDRAGON COOPERATIVE EXPERIENCE & SOCIAL ENTREPRENEURSHIP

Confronting the case to FSSD (Framework Strategic Sustainable Development) with MSLS 2010 tribe

Page 2: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

How do we create more knowledge?

Are we ready for “optimal disconfort” co-creation?

Page 3: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

CHECK IN:Who am I?What is my life dream?

What knowledge do we wantto co-create today?

Page 4: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

What knowledge do we want o co-create today?

FSSD & MSLS2010 passions & life dreams

Social Entrepreneurship

MONDRAGON Cooperative Experience

Our destiny/vision for today? …backcasting

Page 5: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

What knwoledge do we want o cocreate today? FSSD & MSLS2010 passions & life dreams

Our destiny/vision for today?... backcasting

– Create a company to leverage awareness on sustainability in my home town– Facilitate companies transformation process to become sustainable– Develop & design new sustainable production industries through eco-design– Create an education project on sustainability and social entrepreneurship– …

CHANGE THE WORLD THROUGH SUSTAINABILITY :)

Page 6: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

What knwoledge do we want o cocreate today? MONDRAGON Cooperative Experience

Our destiny/vision for today? ... backcasting

– What is MONDRAGON? – What is shared/promoted?– How big is it? Effective? Who’s involved?– What is SUCCESS for M.? – What makes M. so successful?– How does MONDRAGON engage coop members?– Is administration of M. coop different than others?– What stages has M. taken from the beginning till now?– How started? How proceeded? & What is planned now?– What was the process of creating M.?– What was the original IMPETUS?– What is M. view of sustainability? What is you vision?– Does cooperativism guarantee sustainability?– How does M. take “sustainability” into account? (not only social sustainability but ecological?– Does the companies in that region form a local supply chain to support each other?– What are the common shared values by companies in M.?

Page 7: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

What knwoledge do we want o cocreate today? Social Entrepreneurship

Our destiny/vision for today? … backcasting

– Social entrepreneurship: profit? Non-profit? How to make a better world?– What are some NGO’s/orgs?– Who is using that model?– What is a cooperative? What are some hybrid models?– How would an organisation with social entrepreneurship features be set up?– What are the challenges in setting a SE, how do we overcome them?– Cooperatives as a TOOL to rebuild trust in society– How does it work?– Advice for creating cooperative networks in our home cities through social entrepreneurship.– How can a company as individual integrate in a social cooperative?– How can I use a model of SE to start a Facilitation business?– Successful models of SE?– Does a cooperative have to count on higher level of TRUST among its “members” than “conventional” companies

Page 8: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

What knwoledge do we want o cocreate today? Our destiny/vision for today? … backcasting

– How to integrate the social entrepreneurship potential to MSLS strategies?

– How Social Entrepreneurship theory understands the importance of ecological value as opposed to just social value?

– What MSLS can teach MONDRAGON & What MONDRAGON can teach MSLS?

– Building FSSD approach into MONDRAGON university education system?– How does MONDRAGON take “sustainability” into account? How can we leverage its commitment?

– How to design a SUSTAINABLE COOPERATIVE SOCIAL BUSINESS MODEL?

Page 9: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

INDEX – stepping stones to our shared vision

CHECKIN: What knowledge do we want to create today?1. What was the process of creating MONDRAGON? Mondragon

Cooperative Corporation (1956-2006)2. How does the Framework for Strategic Sustainable Development

feed in MONDRAGON? Confronting MONDRAGON to FSSD3. Understanding Social Entrepreneurs Who is a SE? Characteristics?

The power of unreasonable people

CHECKOUT: What might be our next step to our shared dream?

Our shared dream…

CREATING A SUSTAINABLE COOPERATIVE SOCIAL BUSINESS MODEL

Page 10: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

What was the process of creating MONDRAGON?Mondragon Cooperative Corporation (1956-2006)

Page 11: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

1. Mondragon Cooperative Corporation(1956-2006)

Page 12: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Starting point (1940)Massive unemployment & social crises: Spain dictatorship after civil war.Lack of any education: technical or in businessSteel-mechanic industrial roots, small & localClosed and protected marketLack of any technology

A shared dream…

EDUCATION & CO-OPERATIVE ENTREPRENEURSHIP TO SURVIVE & TRANSFORM THE SOCIETY!!!

Page 13: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Mondragon education: Leading thoughts“The world is not there to contemplate it but to transform it”

“Share knowledge & education to democratize power”

“A technical school that it is not at the same time a school for human being development, is caving its own grave”

“Work and study hast to go hand by hand”

“God ideas are those ones who transform into real actions”

“Se ha dicho que el cooperativismo es un movimiento económicoque utiliza la acción educativa. Pudiéndose también alterar el ordende la definición diciendo que es un movimiento educativo que utilizala acción económica”

JM Arizmendiarrieta

Page 14: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Prior to industrial co-operatives creation:– 1943: In-factory technical training– 1948: Engineering Technical school– 1956: First industrial co-operative ULGOR (13 years later)– 1966: First local co-operative cluster ULARCO (inter-cooperation)– 1974: Degree studies / international university agreements– 1998: Mondragon University -3 faculties: Engineering MGEP –

Business ETEO – Education HUEZI

Academic course: 1974-75 2007-08

– International experience: 2 110– Post-graduate: - 459 – Graduate: - 3.248– Courses: 237– Technical: 815

Mondragon education: historical facts

Page 15: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Number of companies: 107

Workforce: 103.731– Worker members: 80.9%– Female/male members:

42.2%– Abroad: 14.261

Total sales: 15.056 M. euros(57% international sales ind.)

Business ranking if listed:– Spain: 7th

– Europe: 32nd

– Forbes 500: 462nd

Group activities: Mondragon University, 12 Technology Centers & Garaia Innovation Park

Body Builders

Components

Construction

Elevation

HouseholdGoods

Engineering & Services

MachineTools

Industrial DivisionFinancialDivision

Mondragon Presidency/ General Council

Source: MCC - 2006

Industrial Systems

Tools & Systems

Industrial Automatisation

Automotive

Equipment

Mondragon GroupMondragon Congress/ Permanent Commission

DistributionDivision

Highlights at Dec 2007

Page 16: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Mondragon background & leading thoughtsA worker cooperative network started by Father Arizmendiarrieta in 1956in Mondragon, a 30.000 people village in the Basque Country (Spain)

Named by several academics as one of the best examples of democracy at the work place (Macleod, Vanek, Williamson, Malone, Whyte & Whyte,…)

VISION: The companies that make up MONDRAGON share their commitment to cooperation and democracy in the workplace, backed by a unique system of worker participation.

VALUES:– Cooperation: owners & main actors– Participation: management involvement– Social Responsibility: fair distribution of wealth created– Innovation: permanent change

Page 17: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Mondragon Worker Co-operative principlesWorker Co-operatives: working people are the heart of thecompanies

Committment to the local environment & society: continuousexperimentation to satisfy society needs (Alecop, MU, Eroski,…)

Business excelency, assuming the leadership & maximumcompetitiveness using the cooperative legal form

MONDRAGON CO-OPERATIVE PRINCIPLES:1. Open membership 6. Incomes/wages solidarit2. Democratic member control 7. Inter-cooperation3. Work over ownership 8. Social transformation4. Capital as a tool 9. Universal character5. Management participation 10. Education and training

Page 18: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Devoted to employment creation: Mondragon net-job growth: 1956-2006

Source: ex novo - Adaptation from MCC - 2005

0

10000

20000

30000

40000

50000

60000

70000

80000

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Years1) 2) 3) 5)

1) First production plant abroad2) MCC holding structure creation3) Started Eroski Group

expansion all over Spain / 5 production plants abroad

4) 26 Production plants abroad5) 57 Production plants abroad

4)

Page 19: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Companies created on diverse sectors & industries:

Avoid companies shut-downs: every Mondragon company has suffered a critical difficulties period over its history

Number of Mondragon cooperative companies: 1956-2003

Source: Clamp 2003

Committed to “companies creation & survival”through inter-cooperation

Page 20: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Mondragon Factories abroad

Page 21: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

International “multi-localization” industrial strategy–“Creative vs. destructive international trade”

1) 2) 3) 5)4)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: ex novo - Adaptation from MCC - 2007

Years

1) First production plant abroad2) MCC holding structure creation3) 26 Production plants abroad4) 65 Production plants abroad

1) 2) 3) 4)

Total employeesEmployees abroad (since 99)

Page 22: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

What about the Retail division? Main facts from 2008:- Total sales 9.013 M. euros- 2.440 centers: 115 hyper, 1029 super, 274 travel agencies, 53 petrol stations, 44 FORUM (sport), 300 IF (perfume), 6 ABAC (books). In France: 4 hyper, 16 super & 17 petrol

stations. In Andorra: 4 IF (perfume)

- 2.000 workforce growth (reaching 56.000)- Opening of 164 new retail centers (Hyper, super)- Strategic decision to transform conventional companies into cooperatives:

- It might become the bigger cooperative worldwide with more than50.000 working members - At the end of 2008 already 14.733 people participate in ownership, profits and management (1.475 annual growth)

Page 23: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Prior basement/seed to the industrial companiescreation

Devoted to University-Companies integration

Co-operative & participatory University: companies + students + teachers (workers)

Village University: devoted to local community service

Committed to Entrepreneurship & R+D+ innovation

Mondragon University: identity signs

Page 24: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

1. Local community Technical, social & business education2. Supports “education & work” combination (ALECOOP

1966)3. Technology Research & innovation

– Technology centre IKERLAN (1974)– Innovation Pole GARAIA (2007)

6. New companies creation & entrepreneurship (1984 –SAIOLAN 1996 – Mondragon Team Academy 2008)

7. International education: (since 1974, in 2008 (110 + 12)

Mondragon University: main roles

Page 25: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

How does the Framework for Strategic SustainableDevelopment feed in MONDRAGON?Confronting MONDRAGON to FSSD

Page 26: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

2. How does the Framework for Strategic Sustainable Development feed in MONDRAGON?

Page 27: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

The FSSD Funnel: Where might be MONDRAGON?

From To

Page 28: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

The FSSD Funnel: Where might be MONDRAGON?

Page 29: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 sustainability principles: Where is MONDRAGON?

...concentrations of substances extractedfrom the Earth’s crust,

...concentrations of substances producedby society,

...degradation by physical means,

...people are not subject to conditions thatsystematically undermine their capacity to meet their needs “

“In a sustainable society, nature is not subject to systematically increasing...

and, in that society...

Page 30: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 Sustainability principles: 1- Concentration ofsubstances extracted from the Earts’s crust

Source MONDRAGON Annual report 2008

Page 31: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 Sustainability principles: 2- Concentration ofsubstances produced by society

Source MONDRAGON Annual report 2008

Page 32: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 Sustainability principles: 2- Concentration ofsubstances produced by society

Source MONDRAGON Annual report 2008

Page 33: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 Sustainability principles: 3- Degradation by physical means

Source MONDRAGON Annual report 2008

Page 34: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 Sustainability principles: 4- ...people are not subject to conditions that systematically undermine their capacity to meet their needs

Source MONDRAGON Annual report 2008

Page 35: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 Sustainability principles: 4- ...people are not subject to conditions that systematically undermine their capacity to meet their needs

Source MONDRAGON Annual report 2008

Page 36: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

4 sustainability principles: Where is MONDRAGON?

...concentrations of substances extractedfrom the Earth’s crust,

...concentrations of substances producedby society,

...degradation by physical means,

...people are not subject to conditions thatsystematically undermine their capacity to meet their needs “

“In a sustainable society, nature is not subject to systematically increasing...

and, in that society...

- Oil dependant industries- Oil Transport & logistics- Oil Automotive industry-…

- Plastic, Iron & Steel components: home appliance,automotive, construction- …

- Construction industries

- Humanity at work based on a Cooperative system “People-centred companies”

Page 37: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

My text about the systems level, My text about thesystems level, My text about the systems level

My text about the success level, My text about thesuccess level, My text about the success level

My text about the strategic level, My text about thestrategic level, My text about the strategic level

My text about the action level, My text about theaction level, My text about the action level

My text about the tools level, My text about thetools level, My text about the tools level

5-level model - football example

Page 38: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Starting point (1940)Massive unemployment & social crises: Spain dictatorship after civil war.Lack of any education: technical or in businessSteel-mechanic industrial roots, small & localClosed and protected marketLack of any technology

A shared dream…

EDUCATION & CO-OPERATIVE ENTREPRENEURSHIP TO SURVIVE & TRANSFORM THE SOCIETY!!!

Page 39: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

5-level model – MONDRAGON 1940 scenario?

Page 40: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Starting point (Mondragon 2007)Solid group expanded internationallySuccessful structures in the pastEuropean production industrial crises: employment threatGlobal & interconnected economyLocal communities on threat: urban massification, internal migration & radical social differences among & within countriesLack and difficulties to create new businessNeed of a change/evolution of our competetitive model:– FROM production/manufacturing TO Knowledge-Research-Innovation– FROM local TO Glocal

Current challenge…

INNOVATION & MULTI-LOCALIZATION TO DEFEND LOCAL COMMUNITY STABILITY & ENABLE SOCIAL

TRANSFORMATION “GLOCALLY”!!!

Page 41: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

5-level model – MONDRAGON 2007 scenario?

Page 42: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Backcasting & ABCD – MONDRAGON 20201. Begin with the end in mind –MONDRAGON 2020

3. Move step by step towards the vision

Awareness

Baseline

CreativeSolutions

Decide on Priorities

Present

Future

Does it move us in the right direction?Is it a flexible platform?Is it a good return on investment?

Year 2020 ??

Page 43: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Understanding Social Entrepreneurs Who is a SE? Characteristics?

Page 44: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

3. “THE POWER OF UNREASONABLE PEOPLE How Social Entrepreneurs Create Markets that Change the World”

(Harvard Business Press 2008)

- Understanding what is a Social Entrepreneur - Classifying types of Social Enterprises- Identifying SE market opportunities- Tapping SE financial resources

Page 45: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Our goals for todayBased on the book “The power of unreasonable people”(J Elkington & P. Hartigan –Harvard Business Press 2008)

Our objectives are:To introduce a new generation of social & environmental entrepreneursTo understand their Business Models & leadership stylesTo identify their market opportunitiesTo find out their financial resources

Page 46: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Understanding what is a Social Entrepreneur

“The reasonable man adapts himself t the world

The unreasonable man persist in trying to adapt the world to himself.

Therefore, all progress depends on the unreasonable man”

(George Bernard Swaw, 1903)

Page 47: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Social entrepreneurs are…Innovative, Resourceful, Practical and Opportunistic,… as any other entrepreneurs

But… What motivates social entrepreneurs is not doing the “DEAL” but achieving the “IDEAL”

So they have a long term commitment with their projects

Most Social entrepreneurs stumble across the opportunity toSERVE OTHERS

Common inspiration is: “You have to be the change you want to see in the world”

(Gandhi)

Page 48: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Why are they unreasonable? Because…

They Want to Change the WorldThey are insanely ambitiousThey are propelled by emotionsThey think they know the futureThey seek profit in unprofitable pursuitsThey ignore the evidenceThey try to Measure the UnmeasurableThey refuse to be made into SuperheroesThey are, well, unreasonable

Page 49: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Characteristics of Successful Social entrepreneursTry to shrug off the constraints of ideology or disciplineIdentify & apply practical solutions to social problems, combining innovation, resourcefulness, and opportunityInnovate by finding a new product, a new service, or a new approach to a social problemFocus-first & foremost-on social value creation and, in that spirit, are willing to share their innovations & insights for other to replicateJump in before ensuring they are fully resourcedHave an unwavering belief in everyone’s innate capacity, often regardless of education, to contribute meaningfully to economic & social developmentShow a dogged determination that pushes them to take risks that others wouldn’t dareBalance their passion for change with a zeal to measure and monitor their impactHave a great deal to teach change makers in other sectorsDisplay a healthy impatience

Page 50: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

How they look like…

Dr. Govindappa “Aravind Eye Hospital”“The largest Eye care medicalcentre in the world”VIDEO: http://tinyurl.com/qb37rm

Nicholas Negroponte (MIT-medialab)“Entrepreneur behind the One laptop per child project”VIDEO: http://tinyurl.com/qkavho

Dr. Mohammed Yumus“Grameen Bank – Nobel Price 2006”VIDEO: http://tinyurl.com/dmbz9f

Page 51: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Classifying types of Social Enterprises

Traditional classification:Model 1: Leveraged Nonprofit venturesModel 2: Hybrid Nonprofit venturesModel 3: Social Business Ventures

Social Enterprise from a wider perspective

Page 52: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Traditional classification

Model 1: Leveraged Nonprofit venturesA public good is being delivered to the most economically vulnerable, who do not have access to, or are unable to afford, the service renderedBoth the entrepreneur and the organization are change catalysts, with a central goal of enabling direct beneficiaries to assume ownership of the initiativeMultiple external partners are actively involved in supporting the venture financially, politically, and in kindThe founding entrepreneur morphs into a figurehead, in some cases for the wider movement, as others assume responsibilities and leadership

Page 53: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Traditional classification

Model 1: Leveraged Nonprofit ventures

Mother Teresa“Missionaries of Charity”VIDEO: http://tinyurl.com/d25chs

Bunker Roy“Barefoot College”http://tinyurl.com/ottmg8

N. Negroponte OLPC www.laptop.orghttp://tinyurl.com/5tfazu

Page 54: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Traditional classificationModel 2: Hybrid Nonprofit ventures

Goods or services are delivered to populations that have been excluded or underserved by mainstream markets, but the notion of making a profit is not totally out of the questionSooner or later the founding entrepreneur or his/her team, typically develops a marketing plan to ensure that the poor or otherwise disadvantaged can access the product or service being providedThe enterprise is able to recover a portion of its costs through the sale of goods & services, in the process often identifying new marketsTo sustain activities & address the unmet needs of poor or otherwise marginalized clients, the entrepreneur mobilizes funds from public, private, and/or philanthropic organizations in the form of grants, loansAs mainstream investors & business enter the picture, even when they are not seeking mainstream financial returns, they push to become model 3

Page 55: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Traditional classification

Model 2: Hybrid Nonprofit venturesRick Aubry“Rubicon Programs”VIDEO: http://tinyurl.com/o4dd82

Martin FisherKickStart: www.kickstart.orgVIDEO: http://tinyurl.com/p7mep3

Dr. Govindappa“Aravind Eye Hospital”http://tinyurl.com/qb37rm

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Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Traditional classificationModel 3: Social Business ventures

The entrepreneur sets up the venture as a business with the specific mission to drive transformational social and/or environmental changeProfits are generated, but the aim is not maximize financial returns for shareholders but instead to financially benefit low-income groups and to grow the social venture by reinvestment, enabling it to reach and serve more peopleThe entrepreneur seeks out investors interested in combining financial and social returnsThe enterprise’s financing-and scaling- opportunities can be significantly greater because social business can more easily take on debt and equity

Page 57: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Traditional classification

Model 3: Social Business ventures

F. ArizmendiarrietaMONDRAGON Cooperativeshttp://tinyurl.com/p75akthttp://tinyurl.com/otm9ft

Dr. Mohammed Yumus“Grameen Bank – Nobel Price 2006”VIDEO: http://tinyurl.com/qt65ux

Page 58: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Team activity

Select one social entrepreneur you might know?Identify which characteristics does he/she have?Identify which type of social enterprise is in used?

Page 59: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Classifying Social enterprise from a wider perspective

Page 60: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

1. Demographic opportunitiesFacts:- Human population toward 9 billion to10 billion people- Age distribution skewing: old vs. young boom nations- Worldwide migration: from rural to cities- One of the best ways of reining population growth is encouraging

economic development

Examples of successful Social Entrepreneurs- Jeroo Billimoria – Child Helpline International -

http://www.childhelplineinternational.org/- Martin Fisher – Cooperative Home Care Associates (CHCA), the

Paraprofessional Healtcare Institute (PHI) & Independence Care System (ICS) http://www.chcany.org/

Page 61: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

2. Financial opportunitiesFacts:- The notion that the haves will find ways to gain more and that the

have-nots will lose more has been acknowledged since biblical times- Extreme financial inequality can sow the seeds of insurrections and

social cataclysm- Tools & frameworks for economic justice are weak or nonexistent

Examples of successful Social Entrepreneurs- Jeroo Billimoria – Aflatoun - http://www.aflatoun.org/- Martin Fisher – Kickstart - http://www.kickstart.org/ (0.6% GDP of

Kenya GDP & 0.25% of Tanzania GDP)- Fazle Abed – Bangladesh Rural Advancement Committee-

http://www.brac.net/

Page 62: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

3. Nutritional opportunitiesFacts:- True famine, hunger, and poor nutrition have been constants

through-out human history- 862 million people across the world are hungry, up from 852 million a

year ago- Every day, almost 16,000 children die from hunger-related causes--

ONE CHILD EVERY FIVE SECONDS.

Examples of successful Social Entrepreneurs- Takao Furuno – The power of Duck - http://tinyurl.com/ojdwy7- Hector Gonzalez – Cuadritos - http://www.cuadritos.com.mx/ (the

largest self-sustaining food bank in Mexico, feeding 100.000 people a day)

Page 63: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

4. Resource opportunitiesFacts:- A growing world population will not be a problem if the planet’s

resources were limitless, but they are not- Demographic pressures are fistering awareness of the natural

resource limits to economic growth- Example: the UN argues that the conflict in Darfur has been driven by

competition for water as climate change bites

Examples of successful Social Entrepreneurs- Phil LaRocco – E+Co - http://www.eandco.net/- Fabio Rosa – Ideaas - http://www.ideaas.org.br/ & the widely

replicated Palmares project http://www.ashoka.org/node/3291

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Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs5. Environmental opportunitiesFacts:- Environmental issues are universal: there is not South-North differences- Nevertheless, poor populations everywhere in the world re forced to live in

the worst circumstances- The dominant environmental concerns include the immediate of clean water

& sanitation, the risks of local & indoor pollution , & vulnerability to natural hazards.

- Other parts of the world: noise, traffic congestion, air & water pollution, long-term climate change,…

Examples of successful Social Entrepreneurs- Yan Arthus-Bertrand – The Earth from the Air -

http://www.wecommunic8.com/earthfromtheair/- Wangari Maathi – Green Belt Movement -

http://www.greenbeltmovement.org/

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Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

6. Health opportunitiesFacts:- From HIV/AIDS, to malaria, to potential pandemics like SARS or Flu-

A, the world problems can seen overwhelming- In 2006,11 million children <5 years died from preventable causes- 4 million babies will not survive their first month of life- > 1/2 million women died in pregnancy, during labor, or after birth

Examples of successful Social Entrepreneurs- Dr. Paul Farmer – “The Man who will cure the world” -

http://tinyurl.com/aovmpq- Dr. Devi Shetty – Narayana Hrudayalaya -

http://www.narayanahospitals.com/- Vera Cordeiro – Resnacer - http://www.ashoka.org/node/3420

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Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

7. Gender opportunitiesFacts:- There is always an inescapable gender component- In the 1995 Kobe earthquake, 1,5 times more women than men died- In the Asian tsunami, death rates for women were 3-4 times those for

men- There are several factors: biological, cultural, economic, or access to

health care, education & information technology.

Examples of successful Social Entrepreneurs- Wu Qing – Beijing Cultural Development Center for Rural Women -

http://www.nongjianv.org/english/index.html

Page 67: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

8. Educational opportunitiesFacts:- Few factors are as powerful as education in empowering humans- In a knowledge society access to educations becomes eevn more

important

Examples of successful Social Entrepreneurs- Bunker Roy – Barefoot College - http://www.barefootcollege.org/- Kyle Zimmer - Fist book - http://www.firstbook.org- Wendy Kopp – Teach For America - http://www.teachforamerica.org/- Michael Brown & Alan Khazei –City Year - http://www.cityyear.org- Javier Gonzalez – abcdespanol - http://www.abcdespanol.com/es/- Liz Maw – Netimpact - http://www.netimpact.org/

Page 68: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

9. Digital opportunitiesFacts:- Enthusiasts may talk of “growing up digital”, but the IT revolution has

created its own divides- 80% of people in the world have never heard a dial tone, let alone

surfed the Web- Kofi Annan: “People lack many things: jobs, shelter, food, health care &

drinkable water. Today, being cut off from basic telecommunications services is hardship almost as acute as these other deprivations, & may indeed reduce the chances of finding remedies to them”

Examples of successful Social Entrepreneurs- Rodrigo Baggio – Committee for Democracy in IT -

http://www.cdi.org.br/

Page 69: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

10 market opportunities for social entrepreneurs

10. Security opportunitiesFacts:- September 11th terrorism attack changed world security, however this

might be an effect of deeper & previous security causes.- Instead of turning to companies like General Dynamics or Halliburton

for security measures, governments should look to social entrepreneurs who recognize address the physical, psychological, social, economic, energy-related, water-related, or environmental security.

- Rich western countries spend up of 25 times as much on defense as they do on overseas aid.

Examples of successful Social Entrepreneurs- Pioneer Human Service - http://www.pioneerhumanservices.org/

Page 70: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

“YOU HAVE TO BE THE CHANGE YOU WANT TO SEE IN THE WORLD”

GANDHI

Page 71: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

CHECKOUT: What might be our next step to our shared dream…“Creating a Sustainable Cooperative Social Business Model”

Page 72: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

Potential MSLS thesis to start workingOur shared dream: MSLS-MONDRAGON

– How to integrate the social entrepreneurship potential to MSLS strategies?

– How Social Entrepreneurship theory understands the importance of ecological value as opposed to just social value?

– What MSLS can teach MONDRAGON & What MONDRAGON can teach MSLS?

– Building FSSD approach into MONDRAGON university education system?– How does MONDRAGON take “sustainability” into account? How can we leverage its commitment?

– How to design a SUSTAINABLE COOPERATIVE SOCIAL BUSINESS MODEL?

Implementing FSSD into a MONDRAGON cooperative

Developing MONDRAGON sustainability through: eco-clusters in Euskadi?,

cluster in China?

Building FSSD approach into MONDRAGON University?

Start a new Team-cooperative to facilitate FSSD sustainability implementation?

Start collaboration & exchanges between BTH and MU: ecodesign,

master, erasmus,…

Page 73: Sweden - "MONDRAGON, SUSTAINABILITY & Social Entrepreneurship" - Blekinge Institute of Technology - Nov 2009

Dr. JM Luzarraga - Mondragon University – Kalskrona - Sweden - November 2009

شكراEskerrik askoMuchas graciasThank you谢谢你

“Our strength does not lead to struggle but co-operation”

P. JM Arizmendiarrieta - 1956