Somewhere in Tanzania, a mother is cradling her premature newborn in a tiny sleeping bag that stays warm without electricity. In Kansas City, a neighborhood has remained intact, and rents have been kept in check, thanks to a new investment product that enables residents to cooperatively own and operate properties. Across Brazil, farmers are being paid through carbon credits to plant trees on pastureland, a novel approach to carbon removal.
You may not have heard of the companies involved in these developments — Embrace Global, Trust Neighborhoods, and Working Trees — but they represent a vanguard that’s inching the world closer to a more sustainable and just future. These ventures, and many others like them, were developed, nurtured, and launched by MBA students who participated in Stanford Graduate School of Business’s Center for Social Innovation, an entrepreneurial incubator and training ground that celebrates its 25th anniversary this year.
“We see that social and environmental problems, if anything, are growing, and the current set of solutions are not keeping pace,” says Matthew Nash, CSI’s executive director. “CSI is about cultivating insightful, principled, ethical leaders who are going to take action on these societal challenges.”
Through its programs, activities, and funding, CSI has empowered a generation of social entrepreneurs whose efforts have had an impact in dozens of countries. A handful of startups are launched each year with aid from Stanford Impact Founder fellowships, which provide the founder with funding and support to develop and launch new impact ventures. In addition, scores of students who take CSI courses head into the world with the knowledge, skills, and motivation to spur change in whatever roles they inhabit, whether in the public, private, or nonprofit sector. “Society is really expecting more from businesses,” Nash says. While CSI offers a laboratory for testing new ideas, it also endows students with a sophisticated understanding of what a modern executive needs to know.
“CSI is the conscience of the school,” says Neil Malhotra, the Edith M. Cornell Professor of Political Economy and CSI’s faculty director. “Our students learn from world-class faculty and peers about cutting-edge management practices. But our students also explain to others the importance of business as a key institution in society, and the need for business to create positive social impact.”
Shawon Jackson, MBA ’21, and current Stanford GSB lecturer, received a SIF fellowship in 2021 to develop his nonprofit Vocal Justice, which offers communication and leadership training for young people of color. “CSI played a critical role in my success — as a social entrepreneur and a leader more broadly,” Jackson says. He recalls a pitch night CSI hosted during his first year at the GSB, where he shared his vision for his venture, and subsequently attracted volunteers from the Graduate School of Education who helped evaluate his pilot offerings.
Shawon Jackson, MBA ’21, founded Vocal Justice and is a lecturer at Stanford GSB. | Courtesy of Shawon Jackson
“I’m especially grateful for the funding I received from CSI, both as a student and an alum,” says Jackson, who also received an Impact Design Immersion Fellowship. “It allowed me to focus on designing and delivering strong programming for young people and teachers, rather than stressing about how I can support myself and my team financially.”
CSI’s aims put it squarely in line with the larger mission of Stanford GSB and the university itself, Nash says. In that respect, its imprint is not only visible in the ideas and innovations GSB students produce, but also in the template it has supplied for enabling impact entrepreneurship elsewhere. Through the tools and approaches it has shared, CSI has had a global impact, according to Nash, helping to crack open new possibilities for health and prosperity around the world.
A Long Lineage of Social Enterprise
Although officially a quarter-century old, CSI is the descendant of a program established at Stanford GSB in 1971. The Public Management Program (originally called the Urban Management Program) emerged from then-Dean Arjay Miller’s interest in bringing management skills to the social sector. The former president of Ford, Miller had been profoundly distressed about the 1967 riots in Detroit and the inability of government leaders to address their root causes. Years later, Miller reflected on the imperative for Stanford GSB to produce civic-minded, professionally trained cohorts of problem-solvers: “Business leaders didn’t understand the new social demands they were facing, and if they did, they didn’t know what to do about them. Government people didn’t know anything about business, didn’t have any management talent, and nobody was doing much about it.”
Arjay Miller was the fourth dean of Stanford GSB from 1969 to 1979.
Conceived as an academy of sorts for would-be public officials, the PMP was revised in the 1980s to expand its scope, an acknowledgment that many GSB students would spend their careers in the private sector.
“When I was hired, we came up with the idea that the Public Management Program should be about leadership,” says Jim Thompson, MBA ’86, who served as its director from 1987 to 1998. “Leadership in the public or nonprofit sector could involve working for a company that does public good, serving on the board of a nonprofit or governmental commission, or becoming a candidate yourself — there are many different ways.”
Those changes led to the Public Management Initiative, whose annual focus on a different area of social innovation was based on a student vote. That, in turn, prompted the faculty to offer electives based on themes emerging from the program. The key to its success was combining public service with leadership, Thompson says. “Maybe there has been a Stanford business school student who didn’t want to be a leader, but I can’t identify one.”
MBA students chose social entrepreneurship as the PMI theme for the 1996-97 school year. Political economy professors David Brady and Daniel Kessler taught a course on the topic with Greg Dees, a pioneer of social innovation research and teaching who previously co-founded the Initiative on Social Enterprise at Harvard Business School. Dees eventually joined the GSB as a professor and spearheaded the initiative that envisioned CSI, according to its pilot proposal, “as the world leader in research and education related to social entrepreneurship and innovations in philanthropy.” A founding gift by Claude (MBA ’52) and Louise Rosenberg and Susan Ford Dorsey led to the official establishment of CSI in September 1999.
Heather McLeod Grant, MBA ’99, says CSI offered a way “to find fellow travelers and colleagues” in the nascent field of social innovation. “I went to the GSB because I wanted to figure out how I could do well by doing good,” she says. “Business school for me was a pragmatic way to figure out how to build my skills and make a sustainable wage doing this kind of work.”
Defining Social Innovation
Kriss Deiglmeier arrived at CSI in 2004 as executive director. Working with faculty directors Jim Phills and Dale Miller, the Class of 1968 / Ed Zschau Professor of Organizational Behavior, she set out to redefine social innovation. Doing so was important, she says, to provide some language that would guide efforts going forward and provide a frame for others to use. “We spent a lot of time coming up with that definition,” Deiglmeier says. “There were big debates — like, is Google social innovation? No, it has to have public value. And the second piece that was so instrumental is the cross-sector approach. To solve our challenges, it was going to happen at that intersection of business, government, and civil society.”
Their definition, introduced in an article in Stanford Social Innovation Review — a magazine that CSI launched in 2003 — has since been cited more than 3,000 times in other publications and reports: A novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals.
At that time, “nonprofits were here, businesses were over there, and governments over there,” which inhibited innovation, Deiglmeier says. “So that was really a call to action.”
Deiglmeier credits some key faculty allies with buttressing CSI’s credibility. “There were some heroic, amazing faculty who stepped up. Bill Barnett, who was teaching in our executive education program for nonprofit leaders, launched the Business Strategies for Environmental Sustainability program. It was really at the edge of innovation and where the world was going, and we were able to put these breadcrumbs in place that played a significant role not only at Stanford but in society.”
Barnett, the Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations, later completely pivoted his research toward sustainability and now also teaches at the Doerr School of Sustainability.
Today, almost 60 courses across Stanford GSB are part of CSI’s curricular offerings. Many students take one or two courses; others complete four or more, earning the program’s Certificate in Public Management and Social Innovation. In 2014, 100 students earned a certificate; last year, the number had grown to 169. That growth aligns with the attitudes and perspectives Hallie Mittleman, associate director of CSI’s GSB Impact Fund, has observed among recent MBAs. “Students sometimes come in after having spent a couple of years in consulting, they have an advising session with me, and they say, ‘I really have not felt that my work has had a lot of meaning, and I want to bring more meaning, and this is the issue that I care most about.’”
Aiming for Impact
An example of the tools and methods CSI has developed to advance social innovation is the “impact compass” that evaluates proposed ventures on six criteria: value to society, efficacy, impact magnitude, scalability, mission alignment, and ESG (environmental, social, and governance).
“Whereas in the ’90s or maybe even in the ’80s, it was all about writing the perfect business plan, these days entrepreneurship is more around design and other methods, trying to develop a business model that will be durable and scalable and a product that really meets the need of an end user,” says Nash.
He notes that decades of experience have demonstrated that successful social innovation requires structured training based on data-driven findings. “Social innovation draws upon the scientific method of experiment, gathering data, learning, improving, to decrease the likelihood of failure. At the end of the day, it has to make a real difference.”
One of the earliest (and now legendary) successes was d.Light, co-founded in 2007 by Nedjip Tozun, MBA ’07, and Sam Goldman, MBA ’07, who wanted a way to light homes for low-income people who historically relied on kerosene lanterns. The company, which was born in the Design for Extreme Affordability course — a collaboration between Stanford GSB and Stanford School of Engineering — developed an inexpensive line of solar-powered lighting products that have been used by more than 175 million people in 72 countries.
d.light co-founder Sam Goldman, MBA ’07 (right), with President Barack Obama at a d.light event. At left is Katherine Lucey, founder of Solar Sister. | Courtesy of Sam Goldman
The results were transformative. Families that had lived in the dark after sundown or had weak (and dangerous) kerosene lamps could extend their productive hours. Kids could study longer and more easily. Small business owners could stay open in the evening. Forbes called d.Light “one of the best case studies on how social enterprises can improve the world.”
It isn’t only the successes that are important, Nash says. “There are definitely failures and learning along the way. Part of our role is to be thoughtful observers and critics, not necessarily just cheerleaders.
“Not every student has the right idea or the right approach or the right business proposal and may not really understand the right problem. We encourage students to engage with those who are affected by the problem and hopefully co-create solutions with them.”
Heidi Patel, MBA ’04, came to Stanford GSB because of the opportunities CSI presented. “I wanted to integrate my training as an investor with my desire to help the community around me and to address big social issues,” she says. “I was thrilled. I tried to take every CSI class there was, and those were by far my favorite classes.”
Heidi Patel, MBA ’04, at a GSB Impact Fund Investment Committee meeting in spring of 2024. | Saul Bromberger
She cites former lecturer Laura Arrillaga-Andreesen, MBA ’97, as a particular influence. “I learned all these frameworks and approaches that exist in the business world also exist in the nonprofit world and it was fascinating. What theory of change was, thinking about impact assessment, about opportunities to use private sector tools for social good. Some of the frameworks, tools, and perspectives I used in those classes I still use today.”
Patel went on to a prolific career in impact investing. Today she is a managing partner at Rethink Impact and sits on the boards of several mission-driven organizations. For the past decade, she has taught the course Investing for Good at the GSB. “I want students to know that we need our best minds and our greatest talent thinking of new ways for business, government, and philanthropy to collaborate on new approaches that can create transformational impact at massive scale,” she says. “I think that’s the GSB’s job — to equip students to thrive in these multi-sectoral opportunities, whether it’s working on one solution that can reach tens of millions of people, or an innovative, place-based approach that can be replicated in many other places.”
Likewise, Jackson returned to Stanford GSB as a lecturer in management, part of a “pay it forward” ethos that he says permeates the social innovation field. This year he is teaching, along with lecturer Matt Abrahams, Essentials of Strategic Communication. “My goal is to help students develop their confidence and competence in communication. I love helping people express themselves authentically and persuasively, and it’s exciting to do that not just with my nonprofit but through my time teaching at GSB.”
More than 50 years after Arjay Miller dreamed up a program that could inspire and enable business students to attack societal problems, those problems have only gotten more challenging. Business leaders must meet the moment with a clear-eyed view of the complexities involved, the agility to move across boundaries, and the tenacity and humility to always keep learning.
“The relationship among business, government, and society is only going to become more important,” says Malhotra. “CSI represents the frontier of management education as our understanding of stakeholder capitalism evolves over time.”
Patel points to General Motors CEO Mary Barra, MBA ’90, as an exemplar. “She is taking a 100-year-old-plus organization and transforming it to be responsive to the climate constraints under which we all operate. I’m hoping the GSB is producing the next generation of Mary Barras.”
“The social sector alone will never ever create the scale that’s needed to address the biggest issues of our time,” Patel says. “If we rely on philanthropy alone, we will never get there. It’s that collaboration with the commercial sector that’s vital to address these massive and urgent problems.”
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