Profit and Progress

This week’s readings were focused primarily on strategies that could be or have been employed by various social enterprises in growing the impact of an organization. One article in particular resonated with me—How Misinformed  Ideas About Profit Are Holding Back the World’s Poor, by Hugh Whalan (who seems to have done some pretty impressive things in his thus-far short career). The article focused on organizations that serve BOP—or, Bottom/Base of the Pyramid—markets, and although it was fairly short, it made some impactful points.

The notion of BOP markets has gained traction over the last decade-or-so; and more and more enterprises—both those with primarily social goal and more traditional businesses (such as Coca Cola, as referenced by Whalan)—are attempting to sell products or services to BOP customers. And the reasons for this growth are in some way economically easy to understand. Simply put, BOP populations represent an enormous amount of economic activity, which The World Resources Institute suggests amounts to about five trillion dollars in annual expenditure—almost half of what the US population spends annually, and significantly more than any other single country in the world!

The core arguments that Whalan makes, which he articulates by responding to a few simple questions, line up well with the logic that Martin Fischer and KickStart adopted in developing their irrigation products for farmers in Africa living in extreme poverty, as referenced in last week’s class discussion. 

Some of the other readings—especially Tripp’s article in the Harvard Business Review—articulate that profit should not be the ultimate goal of organizations that seek to make the world a better place. Traditional measures of growth, they argue convincingly, do not always align with the metrics of meaningful impact. That’s fair enough, but I don’t think of most people’s stereotypes of good-doing organizations in extremely poor parts of the world as being overly profit-driven. Instead, I would suggest that revenue (and capitalism—small “c”—more generally) are important tools which should not be overlooked (but too often are) by those trying to make the world a better place.