Cover Story: BIZ 3.0 – Make $$$ and embrace your inner philanthropist

When Sacha McMeeking, self-described “lawyer-come-lobbyist from the Mainland”, steps into the spotlight at the recent Deloitte/Management magazine Top 200 Awards she poses simple question.
“What do you get,” she asks the 760-plus business leaders, “when you combine the passion and connectivity of community, with the innovation and drive of business, and the authority of government?”
The answer, says McMeeking, is business model that, overseas, has led to 38 percent drop in deaths from malaria. It is responsible for installing hygienic toilets in mega-shanty towns, creating employment for tens of thousands of women in Africa and access to micro-credit for hundreds of thousands of SMEs.
“These examples matter because none of them are the products of philanthropic largesse,” McMeeking tells New Zealand’s most senior business leaders. “They’re all examples of where business has made good money by doing good things.”
McMeeking calls her vision for the future of commerce, Business 3.0. It’s the evolutionary step that binds business to beneficence. And it’s quantum leap from current ‘good’ business practices that back up worthy causes through sponsorship, donations or grants.
If Business 1.0 was the “undiluted, ravenous pursuit of profit”, as McMeeking tells her audience, Business 2.0 was about doing good by not doing bad. It was triple bottom line accounting, minimising bad impacts, generous philanthropy and “some fabulous CSR reports”.
“But Business 3.0 is our next evolution so that we can, together, do good stuff while making good money… This is about leveraging our intellect and the entirety of our balance sheets rather than the small trickles that constitute our philanthropic funds,” she says. “It’s about using passion, intellect and financial grunt to solve problems that matter to us all.”
Business 3.0 signals it’s time for business folk to embrace their inner philanthropist. It gives the thumbs up to social activists wanting to make peace with their capitalist within.
McMeeking is tapping into groundswell of activity that has been gathering momentum right round the world for some time now under wide variety of guises and names. (See box story “Look who’s talking”.)
It encompasses everything from microfinance – where tiny slivers of credit might mean poor villager can buy buffalo and sell its milk at profit – to hands-on practical projects providing housing, education or clean water. Together they aim to find new solutions to some of the world’s toughest problems.
McMeeking sees Business 3.0 as global step-change occurring across both macro- and micro-levels. At the macro level, global companies are exploring bottom-of-the-pyramid growth strategies, using social innovation models to generate employment that creates the disposable income to increase product sales.
At the micro level, social entrepreneurs are working globally to address social and environmental challenges through for-profit businesses.
Pie in the sky stuff? Not according to business giants Danone, Unilever, Procter & Gamble, and string of other multinationals and Fortune 500 companies.
Not according to leading management thinker C K Prahalad, either, who first alerted the business world to opportunities to help meet the needs of the world’s five billion poor.
Nine years ago, he reckoned they were collective market of US$12 trillion. Some say that’s now likely to be closer to US$14 to $15 trillion.
And not according to influential global entrepreneur Richard Branson or growing number of next-generation thinkers and do-ers who see the old ways aren’t fair, aren’t working and who are busting to try something new.
Over in Asia, for example, new models of entrepreneurial innovation are already shaping the region’s social and economic future, helping to address developmental issues while providing economic good.
Both developed and developing economies provide plenty of options for individuals and organisations wanting to make money while doing good.
At the Harvard Project for Asian and Intermational Relations (HPAIR) in Seoul last year, MSNBC anchor Richard Lui spells out his own ‘small brush with social entrepreneurship’ across 15-year period before he got into news. And he pragmatically scopes out new-world career opportunities to packed room of hand-picked next-generation students.
For those with bent for figures, there’s the challenge of tackling wealth inequality around the world, he says. For those mulling over career in healthcare, why stand by as so many people die when preventions and cures are available?
Given global advances in food, nutrition and distribution, why should billion people around the world go hungry? What can be done to preserve natural resources and protect the environment? For those interested in education, there are issues around access, spend and performance to be resolved.
Then there are gender issues. (“Why was the female death rate from tsunamis in 2005 and 2011 three to four times greater than the male death rate?” Lui asks.) And access to technology. (“Eighty percent of the world hasn’t heard dial tone,” he says.) And plethora of problems around physical, psychological and social security.
In the enthusiastic cut and thrust of conference presentations, social entrepreneur is broadly defined as anyone with entrepreneurial spirit. They may be government servant, working for profit or not, effecting change from within or outside company, or simply from home.
“They’re anyone who’s not happy with the status quo. They believe that, even at the margins, they can make small difference to change the world and make it better place.”
Here in New Zealand, McMeeking’s Business 3.0 resonates with an additional layer of our uniquely antipodean values. Its business model brings together the collective power and potential of business, government, community and, importantly, iwi.
McMeeking (Ngai Tahu), who holds Master of Law degree and was an inaugural Fulbright Harkness NZ Fellow in 2010, recently transitioned from role as GM strategy and influence with Te Runanga o Ngai Tahu to found her own boutique consultancy.
She argues that New Zealand – with its unique talents and pressing issues – should be leading contributor to this global step change.
Founded on strong social ideal, New Zealand, with its established entrepreneurial talent and culture that expects DIY innovation, has immense potential to demonstrate Business 3.0, she says.
“Iwi and Maori organisations will be unique contributors to social innovation in New Zealand,” she says. “Iwi have responsibility to create social, cultural and environmental outcomes for their tribal members, and tribal businesses will be the perpetual revenue stream for creating these benefits.”
McMeeking conservatively estimates the iwi/Maori economy at somewhere around $37 billion. With that set on rapid growth trajectory, she says iwi face choice.
“They can choose to create perpetual legacy. They can do this through very small profit stream – maybe each organisation has $5 million to $20 million annually for education scholarships and all those types of things and we can wait decades to recreate ourselves as the proud and integrated people that we have been for over 1000 years.
“Or iwi can choose to adopt the model of Business 3.0… Iwi can leverage the entirety of their balance sheet to create change: to change the world in way that honours our tupuna and provides for our mokopuna.
“To me, that means iwi are pioneers of necessity in New Zealand application of Business 3.0.”
Back at the Top 200 Awards, McMeeking acknowledges Business 3.0 is still in its infancy.
“Iwi will be learning Business 3.0 – no doubt on occasion on the front page of the newspaper – and in doing so that will enrich our New Zealand identity. What is most critical in realising the full potential of Business 3.0 is the very purpose of this evening: it is leadership, it is integrity and authenticity. And only together can