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The Surprising Rise of the Social Entrepreneur

April 13, 2010

The Surprising Rise of the Social Entrepreneur

Every evening Linda and I try to watch (usually by Tivo) the first fifteen minutes of the ABC World News with Diane Sawyer to get a feeling for what the big stories are that dominate mainstream media. It seems to me the most enduring story of this long recession is the slow pace of job creation. It is a psychological disaster. 


The lead paragraphs of Tom Friedman’s New York Times April 4 column, titled “Start-Ups, Not Bailouts,” caught my eye and took my breath away. 

 Here’s my fun fact for the day, provided courtesy of Robert Litan, who directs research at the Kauffman Foundation, which specializes in promoting innovation in America: “Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less,” said Litan. “That is about 40 million jobs. That means the established firms created no new net jobs during that period.”
Message: If we want to bring down unemployment in a sustainable way, neither rescuing General Motors nor funding more road construction will do it. We need to create a big bushel of new companies — fast. We’ve got to get more Americans working again for their own dignity.

What’s the fix? My mentor and friend, Peter Drucker, decided in mid-career that a big part of the solution for his dream of a Functioning Society would come from the social sector. About the same time, the mid 1980’s, though thirty years younger, I came to the same conclusion. It is what bonded our relationship and drew us together in a unique pairing of an intellectual and an entrepreneur. We were magnetized by a common cause. 


My general interest in the social sector was nonprofits of all sorts. Together, Peter, Frances Hesselbein, former head of the Girl Scouts of the USA, Dick Schubert, former head of the American Red Cross, and I formed The Peter F. Drucker Foundation for Nonprofit Management (now Leader to Leader Institute). Twenty years later, it is still headed by Frances Hesselbein. Our customer was mainly the small and midsize nonprofits. The term Social Entrepreneur was barely beginning to be used. 


Peter wrote the seminal Harvard Business Review article, “The Entrepreneurial Economy,” in 1984, and as well the early definitive book on the topic, Innovation and Entrepreneurship, in 1985. I looked in the index of the book to find there was still no reference to the term “social entrepreneur.” 


My special and highly focused interest was a subset of the American Social Sector – the American Megachurch. In the mid-80’s, churches were mainly small and denominational. I knew and Peter knew that the practice of organized and disciplined management was equally adaptable to exponential growth in all sorts of Social Sector organizations including churches. In 1984, according to church statistician, John Vaughn, there were only 100 churches with weekly attendance of one thousand or more.  Peter didn’t know this subset as well as I did. Both of us saw the enormous possibilities for social and spiritual benefit that could come from disciplined entrepreneurship. 


I introduced the leaders of the Christian organizations to Peter. He graciously folded them into his portfolio of social sector leaders alongside a host of others that included major labor unions, community organizations, research labs, hospitals and universities, all of which have grown large in scale. 


In 1984, Leadership Network was formed. We chose two unique approaches to infusing leadership skills in large American churches. First, we sought out the leaders who were getting the best results. That is where we learned our first two cardinal values from Peter:

1. Build on the islands of health and strength. 

2. Work only with the receptive and work only on what’s trying to happen.

We decided not to be “against” but “for.” 


We found that the people who had done the outstanding work in building megachurches were the best and most sought after experts and teachers. Seminaries barely touched leadership issues in those days. Leadership Network created a context for peer group idea exchange of best practices. Later we distilled this into three words: Find, Connect, and Multiply. 


The next thing we did was expose the top leaders to Peter directly in groups of thirty so that he could listen to them as well as teach. They were eager learners. Over a period of years, Peter spread the management virus to hundreds of church leaders who in turn multiplied the practice to their peers in multiple denominations around the country. Our method was (and still is) leaders connecting with leaders to multiply. 


Over 25 years, Senior Pastors of large and growing churches have become Social Entrepreneurs alongside their role as Communicators of the Word. Many, if not most of them, have developed working partnerships with Halftimers with finely tuned organizational skills, often known as Executive Pastors. There are today over 7,000 churches in the United States with over 1,000 people in weekly attendance! Has any of field grown so large so quickly? Peter Drucker, before his death at age 95, was quoted in Forbes Magazine saying, “The pastoral megachurches that have been growing so very fast in the U.S. since 1980 are surely the most important social phenomenon in American society in the last 30 years.”  


The latest trend is a significant increase in volunteerism led by independent Social Entrepreneurs. Great leaders with big ideas. They are working in all the domains of society. Two great examples are TOMS Shoes, led by Blake Mycoskie, and Teach for America, led by Wendy Kopp. These are not specifically Christian organizations, but Teach for America has studied the motivation that drives thousands of graduates of elite colleges to spend their first two years teaching in inner city schools. Their findings: half of these teachers cite faith as a major motive for Main Street instead of Wall Street. 


I will close with Bill Drayton’s definition of a Social Entrepreneur drawn from McKinsey Quarterly. Bill founded Ashoka which connects 2,700 Social Entrepreneurs around the world. 

“After all, what defines the true social entrepreneur is that he or she simply cannot come to rest in life until his or her vision has become the new pattern societywide. Scholars and artists are satisfied when they express an idea. Professionals are when they serve a client well, and managers are when their organization succeeds. None of this much interests the entrepreneur. The life purpose of the true social entrepreneur is to change the world.”


So What about You? 

  1. What reignites your passion? 
  2. What little (or big) section of the world are you called to change? 


Recommended Resources: 

Innovation and Entrepreneurship by Peter F. Drucker, Harper & Row (1985) The base text for entrepreneurs in all fields. 


How to Change the World: Social Entrepreneurs and the Power of New Ideas, Updated Edition by David Bornstein, Oxford University Press, USA; 1 edition (February 5, 2004). This book documents the work of Ashoka in a variety of fields.  

Health Report: 

I am beginning to get better, but I’m not out of the weeds yet. Please keep praying for T4 and T5 to fuse. Prayer works! 


As always, I welcome your thoughts. You can e-mail me personally at,

or converse with the entire community at

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