HE'S A venture capitalist with a difference. Because William Drayton's not-for-profit organi- sation Ashoka:Innovators for the Public, invests in people. Not just any people, but those who are what he calls 'social entrepreneurs' -people who can cause major structural change in society.

For Drayton, with an impeccable background from Harvard, Yale Law School and Oxford, and a long association with McKinsey & Co, the social entrepreneur is no different from a top business entrepreneur, 'They have the same personality type but the difference is that the social entrepre- neur works with other half of society,' says Drayton, who launched Ashoka in 1980,

Ashoka, which operates in 30 countries, selects and financially supports entrepreneurs who have a vision to solve societal problems. Convinced that business and social sectors have to learn from another, ('Steve Jobs, Bill Gates will have more in common with the Ashoka fellows than they have with General Motors'), Ashoka is trying to build bridges between the 'two halves of society,', Its partnership with McKinsey in this has workedfpr both of them. ..

Drayton, who is a recipient of Yale School of Management's EntreprenewiaI Excellence Award, and the US's National Public Service aw'ard, speaks to Nivedita Prabhu about how al it is to both sectors to build this bridge and about a new breed of entrepreneurs who use cor- porate skills to solve social problems.,

Why do you call yourself a venture capital- ist? A VC expects a return on investment. Are you get ting a return on the financial support you give Ashoka fellows?

Sure we are, but it's not financial. But if you invest in a social entrepreneur, you are launch- ing an idea thats going to change the field, you are launching a career of someone who is going to very important in that field, in that society for deCades to come. They are going to continne to develop that idea and develop other ones. You are also launc~ the institution that supports ;ill of them. So for a very small sum of money, the lever- ages are extraordinary. You invest a small amount of money and you invest the skills we have developed like other VCs who are able to identify a good idea, and then through a variety of of ways help the entreprenuer clarify his way of thinking and find colleagues for him to collaborate .with and develop his new methodology. It doesn't cost much but the impact is extraordinary.   

Every time any of these people succeed, they are a role model. There are hundreds of other people who may not be brilliant entre- preneurs but they get inspired and encouraged to care about society as a whole. To give them;' selves permission to do something about it. This is the cutting edge of democratic revolu- tion as well as the cutting edge of the introduc- tion of competition in the hands of society.

Is the corporate sector getting to be more aware of its social role?

Three centuries ago in northern Europe com- petition came in to the business sector and it ~ually swept through the rest of the world leadjng to a compounding growth of productiv- ity of two to three per cent a year. The social sector has been mired in bureaucracy tlirough most of those three centuries. But in the last two or three deCades competition has come into that sector. The number of citizen organisations have multiplied at least a thousand per cent. But more important than that the average size of the organisation is bigger, ili.e skill levels are higher and competitiveness is much higher. Anyone can enter.. If you have a better way of   teaching kids or working on human rights, you can get the resources to out compete the other organisations. And that competitive process is accelerating.

The cutting edge will be  the entrepreneurs.  Instead of having half the society on competitive lines and half on bureaucratic lines, suddenly they are both becoming com- petitive arms. Historically,  the social and business sectors have not talked to one another, except with great discomfort. Now you have a whole new set of actors in the social sector. And the opportunity for the business sector is in collaborating with the social sector.

This is one of the things Ashoka is doing – the business social bridge. We have growing strategic partnership with McKinsey that allows the best management skills come to the cutting edge entrepreneurs in the social sec- tor. The pace setting social institutions through the McKinsey connection pick up the skills that increases the ability of the two sectors to talk and collaborate.

Another critical business bridge programme is the entrepreneur-entrepreneur programme. We- have found that business entrepreneurs and social entrepreneurs have the same personality type and the same experience. The two cutting edges of .the two sec- 1 tors have more in common with one another, than they do with more slow moving institutions of their sectors.

A health entrepreneur has more in common with a business entrepreneur than with i the Red Cross. Steve J:i>bs,BillGates will have -e more in C?1l1Jn°n with the Ashoka fellows e than they bjive witJt General Motors. They are the right people to open one another's u world to each other. They ask the same kind of  questi'ons azId thini the same sort of way.

So are corporates moving beyond building markets for themselves and image making?

Those are legitimate goals. The Ashoka- McKinsey relationship is valuable to both sides. Our fellows are learning these skills, but the McKinsey consultants are the best sort of clients. They are not working with some social worker who is going to drive them nuts. They are dealing with people who have powerful stt'ategies for changing society and present complicated management challenges. That is very satisfying to the McKinsey consultant. Its the best type of pro bono activity.

In Brazil 20-25 per cent of the staff in McKinsey are doing this stuff. And they have found that the turnover is much lower among the staff that get involved. They are much more satisfied. Through the numbers of the firms that involved with housing or bWlding a consumer movement, the firm is developing and under- standing that they cannot get it any other way but from the people who are working in the field and who have the breadth of knowledge.

It significantly enhances their ability to advice their corporate clients. McKinsey is getting a great competitive advantage in Brazil because they understand much more about Brazil than any of their competitors.

Will it be essential for the corporate sector to work with the social sector in the future?

You can ignore the other naIf of society as long as it is a somnolent quagmire of bureaucracy. But you can't ignore it as long as it is as compet- itive as you are. Like you cannot ignore the emerging market. It would be dumb to not engage with this enormously Vlorant dimension of society. The smart companies are already fig- uring it out. The Cummins Engine company here is figured out. McKinsey has figured it out., There are many such examples.