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Physics Pop Quiz.

Can something be in two places at the same time?
The answer from advanced physics is a clear (if counter-intuitive) Yes.

Can you create something from nothing?
We all know that you can’t — except scientists explain that you can, by taking a vacuum (nothing) and blasting it into its dense, complementary matter - anti-matter components (lots of something).

Can these esoteric observations help us address societal problems - problems operating on the scale of billions of people, not the sub-atomic level of quantum physics?
As metaphors and guiding questions, yes.

Let’s start with money. As a physical medium, if I’ve got a $5 bill in my wallet, it can’t be in yours at the same time. But, as a representation of financial value, my five dollars can be many places at once. If I deposit it in a bank, it’s mine, even if the bank considers it theirs and then uses it to make five $1 loans (meaning “my” five dollars is now in seven places at once).

A loan is the most basic financial derivative, a building block that, in effect, creates money and puts it into the hands of those who need it and can use it to create value. (This is not to overlook derivative’s frightening power and potential destructiveness. Derivatives too numerous and too complicated to describe account for more than twenty times the amount of money in the world’s annual economy, and those tied to housing values brought financial chaos to the world when they imploded.)

But let’s not forget the fundamental lesson: loans let us store the same medium of value in several places at the same time. And these loans need not be money. For instance, Impact Everyday is creating a credit card that lets you loan it the “points” your card earns, whose cash value is then used to fund renewable energy projects. Where do your points “live?” With you, with the card company, or with the solar farm you’re supporting?   It’s not a stretch to say they live each of those places at once.

Or consider your time.  We know that we can’t get it back, but we can come awfully close when we bank it. Time banks create non-monetary markets, often in income-strapped communities, where a unit of effort I perform (say, an hour’s worth of computer programming) is banked until I redeem it (maybe for an hour’s worth of repairs on my car). In obvious ways, this non-cash economy creates a powerful means for putting idle time to productive use and bootstrapping economic activity.

Lent time, as with lent money (credit card points, or other items of tangible value), unlocks value.  In different ways, each transforms potential into value that can help people and communities right now. Dare we say, being in two places at once creates something from nothing?

I consider these examples of Big Picture Design. A principle of Big Picture Design is never to let a good idea go to waste. Good ideas are everywhere, often requiring nothing more than imagination to be applied in a new context. If you can lend money, why not credit card points, time, airline miles, equipment, … ?

Big Picture Design also teaches us to consider everything in developing a solution to a societal problem. By considering everything, not just features that first come to mind, solutions are more comprehensive—and better.

Wal-Mart, poster child for much that needs changing (especially in the area of labor rights), has also jumped to the forefront of the environmental movement by (finally) considering everything involved in its products’ manufacture and delivery. A company that values low costs over everything else discovered it had ignored waste. Once it recognized this oversight, it eliminated the water in its gallon-sized laundry detergent, producing a much smaller container that eliminated three-fourths of the packaging, weight, shipping costs, and shelf space associated with the product. Customers got a less expensive, more convenient product that cleaned clothes equally well. Wal-Mart made more money.

From 2005 to 2008, Wal-Mart shifted its entire detergent inventory to small-size containers, pulling the industry’s production (one billion units) along with it. During this period, Wal-Mart’s actions alone caused 95 million fewer pounds of resin from petroleum to be used, 400 million fewer gallons of water, and more than 60,000 fewer tons of cardboard. The reduction in weight resulted in less fuel being consumed by its fleet of trucks, saving the company money and keeping 11 million pounds of CO2 out of the atmosphere

Wal-Mart also learned that, while it had believed it had nothing in common with soft-headed environmentalists, they both wanted the same outcome. Whether driven by lower costs (Wal-Mart) or a sustainable planet (environmentalists), finding common cause was the best way forward.

To both, waste was the enemy. While it may have appeared that nothing could be gained from Wal-Mart and environmentalists joining forces, this nothing became something. A big, profitable, sustainable something.

How can we make sense of all the changes taking place around us?  More importantly, how can we create the change necessary to attack our most pressing societal problems?

Short answer:  building blocks.  I will return to this theme again and again in other posts.  But for now: a preview.

Eric Beinhocker's Origin of Wealth leans on the theory of complex systems to show how, little by little, a small thing like a wheel gets incorporated into increasingly complex components and systems.  First we see carts, then bikes, then the Audobon.  More building blocks mean more complex combinations built from them.  And these combinations give rise to greater variety, greater sophistication, and greater wealth.

Brian Arthur's The Nature of Technology provides a related account, up to a point, but emphasizes how change is not always gradual and continuous.  For instance, piston-powered propeller airplanes began as rather simple machines and performed well for short flights.  But when these planes began to fly at higher speeds at higher altitudes, their limitations became evident.  To address them, engineers began making a series of increasingly complicated modifications until, finally, an entirely new means of powering a plane appeared:  the first jet-engine.  This invention was not further evolution of the piston-propeller arrangement but, instead, was based on entirely different principles.  It was much simpler too, the original prototype of the jet engine having just one moving part!

In my book, Design Your Life, Change the World: Your Path as a Social Entrepreneur, I have examined how similar ideas apply to social enterprises.  Often, social enterprises evolve gradually, becoming increasingly effective as they become ever more complex.   As an illustration:  Once, local banks were as much fixtures of communities as mom and pop grocery stores (been to one of those recently?).  Over time, they began to add remote branches and, as regulation allowed, expanded their reach to increasingly distant locales.  These changes were intended to create more efficiency, more competition, and more choice.

Overseas, a similar evolution began to include poorer and poorer customers as first, nonprofit organizations and later, for-profit banks began to offer microcredit and other microfinance offerings.  Still, microfinance excludes ten times as many customers as it serves.  Poor clients are expensive to serve, even more so when they are at a distance.  Branches are too expensive in many parts of the world.

Yet in Kenya, an invention has dramatically changed the situation.  Much like the jet-engine, which overcame the deficiencies of propeller planes by incorporating a completely new principle, M-Pesa overcame financial exclusion, especially created by distance, by creating an alternative form of money.  Kenyans buy this currency, which is installed on their cell phones.   This e-currency can then be safely, conveniently, and affordably transferred to someone else by sending a financially secure text message.  Urban workers can remit money to relatives in the countryside.  Micro-entrepreneurs can buy trinkets or agricultural products to resell without the insecurity of relying on bus drivers to transport their payments or the inconvenience of taking the bus to make payments themselves.

How successful is M-Pesa?  Over half of all Kenyans use it, nearly three times as many as have bank accounts.  M-Pesa has created similar services in Tanzania, Afghanistan, and South Africa.  It recently created a partnership with Western Union that allows funds transfers to Kenyan M-Pesa customers from 45 countries. 

Is this a "one-off," relevant only to citizens without ready access to banking services?  Not at all.  Mobile wallets (as they are known) are moving "up market" to the United States and the rest of the developed world.  Tech stalwarts (Apple, Google, and others), mobile carriers (including Deutsche Telecom, China Unicom, Verizon), and financial institutions and credit card companies (among them Chase and Visa) are all exploring how they can capture this huge, potential market.

What was created by the invention of alternative currency has begun to evolve.

Let's consider this illustration from an evolutionary perspective.

The banking system changed in ways that resemble biological evolution.  New variations (say, bank branches) are tested for their performance (would people use them?) and, when successful, they proliferate. 

Producing societal-level change isn't under the control of any single organization.  Consider the environment.  No company or government, of course, "controls" efforts to address climate change.  Yet there are many ways organizations play roles in striving to stem our environmental problems. 

How can we stack the odds so that they are successful?

By encouraging variation, creating fair and effective tests, and ensuring that winning ideas truly proliferate.  These are not abstract ideas without application.  For instance, the tests performed in the marketplace (profit, sales) give distorted results that fail to account for environmental (mis-)behavior.  As the adage goes, you get what you measure, and we are measuring the wrong things.  Similarly, proliferation can come from replication, but exposing winning ideas to others provides another means to increase their scale.

But we must be cognizant, too, that invention is sometimes necessary to spark progress when we are at an impasse.  Methods like recycling, just like propeller-powered planes, can't evolve far enough to achieve our environmental ambitions.  Recycling is better than tossing, but as a practice it still fails to promote better, inherently green methods of creating products in the first place.  That is where invention becomes critical, to create "jumps" in evolution rather smooth, gradual refinements.  Markets in carbon avoidance, for instance, are built on the premise that you can buy the benefits of others' good behavior.  From this new premise various ways to create and operate these markets emerge, themselves subject to variation, testing, and proliferation.  Invention begets evolution.

These two forms of change - gradual, continuous; and radical; discontinuous - operate by creating and re-organizing building blocks.  We can think of building blocks as fundamental elements that underlie the process of creating change.  To be architects of change, we must learn to recognize and harness them.  I intend this blog entry itself to be a conceptual building block which we return to, and build on, as we understand how to improve society.

My daughter graduated from Oberlin College on Memorial Day.  The ceremony took place in a park with little shade on a crystal clear day, the kind you get in the Midwest when the temperature spikes 40 degrees in twenty-four hours.  It was sweltering.

But the true intensity came from the anticipation of what lies ahead, measured in people to be helped, a planet to be saved, lives to be changed.

Of course, the template for graduation speeches is to remind students to remember friends and institution; follow their dreams; and give back to others. 

But Oberlin is different.  A liberal arts college and music conservatory founded in 1833 in Oberlin, Ohio, it admitted women from the beginning, and granted women the first bachelor's degrees in the country in 1841.  In 1835, it became the first college to adopt a policy to admit students regardless of race. 

The town has long had progressive roots as well.  It was a pivotal stop on the Underground Railroad that ushered slaves to freedom in the north.  Residents' of Oberlin and the neighboring town of Wellington efforts in helping a fugitive slave flee to Canada reportedly sparked the Civil War.

Today, Oberlin and its environmental visionary, Professor David Orr, are in the early stages of creating a carbon-neutral, economically vibrant community that brings together town and gown, farm and city, today's needs and tomorrow's demands.  The Oberlin Project is a beacon pointing to the kind of world we can create if we try.

So, there was a rich and storied context as Oberlin's commencement speaker, Dr. Helene D Gayle, spoke about changing the world. 

Dr. Gayle had planned to be a pediatrician but had an epiphany at her brother's college graduation, where an epidemiologist described a successful campaign to eradicate smallpox.  The speech allowed Gayle to see how her own skills in medicine could be more broadly applied in a career in public health, providing her the opportunity to address interlinked problems of poverty, lack of affordable health care, and a broad set of inequities throughout the world. 

Thus was launched her remarkable career, first with the Centers for Disease Control and Prevention where her efforts focused on HIV/AIDS; then at the Gates Foundation, where she directed the foundation's HIV, TB and Reproductive Health program; and now at CARE (one of the best known organizations in the world devoted to fighting poverty, supporting women, and bringing about social justice), where she has been President and CEO since 2006. 

All because she was moved by a commencement address.

Some Oberlin graduates undoubtedly were moved by Dr. Gayle's remarks, their futures shifted in positive ways that will be revealed over the course of their lifetimes.  And yet others - including those who want to make a difference in the world - are still searching, despite the glimpse of all things sustainable, equitable, and right about the world that four years at Oberlin exposed them to.  I know, because I asked.  And because I teach students who are also looking to create meaning in their lives.

As a professor at the Ross School of Business I teach courses with titles that are a bit too long, like Solving Societal Problems through Innovation and Enterprise.  In these courses, I want my students to see that innovation can propel for-profit and nonprofit organizations to tackle some of the world's chief challenges: poverty, health care, education, the environment.  And taking these problems on can be done from a sense of opportunity, not just responsibility. 

We discuss ways to dramatically improve health care with cell phones, discarded medicines, and video games.  We consider improving education for children in India with "educational Karaoke," teenagers in the worst Bronx schools by training them as entrepreneurs, and college-ready students in Arica who cannot afford tuition by providing free, world-class college curricula.  We discuss charities run as for-profits, multinational corporations working in full-partnership with slum dwellers, alliances between environmental NGOs and huge retailers who intimately depend on each other for their mutual success through saving the rainforests, and powerful means of harnessing the power of collective action to identify, solve, and accelerate solutions to the world's most pressing challenges.

Why do students flock to these courses?  Because they hunger to combine their intellect and their hearts.  They crave the sense of meaning that comes from creating, especially when they find work that provides them with a means of support and a vehicle to have huge impact.  And mostly because they see the world with fresh eyes, free from the cynicism that that can come from thinking that anything that can be tried, has been tried.

The companies and organizations that are forging a better world need fresh eyes, too.  The practices that have gotten where we are - a physical planet in perilous shape and a socio-economic planet where the distribution of wealth and access to life's necessities (let alone luxuries) is more skewed than ever before in history in favor of the "haves" - are not the same practices that can lead us to a planet capable of sustaining us physically or providing a secure, healthy world that truly creates opportunity for all.

Graduation is both an end and a beginning.  It is a time to reflect, give thanks, and seek renewal.

To my daughter Hannah I say, 

"Congratulations on completing your degree. I'm so proud of you.  As you take your Oberlin degree into the world, I know we are lucky to have you joining the fight for a more sustainable world.  Lead, take action, and become a life-long student."  (The word "student," derived from Latin, suggests study, scholarship, and learning - not necessarily formal education, you know.)

And to students everywhere - whether you're enrolled in a degree program; striking out on your own as a (social) entrepreneur; working in an organization; or possibly running one - I say, 

"There's never been a time we've more urgently needed new ways of addressing the societal issues in front of us.  There are innovative ways for business to seek opportunity to serve, rather than acting purely with greed, frustrating progress, or withholding their formidable talents that could be used to create immeasurable benefits.  It's time to see the world with fresh eyes and create a better world.  It's time for us to graduate from old ways, which no longer serve us, and look at the world anew."

I have had the privilege to teach and learn from "students" of all stripes who want a more just society: those enrolled in my classes of course; but also those who I've worked with and supported on the ground in inner cities and the farthest corners of the planet;  officials of organizations devoted to a more equitable society, whether they occupy corner offices or cramped quarters in an attic; and like-minded do-ers seeking to make inroads against injustice through the provision of clean water, access to microfinance, more sustainable food systems, the elimination of homelessness, to name a few areas.

I invite you to join me in exploring a new world where we solve societal problems through innovation and enterprise.   Let us learn together.