Yesterday, I briefly referenced the new report “Growing Opportunity: Entrepreneurial Solutions to Insoluble Problems,” authored as a collaborative effort by SustainAbility and The Skoll Foundation (among others). It is a truly thoughtful analysis of the “state of innovation” of social entrepreneurship and challenges faced by organizations that are defining these new business models. Among them:

- Access to capital. This is an issue for any entrepreneur, but the added challenge for social entrepreneurs is their hybrid nature: Are they not-for-profits or emerging, viable commercial enterprises? The result is they are not competing on equal footing for potential funding sources in either area.

- Ability to scale. As the report suggests, social entrepreneurs worry about “how fast can I grow, continue to deliver, and not compromise my mission?” Beneath this is a leadership development and talent management issue. There are scalable organizational structures, but recruiting and developing the right people to make those structures operate effectively (in a social enterprise context) is a challenge.

And note that access to capital and ability to scale are in addition to the central issue of any new venture: Delivering value to members of the marketplace it targets.

But the report’s most intriguing insight is around what it calls Mindset 3.0. Mindset 1.0 was about regulations and compliance; 2.0 was about corporate citizenship, including organizational accountability and volunteerism. Mindset 3.0, on the other hand, is about creative destruction/reconstruction, about “reperceiving” immense global challenges as opportunities to change entire economic systems.

The report further suggests that Mindset 3.0 has five main components, several of which resonate with themes I’ve addressed in this blog:

1. Systems thinking and design. This resonates with research showing how socially responsible leaders have a more complex “world view” and how they fit within it. It also resonates with Howard Gardner’s “ethical mind.”
2. Consumer engagement. Really, this is about co-creating marketplaces. It is similar to the mental model of successful, socially responsible leaders I’ve interviewed. These leaders all believed that if they looked deeply enough within the consumer’s mind and activities — and engaged with consumers in more collaborative ways — they could create new markets.
3. Business models. A “theory of the business” and how it works that is some variation on traditional models.
4. 360 degree accountability. This is similar to the way expert leaders think about triple-bottom-line accountability.
5. Emerging economies. Bottom-of-the-pyramid thinking.

What all this means, I suspect, is that we are beginning to grasp the “what” part of “what is socially responsible enterprise?” And that’s a big part of the battle in addressing the three challenges. If we don’t develop clear meaning around the “what,” the systems to support the “how” will struggle to emerge.