The Center of Impact: A Quarter Century of CSI

Somewhere in Tanzania, a mother is cradling her premature newborn in a tiny sleeping bag that stays warm without electricity. In Kansas City, a neighborhood has remained intact and rents have been kept in check thanks to a new investment product that enables residents to cooperatively own and operate properties. Across Brazil, farmers are paid carbon credits to plant trees on pastureland, a novel approach to greenhouse gas removal.

You may not have heard of the companies involved in these developments — Embrace Global, Trust Neighborhoods, and Working Trees — but they represent a vanguard that’s inching the world closer to a more sustainable and just future. These ventures, and many others like them, were developed, nurtured, and launched by MBA students who participated in the Center for Social Innovation at Stanford Graduate School of Business, an entrepreneurial incubator and training ground for leveraging markets for social good that celebrated its 25th anniversary last year.

“Many social and environmental problems are growing in magnitude, and the current solutions are not keeping pace,” says Matthew Nash, the center’s director. “CSI is about cultivating insightful, principled, ethical leaders who are going to take action on these societal challenges.”

Through its programs, activities, and funding, CSI has empowered a generation of social entrepreneurs, impact investors, and leaders across business, government, nonprofits, and philanthropy whose efforts have had an impact in dozens of countries. In addition, scores of students who participate in CSI’s programs and coursework head into the world with the knowledge, skills, and motivation to spur change in whatever roles they inhabit.

“CSI is the conscience of the school,” says Neil Malhotra, the Edith M. Cornell Professor of Political Economy and the center’s faculty director. “Our students learn from world-class faculty and peers about cutting-edge management practices. But our students also explain to others the importance of business as a key institution in society and the need for business to create positive social impact.”

A handful of startups are launched each year with aid from Stanford Impact Founder fellowships (see “Good Fellows,” below), which provide founders with funding and support to develop and launch new impact ventures. Shawon Jackson, MBA ’21, a current Stanford GSB lecturer, received a SIF fellowship to develop his nonprofit Vocal Justice, which offers communication and leadership training for young people of color. “I’m especially grateful for the funding I received from CSI, both as a student and an alum,” says Jackson, who also received an Impact Design Immersion Fellowship. “It allowed me to focus on designing and delivering strong programming for young people and teachers, rather than stressing about how I can support myself and my team financially.”

CSI’s aims put it squarely in line with the larger mission of Stanford GSB and the university at large, Nash says. Its imprint is not only visible in the ideas and innovations students produce but also in the template it has supplied for enabling impact entrepreneurship beyond campus. Through the tools and approaches it has shared, CSI has had a global impact, according to Nash, helping to crack open new possibilities for health and prosperity.

Although officially a quarter-century old, CSI is the descendant of a program established at Stanford GSB in 1971. The Public Management Program (originally the Urban Management Program) emerged from Dean Arjay Miller’s interest in bringing management skills to the public and social sectors. The former president of Ford, Miller had been profoundly distressed about the 1967 Detroit riots and the inability of government leaders to address their root causes. Years later, Miller reflected on the imperative for Stanford GSB to produce civic-minded, professionally trained cohorts of problem-solvers: “Business leaders didn’t understand the new social demands they were facing, and if they did, they didn’t know what to do about them. Government people didn’t know anything about business, didn’t have any management talent, and nobody was doing much about it.”

Conceived as an academy of sorts for would-be public officials, the PMP was revised in the 1980s to expand its scope, an acknowledgment that many Stanford GSB students would spend their careers in the private sector. “When I was hired, we came up with the idea that the Public Management Program should be about leadership,” says Jim Thompson, MBA ’86, who served as its director from 1987 to 1998. “Leadership in the public or nonprofit sector could involve working for a company that does public good, serving on the board of a nonprofit or governmental commission, or becoming a candidate yourself — there are many different ways.”

Those changes led to the Public Management Initiative (PMI), whose annual focus on a different area of societal impact was based on a student vote. That, in turn, prompted the faculty to offer electives based on themes emerging from the program. The key to its success was combining public service with leadership, Thompson says. “Maybe there has been a Stanford business school student who didn’t want to be a leader, but I can’t identify one.”

MBA students chose social entrepreneurship as the PMI theme for the 1996–97 school year. Political economy professors David Brady and Daniel Kessler taught a course on the topic with Greg Dees, a pioneer of social innovation research and teaching who previously co-founded the Initiative on Social Enterprise at Harvard Business School. Dees joined Stanford GSB as a professor and spearheaded the initiative that envisioned CSI, according to its pilot proposal, “as the world leader in research and education related to social entrepreneurship and innovations in philanthropy.” Founding gifts by Claude (MBA ’52) and Louise Rosenberg, Susan Ford Dorsey, Shawn and Brook (MBA ’70) Byers, and Susan and Gib (MBA ’66) Myers, Jr. led to the official establishment of CSI in September 1999.

Heather McLeod Grant, MBA ’99, says CSI offered a way “to find fellow travelers and colleagues” in the nascent field of social innovation. “I went to the GSB because I wanted to figure out how I could do well by doing good,” she says. “Business school for me was a pragmatic way to figure out how to build my skills and make a sustainable wage doing this kind of work.”

Kriss Deiglmeier arrived at CSI in 2004 as its executive director. Working with faculty directors Jim Phills and Dale Miller, the Class of 1968/Ed Zschau Professor of Organizational Behavior, she set out to redefine social innovation. Doing so was important, she says, to provide some language that would guide efforts going forward and provide a frame for others to use. “We spent a lot of time coming up with that definition,” Deiglmeier says. In the end, they decided social innovation should have public value and occur at the intersection of business, government, and civil society.

That definition of social innovation, introduced in Stanford Social Innovation Review — a magazine CSI launched in 2003 — has since been cited more than 3,000 times in other publications and reports. At that time, “nonprofits were here, businesses were over there, and governments over there,” which inhibited innovation, Deiglmeier says. “So that was really a call to action.”

Deiglmeier credits some key faculty allies with buttressing CSI’s credibility. “There were some heroic, amazing faculty who stepped up. Bill Barnett, who was teaching in our executive education program for nonprofit leaders, launched the Business Strategies for Environmental Sustainability program. It was really at the edge of innovation and where the world was going,and we were able to put these breadcrumbs in place that played a significant role not only at Stanford but in society.” (Barnett, the Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations, later completely pivoted his research toward sustainability and now also teaches at the Doerr School of Sustainability.)

Today, almost 60 courses across Stanford GSB are part of CSI’s curricular offerings. In 2014, 100 students earned CSI’s Certificate in Public Management and Social Innovation; last year, the number had grown to 169.

The center is guided by the definition of social innovation updated in 2014 by Malhotra, former executive director Bernadette Clavier, and former CSI faculty director Sarah Soule, the Morgridge Professor of Organizational Behavior and Stanford GSB’s next dean. “Social innovation is the process of developing and deploying effective solutions to challenging and often systemic social and environmental issues in support of social progress,” it states. It notes that solutions may come from a variety of sources and emphasizes that solutions require “active collaboration” between different types of organizations.

That sense of mission aligns with the attitudes and perspectives Hallie Mittleman, the associate director of CSI’s GSB Impact Fund (see “Value Propositions,” below), has observed among recent MBAs. “I often speak to students in advising sessions who want more meaning in their work,” she says. “They come here to explore how business and impact can intersect.”

An example of the tools and methods CSI has developed to advance social innovation is the “impact compass” that evaluates proposed ventures on six criteria: value to society, efficacy, impact magnitude, scalability, mission alignment, and ESG (environmental, social, and governance) factors.

“Whereas in the ’90s, it was all about writing the ‘perfect’ business plan, these days entrepreneurship is more hypothesis-driven and embraces principles of human-centered design, aiming to develop a product that really meets the need of an end user and a business model that will be durable and scalable,” Nash says. He notes that decades of experience have demonstrated that successful social innovation is driven by evidence-based decision-making. At the end of the day, the innovation has to make a real difference.”

One of the earliest (and now legendary) successes was d.light, co-founded in 2007 by Nedjip Tozun and Sam Goldman, both MBA ’07, who wanted a way to light homes for low-income people who historically relied on kerosene lanterns. The company, which was born in the Design for Extreme Affordability course — a collaboration between Stanford GSB and Stanford School of Engineering — developed an inexpensive line of solar-powered lighting products that have been used by more than 175 million people in 72 countries.

The results were transformative. Families that had lived in the dark after sundown or had weak (and dangerous) kerosene lamps could extend their productive hours. Kids could study longer and more easily. Small business owners could stay open in the evening. Forbes called d.light “one of the best case studies on how social enterprises can improve the world.”

It isn’t only the successes that are important, Nash says. “There are definitely failures and learning along the way. Part of our role is to be thoughtful observers and critics, not necessarily just cheerleaders. Not every student has the right idea or the right approach or the right business proposal and may not really understand the right problem. We encourage students to engage with those who are affected by the problem and hopefully co-create solutions with them.”

Heidi Patel, MBA ’04, came to Stanford GSB because of the opportunities CSI presented. “I wanted to integrate my training as an investor with my desire to help the community around me and to address big social issues,” she says. “I was thrilled. I tried to take every CSI class there was, and those were by far my favorite classes.”

She cites former lecturer Laura Arrillaga-Andreesen, MBA ’97, as a particular influence. “I learned all these frameworks and approaches that exist in the business world also exist in the nonprofit world and it was fascinating. What theory of change was, thinking about impact assessment, about opportunities to use private sector tools for social good. Some of the frameworks, tools, and perspectives I used in those classes I still use today.”

Patel went on to a prolific career in impact investing. Today she is a managing partner at Rethink Impact and sits on the boards of several mission-driven organizations. For the past decade, she has taught the course Investing for Good at Stanford GSB. “I want students to know that we need our best minds and our greatest talent thinking of new ways for business, government, and philanthropy to collaborate on new approaches that can create transformational impact at massive scale,” she says. “I think that’s the GSB’s job — to equip students to thrive in these multisectoral opportunities, whether it’s working on one solution that can reach tens of millions of people or an innovative, place-based approach that can be replicated in many other places.”

Likewise, Jackson returned to Stanford GSB as a lecturer in management, part of a “pay it forward” ethos that he says permeates the social innovation field. This year, he is teaching, along with lecturer Matt Abrahams, Essentials of Strategic Communication. “CSI played a critical role in my success — as a social entrepreneur and a leader more broadly,” Jackson says.

More than 50 years after Arjay Miller dreamed up a program that could inspire and enable business students to attack societal problems, those problems have only gotten more challenging. Business leaders must meet the moment with a clear-eyed view of the complexities involved, the agility to move across boundaries, and the tenacity and humility to always keep learning. “The relationship among business, government, and society is only going to become more important,” says Malhotra. “CSI represents the frontier of management education as our understanding of stakeholder capitalism evolves over time.”

Patel points to General Motors CEO Mary Barra, MBA ’90, as an exemplar of these ideals. “She is taking a 100-year-old-plus organization and transforming it to be responsive to the climate constraints under which we all operate. I’m hoping the GSB is producing the next generation of Mary Barras.”

“The social sector alone will never ever create the scale that’s needed to address the biggest issues of our time,” Patel says. “If we rely on philanthropy alone, we will never get there. It’s that collaboration with the commercial sector that’s vital to address these massive and urgent problems.”