In Search of the Hybrid Ideal

In Search of the Hybrid Ideal

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In Search of the Hybrid Ideal

The “hybrid ideal” – the hypothetical organization that is fully integrated—everything it does produces both social value and commercial revenue.

This piece, from the Stanford Social Innovation Review, is an excellent look at hybrid organizations. It provides some good introductory background and then concentrates on four main challenges to running these types of organizations:

* Legal Structure

* Financing

* Customers and Beneficiaries

* Organizational Culture and Talent Development

Those of you who know me, may also know that I spent 9 years of my life running precisely this type of organization – a mission-driven technology consulting shop. The challenges that this article outlines are bang-on.

This is a deep dive, and not for everyone, but if you are interested in understanding this burgeoning area, I highly recommend you read this all the way through.

“In Search of the Hybrid Ideal”

By Julie Battilana, Matthew Lee, John Walker, & Cheryl Dorsey

#socialenterprise #mission #soulfulcompany #socialchange


  1. Between your posts, and numerous others this week, a lot of pieces of the puzzle that is the organization of the future have fallen into place, Gideon Rosenblatt . This will become a massive social movement.

  2. Gregory Esau I am really betting on that! 🙂

  3. You and me both, Gideon Rosenblatt !!

  4. I respect the thought behind this article. I also recognize that systems and norms for allowing these types of organizations to thrive are evolving. Every story is great.

    Maybe I’m too cynical, but I continue to think that these types of org models will continue to be niches and will still generate only a small fraction of both GDP and social benefit delivered. That doesn’t mean that it’s a bad idea at all, I just think that the challenges outlined in this great article multiply exponentially at scale.

    Respectfully, my opinion is offered, of course. And it may be only mine.

  5. Odds are, you may very well be right, Jeffrey J Davis . And if we continue to use the course grain measure of GDP (and it is a very course grain measure), that could very well hold true.

    However, one of the many tangents to this movement is the growing need for different measures and metrics of economic well being, and the GDP is not an effective measure for that.

    I am at heart, a market capitalist. I believe in it (and hopefully those that have read me here over the last nine months know I have a very nuanced, layered view of ‘market capitalism’!), and one reason why is it’s ability to transform and adapt to changing cultural conditions.

    The wild card in all this is social networks, where personal empowerment and heightened awareness for both a need for change and ability to drive that change is growing. And ultimately, this is very much a market phenomenon, and if enough people would rather be part of what can be a eco-system economy, then entities like the hybrid organization will flourish.

    There are a lot of depends in these possible scenarios, but I personally love the idea that nothing is stopping me from being a major force in driving this change.

  6. Jeffrey J Davis – no, I think you are right on in your assessment. Access to financing seems to me to be the real choke point. I mean to make this happen, it will be important to be optimistic and bullish, but I was just talking to a friend yesterday who does a lot of angel investing and we were talking about the considerable obstacles around getting private capital interested in these kinds of investments.

    In my view, solving this issue of access to capital is the key nut to crack.

  7. Gideon Rosenblatt I think the only viable source of serial funding will be from current / former entrepreneurs who came upon FU money somehwere along the line and have developed a balanced scorecard / hybrid stakeholder mindset and really passionately want to fund success to see this vision realized. Alternatively, you could imagine smaller tranches of institutional pension money going to these types of firms.

  8. Socially responsible equity funds are growing rapidly.

    “Socially responsible investing is a booming market in both the US and Europe. Assets in socially screened portfolios climbed to $3.07 trillion at the start of 2010, a 34% increase since 2005, according to the US SIF’s 2010 Report on Socially Responsible Investing Trends in the United States. From 2007-2010 alone, SRI assets increased more than 13%, while professionally-managed assets overall increased less than 1%.[11] As of 2010, nearly one of every eight dollars under professional management in the US is involved in socially responsible investing—12.2% of the $25.2 trillion in total assets under management tracked by Thomson Reuters Nelson.

    Research estimates by financial consultancy Celent predict that the SRI market in the US will reach $3 trillion by 2011. The European SRI market grew from €1 trillion in 2005 to €1.6 trillion in 2007.[14]


  9. Drew Sowersby I think you are onto the concept but I cnat fully crystallize it in my mind. A storm of niches spreading virally could somehow have a meaningful impact if their is a multiplicative network effect. We need to build the infrastructure to foster and enable that multiplier.

  10. Gregory Esau, interesting stats. Tks. The key question for me is around startup funding. You actually have some real leaders in this area in your neck of the woods:

  11. I was making a greater point, Gideon Rosenblatt , that there is not just a groundswell of people (bottom up, we’ll put them as) who want the purpose and meaning of working with the hybrid style of organization, but also those who want their investments to go towards socially conscious hybrid styles of organizations.

    While I was writing on the premise of existing organizations (financial in the graphic) as moving towards hybrid, with support data that again investors are growing for this type of model, the data also supports the long term viability of hybrid model. For early investors, that is important if we are talking start ups.

    More importantly, however, for attracting the talent that will make these work. Increasingly early investors (angels, VCs and so forth) are more looking towards the quality of the team that are behind the business concept, and the systems they use.

    As a member of Vancity, I am very proud of their role in investing in the community, Gideon, and one of the many reason I use Vancity rather than a ‘bank!

  12. Gregory Esau and Drew Sowersby – I’m hoping that some combination of the bottoms up funding becomes more feasible for the startup realm. I have not been keeping track of what’s happening with the crowd funding legislation here in the US and need to follow up on that:

    Jeffrey J Davis – what you’re saying about successful, value-driven entrepreneurs being a powerful driver of this kind of initial funding sure maps to the reality I see in the Seattle/Portland area.

    Gregory Esau – yes, you have something very special there with Vancity. I can’t remember the gentlemen’s name, but I saw someone from Vancity speak at a BALLE conference around this time last year up in Bellingham and was really impressed with this vision and way of thinking. Do you know the folks at Renewal Partners? Pretty amazing too…

  13. When I get some more cohesive momentum, Gideon Rosenblatt , I will be looking to connect to the Vancity group in search of collaborative overlaps.

    I will have to look into the Renewal Partners, thanks for bringing them to my attention!

  14. Gregory Esau – yeah, Renewal is a great crew.

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