Social Entrepreneurship needs good management like anything else

Akula launched SKS Microfinance in my home city of Hyderabad, India and grew it into one of the biggest lenders. In recent time SKS came under the microscope for aggressive debt collection techniques which lead to farmer’s suicides.

I always viewed micro finance with skepticism in the sense that not every poor person can become an entrepreneur with a micro loan and make money to get out of poverty.  Every single developed country and developing countries like China and previously Korea etc moved their citizens out of poverty through jobs and mainly manufacturing jobs. History tells us that especially for the size of populations in India, Bangladesh or African countries that is the only way out.

Akula talks here about his learnings and wants to help social entrepreneurs.

Other than the first round of 3Cs I propounded earlier for microfinance and social entrepreneurship – access to capital, dealing with capacities and costs, the new 3Cs are vital for social enterprises,” Akula said. Asked by audience members on what were the key mistakes he made at SKS, he skirted a direct answer, saying, “I just did not focus on the three Cs: did not focus on culture, code of conduct and control.”

Well, the main thing is that as he said he cannot be naive and run a large organisation. Any organisation whether it be government, not for profit, social enterprise or the private sector need good management. Ask Drucker.

Infact, as Drucker argued that for organisations in the social sector which do not have a bottom line like for profit companies they need more management and not less. Akula should start reading Drucker and others and learn from the history of the last 100 hundred years like all other people who work in the social sector.

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