The desire to make a difference comes from within
By definition, entrepreneurs are good at seeing opportunities. RSM alumnus Marcello Palazzi (MBA 1993) is no exception. Over the past 26 years, the serial entrepreneur has been involved in more than 300 projects in 30 countries. The opportunities that specifically interest Palazzi tend to be unique and are found in the gap between what society needs and what government, companies, and philanthropies are structured to provide. It’s a gap that includes some of the world’s most complex problems.
Story by Bennett Voyles
Finding the right kind of opportunity can be a challenge, Palazzi allows, but an interesting one. ‘It is of course not always easy to do it in a sustainable way financially but it can be done. This is where in a way the fun is, in the sense of being able to build a model that works financially and also works in providing for essential societal needs.’
The 58-year-old Italian-born Amsterdam resident has been trying to bridge that gap since his days as an economics and business student in the 1980s and early 1990s, back when most business schools still preached the dogma of shareholder value.
Economics and ethics?
The son of an entrepreneurial engineer and the grandson of a judge, Palazzi grew up taking part in family discussions that ranged broadly, drawing no clear lines between business, ethics, or ideas. When he started studying economics as an undergraduate in the United Kingdom, he found he could not easily separate business from the social realm. ‘The economics didn’t make sense to me. I was looking for “hey, where are ethics? Where are values? Where are things like welfare and well-being?”’ he says.
Meanwhile, his family’s far-sightedness served him well: while he was still in his early 20s, Palazzi and his father built a business in environmental diagnostics, a service that served both his father’s concern about environmental destruction and filled a regulatory need for better tests.
The ‘civic economy’
It also led him to a pioneering dissertation at London Business School, where he wrote one of the first studies about how business and the non-profit sector might work more closely together. His thesis showed the Save the Children fund how it could work with private companies to promote child welfare, giving the global NGO a blueprint that it continues to follow today.
Next came two books on what Palazzi calls “the civic economy”, and in 1989, while an MBA student at RSM, he co-founded the Progressio Foundation with clean-tech investor Paul Kloppenborg. ‘We were rejecting this black and white thinking that business is there to make money, government is there to promote the public good, and society is there to be like a kind of activist or watchdog,’ he says.
Benefits for share- and stakeholders
As out of step as that might have seemed with the times, Palazzi insists that the economists were actually out of step with reality. Deep down, he argues, most people have always thought about multiple stakeholders. ‘Virtually everyone in society, everyone who is in a more or less position of leadership or entrepreneurship, is both thinking about themselves and their private interests but also about the interests of their community, their society, or the world,’ he argues. ‘In a way it’s very simple but I think it has profound implications for economics,’ he says.
For the past three years, Palazzi has concentrated mostly on spreading the Benefit Corporation gospel. B-Corps, as they are generally known, have a special kind of corporate structure that focuses on providing benefits not just for shareholders, but also for all its stakeholders, including society.
Following your North Star
B-Corps’ broader emphasis comes easily to Palazzi. Unlike many business school students, Palazzi never focused on building a conventional career. ‘I never thought about a career,’ he says. ‘Even when I was 26-27 years old, when I went to business school, I wasn’t looking for a career. I was looking to do something meaningful in my life.’
But not having a career in mind doesn’t mean he ever lacked a sense of direction. ‘I have three kids ... I’ve been trying to help them navigate their early working years, and I tell them it’s very important to have a trajectory. I always had a trajectory – I always knew that my space was this civic economy space, between economics and ethics or entrepreneurship and ethics. Every day, even this morning, I woke up and I was reading stuff and I still say this is really my thing. If you have a clear sense of direction, then you can do anything, because basically you’re always following your North Star.’
For future social entrepreneurs, Palazzi recommends a double education. First, get a good business education. ‘I think that economics, entrepreneurship, business, in a way, are fantastic preparation for life because basically, once you know a bit of economics, a bit of entrepreneurship, you can do anything – you can run a restaurant, you can sell a country, you can do anything.’
Second, go see the world. ‘A lot of business people are not knowledgeable about societal issues, about what goes on outside the strict confines of business,’ Palazzi points out. ‘If you have that kind of wider understanding and knowledge, there are lots of opportunities out there.’
Learn more about the activities of the Progressio Foundation.