Center for Social Innovation

Politically radical social workers didn’t expect to be working in a bank any more than white-collar bankers expected to be holding meetings in a crowded public market. The microfinance loan officer is a unique sort of professional, and when commercial microfinance began, there weren’t any of them. New types of hybrid organizations always have to make up institutional culture from scratch. “When you don’t have a ready-to-wear model for how to function and you’re trying to combine these divergent logics, two key issues are ‘Who should you hire?’ and ‘How do you socialize them?’ to make money without losing track of the social mission,” says Julie Battilana, assistant professor of business administration at Harvard Business School.

Two of the first social development NGOs to transition into commercial microfinance organizations in the early 1990s—both in La Paz, Bolivia—handled the tension in different ways, and with differing success. At Banco Solidario (BancoSol), a visionary leader named Francisco “Pancho” Otero hired seasoned ... Read more