Tuesday, December 21, 2010

For leaders: balancing care with candor

By John C Maxwell

Every person makes mistakes at some time in the workplace. Everyone needs someone to come alongside them to help them improve. If you’re a leader, it is your responsibility and your privilege to be the person who helps them get better. That often begins with a candid conversation. But before you have it, it helps to ask yourself what the nature of the problem might be.

My friend Sam Chand says that when he is having difficulty with a person he asks himself one simple question, “Is this person a can’t or a won’t? Can’t is about abilities. We can help these kinds of people in most cases—not in all cases, but in most. But won’t is about attitude. If the issue is attitude, the time to let that person know there is a problem is now, because here is the deal: we hire people for what they know and fire them for who they are.”

I believe that people can improve their attitudes and their abilities. And because I do, I talk to them about where they’re coming up short. If you’re a leader and you want to help people, you need to be willing to have those tough conversations. So how does a leader handle being relational while still trying to move people forward? By balancing care and candor.

           Care without candor creates dysfunctional relationships.

           Candor without care creates distant relationships.

           But care balanced with candor creates developing relationships.


Here is how care and candor work together in leadership:

Caring Values The Person While Candor Values The Person’s Potential

To lead successfully, it is important for you to value people. That is foundational to solid relationships. Caring for others demonstrates that you value them. However, if you want to help them get better, you have to be honest about where they need to improve. That shows that you value the person’s potential, and requires candor.

If you’re candid with someone but with their benefit in mind, it doesn’t have to be harmful. It can be similar to the work of a surgeon. It may hurt, but it shouldn’t harm. As a leader, you must be willing and able to do that. If not, you won’t be able to help your people grow and change.

Caring Establishes The Relationship While Candor Expands The Relationship

The things that usually help to establish a relationship are common ground and care. But those things usually aren’t enough to make a relationship grow. To expand a relationship, candor and open communication are required.

Most leaders I talk to have a difficult conversation that they know they need to have but are avoiding. Usually they are reluctant for one of two reasons: either they don’t like confrontation, or they fear that they will hurt the person they need to talk to. But if a leader can balance care and candor, and the follower responds with grace and willingness to grow, it will actually deepen and strengthen the relationship.

Caring Defines The Relationship While Candor Directs The Relationship

Solid relationships are defined by how people care about one another. But just because people care about one another doesn’t mean that they are going anywhere together. Getting the team moving together to accomplish a goal is the responsibility of the leader, and that often requires candor. My friend, Colin Sewell, owner of several auto dealerships, said to me, “Leaders have to make the best decisions for the largest group of people. Therefore, leaders give up the right to cater to an individual if it hurts the team or the organization.” If you want to lead people well, you need to be willing to direct them candidly.

Caring Should Never Suppress Candor While Candor Should Never Displace Caring

The bottom line, which has already become very clear, is that good leaders must embrace both care and candor. You can’t ignore either. So to help you strive to keep the balance between the two, I’ve created a caring candor checklist for working with people. Before having a candid conversation, make sure that you can answer yes to the following questions:
  • Have I invested in the relationship enough to be candid with them?
  • Do I truly value them as people?
  • Am I sure this is their issue and not mine?
  • Am I sure I’m not speaking up because I feel threatened?
  • Is the issue more important than the relationship?
  • Does this conversation clearly serve their interests and not just mine?
  • Am I willing to invest time and energy to help them change?
  • Am I willing to show them how to do something, not just say what’s wrong?
  • Am I willing and able to set clear, specific expectations?
 
If you can answer yes to all of these questions, then your motives are probably right and you have a good chance of being able to communicate effectively.

As a young leader, I found it very difficult to have candid conversations with people. I often postponed those difficult talks, hoping that an issue would go away. Seldom did that happen. Maybe you relate to that. If so, you’ll be glad to hear that you’re normal. However, you need to know that candid conversations are a leader’s responsibility and must be done—but in the right way with the right attitude. When an employee is hired to get a certain job done and doesn’t, that hurts the team and the organization. And it’s then time for the leader to take action. That can be very hard; but in the long term, it’s best not only for the organization, but also for the person who needs to hear what’s not going right. If your goal is to help the individual, improve the team, and fulfill the vision of the organization, then this is the path you should follow as a leader.

Adapted from my upcoming book, The Five Levels of Leadership (October 2011)
 
John C Maxwell

Wednesday, December 15, 2010

The distance between ordinary & extraordinary is shorter than you think!

By John C Maxwell

What do you think of when I say the word “ordinary?” These are the words that come to my mind: Common. Usual. Normal. Boring. Average. Something you see everyday.

What about “extraordinary?” I think of: Amazing. Incredible. Uncommon. Unusual. Special. Above average. New.

In the English language, only five little letters separate “ordinary” from “extraordinary:” extra. And while “extra” can be defined as “outside,” in English it also means “just a little bit more.”

The word we use is not as important as the idea: the distance between ordinary and extraordinary is shorter than you think. For too long, people have thought there was a huge gap between normal and special. They’ve assumed that “above average” was far above “average.” Unfortunately, once you believe that, it’s easy to conclude that since you’re “average,” you’ll never be anything else; that there’s no way to claw your way up to “above average.”

I’m here to tell you that you’ve made the gap too wide. Let me illustrate. If you’re an average reader, you’ve taken 2-3 seconds to read this paragraph so far. Two lines of text = one second. How much more would you be able to read in another second? Another line? Not very much, but really, what difference does a second make?

Well, in some areas of life, a second makes all the difference in the world. Have you heard of Usain Bolt? Often referred to as The Fastest Man in the World, Bolt is the current world-record holder for the 100-meter race in track and field. His record for that race is 9.69 seconds. In the Olympics, he won the gold medal racing against seven other men in the finals. What was the time difference between his time and that of the silver medalist, Richard Thompson? Thompson ran the 100 meters that day in 9.89 seconds. The difference between gold and silver was .2 seconds. The “fastest man in the world,” the winner of that race and world-record holder, ran 100 meters in 2/10 of a second less than his nearest competitor. A second – or even a fraction of a second – CAN make a huge difference.

In life, just as in sports, an extraordinary performance is often separated from an ordinary one by the slightest of margins. What if your ordinary life could become extraordinary with only the smallest of changes? Would it be worth trying?

Here are some “extras” that can help you close the gap between ordinary and extraordinary:

A little extra effort. There is a price to be paid for achievement. Sometimes it’s a large price. But sometimes just a little extra effort can yield significant results. What price are you willing to pay for success?

A little extra time. To give something time, we need something other than perseverance. We need patience with the process of growth. I believe that many of us overestimate events and underestimate the process. But we’ve got it all wrong. As I wrote in the Law of Process in The 21 Irrefutable Laws of Leadership, leaders develop daily, not in a day.

A little extra help. I love this saying: “If you see a turtle on top of a fence post, you know he had help getting there!” Why do I love it? Because I’m a turtle on a fencepost. I know that I didn’t get to where I am in life on my own. I’m just not that smart, gifted, or fast. The truth is that those who reached “extraordinary” had help getting there. And many types of success can only be achieved with help. If you refuse to ask for – or accept – it, you limit yourself and your work to a lower level of achievement.

Remember that ordinary and extraordinary are not far apart. If you accomplish just one of the above “extras,” your work will begin to be above average in that area.

If Ordinary People …

              Gave a Little Extra Effort,

              Spent a Little Extra Time,

              Sought a Little Extra Help …

                          They Would Become Extraordinary!

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Sunday, December 12, 2010

Top 5 funding mistakes by entrepreneurs – By Adam Hoeksema

– Adam Hoeksema is the founder and CEO of startup consultancy firm Executive Plan This article appeared on Under30CEO. The views expressed are his own. –

For most entrepreneurs these days, funding is nearly impossible to come by.

According to the report titled, “Important Things for Entrepreneurs to Know about Angel Investors” and distributed by the Angel Capital Education Foundation, only 1 to 4 percent of applicants successfully raise angel investment capital. So before you ruin your chance at securing investors, make sure you have not committed any of the following deadly mistakes.

1. Wait until you need it. So many entrepreneurs make the mistake of waiting until they need the capital “tomorrow” to begin the process of seeking funding. Make no mistake about it, the process of raising capital can take months and months. Even a simple loan will require enough paperwork to kill a small tree. Ironically bankers and investors are more likely to provide you with additional capital when you don’t need it. So don’t wait until you have an immediate need to begin the funding process.

2. Submit a full business plan. Another great way to get your funding application thrown in the trash is to submit an unsolicited, full business plan. An investor or banker is not going to waste two hours to read through an entire business plan with your initial funding request. Submit a short executive summary, then if you are asked to submit a full business plan – great. Just don’t start with your business plan.

3. Claim “conservative” projections. It can be a major turn off to some investors and bankers when you call your financial projections “conservative.” Of course you think your projections are conservative, but the fact of the matter is that many, if not most, businesses fail within a few years of launch. If every entrepreneur’s projections were truly conservative, then why are so many small businesses unsuccessful at reaching their projections? Don’t let yourself sound ignorant. Simply state your projections and let the bankers or investors make their own judgment.

4. No next step. Maybe you get a chance to submit an executive summary to a potential investor or even recite an elevator pitch to an interested banker. This is a golden opportunity that can be worthless if you fail to outline a clear next step. For instance, in your executive summary you should request a meeting or a phone call as a clear next step. If you simply end your elevator pitch without a clear next step, your audience will quickly forget your funding needs.

5. No follow up. Don’t just assume that a potential investor will follow up with you if they are interested. They may want to gauge your commitment by waiting for you to follow up. Give the investor a couple of days to review your executive summary, but make sure to follow up before you fall of their radar screen.

Keep these potential deal breakers in the forefront of your mind as you begin the funding process for your small business.

Courtesy: Reuters Blogs

Friday, December 10, 2010

The Art of Social Entrepreneurship

By DIANA MIDDLETON

Since Jerome Engel joined University of California at Berkeley's Haas School of Business in 1991, the entrepreneurship expert has seen social entrepreneurship evolve into an increasingly attractive prospect for students. These kind of ventures aim to pair profits with societal impact. Lately, says Mr. Engel, who now chairs the New Venture Creation and Venture Capital Program at the school, the school has seen more students participating in social entrepreneurship competitions and enrolling in classes on the topic. Mr. Engel spoke with Wall Street Journal reporter Diana Middleton about why social entrepreneurship is snagging the attention of M.B.A. students – and what schools can do to help them do it well. Edited excerpts follow.

Q: How did social entrepreneurship take off at the school?

A: It all started about 10 years ago. A student asked me about social enterprise, and I said, "The non-profit center is down the hallway." But what the student wanted was a for-profit business that also had a social mission. From there, the leadership and initiative came from the students

Q: How are the social entrepreneurship classes structured? 


A: We have courses that are focused on the topic, but we don't do 'how-to's.' We don't say exactly how to do it. Our classes are more about strategy and finding a worthy purpose. We engage students by showing them how they can use the capitalist model in a powerful way by allocating resources to solve local problems. And we show how to measure that social contribution in a legitimate way.

Q: Is there any evidence to show that consumers or investors will respond to for-profit companies with a social mission? 


A: Customers pay a higher price for a product that has higher personal value, or perceived value. People tend to use their economic power to illustrate personal choices, and people are connecting with doing good. People are increasingly associating their personal values in personal investments. That's because the value we receive isn't just the product, but the intangible. Look at bottled water. There was a product that had no differentiation, but it was sold at different price points based on intangible desires from the consumer. Of course, bottled water is frowned upon right around now.

Q: Is social entrepreneurship benefiting from a level of "trendiness" right now? 


A: There may be a superficial percentage who think it's stylish to care, but the bulk of consumers are substantive. It's important that social enterprises aren't just public relations stunts. People have values, and they want to link those to their identity. Capitalistic ventures that do social entrepreneurship well can deliver a good product while building up a bank account of good will.

Q: Aside from classes, what are other ways Berkeley students get involved? 


A: In partnership with several other schools, we also offer the Global Social Venture Competition. Students come together with real socially-minded projects they are going to pursue and compete to find a way to make it profitable. Students also have to prove and measure the social contribution.

Write to Diana Middleton at diana.middleton@wsj.com

Courtesy of The Wall Street Journal

M.B.A.s Seek Social Change

Enterprises With a Cause Gain Ground on Campus

By DIANA MIDDLETON

During his M.B.A. studies at University of California at Berkeley, Jeff Denby told everyone his ultimate career goal: to start an underwear company.

Soon, professors and classmates at the Haas School of Business began to call him "the underwear guy."

But Mr. Denby—who had formerly worked in industrial design and went to business school interested in supply-chain management—decided early in his program that he wanted to create a company that was about more than just boxers or briefs. In his view, it was critical to create a product that was environmentally friendly and sustainable—and whose sales could help support good causes.
Q&A

This type of social entrepreneurship – that is, building a for-profit company with a social conscious or linked with a social cause – is becoming increasingly attractive to would-be business founders. The idea is to make money while either directly impacting consumers with its services or funneling a portion of profits to charities. Often, these companies employ people or source resources from economically depressed areas of the world that then also benefit from the charitable donations from the profits.

And with an increased interest in socially-responsible money-making, business schools have been pushed to create a whole host of courses and study tracks to help M.B.A. students sort out the best way to pull it off. Schools like University of Oxford, Cornell University and Dartmouth College have all seen increased demand for instruction in social entrepreneurship.

Some administrators say it's a generational progression of business-school students who have grown up more socially aware. Others say a lack of traditional jobs has spurred an interest in entrepreneurial ventures—and the focus on societal impact is partly a matter of trying to escape the stigma of the "greedy M.B.A."

"I think the interest in entrepreneurial ventures with social value [is about] more than the fact that people can't get jobs as easily," says Colin Mayer, dean of Oxford's Saïd Business School in the U.K. "There's also a sort of underlying sense of guilt about what happened during the crisis."

For his part, Mr. Denby, who graduated in May 2008, has long wanted to use his business skills for good. Before Mr. Denby co-launched PACT Organic Underwear as an online-only company in August, he researched all aspects of manufacturing and distribution to make sure his products would be legitimately sustainable, from the labor he employed to the inks used in the garment dye. Then he decided to pair each intricate pattern used on the underwear with a themed charity. For example, 10% of the proceeds from one blue pattern inspired by a Japanese woodcut, go to a marine conservation group.

Mr. Denby says his entrepreneurial spirit was fostered by Berkeley's curriculum. In one social entrepreneurship-focused course, guest speakers would make weekly appearances to discuss their for-profit business models. Mr. Denby also enrolled in a start-up workshop where he thought carefully about what charities to target, he says.

At Oxford's Saïd Business School, students use the Skoll Centre for Social Entrepreneurship to insert these concepts into their business plans. Recent projects include building water purifying systems in Africa and developing Internet banking systems in regions without significant technology infrastructure. Oxford has offered electives in social entrepreneurship through the center for years, but recently expanded its options.

The school also provides a venture fund that students can tap to fund worthy projects. In those cases, the school has a stake in the company—and its success—says Mr. Mayer, adding that the increased focus among students stems from the dearth of traditional jobs in finance and accounting, as well as the malaise surrounding the economic collapse.

"There is a real sense that doing good business can promote real change in economically depressed regions," Mr. Mayer says.

What's more, a for-profit enterprise with a socially responsible backbone is more attractive to nervous investors during economic turbulence than traditional business plans, argues Gregg Fairbrothers, director of Dartmouth College's Entrepreneurial Network at the Tuck School of Business.

"Financing is tough for start-ups," says Mr. Fairbrothers. "For investors to take a risk with you, it helps to have tangible social good coming from it, not just the promise of a fat IPO that will make everyone rich."

Mac Dougherty, a June 2009 Dartmouth grad, is doing just that. He joined forces with two computer science and neuroscience professors to market the services provided by a microprocessor that powers computer servers. The technology uses significantly less energy than its competitors. Not only would the technology be greener, he says, but it could also be useful for developing countries where energy shortages are the norm.

Mr. Dougherty credits Dartmouth with providing ample resources to pursue social entrepreneurship. He honed in on the concept during his first-year project course, and later plumbed the resources at the Dartmouth Entrepreneurial Network and landed a fellowship with the Allwin Initiative for Corporate Citizenship, an on-campus center that aims to instill ethics and a social conscious into the students.

Currently still in its planning phase, the technology company, called Cognitive Electronics, will eventually be marketed to government firms and defense agencies. Currently, they are conducting research for the Navy, which is partially funding the operation. The technology uses only 1% of the energy that current comparable products utilize – but performs as well. But that won't be its only impact. Mr. Dougherty also wants to take the company and its products to Sub-Saharan Africa where cellphone technology exists, but energy deficiencies mean it's not being fully-utilized.

"We could get all this technology into the hands of people, and unlock a lot of potential," says Mr. Dougherty.

Business-school administrators say these types of start-ups can do more than just help alumni launch sustainable businesses, they can also help rebuild credibility of businesspeople on a larger scale, says Joe Thomas, dean of Cornell's Johnson School, home of a Center for Sustainable Enterprise. Last year, Cornell began offering a four-credit course that focuses on the best practices for social change for its M.B.As.

"A few years ago, students came to business school thinking they would get rich right away," Dartmouth's Mr. Fairbrothers says. "But now, I think students are trying to focus on doing reasonably well while doing some good."

Courtesy of The Wall Street Journal

Friday, October 22, 2010

Mzalendo Halisi Initiatives

Who we are, our objectives
  • Twenty Thirty Ventures Ltd. is a not-for-profit transformational Social Enterprise that aspires to engage in activities that are geared towards fostering a socio-cultural order that binds Kenyans by venturing in social cultural activities that are a celebration of being Kenyan. We believe that there is a strength that comes from diversity and from unity and it is time to channel it positively for the enhancement of our Nationhood.

     Inspired by the 4th Guiding Principle of the Kenya Vision 2030 that states “In the pursuit of economic, social and political aspirations, Kenyans shall formulate and adopt a core set of national values, goals and political ideology”, we aim to engage in social ventures that will aid Kenya in developing a universally accepted national set of values and social institutions that primarily foster equity, national unity and cohesion, and the attitude change necessary to combat the twin cancers of corruption and impunity.

    Twenty Thirty Ventures Ltd. recognizes that it is crucial at this stage of national rebirth to set a character benchmark with which current and future generations of Kenyans will vet appropriate leadership and patriotism for the benefit of all. Twenty Thirty Ventures Ltd. aims to primarily engage in programs that achieve the following objectives in Kenya:
    1. Define National Values
    2. Redefine Success
    3. Promote Cohesion, Unity and Conflict Mitigation
    4. Promote Justice, Equity, Equality & Fairness
    5. Promote Mentorship
    6. Promote Gender Parity
    7. Identify and Nurture Talent while fostering an environment where creativity, innovation and hard work are rewarded
    8. Promote National, Cultural and Social Pride and sense of Worth

    Activity Description

    Area of Implementation
    We are inspired by the recognition that unless we radically change the way we do things in this country then Kenya will surely burn as evidenced by the post election violence witnessed after the 2007 general election. Our outlook is national; we aim to roll out our activities in every corner of Kenya.

    Beneficially Community
    It is important to state from the onset that our initiatives will target both genders on a 50-50 basis with a commitment not to discriminate towards either.  While our activities are not specific to promoting gender parity, we intend to do everything in our power to address both genders equally while trying to rectify the situation today where most gender based programs, though noble, are slanted to favor the girl child. It is no secret that youths in violent gangs are mostly male and these need to be engaged in gainful employment.

    Our organization is born of the current state of chaos in the Kenyan society. Besides the post election violence of 2008, most relationships in our society are in a state of flux. This is true to business relationships, social relationships, leader vs the led relationships, teacher student relationships, relationships between parents and their children, spouses, religious leadership and their flock, name it! We boldly trace this breakdown to the lack of managed generational transition; from the first generation of Kenyans who were caught in conflict between modern and tradition norms to the current generation which has largely aspired for and adopted a western way of life. We have not defined methodology for mentoring the youth, and eventually handing over responsibility to them. We believe this situation is both accidental, and by design. We have as a society adopted modern norms wholesale while purging the good tried and tested social systems that exited and worked in our traditional society. There is general lack of respect and trust between individuals, communities and for institutions within the modern Kenyan psyche.

    It is true of Kenya that:

    1.      The education system favors book smart students and is geared towards white collar employment
    2.      Apart from athletics, there exists no structured sport development effort
    3.      There are no structured talent spotting and development efforts
    4.      We have not fully exploited social cultural and leisure activities as a source of livelihood and general wellness of our society
    5.      We have no universal national values and taboos
    6.      Meritocracy is lacking within majority of sectors in the Kenyan society, nepotism is the order of the day
    7.      There is a dire shortage of positive role models for the youth of Kenya be it in political leadership, religious leadership, business leadership, youth leadership, social leadership and all manner of leadership.
    8.      We do not have structured initiation into teenage and adulthood
    9.      There is no structured national mentorship effort for our youth
    10.  There is no structured effort to have youths of different communities interact and integrate, and the current education system that confines youth to their regions of birth during their school years makes it even worse
    11.  Most efforts to fight corruption are perceived to have largely failed
    12.  There is a worrying level of apathy and cynicism among the Kenyan population, especially the youth, towards participating in decision making and activism on matters that impact their daily lives

    For a long time the Kenyan society has emphasized book learning at the expense of other talents. We believe millions of talented youths are idle and living in despair because we lack professional support programs to identify, nurture and monetize these talents. Twenty Thirty Ventures Ltd intends to change this. We believe social cultural activities, recreation activities, entertainment and sports can provide much needed employment for our youth, while providing an outlet for pent up emotions and acting as agent of integration through interaction. We aim to exploit the Kenyan entrepreneurial spirit, the creativity of our youth while taking advantage of modern ICT advancements and prevailing corporate social consciousness of our corporate organizations.

    Twenty Thirty Ventures Ltd. believes that the paramount driver for national cohesion, integration and accelerated growth will be a total attitude change among our people. This attitude change will only be achieved if processes for nurturing and rewarding hard work, creativity and innovation in the Kenyan society are proactively made fair/just and seen to be fair/just.

    In this regard, our proposal tackles the following key areas:
    ·         Conflict Mitigation and Reconciliation
    ·         Good Governance
    ·         Civic participation
    ·         Workforce Development

    Strategy

    Our first ambitious initiative will be the leveling of the playing field. We aim to create a value system for defining the rules of the game by which we will judge the players. 


    Who are the players?
    ·         The Kenyans who go about their daily business to earn an honest living
    ·         The Kenyans who have various unexploited talents
    ·         The Kenyans who yearn for honest servant leadership
    What is the game?
    ·         The creation of sustainable enterprises
    ·         An assurance that effort, creativity and innovativeness in all sectors of our society will be recognized and will be rewarding
    ·         An assurance that corruption and impunity will not be applauded
    ·         Restoration of a sense of hope, togetherness and well being for the Kenyan people
    ·         Restoration of a culture of paying an fair fee for services rendered/elimination of the culture of expecting handouts

          The particulars/specifics of our strategy are currently classified as TOP SECRET. We will post them here presently as we roll out our initiatives.

          These are unchartered waters, but we are determined, and we believe we have the support and the will of progressive Kenyan people is our sail. 

Tuesday, October 19, 2010

Big Ideas: J. Gregory Dees makes the case for social entrepreneurship

Starting today, we're going to check in regularly with big thinkers in the field of social innovation. We want to know what they're working on, what questions they're wrestling with, and what opportunities and challenges they see up ahead for the sector.

First up, J. Gregory Dees—professor at Duke's Fuqua School of Business, director of the school's Center for the Advancement of Social Entrepreneurship, and often referred to as the "father of social entrepreneurship education." He's the coauthor and editor of several books on social innovation, and he's at work on another, due out next spring. Read on for highlights from our conversation.


On why social entrepreneurship is essential for solving social problems: "Social and environmental problems tend to be shifting and complex. To solve them you need context-specific knowledge—as well as creativity and motivation—which is scattered among private citizens. Social entrepreneurship allows us to tap into that."

On government's limitations as a problem-solver: "We don't know in advance what's going to work, which solutions are going to be most cost-effective, which are going to work best in which circumstances. The only way to know that is by have lots of different experiments going on, and that's something governments are ill-equipped to do."

On businesses' limitations: "Many of the large firms that make up our markets are investor-owned and have a responsibility to deliver profits to their investors. But most of the experiments to find solutions to social problems are not going to meet that financial threshold, and that's where we need social entrepreneurship—to fill the gap."

On his current project: "I'm writing a book that argues that social entrepreneurship is just as important to the health of society as business entrepreneurship is for the health of the economy. It's for anybody interested in helping create a healthy environment for social entrepreneurship—and that includes policy makers, funders, educators, and citizens."

On the need (still) to make the case for social entrepreneurship: "Those of us in the field may not realize it, but there are still a lot of folks out there who see social entrepreneurship as nice but not that significant, maybe even as a passing fad. And a related worry I have is that, as new as the concept is, it's old for some folks, and they're looking for the new, new thing—something else, like, say, impact investing. We still have a case to make for why social entrepreneurship is essential."

On social entrepreneurship's Catch-22: "If people assume that social entrepreneurship is marginal, that it doesn't really scale, then they don't make the effort to do the policy changes to get large-scale successes. In other words, they're not going to invest in the ecosytem to support them. And that's a problem. We're going to need the ecosystem if we're going to have large-scale successes to point to. It's a bit of a Catch-22."

On the ecosystem for business entrepreneurship (a telling contrast): "How many businesses would start from scratch and go to scale if we didn't have venture capital? If we didn't have banking and financial infrastructure to support business growth? If we didn't have business schools? We have a very elaborate support structure for business entrepreneurs. How well would they do without it? My guess is not so well. Without something similar for social entrepreneurship, we can't expect to see the same kind of scaling and impact."

On the need for better ways to measure social impact: "We badly need greater clarity and transparency in performance evaluation and assessment. That would give skeptics confidence that we're achieving the impact we're claiming to achieve. But that's a small piece of a larger puzzle. We need improved legal structures, better financial mechanisms, better pipelines for talent, and more directed education and training. We need all of that, and a culture that understands social entrepreneurship and supports it."

On the idea that the U.S. lags behind other countries in social entrepreneurship: "I don't know how to do those comparisons. We're talking about very different contexts, very different social problems and needs. There are some very exciting things going on outside the U.S., and to some extent the pressing needs in other places may open the door to new kinds of innovation, like the use of cell phone technology to solve problems related to rural poverty and to link it to microfinance. But there's a lot of creative, exciting stuff going on in the U.S."

Monday, September 27, 2010

Sunday, September 5, 2010

'Patient' Capital for an Africa That Can't Wait

By THOMAS L. FRIEDMAN
Published: April 20, 2007 New York Times


CORRECTION APPENDED

Last week, I was touring northern Tanzania when our car passed the small town of Karatu and we suddenly came upon an open field splashed with colors so bright and varied it looked from afar as if someone had painted a 30-color rainbow on the landscape.

As we got closer, I discovered that it was Karatu's huge clothing market. Merchants had laid out blankets piled with multicolored shirts, pants and dresses, much of it used clothing from Europe, and were hawking their goods.

This was not Nordstrom. A man with a tape measure dangling from his back pocket and a megaphone in his hand was shouting: ''A thousand shillings for these trousers. It's like giving them away.'' Men and women, themselves dressed in brightly colored native Tanzanian garments, sifted through the mounds of clothing, holding shirts or slacks up against their bodies to see if they fit.

Scenes like this remind you that Africa is neither all tragedy nor all renaissance. It is a diverse continent that's struggling to find its way in the global economy and has both of these extremes, but is much more in a middle place that looks like that field in Karatu: a wild, unregulated, informal, individual brand of capitalism, which we need to channel into formal companies that can grow and scale up, even with corrupt governance.

Africa needs many things, but most of all it needs capitalists who can start and run legal companies. More Bill Gateses, fewer foundations. People grow out of poverty when they create small businesses that employ their neighbors. Nothing else lasts.

Whenever you read about capital flowing into Africa, though, it tends to be from big lenders like the World Bank, which have very strict criteria and work on big projects, or from microfinanciers, giving out $50 to a woman to buy a sewing machine. Microfinance has a role, but many people don't want the pressure of being an entrepreneur. They want the stability and prosperity of a job created by capitalist risk takers and innovators. See India.

In some ways what Africa needs most today is more ''patient'' capital to spur its would-be capitalists. Patient capital has all the discipline of venture capital -- demanding a return, and therefore rigor in how it is deployed -- but expecting a return that is more in the 5 to 10 percent range, rather than the 35 percent that venture capitalists look for, and with a longer payback period.

A good example of what happens when you combine patient capital, talent and innovation in Africa is the Kenyan company Advanced Bio-Extracts (ABE), headed by Patrick Henfrey. He and his partners put together a fascinating group of both white and black African farmers and scientists to build the first company in Africa to cultivate the green leafy plant artemisia, often called sweet wormwood, and transform it into pharmaceutical grade artemisinin -- a botanical extract that is the key ingredient in a new generation of low-cost, effective malaria treatments commonly known as artemisinin-based combination therapies (ACTs). Malaria still kills nearly one million people in Africa every year, more than H.I.V.-AIDS.

From its factory outside Nairobi, ABE is not only processing the feedstock for the drug, but has also contracted with 7,000 farmers, most with small farms, to grow artemisia in Kenya, Tanzania and Uganda. The crop gives farmers four times the financial yield of corn.

''We are commercializing a product that had never been commercialized,'' Mr. Henfrey said. To make it possible, though, the founders had to not only scrape together all their own money, but also had to find investors, like the Swiss drug giant Novartis and the Acumen Fund, a nonprofit venture capital investor based in the U.S., to put up patient risk capital. (Banks demanded collateral that ABE did not have.)

''Those little windows of support make these things happen,'' Mr. Henfrey said. ''We could not have done it otherwise.''

Nthenya Mule, Acumen's Kenya country director, commented to me that the stereotype of Africa is that it is hopeless and just waiting around for the West to come to its rescue. In reality, she added, ''there are positive things happening in Africa, but they are not happening overnight, and some are happening quietly. ABE is exemplary. You will not see it as front-page news, but in 18 months they set up a factory with 160 people interfacing with 7,000 farmers and supplying one of the major pharma companies in the world.

''Those stories need to be talked about. It is critical to see things in action. A pothole in the road does not require a workshop. Fill it. We need a new kind of drug -- let's go out and make it instead of let's talk about it for the hundredth time.''


Correction: April 25, 2007, Wednesday Correction from my last column: H.I.V.-AIDS kills more people in Africa than malaria.

Social enterprise: It takes a network

Social enterprise: It takes a network

Teaching the world to change

Teaching the world to change

Who will sit at table where list of national heroes will be drawn up?

By GITAU WARIGI, gwarigi@ke.nationmedia.com
Posted Saturday, September 4 2010 at 18:22

In Summary
Honours: The new law recognises only three national days



The next national day is Mashujaa (Heroes’) Day, formerly Kenyatta Day, on October 20. It is going to be the first national day celebrated under our new Constitution, which recognises only two other national days on the calendar – Jamhuri Day and Madaraka Day.


It was indeed a great thing to establish a Heroes’ Day. But there are pregnant questions that remain unanswered. Who should be designated a national hero? What exactly are the criteria? And who establish these criteria? There will be plenty of fireworks if this issue is not sorted out well.

 
Some weeks ago, precisely the same problem arose in Zimbabwe when President Robert Mugabe refused to have a trade unionist-turned opposition politician buried at the national shrine in Harare called Heroes’ Acre.

 
It would be too glib to say that the man – Gibson Sibanda – was denied the honour merely because he was an opposition figure. I have problems myself with the supposition that just because you shout a lot against a particular regime in power, and you have been jailed for it, therefore you deserve the same consideration as a Nelson Mandela.

 
Ngugi wa Thiong’o’s most compelling novel, A Grain of Wheat, which was published in 1967, paints a vivid picture of the frantic preparations and the nervous anticipation on the eve of the 1963 Uhuru Day celebrations. Ngugi’s warning about the follies of mistaken heroism was prophetic.

 
Within a few years of independence, Kenya quickly drifted into the habit of rewarding sly but undeserving lackeys and sidelining individuals who bore the real sacrifice.

 
Sure, I often feel Ngugi over-romanticises the Mau Mau heroes, but I am entirely in agreement that the Elder of the Golden Heart honour that is routinely awarded to the ever-changing roster of Cabinet ministers does not in any way define national heroism.

 
Why, to start with, should national heroes always be politicians? Shouldn’t we broaden the definition? Who, for instance, is Jamaica best known for across the entire world other than reggae icon Bob Marley? Isn’t it the same for Pele and Brazil?

 
The search for a new constitutional order and for comprehensive change has been a long process, longer than the 20 years we often cite. Yet the struggle towards Kenya’s self-actualisation as a country has been much longer still.

 
Who should the triumph belong to? The short-termers and self-publicists who imagine any change of government is a “liberation” or those who know the true markers are when something truly historic occurs?

 
And can we distinguish minor heroes who fought localised proto-nationalist struggles from those who had truly national agendas? Should every Mekatilili, Waiyaki Hinga or Koitalel get a statue in the capital city? If we were to examine their philosophies, what would they be about?

 
Most crucially, who will sit at the table where the list of the heroes is drawn up? A committee of self-important commissioners or a diverse company of thinkers and ordinary Wanjikus? How will we ensure the list is not a product of temporary political fads or the self-serving agendas of those holding power?


Let me go back again to Zimbabwe and the controversy there over Heroes’ Acre. I don’t think the brouhaha was because this Sibanda fellow was qualified to be buried at the shrine.
The fracas was really about the fact that the dominant Zanu-PF party has not openly defined its criteria for designating a person a national icon for reasons other than having participated in the liberation struggle.


Speaking of Mugabe, there is contemporary tendency to imagine the nasty things people say about him these days to mean his past liberation record is zero. A lot of African independence pioneers find themselves suffering the same fate today. But, if we start on this path, we will be demeaning Mashujaa Day.


It was Mugabe, after all, who agreed without any hesitation that his biggest political antagonist (and fellow liberation hero), the late Joshua Nkomo, belonged at Heroes’ Acre.


gwarigi@ke.nationmedia.com