What a privilege and honor to be invited to the Business and Poverty Conference in Oxford on July 4th and 5th. Made with Joy Partner, Ben Newton, attended the Monday sessions while Made with Joy Founder, Joy Foster, was able to attend on Tuesday. Below is a summary of the sessions that Joy attended. There are many amazing nuggets of wisdom to be found below.
Joy’s personal takeaway:
It was that it was fantastic to spend a day with people who cared so much about eradicating poverty in this world. We applaud the efforts of John Hoffmire and his team for pulling off such a content rich conference on such a complex topic.
Summary of Tuesday, July 5th
Zahid Torres-Rahman (Likedin) (Twitter) (Website) Founder ad Director, Business Fights Poverty – introduced the first speaker. Coming from three generations of inter-racial marriage has given him a deep belief in humanity despite the differences. Over 10 years ago, he and his wife started Business Fights Poverty. Business Fights Poverty breaks down large goals into smaller actionable challenges within specific time frames.
How to dull disasters
Stefan Dercon (Profile) Blavatnik School of Governance, Oxford – Disasters, poverty and insurance – Let’s think about the Ebola crisis. 13,150 people died across three countries Libera, Sierra Leone, Guinea. It took 3 months to declare an emergency, every month that they were late caused about 7,000 people to die. A second example, is the earthquake in Nepal. Another example, Hurricane Katrina. The symptoms are the same pre-disaster, post-disaster issues are always the same. There is no innovation in financial instruments to fund aid, it is effectively stuck in the 12th century, it is fundamentally disasterisly organised.
How do we solve this issue? Insurance? Great thing is that you sort this before hand, you make a credible commitment beforehand. Good, but not ideal for human disasters. Parametric insurance is better which is tied to the level of the disaster (i.e. if the rainfall is x, you will get x). But this doesn’t work. Getting insurance to poor people doesn’t work.
By itself, insurance is not the answer, despite the fact that it has three key ingredients: a fast, evidence-based decision-making process, a coordinated, credible plan for post-disaster action agreed in advance, financing on standby to ensure that the plan can be implemented.
In 1985, Mexico City was destroyed by an earthquake. They created FONDEN. They have a clear list of the local infrastructure, they know what is protected and what isn’t protected. There is a risk pool of money which can be tapped into. Simply having this plan in place add 4% to GDP. To make this work, you bring in the professionals, scientists, implimenters, officials, financiers. They develop systems to transfer the risk and get better protection for themselves.
The opportunity lies in moving away from ‘begging bowls’ to pre-planned response so that we can have really Dull Disasters – get rid of the emotion, make them less impactful, less hurtful. Dull Disasters? The book is coming out in 2016.
on Creating Employment
Abdulrahman Al Dabal (CEO, GAS Arabian Services & Budget Rental cars 10 cars at start up to 32,000 cars today) and Alex MacGillivray (Director of Development Impact, CDC Group) on Creating Employment – Alex finds employing people as a huge privilege. Thinking back in his career, people enjoy hiring until they get to about 49, but when they hit 50, it starts getting more difficult. It does seem that there is a diminishing return after 50 people.
Abdulrahman feels lucky that he has been able to employ people in really impoverished areas. Giving people jobs and pulling them out of poverty is a special kind of satisfaction.
Alex spoke about the factory wages in Bangladesh, turnover is quite high, that said, women will come back after having children which to HR in the factory, proves that the jobs are really valued. The wages aren’t high by comparative standards, but high by local standards. Unfortunately, in Ethiopia, the wages are even lower and not regulated, so companies are now moving to Ethiopia for the cheaper price.
John Hoffmire asked the speakers what kind of appreciation comes back to entrepreneurs who employ people in third world markets? Alex spoke about a commodity business in Tanzania. He employed a lot of women in his factory, this changed the way men behaved (for example where they went to the loo). When Alex asked if he had considered employing diabled people, the factory owner said he could, but no one had actually asked him to do this.
John Hoffmire asked Abdulrahman to talk about a child who benefited from employment in a third world country. Abdulrahman spoke about one of his employees who worked his way up to an assistant vice president. About 6 years ago, Abdulrahman was invited to a celebration for this employee’s son who was that number one mathematician in India and East Asia. Then 2 years later, the employee’s daughter was the number one mathematician. The children now will be attending major universities in the US.
Question from the audience with regards to how to educate consumers so that they can make decisions about who they purchase from. Abdulrahman suggested that awareness can be spread through social media and pressure can be put on the governements to make better environment for workers.
Another question from the audience touched on the true impact of CSR (Corporate Social Responsibility). Inside Saudi Arabia, many companies don’t employ women. There was some push back as they don’t believe that there is a place for women in the workforce. One of the clients that they worked with, had about 5% of women on their staff. CDC built in a series of awards for companies who focused on employing women, in a 5 year period, they trebled the number of women in the workforce and they’ve now increased the workforce to 15%. India has a 2% CSR mandate and it isn’t necessarily being used positively or strategically.
Breaking Generational Poverty
Don Barden, Behavioural Economist & Author of the Perfect Plan (Linkedin) and Rupert Younger Director, Corporate Reputation Centre, SBS – The conversation started around generational poverty. Rupert spoke about how it comes down to the stakeholders. In the case of McDonald’s, they are making great stides with their new CEO in realigning the priorities of the stakeholders to benefit the employees.
Don Barden focused on the top 1% elite who ultimately ‘serve others’.
‘If you want to eliminate poverty, stop studying poverty, start teaching a new mindset, the mindset of servitude. Who you are is more important than what you do.’
Opportunities for change lie in creating safe environments, because when people are scared, they aren’t able to be who they are or express who they want be.
Rupert asked the question, ‘How do change the way you are?’ especially when you are dealing with multi-generational mindsets. Don said breaking generational mindsets is so difficult.
‘The impact of a generation lasts for 6 to come.’ – Don Barden
In the third world, so many people don’t believe that their children’s lives will be better than their own. Rupert disagreed with this, in particular because of the advancements of technology. Businesses, he argues are returning to the fundamentals of ‘Why are we doing what we do?’ He argues that there is a shift in business mentality from ‘making money’ and that money should be an outcome.
Don Barden spoke about Conrad Hilton, grandfather to Paris Hilton, he touched on his initial intention for the Hilton Hotels was to create a safe environment for people to travel around the world. What is reflected in Paris Hilton, compared to what her Grandfather’s original vision, is radically different.
Don gave the story of Chick Fil A, a company which closes on Sundays because they feel that everyone deserves a day off. They are a company that focuses on serving other people. After a mass shooting on a Saturday night, Chick Fil A opened on a Sunday morning and served people who had been up all night. They were a company focused on serving.
Rupert was asked to speak about taking in Refugees. He came from the view point of ‘Why wouldn’t you offer a space to a refugee?’ The process itself slowed down so much through various hoops that are in the way and they still, a year on, don’t have a refugee in their home.
Do you want to eliminate poverty? Work out who you are, that is the one thing you can rely on. 10 years from now, you’ll be working in industries that don’t even exist yet. – Don Barden
Question from the audience – what are the true values that businesses should embrace? Don Barden said companies should ask ‘What are you doing to serve other people?’. He spoke about the ‘golden rule’ – which isn’t ‘Do unto others as you would want them to do unto you’, rather ‘do unto others as they would want you to do unto them.’ Rupert mentioned the ‘Rule of St Benedict‘, rules written down in 500 AD about how to run a monastery. When dealing with day to do day, the rule suggests to consult the elders. When dealing with the longer term strategy, the rule suggests consulting the younger people.
Another question of the audience was about changing people’s mentality, sharing stories on social media is a key influential thing you can do.
The economics of poor decision making
Mungo Wilson, Professor Said Business School and Terry O’Shaughnessy, Professor of Economics, University of Economics – Mungo spoke about the consumer and how the businesses exploit consumers who are making bad decisions. He spoke about candy at the checkout, mortgages and gym club membership. Phising for Phools is a great book on the economics of poor decision making by businesses and politics.
Question from John Hoffmire – ‘What happens when people’s children are hungry? Are people facing poverty more likely to make bad decisions?’ Terry argued that we need to find inspiration from the right things that people make the right decisions and not always focus on the negative decisions that people make. He spoke about Wales and the issue that they face in that they were highly subsidised by the EU. Despite this, they voted against remaining in the EU. Why would they stay in this part of Wales, which is rife with drug use and poverty? They have housing, they have a social network.
There is an ‘Assumption of Common Knowledge’ which assumes, ‘I understand the rules of the game and that I am trying to win’ this compounds because you make a second assumption which is that ‘I understand the rules of the game and that I’m trying to win and I understand that you understand the rules of the game and are trying to win.’ and this goes on and on. The problem is, not everyone is playing to win in reality.
What does the regulator do to protect people from themselves and businesses from exploiting people? Terry said that regulations against zero hours contracts for example would help shift the risk back to the corporations which has now shifted to the employee. Mungo said that he doesn’t believe a regulator needs to be involved, that it could be worked out between the companies and the employees, he referenced the book ‘Who Gets What and Why‘ – saying he agreed with Terry that regulators can help, but it is really about the mechanisms that are used. Terry argued that regulators should bring in ‘expert thinkers’ who are thinking hard about mechanisms which can be improved – for example, he told the story of the British economist from Oxford who spent a lot of time thinking about auctions, which, on the surface aren’t very interesting to most people, however, when it came down to auctioning the G3 mobile network, he was able to generate more than £21 billion for the UK tax payers. This was a great example of slow thinking that paid off when it mattered.
Social Impact Investing
Mohomad Amersi, Founder, Inclusive Ventures Group (website) – When Mohomad arrived at SAID to do his EMBA, he was primarily involved 80% in for profit ventures. The EMBA opened up his eyes to the social impact aspect of business. People. Planet and Profits are the three Ps that governments and companies are looking at. There is really no space in which all three work in harmony.
Mission of the Inclusive Ventures Group:
It starts by standing with the poor, listening to voices unheard, and recognizing potential where others see despair.
It demands investing as a means, not an end, daring to go where markets have failed and aid has fallen short. It makes capital work for us, not control us.
It thrives on moral imagination: the humility to see the world as it is, and the audacity to imagine the world as it could be. It’s having the ambition to learn at the edge, the wisdom to admit failure, and the courage to start again.
I + Deals = Ideals – Mohomad spoke fervently about social enterprise and the need for charities to come away from funding and move more towards sustainable solutions. One option he spoke about was a company they invested in called Rural Shores, a BPO enterprise (Business Process Outsourcing). He also spoke about Bridge International Academies, who have a very technological way of training teachers and which is currently the largest school organisation in Africa, and soon the world. Both investments are going very well.
Jarrod Ormiston, University of Sydney and Richard Barker, Professor, Said Business School – Small organisations argue that they don’t have the resources to measure their impact, however, they are so close with the people that they work with that they could pull their impact out if they knew how it was going. With larger organisations, you find that people in the organisation might be further away from the impact.
Inevitably, when you get into social impact measurement, there will be difficulties. Richard went to a bank a couple months ago, they had created a narrative about their social impact which suited them, however it was just another way of talking about lending. If you look at the WWF (World Wildlife Foundation), the purpose is social impact, whereas with a bank, the purpose isn’t social impact, it is making money.
There was a discussion of what percentage of investment should be invested in measurement, the suggestion that was made was about 10% of the investment should be put into measuring impact. This could be problematic for a new company, in which their investment matches their revenue and effectively they are putting 100% of their profit into measurement, however, over time the amount invested in impact measurement should come down.
It is possible to get social impact measurement wrong. Embedding a strategy for measuring it as you go along and made informed decisions based on data in real time as opposed to consultants who are measuring impact looking backwards over a one or two year period.
There was a discussion of standardization of measurement metrics, the point made was that what works for one organisation, may not necessarily work for another organisation. For example, in the UK, a social entrepreneur could spend £200,000 to put 24 unemployed people through a one year coaching and training programme while in Africa, with the same amount of spend, a social entrepreneur could distribute £5 million condoms.