This Aid Band-Aid was designed by Daniela Kon and her team at Deeda Productions for our beta website of “Investing Time in People“.  Check it out:

The website’s function right now is to just hold the space for lessons and stories from people who have experienced the impact of development work with a focus on human capacity building and “investing time in people” (as opposed to giving things away). All of us involved in this project feel that we have made mistakes in the way that we have given our time and money and, by sharing what we have learned, hope to influence positive changes in how others approach social sector work. We’re not sure if we’ll take this further, turn it into an ad campaign, or partner with other organizations, but for the time being, this site is holding the space for all of those possibilities. If you are interested in this work in any way, be in touch! In the meantime, feel free to pass on this band-aid image to anyone who you think might need to be reminded to think differently about aid!

“People don’t buy what you do, they buy why you do it,” says Simon Sinek in his very popular TEDx talk. And he’s right. People buy thy WHY. The thing is… this is a big problem in development work! People buy the WHY – which means they are fueling good intentions, not necessarily good impacts. Here are some thoughts about this that our team at PEPY  & PEPY Tours put together via video (thanks for the animations, Wei!):

Selling the WHY works for companies selling products or services, like in Simon’s example, Apple. If Apple sells their WHY – like “Being Different” – people can get on board with that. They buy into the WHY and then they buy the product. But if the WHAT fails (ie: if the product breaks, isn’t really all that “different” or just doesn’t fit the person’s need), then the person wont buy from that company again, and in today’s world, they’d use social media to let all of their friends know not to buy it either.

But if the WHAT fails in development work (ie: people really weren’t “saved” from XYZ disease, kids didn’t show up to the school, the well as broken, the micro-loans caused more debt than gains in wealth, etc), the donor who was so moved to fund the project because she believed in the WHY sometimes never finds out. And when the annual collection information touting the WHY of the organization ends up in her inbox again, she might send another check, again, and again, and again….

So we need to stop buying WHYs and start buying HOWs. And if donors start buying good HOWs, then NGOs will start selling their HOWs, and we can use our fundraising for more education, rather than emotions fueling good intentions.

Pass this on if too want to be part of a HOW and IMPACT focused movement.

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Pssst – we have some beta info up on www.investingtimeinpeople.org – a loose collection of people (like you?!) who share similar ideas about development work. We are looking to apply for a grant that is coming up in a few months with regards to creating an ad campaign around the HOWs of high impact development work. Want to be involved? Drop a note!

In business school you are surrounded by people who believe in the power of markets. There are people in my class who are passionate about freeing markets, about scaling enterprises, and about generating profits. Yet some of those SAME people are advocates of giving things away in development work. I have had countless discussions with people who see “aid” as the only way to help “the poor”, and debate with me about why that aid needs to give things away.

I am in Cambodia for a few weeks meeting with our team at PEPY (more for my good than theirs, as I missed them and couldn’t stand being away too long!). Standford University’s MBA program just came through on a learning trip and met with our team at PEPY Tours and I joined for the day as I always enjoy meeting with students, especially groups like this looking to discuss social enterprise. This time, I got into yet another discussion over dinner with an MBA student who was holding the position that if you don’t give things away, you can’t reach all of the people who need it now.

One of her arguments was that “since people don’t have things now, the distribution channels clearly don’t exist to get them what they need.” The problem is, aid is much worse at creating distribution channels, especially long term ones, and any that do exist will be destroyed by giving that same product away. When will our MBA programs start teaching that business in “your country” is based on the same principals as business in “their country”? Imagine if you started your next software company or organic farm or hedge fund, and someone started giving away the exact same goods or services for free to provide aid to the people of America (which, as we all know from our debt levels, we might well need). I bet those MBA’s would be less excited about giving things away if it was their business that was at stake.

Take eggs in Rwanda. This is a fabulous two minute video highlighting an example of a distribution system being destroyed by aid:

I have been away from Cambodia for only 4 months and all of a sudden there are hundreds of small kids bikes with back racks all over the rural country side. I have seen so many aid organization’s bike projects over the years designing “the best new bike for ‘the poor’” and here is a basic small Chinese-made bike which is nearly perfect for the needs and finally reaching these so called “poor”. And why are they everywhere? Not because someone gave them away. I should know, as PEPY used to have a small bike scholarship program in the area before – probably harming markets and surely delaying the purchase of bikes like these. Fortunately we stuck around long enough to learn that we needed to be investing time in people rather than giving away bikes. These small bikes I see today are not available now because of aid but because someone is making money off of selling them and therefor has found a way to make sure that they are available far and wide… and I bet that person didn’t even need an MBA to figure that out.

“But that wouldn’t really happen in real life,” said one of the students in my economics class as our professor was reviewing game theory and the economics of auctions. “People wouldn’t act in that way, and it wouldn’t work like that.”

Our professor turned around and smiled and looked at us all like he’d just realized that we had come to the theatre to see Jaws and brought our bathing suits thinking we’d get to swim. “Don’t try this at home, people,” he said. “This is E-CON-OMICS. It’s not real life! Did you think I was going to tell you how to make day-to-day business decisions? You do have strategy class, right?” and he went back to eagerly scribbling away his mathematical proof about what might happen if there was perfect information, if all people were rational, and if we were interested in the average collective behavior of a bunch of unaverage people.*

That night, after memorizing a bit more about Nash equilibrium theories, I decided to try to go see Jeffrey Sachs speak as he was giving a “sold out” lecture at Oxford. I figured it would give me fuel for my economics fire and give me a further look into an economic perspective I have been turning over for the last few years.

It would be the third time I had seen him speak. The first was at Notre Dame a few years ago, just after I had started PEPY. I was on campus as part of a guest session on “alternative careers” and Sachs was speaking at the university’s biggest annual lecture series. I rushed out of my little workshop to see Sachs’ presentation and I didn’t understand the professor’s confusion about my excitement to see “the rockstar economist” speak.  “I’m not sure you agree with him,” the professor said, looking at me with that same confused expression.  “What, was this guy mad? Of course I agreed with him!” I thought.  “Sachs was calling for more people to work towards livelihood improvements in ‘developing’ countries. How could I not agree with him?”

It wasn’t until the second time I saw Sachs speak, at Conde Nast’s “World Saver Awards” ceremony in NYC, that I realized that the ND professor’s look was likely due to my level of ignorance about development economics. By that time, I had fortunately spent a little more time to educate myself and had read more of Sach’s work and those of “competing” economic thinkers. I had also come to some of my own conclusions about what might “work”, or not, in the development sector based on my own failures and experiences. That time, (along with being a bit shocked that Disney Cruise Lines was up for a “World Saver” award for having painted their cruise ships with a more environmentally friendly sealant?!), I noticed that his prescription for how we should move forward didn’t fully jive with my own.

So I went to the lecture at Oxford reminding myself on the whole bike ride there to be open to listening to his perspective and to seek to understand where he was coming from. I was so conscious of WHO was speaking that I hadn’t bothered to read WHAT it was he was speaking about. I arrived expecting a millennium development goals debate and was presented with a diagnosis of the American political and economic decline that I couldn’t help but agree with. Sachs’ talk focused on his new book, The Price of Civilization: Reawakening American Virtue and Prosperity with nearly the entirety of the talk, and the larger part of the book, focusing on defining the problem and its causes. To my surprise, here I was listening to Jeffrey Sachs and I was agreeing with so much of what he was saying. But then, at the very end, he touched on the “How to fix it” ideas which the second par of his book focuses on.

And then I heard it in my head: Sachs, this is E-CON-OMICS. Don’t try this at home!

I recognize that people would be very upset if they were presented with a book that analyzed the problems of the economy or the development sector and were not then presented with solutions for how to go about talking these problems, but my economics professor was right. This is economics, not strategy!

We can learn a lot from economic theory and, when looking at averages and analyzing trends, it is an essential tool. But when looking at exactly what to then do in a certain instance, especially instances that involve real human beings who are not all rational, who certainly don’t all have perfect information, and who don’t always act in alignment with their own best interests, simply applying economic theories of averages of what is supposed to happen when A and B meet can be more like hiring a professional conductor to generate beautiful music out of singing seals. It’s gonna take a lot more work than just giving them sheet music.

From this point in the lecture, my typical Sach-ian reactions kicked in. I didn’t agree with the global solution theories he touched on and see problems with taking any “proven” solution here and plopping it down there and there and there and scaling it as if one could mass produce solutions as easily as Band-aids. Sach’s model examples of economic role models were the northern European countries (notably, some of them oil-rich, like Norway), and when a few audience members from or referring to those countries noted that they too were having economic problems, Sachs practically put his fingers in his ears.

It was the most disappointing part of a very interesting discussion when Sachs responded to a student who was questioning why we should model an economic improvement plan on situation’s like Iceland’s with a response that started with “Don’t tell me bad things about the economies of Northern Europe. I don’t want to hear that.” He might have been joking a little bit, but he didn’t really respond to the question nor did he seem interested in discussing an issue that might challenge some of his assumptions. Kenyan economist Bernadette Wanjala recently published what was deemed the first independent audit of the Millennium Villages Project, a project trying out Sach’s theories in African communities as a partnership between Columbia University and the UN. If Sachs and all those of us who have “theories” about how to improve the world aren’t seeking out and harnessing contradictions to these ideas, we’re not going to find viable remedies to the problems we continue to face. Instead, we’ll counter our cognitive dissonance by seeking out “proof” to fuel our egos rather than our world. I believe that we need to be asking people TO tell us where we are wrong and then seeking out ways to work with them to find solutions which are more viable through constantly iterating our ideas based on new information.

Sachs’ speech was followed by a panel of Oxonians who had been asked to provide comments and critiques of Sach’s talk and his book. Side note: I love panels like this one, which unfortunately are very rare, as they each dug right in and were not afraid to speak their minds about where they disagreed or had more questions. There was none of the usual chest puffing that comes with panelists each trying to put their business resume on the table by spending the majority of their allotted time talking themselves up – they got straight to the debate and academic questioning– gotta love the Brits! The American on the panel, Peter Turfano, Dean of Oxford’s Said Business School, also highlighted the areas he had questioned about the book touching on a need for more strategic thought in the “what” to do after the thorough economic analysis of the “why”. His comments made me realize that we should leave the economics to the economists and then use their findings to fuel strategy designed by those who are experts in implementing projects involving real human beings.

Another question worth noting was from an audience member who asked if Sachs had shared these ideas with the US government. “They wouldn’t take my calls,” jokes Sachs on two occasions. Funny, the US government doesn’t let Sachs or any one of with a good idea us experiment with the US economy and people’s lives. (Well, to fit in with what Sachs and I both think is wrong with the US, they MIGHT have let him try out his theories, if he had enough money to make it worth their time to listen to him.) Yet, when it comes to international development, the barriers to entry are much lower. Sachs, and many of us (myself included), are guilty of thinking it’s ok to experiment by taking the lives and economies of others in our own hands. We think we can all play strategist, politician, and hero. The US government wouldn’t take his calls, yet communities in Africa are living out his theories. Unfortunately for the world, there is no checks and balances systems set up in global development, no bi-partisan senate debates forcing Sachs to stop, change, or improve. It seems the system is so lacking that even when others take time to do monitoring and evaluation of our projects for us, we can write it off and ignore it. Hmm…. maybe it’s not so different than the current US government after all… but back to the lecture.

I got to meet Sachs afterwards and asked him a few questions related to how his books are written and with regards to the split between economic analysis and improvement strategies. He noted that the majority of his time and expertise is spent in the problem analysis and that I’d see when I read his new book that the “solutions” parts were incomplete and intended more as suggestions/shoves in the right direction. I forgot to ask if he felt the same way about his solution suggestions from the “End of Poverty”, but when standing in front of rockstars or rockstar economists, the right questions sometimes fail to formulate. (Sachs? You reading? Want to share some insights?)

I walked out of the lecture realizing that I had thought I didn’t agree with Sachs, but it turns out I do. I agree that there are big problems in how development work is being administered and how the impacts are not what they could/should be. I also agree that the political, economic, and corporate sector of the US is out of balance and that we are on a high-speed downward path. I just don’t want Sachs or any economist conducting our choir of seals.

The value I see is that Sachs has spent time detailing the WHAT, but we need to do a better job of figuring out the HOW. Sachs, and all those with theories of HOW should hopeful marry themselves to the goals rather than the solutions so that we can all freely debate and improve these imperfect solutions. Because they are ALL imperfect. That was my biking mantra on my way home to my economics studies where I had to go back to channeling the mind of an economist, pretending the world was full of rational ego-less creatures who care more about improving their lives and the world than their reputation. And now, economics makes a little more sense. Just don’ try it at home (or in Africa for that matter).

* Note: Those are not direct quotes, but my general summary. Also note that I LOVE our economics professor and his love for all things econ. It’s fabulous to be around people who are passionate about their subject and he often jumped with excitement when talking about economic theories he thought we should know, even if they were outside the scope of the course, which was either the most interesting part of the lecture, of the part where he totally lost me! I also loved that he was honest with us that this was NOT a representation of how things “would” work, but measures of averages and possibilities based within constraints. That recognition, that theory and reality are not directly interchangeable and require reworking of ideas to fit into the specifics of each new scenario should be a hallmark of formal education – from international development frameworks to MBA business planning. If it’s not, we’ll head out into the world and think we can apply these cookie cutter ideas to real human beings. And that would be just as silly as wearing a snorkel to Jaws.

I don’t usually link to PEPY’s monthly newsletter in my blog, but the song from the PEPY Tours video in here won’t get out of my head, so I thought I’d infect you with it too.  (Click on the image to see the newsletter)

Yep, that song is a Khmer rap song. Yep, it’s pretty awesome. Do YOU wanna ride with us? Awwwww, yeah…. I hope it will be in your head all day too so you can spread the Khmer rap love around the world.

Making a monthly newsletter at PEPY is something we have been doing since 2005 and you can watch the progress and change of our vision and learnings if you flip through old additions. We’ve kept up this practice over the years as we believe that having a monthly newsletter is more valuable than just a platform to connect with supporters. It’s a way to share the lessons we have learned, reach out to other NGOs working in similar sectors, give travelers information about global philanthropy issue, and allow us to highlight a place which often gets media coverage with a different bias through a new window.  Read up, ride with us or at least sing the song, and let me know if/how you’d like to see the PEPY newsletter improve to add more value in the world

Both “participatory development” and “design thinking” theories advocate for project planning to start with the needs of the end-user. It’s interesting to me that both concepts illustrate pretty much the same intuitive process, yet the naming of both makes them seem less broadly applicable. I guess maybe that’s because “Successful impact-for-the-end-user-focused-planning” is a much less sexy name!

I had dinner last night with a fabulous crew of Rhodes Scholars who are studying everything from love to girls education in Pakistan. In addition to learning about Heidegger, I learned more about the work some of them do with an Oxford based NGO which supports programs in southern Africa. Part of their role is helping to vet project proposals.

They mentioned that when a project was proposed to them they weren’t able to tell if the proposer had considered other alternatives as the only material available to them was their current hypothesis for success. Here is a little brainstormed list of some questions that they could put on their application form to both check for and encourage “design thinking/participatory” planning.  I’d love YOUR thoughts on what questions they could add or what things you would change!

Potential questions to ask in a project proposal application form to check for an end-user impact focus:

a)    What is the goal you are working towards?

b)   What alternative actions/plans have you tried or considered outside of the proposed project which you have rejected and why?

c)    Who are the stakeholders in your proposed project, how do you know/relate to them, and how have their needs/opinions shaped your project proposal?

d)   What is your proposed project?

e)    How can you measure success towards your goal through this project?

f)     What are some potential barriers to success for this project?

g)    Can you already anticipate some ways you might need to alter your given plan if your hypothesis is unsuccessful? What might some of those ways be?

We had previously been discussing the importance of NGOs marrying themselves to an impact goal rather than the hypothesis for success which is their “plan”. This is probably the same for a novelist, an entrepreneur, a parent….. all of us. We sometimes “think” we know how to reach a goal, and we continue down the path of trying to prove that plan correct until sometimes we reach the point of failure. We were discussing how it is important to flush out many possible paths to a goal before deciding which hypothesis to consider and then how important it is to be able to notice the signs of failure fast so that you can iterate and adjust quickly towards reaching a goal. If impact “success” is the goal, it might be achieved in this manor though the executed plan will likely look very different than the original proposal.

First off, do you believe that this type of thinking is important or not, and if so why?

And second, what questions would you add/change/remove from the list above to encourage and understand this thinking?

Hope to hear your thoughts!

Clearly, business school is getting the better part of my time and my blog is being neglected. I have though had many posts written in my head….. my fingers just haven’t gotten to typing them!

The last real post I wrote was about “social” enterprise and if the “social” is really needed and there were a number of great comments/tweets/emails about that (so thank you!). I wanted to comment on a link Adam Kronk had added to a piece by Aspen Institute’s Judith Samuelson.

A quote in it said, when commenting on the new “B-corp” status between NGOs and for-profits:

“In business schools we need to spend more time on case examples of businesses that have succeeded in accessing capital in public markets, but are managed with common sense values, decision rules and protocols up and down the supply chain and in relation to consumers. It will not always be a pretty picture, but it is a failure if MBAs learn that they need to set up a specially chartered organization to bring their values to work. “

It’s true. Getting an MBA in a year is like trying to eat the full contents of your refrigerator in one sitting. (OK, not a good example coming from a student as my fridge is pretty empty, but imagine it weren’t ) There is so much I want to dig deeper into and I know it will take me years to be able to reflect on and digest it all (burp!).

We spent a bit of time today in our Finance class speaking about how, in the US in the 1930′s, a post-depression measure to spark business and deter bankruptcy fears was to instate a tax break on debt interest payments. Prior to this, both debt and equity payments were not treated as tax credits so companies would have had a higher proclivity towards equity than they would today. In other words, this policy incentivizes higher debt levels.

Our professor alleged that this was intended to be short term, but instead it has spread around the world (though apparently not to Estonia?!) and now, though many politicians and economists alike think this market distortion needs to go, no one is willing to change it. It would be political suicide to take this on and as a global society, we’re too often concerned with short term benefit to take big risks which might threaten our own personal brand longevity though potentially improve society. As our professor also commented in different words, imagine if all of those genius people who are now financial engineers trying to make new financial products to avoid taxes (like “coco bonds“…. not a cereal it turns out) were MAKING products/services to earn their money….. they’d be improving society, not just financial returns. I know, I know, I can hear my finance friends grumble about how finance drives society… but where is it driving us?

And then, though I could tell our professor enjoyed the theoretical discussion as much as we did, we went back to formulas and beta’s and graphs…. and now, even though my marketing paper is calling, I really just want to find people who have ideas about how we can get all of us to smarten up and take risks which might put ourselves in short term financial constraints for the betterment of the future of our society.  How do we incentivize that? I guess not by grading us on how well we can analyze the buying centers for curled metal manufacturing parts (in 2000 words or less), but by giving us grades far into the future once we put our new knowledge into action and prove how well we can improve society. I’d rather work towards being graded on that.