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 is “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.

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.

This is a guest blog post by Allie Hoffman of The Pari Project. Before I left Cambodia, Allie took over the TEDxPhnomPenh license and recently organized a team to execute Cambodia’s second TEDx event. Below she describes our motives for starting this event in the first place, how doing something “for the local people” only works if it is “with”, and how the juxtaposition of expat and local development workers can lead to interesting personal insights.

I am sad that I missed this second TEDxPhnomPenh event, but I’m proud of the team that put it together and I love learning about the impact it is continuing to make. Read on to learn about Allie’s journey through this process!

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From the start, TEDxPhnomPenh was about bringing the TED brand – ideas worth spreading – to Cambodia, where we thought young people were hungry for the opportunity to share, question, challenge, explore and create. Our version of TEDx was centered around young Cambodians and what the event might mean to them.

Executing the event the first time, we had a room full of 120 people who experienced 12 amazing TEDxTalks. The audience, we estimate, was 70 – 75% Khmer.

We just recently organized the second TEDx in Cambodia. This time we wanted to expand the brand, and include more people in the TEDxPP experience. So we got busy planning a second event – a simulcast event – and set up a team to execute that, while the team for the live event stayed busy coaching speakers, counting tickets, and dressing up the space so it was camera ready.

Two weeks before the event, the MC, Vanna Sann asked me to lunch. Everyone loved having Vanna as the MC. He is well-spoken, articulate, clever and totally in tune with the event and what we were trying to do.

He had seen the ticketing spreadsheets; the entries showed over 75% Western attendees. We had set up a system that required people to electronically submit for a ticket. We thought the system would run itself, as long as we promoted via Khmer media channels. With all of the rest of the planning going on, I had not been carefully monitoring the results.

What I had not expected was that the young Khmer population at whom we were targeting the event would not be as quick to register as their Western counterparts.  Vanna was brutally honest: “I’m not doing this so that I can look out onto that audience and see a bunch of Western faces.”

Sitting at the lunch table, it felt like he was taking my internal conflicts about who I want to be in Cambodia versus who I am comfortable being, and throwing them back. It is easy to be a foreigner working in development in Phnom Penh; it’s a lot harder to push past the immediate comforts of lovely restaurants, great bars, and a lively social life – to create something enduring in a culture that I am still learning about.

I got back to the office, turned a sheet of paper over, and scribbled on the back:

Collaboration & Openness
Empowering People/Providing Opportunities
Creativity
Innovation

Seeing those words in print changed something. Over the next two weeks, we went into the database and reworked the ticketing, bringing us to 60% Khmer attendance by the time the event came around. We lost one MC, but gained another: Thul Rithy. Charismatic, funny, clever and sarcastic: he was amazing. Now he will go on to continue to lead KhmerTalks, which he founded as a way to spread the TED experience in Khmer. KhmerTalks returns to Phnom Penh on February 25^th. His participation in both events brings the ‘ideas worth spreading’ movement forward significantly.

In the end, the event went off without any major glitches. The stage that day hosted 14 talks including speakers came from America, Australia, Cambodia, India, New Zealand, Spain and Singapore.

One of my favorites was Khiev Kosal. Convicted of attempted murder at age 16, he grew up in a prison system in the US that somehow allowed him to find his voice. After being deported to Cambodia upon release, he now shares his poetry via spoken word. As he got off the stage, one of our technicians was in tears. They embraced for a long time; as others crowded around to congratulate him on what had been an enormously commanding 18 minutes, they held close – complete strangers – both sharing something powerful with the other.

I knew leading TEDxPhnomPenh would challenge me. I didn’t expect the challenge to be so personal. Am I changed? I think so. I find myself looking at the hiring process at Pari differently, asking different questions to potential clients, staying longer in certain conversations, migrating to different people in social settings. Will it last? Here’s hoping.

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This was a guest post by Allie Hoffman of The Pari Project.

I’m starting my first week of classes at the University of Oxford in their MBA program, and I realize that I am not in the minority for having chosen this program because of its connection to the Skoll Center and its focus on “social entrepreneurship.” Many of the people I have met state that some aspect of “better” business is what brought them here…. well, that and the fact that you get to study in an institution with 800+ years of history and where some of the world’s most brilliant minds have gathered. It’s a fascinating place!

During our first week of orientation we had an optional day and a half session on social innovation that opened with Pamela Hartigan, director of the Skoll Center, speaking about how she thinks the word “social” needs to be removed from “entrepreneurship”. I couldn’t agree more, especially given the reception these concepts have received from some of my MBA classmates.

The polarization of “entrepreneurship” and “social entrepreneurship” implies mutual exclusivity. If you are a “social” entrepreneur, do you somehow get to claim moral superiority over your every day entrepreneur? Many of the most mission driven organizations I have seen have never heard of nor benefited from the term “social enterprise”, so why do we make this distinction? Is this naming trend causing us to forget that ALL business has the responsibility to not only increase profits for shareholders, but also respect and support the world around it?

I view “social” enterprises as businesses working towards social changes as their mission above maximizing income. We don’t call Colgate a social enterprise, but if a group said they were starting a business with the explicit mission of getting toothpaste out to people all over the developing world to reduce tooth decay, we might consider them so. If a group with a stated social mission took on the same business as Colgate, would just the motivating factor be enough to note the difference? Or, would there be no difference at all? And towards that end, should programs like mine be working to remove the polarizing “social” from the entrepreneurship to attract more MBA’s who don’t associate at all with the social side of this curriculum. Perhaps through their drive for successful businesses they will be ones who have the largest ability to make changes in the world?

Relying on free market approaches to global development does leave me with some additional concerns many stemming from a lack of a systematic way to define what “social” impact is. If we believe that people will vote with their money for the things they believe in, then we might take the mindset that as long as you had a socially driven society, the market would drive social improvements. The dilemma here is that the social/environmental implications of certain purchases are not readily available to influence consumer decision making. More worrying is that much of this complete impact understanding is also not readily understood or sought out by business leaders themselves. If we don’t know our social impact and can’t measure it, how can we improve it?

It turns out the same dilemmas causing failures in the NGO world are at work in business. An inability or lack of effort to measure impact and tie positive impacts to future decision making, both for donors and consumers, is creating inefficient markets where funding is going to areas which, with full informational clarity would be less desirable options.

How do we mesh all of the good intentions on one side with all of the business drive on another and make all parties realize that we can and are working towards the same goals? I’m so excited to see where this year takes me and all those of us on this course and how this unique MBA program will impact the work we all take on throughout our lives. Let’s hope that in the future the “social” doesn’t need to be listed as a distinction as a better understanding of the complete spectrum of impacts of our work will be available to all business leaders and consumers and we will all prioritize a better world in designing our businesses.

I wrote a piece for the PEPY Newsletter this month about a failure we had at one of our programs at PEPY and I thought I would share it here as well. I just realized that we should also post it on the Admitting Failures website – a site I have tweeted about before and really appreciate. One of my cohort through the Skoll program at Oxford is David Damberger who helped create the site through Engineers Without Borders (and here is a TEDx talk he did on the subject of failure). I’m excited to have a chance to study with others who believe that admitting failures and lessons learned is a way to improve our global impact!

Failing: A story of forgetting our own lessons at PEPY

Sometimes, even when we know the right thing to do, we fail to do it. We do this with seatbelts, diets, speeding, and love, and as it turns out, we sometimes do this with PEPY programs too.

Recently one of our programs faced a failure which should have been avoidable but which will hopefully help us set better systems in place to avoid similar problems in the future.

You might have read about our “Saw Aw Saw” program, the arm of PEPY which partners with communities to help them create and implement plans to improve their government primary schools.

To build more long-term sustainability into the program (click here to learn how we define “sustainability” at PEPY), SAS includes a small business development component. The idea is that if schools are able to generate additional income on their own, they can use this income to further develop their school beyond what the government or other fundraising efforts provide.

Last year one of the SAS partner schools decided to start a small mushroom growing business. It did quite well, as there was no other local supplier of these nutritious mushrooms, and their first rounds of sales went very well. Eventually, it became too difficult to source mushroom spores and the program stopped.

This year, two schools decided to start a spore-growing program, as spores typically generate a high net profit and in this way they could support local families in improving their nutrient intake by affordably growing their own mushrooms at home. This sounded like a great plan!

BUT we rushed into this program to try to get it started before the end of the school year. We didn’t do enough research, or support the communities with the tools and networks to do this themselves and we also didn’t have the in-house technical expertise to understand the threats to this agriculture program.

Part of the SAS model provides support for the one-off training costs which go into business development. We sent representatives from both schools to a course on mushroom growing. In addition to poor research, we made another big mistake, which goes against the lessons we have learned:

WE paid for this in full. The school support committees did not have to invest funding into this project, only their time. As such, if there was a financial waste, they had very little incentive to point it out or prevent it.

We didn’t send any PEPY staff to the training, which would have helped us to understand the program into the future and might have also prevented us from wasting funds on unnecessary equipment. You see, the key to growing spores, it turns out, is a sterile working environment. We had researched this enough to know the very basics, but when signing community members up for the course, we failed to research what technical tools, apart from the training component, would be required for the success of the program. When the community came to us with a proposal to go to a nearby training on spore growing, we accepted the proposal without doing enough research on how the training would work.

It turns out that part of the training included how to use one of the key tools in spore growing. This sterilization device is, you guessed it, electricity-powered. We had sent two people who live in remote communities with no electricity to a training about how to use an electronic instrument, just because they had asked.

Big oversight.

One of the more important lessons which was reinforced through this process was that when we asked the community members to return these products, they didn’t want to and instead wanted to try to just “put the machines on coals”. Clearly, apart from being dangerous, this would have been a waste of money and a valuable tool. Why didn’t they want to return it? In large part, because they didn’t pay for it. We did. If they had been making decisions with their own funding, it is much more likely that the decisions would have been pushed by impact rather than interest.

Rather than grow spores, the plan now will likely be to search for more affordable and reliable sources of spores so the School Support Committees can go back to growing mushrooms to support their education programs. In the meantime, we’ll be sure to improve our systems of research and decision-making so that this type of problem can be better avoided in the future.

Guest Post By Allie Hoffman of The Pari Project

Lately I have been exploring the difference between ‘managers’ and ‘leaders’, wondering what ingredients go into making someone effective as one but not the other, and whether or not you can nurture both.

The reason for the exploration is intensely personal; I’m supposed to step aside and hand over the social enterprise I created to a Leadership Team in the near future. (‘Near’ is relative; it might be another year or more, so bear with me.)

Despite the long-winded and self-directed timeline, thinking about handing over can be panic-inducing; my entire identity is wrapped up in being an unwitting founder, and to think my current challenge is to develop traits in others I barely understand in myself, is daunting.

Pari has worked with 35 NGOs in its lifetime; that’s 35 leaders and/or managers to study. When I think about the effective leaders, I think about their common traits: humble, patient, confident, fearless, audacious, original. I think about how their work has become an intrinsic part of who they are, and their devotion is unshakable. With this devotion comes vision, that constant desire to be springing forth something new and transformative.

Pari has also worked with a lot of great managers. Getting people to do things they would otherwise not want to do is an art form; great managers know how to get things done. Managers think in linear ways; they communicate clearly and effectively; they are often meticulously organized. Managers see problems, and immediately set to work solving said problem. Their solutions are innovative and incisive.

What do I have – managers or leaders? I don’t know. Which one am I? I don’t know either.

What I have learned is that if I leave behind a space where people are questioning, challenging, innovating and taking risks; an approach that begets flexibility, adaptability and patience, and a core ideology that implores the team and its leaders to ‘believe in better’, then I leave having done my job.

What do you think great leadership entails? What does it mean to be a great manager? Please leave your thoughts below.

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This is a guest post by Allie Hoffman of The Parivartan Project. Pari is a social enterprise whose purpose is to empower the citizen sector; to do this, they provide fundraising, marketing and organizational development services. To learn more: www.thepariproject.com

A friend just sent me this photo…

Like with hero-worshiping in the social sector, when the media and then general public praises and supports a model which sounds like a quick fix to big problems, we get copy cats. Now we’re not only “giving things away” once, we’re giving DOUBLE things….. oh goodness.

It will be great if we can harness these great intentions all of the purchasers have and use these popular brands to steer us towards support which is about BUILDING markets and skills rather than increasing dependencies on aid. I recently wrote a piece about how we might be able to use the popularity of a brand like TOMS (the company BOBS above is copying) to help steer people away from giving things and towards investing time in people.

Did anyone see that TOMS recently launched an eyewear line where each pair “helps give sight to a person in need”? What do you think about this new eyewear line which is partnering with an NGO rather than giving shoes away? Share your thoughts!