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Social Entrepreneurship - A Movement Towards Building Better Business

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I attended a talk given by Tal Dehtiar of Oliberté last week on Thursday, hosted by Capacity Waterloo Region as part of their Change Agent Series. Oliberté is the first company in the world to market premium urban-casual footwear that is exclusively made in Africa, from the natural rubber found in Liberia and leather from Ethiopia, to local workers manufacturing shoes in factories built to ISO 14000 (environmental management) standards, where workers are paid a fair wage and no child labor is used.

Tal is certainly an accomplished individual, having founded MBA's WIthout Borders (MWB) several years ago prior to Oliberté, which he then eventually sold (the rights) to CDC Development Solutions. 

From my perspective, it seems that a lot of his motivation comes from seeing business as the biggest change agent in the world. Perhaps this point of view was shaped by his family history and struggles as new immigrants to Canada a couple of decades ago, a story which he shared with the audience. Similar to many familiar new-immigrant stories that you hear today, Tal's parents were highly educated back in their home country, but either due to a lack of English-speaking skills or education credentials not being recognized here, they had to make do with whatever job was necessary in order to survive. And similar in outcome to many immigrant stories, Tal's parents ended up starting their own business, becoming successful in turning a profit, while in the process, employing hundreds of people to work for them. 

With this in mind, Tal views his for-profit company Oliberté, as a social venture or social enterprise. And he does so because at the end of the day, he believes that he is charting a much more sustainable way of life for people living in countries like Ethiopia and Liberia, by providing them with a stable means of employment and fair income. Tal has also heard many local people say that they do not need any more direct aid or charity (in the traditional sense of the word) in Africa. What they do need are jobs in order to provide for their families themselves, with sustained economic growth and investment in order to build a middle-class in Africa, which currently does not exist. This is something that Dambisa Moyo argues in her book, Dead Aid: Why Aid Is Not Working and How There Is A Better Way For Africa. 

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That being said, Tal made the point that although Oliberté is a social enterprise, it is a footwear company first, competing with the likes of Lacoste, Roots, Nike, etc., in the premium footwear market in terms of price point and quality of the product. They are not necessarily focusing on selling the 'social good' aspect of the company, although it does provide a great backstory to the company, and I completely agree with this approach. 

Social ventures and social enterprises, especially those competing for market share with traditional for-profit companies (social enterprise in the non-profit space is another discussion altogether), do need to compete at the very same level of traditional for-profit companies, both in terms of value the social enterprise brings to the table and/or the quality of the products they produce. Tal recognizes that if they were to rely solely on the 'social good' aspect of their company alone, i.e. providing jobs for people in Ethiopia and Liberia in a safe and fair manner, minimizing environmental impact and more importantly, changing the current perception of Africa as a place where you CAN invest and do business, without a strong focus on the product itself, Oliberté will only go so far in the long run.

There absolutely HAS to be a focus on producing high-quality product that is able to compete with other companies vying for market share and consumers attention. The fact that there is a 'social good' aspect to it, provides the social enterprise with a competitive advantage, but again, should not be made into the deciding factor for consumers in general when it comes to choosing between products to buy. The quality, attributes and brand of the product should be able to stand on its own merit, especially since, as it turns out, the market segment of those who are lifestyle-, sustainable- and health-conscious only represent 18% of the total market segment. Not too sure which consumer market Tal is referring to, but if he is referring to the US/Canadian market, this 18% number is not surprising at all.

Overall, the talk was really good and I am glad that I went. Tal was very candid and personal in his approach to storytelling and answering questions, calling it as he saw it and providing honest answers about the operations of Oliberté and future plans for his company (I had a great conversation with him on marketing and development strategies after his talk). And I believe that it was this approach that allowed him to connect with the audience.

As I have seen over and over again, it all comes down to people. From the support system of people who are there for you/your company through the good times as well as the bad, the people who work for you and have placed their trust in your leadership and judgment, as well as your consumers who expect to receive great value for money from your product.

Speaking of which, I may just order a pair of Oliberté shoes in the next couple of days, and yes, they do ship to Canada.

Many thanks to Jennifer King and Capacity Waterloo Region for organizing the event.

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Lessons from Engineers Without Borders

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I attended a lecture this past Monday evening where the keynote speaker was George Roter, co-founder of Engineers Without Borders Canada. This event was part of the Change Agent Series hosted by Capacity Waterloo Region, in partnership with a number of organizations including Social Innovation Generation.

I first met George Roter when we invited him to give the opening keynote at the inaugural Waterloo Conference on Social Entrepreneurship, held at the University of Waterloo and Wilfrid Laurier University in November 2007. Back then, we were simply a group of students and recent graduates from UW and WLU, looking to foster a dialogue around social entrepreneurship and social enterprise in the Waterloo Region. The WCSE eventually became the Laurel Centre for Social Entrepreneurship, and for two years, we found moderate success mainly in the university student community, running a lecture series, a 3-day social enterprise 'bootcamp' intensive, as well as a follow-up conference on social enterprise in November 2008, with Marc Kielburger as the opening keynote speaker.

Alas, for a number of reasons (which I hope to eventually highlight in a future blog post), the Laurel Centre for Social Entrepreneurship no longer exists. However, I have taken lessons from that failed start-up organization and will certainly carry them forward with me. 

When George Roter spoke on Monday, he shared lessons learned from Engineers Without Borders through the years. Each one of them resonated with me, and I thought that I would share them here:

LESSON NO. 1: CHANGE IS MESSY

Since its founding in 2000, Engineers Without Borders has always had as its mission statement: "Promoting human development through access to technology"

George talked about fostering a culture of continuous learning within the organization, and in the years that EWB has been doing international development work overseas in Africa, they have begun to realize that perhaps the social change they are looking to affect is not as simple as "promoting human development through access to technology." George admitted that the process of social change is complex, and perhaps EWB's role in international development in Africa is to help create the institutional framework that allows innovation to occur. That is why at the EWB Conference back in January 2009, George stood before an audience of 750 fellow EWB members, and perhaps more dramatic than he intended, burned their mission statement on stage as a symbolic gesture of embracing change and uncertainty.

Change IS messy.

It was important to communicate these changes to EWB members across the board. However, for an organization that has grown as large as EWB has in the past 10 years (30+ EWB chapters across Canada, with close to 50,000 members), this task has certainly posed a challenge. George admitted that they underestimated how long it would take to get this message across their membership given the obvious challenges of geographical distance between chapters; and even more so to come up with a new mission statement for EWB. But that is ok, as you will see from the next lesson he shared.

LESSON NO. 2: THE FAILURE PARADOX - IMPORTANT TO LEARN FROM MISTAKES

George then spoke about being prepared to fail. "If you aim to be wildly successful, you need to be prepared to fail" 

For any social venture to be successful, they need to be open to failure and uncertainty. This does not mean that you go out of your way to fail, you certainly need to have your i's dotted and t's crossed. Rather, you need to establish a culture of openness and risk-taking very early on in the organization, and this requires leadership from the top. In other words, it is OK to go out there and take risks. If the risk pays off, then well done, you continue to grow and manage your organization from there. If it does not, then you acknowledge your mistakes and learn from them, and see if you can achieve the desired result in a much more effective manner. Since EWB published its first annual report way back when, they have always included an ad-hoc "failure report section" where they highlight lessons learned from out in the field. Only recently have they begun to publish an actual "Learning from our mistakes" report, that is sent out to all their members and staff, as well as their donors and board of advisors. 

George recommended reading the following book, Getting to Plan B, to get more perspective on this. So often in the social/voluntary sector, do we place a heavy emphasis on ourselves to plan for, and execute Plan A, without allowing ourselves to even consider a Plan B, C or D. Of course, this is not as simple as it sounds, as there are issues of non-profits and charities being tied to funders/government agencies averse to taking risks, and so forth. It seems that EWB has been lucky in this respect. Because they have always been regarded as "shit disturbers" (George's words, not mine), they are given the leeway by their donors and board of advisors to take on opportunities while managing risk, and thereby learning from the process. They are currently helping their partner organizations in Africa to adopt a similar mindset of managing risk, reporting and learning from their mistakes, but perhaps presenting it in a much more diplomatic fashion given the context of the culture in Africa.

I read a great blog post recently on what makes a good (social) entrepreneur that should be required reading for any startup founder, wannabe entrepreneur or leader within an established organization. What it comes down to in the end are four letters: JFDI (a play on Nike's Just Do It).  

LESSON NO. 3: HUMBLE ENTREPRENEURSHIP

And lastly, the notion of humble entrepreneurship, is certainly an intriguing one. George talked about the opposing forces of humility and entrepreneurship, where more often than not, it takes a daring and charismatic leader (entrepreneur) to lead a team of people from the very beginning. As the organization grows, more emphasis should be placed on the organization and its mission, rather than on the entrepreneur. However, sometimes ego gets in the way and founders have a hard time time letting go of control, stifling innovation and debate in the process, and thereby risking the future of the organization.

This reminds me of a conversation that Rod Schwartz of ClearlySo and Liam Black of Wavelength, had a couple of months ago on the notion of the charismatic social entrepreneur. It is certainly worth revisiting:

"In the early stages of any entrepreneurial venture, social or otherwise, it is the energy and drive of the single entrepreneur (or sometimes a duo of co-preneurs, à la Google) that keep the “show on the road”. Her (or his) passion, drive, connections, persuasive powers etc. are what enable the venture to get through the impossibly difficult early days.

In social entrepreneurship this is even more the case. As there is often no equity upside, the financial incentive is essentially non-existent. Moreover, the social nature of the organisation gives the enterprise the element of a “crusade”. In this regard the CEO/Founder’s vision is the lifeblood of the enterprise—the source of strength on which others often draw.

Yet frequently this strength becomes a source of weakness instead, especially as the organisation matures. So impassioned is the leader by the mission, so violently consumed by this personal passion, they stifle innovation, debate, staff development and, inevitably, the enterprise’s future. Such dysfunctionality is often the rule, in the dozens of social enterprises I have observed over the past decade."

George mentioned that one of the challenges of operating in the social/voluntary sector, is that we do not force high performance. This is why it is important to invest time, money and energy into smart and passionate people, those who have a passion for what is possible, regardless of credentials. Creating value for what you ultimately want to achieve and see in this world is really what drives people in the end.

George then ended the evening by relaying the story of a farmer in Malawi named Justin Panja whom he met several years ago. Justin, with the help of EWB, has been able to grow 14 different types of crop on his farm in the village of Mulere to earn an income. He is a man with no formal education having only completed the 4th grade. Yet, Justin has the passion, drive and energy to work as hard as he can in order to realize his dream of sending his three children to university. Will this dream be realized? Nothing is for certain. However, Justin is held up as an example of a person who has the passion for what is possible, and will do what is necessary to accomplish his goals.

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Overall, I enjoyed the lecture and it certainly sparked a lot of thoughts for me (hence, this long blog post). 

I spoke to George after the talk, and asked him the question of what was crucial to getting EWB off the ground in its infancy, relating my previous Laurel Centre experience. He said the one important factor that was absolutely critical to EWB's early success, was attracting and putting together a solid board of advisors who believed in what they were doing, and leveraging their intellectual capacity as well as their connections to key resources in the industry. Of course, having a great team from the start helped out as well. 

It seems that both George and Parker Mitchell, had a support system of people who believed in them and their ideas right from the very beginning; allowing them to take risks, make mistakes and learn lessons along the way, and thus growing Engineers Without Borders Canada into the success that it is today.

For some insight into the EWB experience from a personal perspective, below is Jon Fishbein who gave a talk titled "Meet the Real Africa" at Ignite Waterloo recently.

 

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