Heroes

Dr. Muhammad Yunus
Dr. Muhammad Yunus

Most entrepreneurs, myself included, are independent spirits.

The “independent” part has always been a big piece of my personality. I’ve never aspired to be “like” someone, and when those stock interview questions show up I’ve always cringed at the one that asks “Who is your hero?”

That is, until 3 years ago.

Three years ago, I found myself with heroes, and someone I want to be like.

In 2010, I heard Dr. Muhammad Yunus speak about humanity. He spoke extemporaneously for 45 minutes, sharing first hand stories of mothers and daughters whose lives had been transformed through education and opportunity; a vision for the end of the man-made condition of poverty; a call to action to all people to end the unacceptable suffering in our worldwide community.

It was the first time I ever had the thought, “I want to be like him.”

Yohaustria Pena, Hero
Yohaustria Pena, Hero

That same year, I went to the Dominican Republic and to Chiapas to see the work of poverty-ending microfinance institutions in the field. I saw for myself the bravery of women standing up against cultural oppression; taking steps that no woman in the history of her family had ever taken before so that her children could go to school; finding the right balance between personal initiative and working as a community; taking risks and succeeding with so little capital and time that they put entrepreneurs like me to shame. I found my heroes.

When I first started Soap Hope, my intention was to create a strong example of social entrepreneurship so that we could make a huge impact in ending poverty, both with our own company and through others adopting the model and learnings that came out of Soap Hope. And while Soap Hope did grow again for the third year in a row, and we did fund over 10,000 days of microlending for women entrepreneurs this year, most days my vision for Soap Hope still seems distant and fragile to me.

As if on cue, this week a friend sent me a video about social entrepreneurs, and when I clicked play I heard the unmistakable compassionate voice of Dr. Yunus – there once again to motivate and inspire. Every time I hear his voice, I hear my calling. And when I go inside and ask what I’m to do, Soap Hope always is the answer I see.

When someone buys one bar of soap from us, it funds one day of microlending for a woman. So I say, “A bar of soap is a day of hope.” This spring, I’m starting a new initiative at Soap Hope called “One Million Days of Hope” – to fund one million days of microlending through sales and partnerships with other companies and organizations.

Everywhere Dr. Yunus goes, he looks for ways to create partnerships with people, companies, and institutions small and large, to further his vision of ending poverty in our world. Yes, I want to be like him. So I will do the same.

One million days of hope would mean 100 times the impact we had last year. It would provide tools and opportunity to thousands of the women who have become my heroes. That’s not something I can do alone. You’ll surely hear me ask you for ideas and action, partnership and participation.

Watch for #onemilliondays. Think about how we can partner together. Expect a call from an independent spirit.

Solving The Puzzle

Jenny is VP of marketing at a $150 million company. Each year for the last three years, her CEO has given the senior team a set of measurable goals. They get a huge bonus when they meet the goals. Every year they’ve met them.

Some of this year’s key goals:

– $30 million in new revenue.
– Double the number of small-business customers.
– Do this without impacting profitability.

Jenny is confident she will meet the goals this year.

And that’s how I know the people in Jenny’s company are passing up a huge opportunity to improve our world.

Huh?

That’s right. Follow me:

Jenny’s company has a simple but powerful formula for financial success that works every year:

– The CEO sets goals that are easy to measure (all numbers).
– He fully empowers his team.
– He pays them a big bonus when they succeed.

The goals are like a puzzle – they only fit together in certain ways, and when the team solves the puzzle they get a big reward. They bring all the creativity and hard work necessary to solve the puzzle.

Last year’s puzzle included, “Do this without impacting profitability.” It would be easy for Jenny to generate the new revenue by lowering prices, or running a massive ad campaign. But the puzzle is harder than that: she has to find ways to reach new customers without spending too much or lowering margins.

Remember, Jenny told me she is confident she will reach her goal. She’s done it three times before. The team has already come up with multiple creative ways to go after new customers.

Now, here’s where Jenny and everyone else in her company is missing an enormous human opportunity.

Jenny’s company will make no measurable impact on any of the biggest challenges in our world: poverty, clean water, clean energy, conflict, education, disease. The company has no social focus at all.

Why? Because there’s no social impact goal tied to their bonus. It’s not a part of the puzzle. Jenny won’t spend any time on it. None of the team’s creative potential will go toward it.

My critic says, “But Salah, it’s not the role of a business to solve social problems. Whatever energy they would use to solve social problems could be used to make more money, which is the purpose of the business. You’re just making the business less effective by injecting extraneous requirements.”

That’s a fallacy that is preventing us from using the vast human capacity in businesses from making big strides toward solving our world’s greatest challenges.

Let me show you how:

Give Jenny this extra goal: “Reduce the number of children who are hungry every day next year by 1,000.” The last part of the CEO’s puzzle is still, “do this without impacting profitability.” Jenny can’t just donate a million dollars to meet the childhood hunger goal, any more than she could just lower prices to meet the sales goal.

The worst possible way to meet this goal is to figure out how to earn more money as a company and then donate the money to organizations that feed children. That will cost over a million dollars. If that were the only way to solve the problem, I would have to agree with my critic.

But that’s not how Jenny is going to solve this puzzle.

Jenny is going to develop creative solutions that integrate the goals – just as you would approach traditional company goals. She will use the social goal as a tool to help meet the financial goals, and use the financial goals as leverage points to meet the social goal.

She might use the requirement about childhood hunger to create new opportunities and tactics for marketing and selling. She might bring opportunity to customers and vendors around the childhood hunger goal that result in a financial benefit. If Jenny is effective, her team will develop a strategy that doesn’t treat the social goal as separate, something outside the main plan, something to figure out at the end. She will use the social goal to help solve the total puzzle.

If Jenny’s CEO will create a social goal that is measurable and clear, and make the team’s bonus dependent on it, he will find what I and other social entrepreneurs have found in our own business experience:

– Brilliant new creative marketing ideas arise from the team.
– New partnership opportunities emerge.
– New dimensions for business appear with customers and vendors.
– A new kind of passion and creativity ignites inside the organization as employees start to see that their work every day is human, not just financial.

Every day millions of people go to work to solve the puzzles presented to them by their company leaders. And almost none of those puzzles include working on the most important problems in our world, because leaders have made the mistake of thinking that the social goal will diminish the business results. That’s an error, and it’s leaving an enormous amount of positive social change on the table.

I challenge every company leader to try this experiment. At your next goal-setting time, add one measurable social goal to your puzzle. Give it teeth: make it as important to the bonus as everything else. Make it impactful: work on the most critical social problem you can. Help your team understand that this goal isn’t a tactic – it’s not a corporate sponsorship donation or a volunteer day. It’s to be integrated into the plan and leveraged, just like the financial and operational goals are.

See the results for yourself. You will never go back, and your whole business will become a part of solving the real puzzle: how our society will cooperate to address the greatest challenges in our world.

Stop Talking About The Poor

  • “I’m looking at the best models out there for using business to solve social problems.”
  • “This is so hard – I’ve been looking for the right organization to work with for almost a year. I don’t want to waste my time working on something that won’t really make a difference.”
  • “One day, I hope to get involved in ending poverty, so I’m studying as much as I can today.”

These are a few of the things I’ve been told by people in the last month who have e-mailed and called because they are passionate about social entrepreneurship and microfinance.

I hate to be the one to break it to them, but talking with other people about helping the poor does not help the poor. While you are talking, they are still hungry.

If you want to discover the best model for combining business and social problems, the very first thing you should do is start a business to solve social problems, or go work for one – right now. Then you will learn what is really involved in a social enterprise. I can tell you from experience, you will be throwing out almost all the ideas and opinions you have about the matter until you do it yourself.

If you want to find the best organization to work with, go work for any organization that is focused on changing any life besides your own – right now. During the year you have been carefully avoiding wasting your time, you have wasted a year.

If you are studying as much as you can today, you have forgotten that while you are studying the problem, a child has missed her opportunity to go to school, so the cycle of poverty is being extended an entire generation in her family. Why are you studying to work on the problem later? The problem is now – work on it right now, and you will learn more than any book could ever teach you.

I’m not saying we shouldn’t talk, reflect, or study. But I have noticed there are too many people who are mostly talking, reflecting and studying. Ask yourself now, am I spending more time talking about changing the world than I am actually working on it? If so, I suggest correcting that imbalance – now.

Stop looking for the perfect way to participate. Go do anything for those in extreme poverty, anywhere – not for you, for them. Not a conference – first provide a meal. Not a study – first send money for medicine. Not a meeting – first fund a water well.

Raise money for Grameen Foundation. Volunteer with Women For Women. Buy a scarf from WORN. Fund a Bank of Hope at Esperanza International. Donate services to CitySquare. Start a weekend business that funds microloans.

Stop talking about it, and do it.

Sometimes It’s A Grind

Cannon Flowers and Serena Connelly are my kind of entrepreneurs. Cannon and Serena wanted to learn – and to demonstrate – how business tools can be used to make a positive impact on society. But they didn’t just talk about social entrepreneurship. They didn’t just convene summits, put on high-profile seminars or publish whitepapers. No – they started an It’s A Grind coffee shop franchise in the Deep Ellum neighborhood of Dallas.

As many of you know, It’s a Grind was no ordinary coffee shop. It was a social enterprise, founded on principles of respect for employees and seeking to meet basic human needs (including a living wage and health insurance for hourly employees). It was a social experiment.

Today we learned that after three years, the Deep Ellum It’s A Grind will be closing because it has not achieved financial sustainability.

Many in the Dallas social entrepreneurship community are expressing sadness about the closing of It’s A Grind. However it’s important for us to focus not on the end of this project, but rather on the successes and lessons that have come from it.

The closing of It’s A Grind says absolutely nothing about the use of entrepreneurship to change our world for the better. It only says that the coffee shop business is a tough competitive environment, like all small businesses in America. All you need to do is listen to Cannon talk for a few minutes about the It’s A Grind experience to realize that the project has provided a deep set of learnings to its founders, employees, and supporters.

Here’s one such lesson: one of the wonderful things about working in a socially conscious business is that every day is full of meaning. Sure, every job is a grind sometimes – but in a socially conscious business each participant is working to change the world for the better, even if what they happen to be doing at the moment is making coffee or washing dishes. So if you are searching for meaningful work, you might join such a business – or start one.

I hope Cannon and Serena will each take their hard-won lessons from this experience and make fresh attempts at new models for improving our society. I hope they will share their learnings with us in writing and in person. Most importantly, I hope others in our community will take inspiration from Cannon and Serena – to stop just talking about social entrepreneurship, and go do it. Yes, some days it’s a grind and sometimes projects must be ended – that’s the reality of a startup. But without taking the risk, there is no chance of success, and there is no progress. If all we do is talk about it, we fail before we even begin.

So hats off to Cannon Flowers and Serena Connelly for working hard, taking big risks, and providing leadership to social entrepreneurs in Dallas. Now let’s show them some respect by picking ourselves up and getting to work!

————
Salah Boukadoum
Co-Founder, Soap Hope
Where 100% of profits lift women from poverty

Put your money where your heart is

 
Friend: “Hey Salah, did you see the company selling scarves at the conference?”
Me: “You mean WORN?”
Friend: “That’s the one. Women refugees make the scarves. They can work from home and earn sustainable income. I think what they are doing is wonderful.”
Me: “So do I. I like the idea and I support their work.”
Friend: “Me too!”
Me: “That’s great! What did you get?”
Friend: “Oh I didn’t get anything, I just love what they are doing.”

I hope I don’t offend anyone, most of all my friend, by pointing out that she does not support WORN. She admires them. She thinks their concept is exciting. And she is glad that they are tackling a problem with their money and energy. But she does not support them.

WORN is a social enterprise – that means it’s a business. If my friend actually wants to support WORN, she has three options:

Buy a scarf.
Tell others to buy a scarf.
Give WORN her time.

Yes, social entrepreneurs are grateful when you recognize their efforts, and like all people they love to hear your encouragement. But if you want to actually participate in changing the world through social businesses, you must buy something from them – or drive other customers to them. Social businesses are businesses. Without purchases, there is no social change.

If you decide to actually support socially focused businesses, you have to become conscious of your buying patterns for a little while. It takes just a bit of attention at first to remember to purchase from social businesses. But once you get in the habit, it becomes second nature. You go to Demeter Project’s It’s A Grind for your coffee meeting instead of a chain. You wait until you get to a store that sells Project 7 gum instead of picking it up at the superstore. You take your spouse to dinner at Cafe Momentum for date night instead of your regular spot. And yes, you skip the household and body care aisles at the grocery store and buy online from Soap Hope instead.

I admit that it takes a small additional effort to buy this way. Sometimes you have to wait, and sometimes you have to go online. But if you aren’t willing to make that effort, why exactly are you excited about social entrepreneurship? Social entrepreneurs aren’t working to enable abstract masses of people to change the world through commerce: they are working to enable you to change the world through your choices. I don’t mean the general audience of this blog – I mean you, the person reading this blog right now.

Social entrepreneurs are realists. They know a $100 scarf or a $75 dinner might not be right for everyone’s budget right now, and they know everyone’s got a favorite flavor of something that they will never switch from – but you can still support these businesses by converting your social network into value for them. They need customers above all else. Put an entry in your calendar once a week to post a tweet, share a link on Facebook, or e-mail a friend. That’s the best kind of marketing there is, and in two minutes a week you will be truly supporting your favorite social entrepreneurs.

You can change the world with very little extra effort by doing this one simple thing: put a sticky note in your wallet that says “Who gets this money?” Whenever you take out your credit card, ask yourself who is receiving the profits. Is it a faceless investment pool with shares in a multinational corporation? Or is it someone whose life is being transformed by support from a social business?

Social entrepreneurs are in it because they want to do the heavy lifting – they will identify the problems, the people, and the sustainable solutions. But they need you to become conscious of your buying habits. At Soap Hope we say, “Your choice is your voice.” So become aware of how your money contributes, or doesn’t, to society. Put your money where your heart is.

Soap Hope supports WORN. To make the scarves even more wonderful, we send cuts of fragrant soaps to WORN that they sprinkle throughout their inventory to give the scarves a gentle and wonderful aroma. We plan to have WORN available for sale at Soap Hope later this summer. If you would like to be notified when WORN scarves are available on our site, please sign up for Soap Hope’s weekly e-mail.

What You Spend Is What You Get

I often ask people, “What’s the biggest problem in the world?” If you don’t know your personal answer to this question, please stop and take a moment to think about it. When you know what the biggest problem in the world is to you, keep reading.

Did you say “potato chips and soft drinks?” No one ever does. Some of the most common answers I hear are water, energy, poverty, intolerance, and war. But did you know that last year, PepsiCo spend over $50 billion in their business of distributing drinks and snacks across the globe? Compare that to the World Health Organization’s (WHO) budget last year of just $5 billion.

You may not think of your potato chip purchase as a driver of human behavior, but it is. PepsiCo has built factories all around the planet; hired some of the smartest engineers, scientists, financial minds, and management experts; created an IT infrastructure that spans the globe – all to support the purchase of potato chips by you and billions of other people. It’s because you spend money on snacks and drinks that drives PepsiCo to create this amazing infrastructure and to organize these incredible resources.

Are snacks and soft drinks ten times more important than global health? They why do we spend ten times as much through PepsiCo than we do through the WHO?

Whatever your biggest problem in the world is, here’s how NOT to solve it: try to convince people to spend their potato chip money on your world problem instead. Trying to change powerful forces like capitalism or culture is a recipe for wasting time and energy. If you want to solve a problem quickly and effectively, use existing forces to accomplish your goal.

That’s where most non-profits take a wrong turn. They reframe the question like this: “How do we arrange for money to be spent on problems we care about like World Health, rather than on problems we don’t care about like Potato Chips?”

It’s the “rather than” that’s the error in thinking. Instead we need to ask the question in forms like these:

  • “Can we get people to spend money on World Health every time they spend money on potato chips?”
  • “Can we get potato chip companies to spend money on World Health?”
  • “Can we create powerful financial incentives for investors that will motivate them or their companies to invest in World Health?”

Guess what: the answer to all these questions is, “Yes!”

There are many ways to leverage existing forces to solve world problems. My favorite is to teach companies that they can make bigger profits if they will partner with world-problem-solvers under a model I call Good Returns (see Scaling Social Ventures).

So I ask you again, “What’s the biggest problem in the world?” Each person has their own answer, so to make it easy to write about here let’s just call it Your Opportunity for now. Now I challenge you to think about Your Opportunity using our new approach: can you get people to spend money on Your Opportunity every time they spend money on coffee? Can you get a glass cleaner company to spend money on Your Opportunity? Can you create powerful financial incentives for investors in a fast food chain that will motivate them to invest in Your Opportunity?

The answer to all these questions is, “Yes.” Now, go do it. Don’t delay, Your Opportunity is here.

If you read my blog, please shop at Soap Hope where we carry everything good for body and home. Every dollar of profit is invested into programs that enable women to lift themselves from poverty.

If you appreciate my ideas, please write on your blog or Facebook right now about Soap Hope and help me solve the biggest problem in the world – poverty in women. You’ll be busy tomorrow, so write a post now!

It’s not enough to teach a man to fish (or, Poverty is a Process)

Almost everyone knowns the proverb: “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”

But what good is teaching a woman to fish if she cannot afford a fishing pole? If her children are sick and she cannot leave them? If a middleman buys her fish for a pittance and keeps all the profit, because she cannot determine the market price?

Most people view poverty as a problem, as a situation. But poverty is actually a process. The many intertwined aspects of the poverty process are self-reinforcing. In order to end the process, many simultaneous individual problems need to be addressed at the same time.

Think about a 28-year-old woman in Africa who is currently trapped in the process of poverty:

Unlike us, she was not taught to read. Did you ever learn anything from a book? Do you remember every recipe you will ever make? Do you ever use a list to remember what to do? Have you ever read how to repair something, or how to use a medicine?

Our friend cannot learn anything except what she experiences directly in person. She must remember everything important in her head. There is no to-do list, no planning. No recipes. No new food preservation technique unless she can remember exactly how to do it when shown. She certainly cannot make any written agreement with a buyer of goods. If her children need three medicines, she will need to remember the dosage and timing of each one by the color and shape of the pill. Can you do all this?

Unlike us, she was not taught how to do basic math. “How much feed can I afford to buy to raise my livestock, given the amount of time it takes to mature them and the price at the market?” “Given the cost of this thread and dye, how much do I have to be able to sell these shawls for to make it profitable?” It is almost impossible to operate the simplest trade without some basic math skills.

Unlike us, she does not have water nearby. Have you ever been thirsty for a few hours? Do you remember how slow you become, how tired it makes you , how it becomes difficult to think and the mood it puts you in?

Our friend cannot fetch water because it is 2 hours away, and she must be with her baby, prepare food and tend to her family’s other needs. So her two oldest sons, perhaps 8 and 10, walk with containers to fetch water for the family. It takes 2 hours to get there, and it takes 3 hours to get back. Have you ever carried water? It is heavy. The boys make this trip 3 times weekly. This trip is one of the main reasons they are not in school. They, like their mother, will not learn to read and write, perpetuating the poverty process.

There are many other dimensions to the poverty process. Chronic illness, climate change, political unrest and many other forces can create instability that makes it difficult to thrive.

Because there are so many interacting factors that work to keep people in poverty, many attempts to address poverty fail. If there are five or six intertwined problems and a program only addresses one or two, the program won’t work.

One of the most powerful tools for addressing all the elements of poverty comes in the form of nonprofit microfinance institutions. In the absence of an industry term, in my group we call it “Microfinance Plus.” Microfinance Plus institutions deploy programs that enable the local population to address all their poverty drivers. They provide small loans to women who use the capital to fund a personal business, like making something to sell at market, opening a kiosk, raising livestock, and yes even fishing. But these loans are also tied to antipoverty programs like literacy training, math skills, healthcare education, schools, and highly local needs like how to preserve an abundant local food or how to avoid a particular local pathogen.

They also provide the intangible but critical ingredient of human support – also known as “hope.” In many areas, poverty has been present for so long and is so profound that the people need to hear about the possibility for a different and better future for themselves and their children, in order to kick-start the process of working toward that future in a new way.

Now we can see that our old proverb doesn’t give us the outcome we want: the end of the process of poverty. “Teach a woman to read and to do basic math; provide her with affordable sources of clean drinking water, basic healthcare, and business training; give her human support and respect; and enable her children to go to school.” Then you don’t need to feed her for a lifetime. She can do that for herself and her family, just as we do.