You’re a founder of a new enterprise and one of your top priorities is social and environmental responsibility. Your management team, however, can’t think of anything but the balance sheet. By year’s end, your bottom line is healthy, but you don’t feel your new enterprise has contributed much to society.
It’s a common dilemma that comes down to a core disconnect that many founders don’t think to look for when pulling together their C-suites. But compatibility surrounding worldview, ethical issues, and dedication to social responsibility can be as important to the success of a business as professional qualifications.
Gustavo Mamão, SF ’11, founder of the Brazilian startup Flourish, which guides entrepreneurs in the creation of mission-driven organizations, has always focused on businesses that demonstrate how a company dedicated to a better world can also be profitable. But it’s an ethic, he says, that the whole management team must get behind. “The extent to which a business embraces sustainability and environmental goals is something that should be decided among founders and investors in the earliest days of the enterprise.”
What does advanced management theory have to do with social and economic justice? Everything, according to MIT Sloan Professor of Management Emeritus Robert B. McKersie. In his latest book, A Decisive Decade: An Insider’s View of the Chicago Civil Rights Movement During the 1960s, McKersie reveals how his convictions and his scholarship merged on the front lines of historic events in the civil rights movement—strategy sessions, marches, boycotts, and negotiations.
McKersie is best known for his pioneering work in industrial relations. His groundbreaking publications include A Behavioral Theory of Labor Negotiations (with coauthor Richard E. Walton) and The Transformation of American Industrial Relations, honored with the George R. Terry Award by the Academy of Management as the most outstanding contribution to the advancement of management knowledge in 1986. McKersie’s Strategic Negotiations: A Theory of Change in Labor-Management Relations (with Walton and Joel E. Cutcher-Gershenfeld) has been used effectively in the Northern Ireland peace process as well as in Israeli-Palestinian negotiations.
The African continent is, in many realms, an untapped frontier, and many global business analysts believe that one of those areas is entrepreneurship. “East Africa, in particular, is very green ground for basic entrepreneurship,” says Flavian Marwa, SF ’10. “Here, it’s more important to execute a simple idea well than to come up with an idea that no one has thought of. You don’t have to be a sophisticated technologist to take advantage of this environment.”
A consultant with the International Finance Corporation (IFC), an arm of the World Bank Group, Marwa uses his insights into the continent to advise the IFC on how African countries can implement policies that stimulate the creation and growth of small and medium enterprises (SMEs). “The idea is to bring in the private sector as much as possible. We know this approach leads to sustainable development. To be effective, however, policies to support SMEs also must address impediments in the value chain of targeted sectors.” Impediments like the skills gap, lack of mentorship, and information asymmetry.
Marwa says that leaders who are committed to a robust education system—from primary to secondary to university levels—will enable their citizens to develop a keen eye for opportunities and empower them with the skills to launch businesses. He notes that in Tanzania and other East African countries, the IFC is encouraging multinational companies to collaborate with universities to develop curricula that are relevant to what is actually happening in industry.
When it comes to approaching African leadership challenges, Yaya Moussa, SF ’10, believes the focus should be through a wide-angle lens. The leaders of individual African nations, he says, must think continent-wide and must collaborate with and leverage the strengths of neighbors.
A native of Cameroon now based in the U.S. after two decades in Europe, Moussa is CEO of Kontinent, an investment company that specializes in African extractive resources. His global resume has given him a multicultural perspective when it comes to finding solutions, and he brings that perspective to the problems of Africa.
“If African countries are to survive and compete in the global arena,” Moussa says, “their leaders must transcend narrow nationalism and think of the continent as a whole. Raising that awareness is of survival-level urgency. African countries need to collectively build a critical mass to have some weight on the global stage. A divided Africa is a weak Africa, an Africa with no future.”
Many of the crises facing countries across the continent, he notes, are first and foremost leadership crises—lack of vision, concerns about legitimacy, and misalignment of interests between leaders and their people. “Those deficiencies are only compounded by the sense of exclusion and by the enduring injustice felt by large chunks of the population—the root cause of political, social, and military unrest.”
Necessity has been the driver of invention in Africa perhaps more than any other region of the world. In most nations on the continent, notes Hal Gregersen, executive director of the MIT Leadership Center, everyday life requires innovative responses to a daunting string of challenges. “You have to be able to think on your feet and develop creative workarounds to get things done.”
Gregersen believes this demanding environment could prove ideal for producing the next generation of innovators. In Africa, he says, business leaders have few opportunities for complacency. “Leaders hoping to create new markets and develop business opportunities have to be open to surprises. They also must be able to take setbacks in stride. In temperament, nearly all successful innovators are very present in the world around them. Operating in a somewhat unstable environment commands your attention and delivers opportunities you might overlook if everything is running smoothly.”
Not that uncertainty and turmoil are ideal conditions for sustainable development. Gregersen acknowledges the profound constraints that exist on developing a generation of creative entrepreneurs in African countries. “One of the great tasks of present-day leaders,” says Gregersen, “is establishing trust-based environments for teaching and learning in communities across the continent.” Gregersen cites the transnational art education initiative Room 13 as one example of how this can be accomplished.
Many associate the African continent with political volatility, but while it is the tension that makes headlines, peace and progress reign in many countries on the world’s second largest continent. Kofi Annan Foundation Executive Director Alan Doss points to nations like Liberia and Sierra Leone as reasons for optimism. Doss is encouraged by the fact that those nations have recently elected leaders according to a peaceful and transparent process. “These officials have come in with the confidence of the people,” he says. “Now they have to build productive partnerships—locally and globally—to produce the sustainable results their citizens are expecting.”
Doss observes that nations like Liberia, Sierra Leone, and Ivory Coast only recently have emerged from periods of terrible violence and enormous human suffering. “To create a dynamic of sustainable progress,” he says, “they need to rebuild sound governance and avoid slipping back into conflict.”
If Doss understands African challenges, it’s because he has devoted much of his career to the continent, promoting peace, sustainable development, and human rights. Before taking on leadership of the Geneva-based foundation established by Kofi Annan, SF ’72, Doss was the Special Representative of the Secretary-General of the UN in the Democratic Republic of the Congo (DRC) and head of the peacekeeping mission there.
One of the world’s smallest countries, Singapore is also one of its great economic powerhouses. That dichotomy is frequently referred to in the business press as the “Singapore Miracle.” Often voted the best global city in which to do business, Singapore has a state-of-the-art infrastructure, a well-oiled and corruption-free bureaucracy, and a forward-thinking environmental policy that has made the country one of the world’s greenest places to do business.
Kiren Kumar, SF ’12, Director of InfoComms & Media at the Singapore Economic Development Board (EDB), says that Singapore is determined not to become a victim of its success. Over the last 50 years of Singapore’s independence, he says, it has attracted investment and jobs by being cheaper, better, faster. “We were a perfect host for many companies’ manufacturing headquarters. But we’ve also been aware of the fact that we can’t maintain this particular value proposition indefinitely.”
One of Kumar’s jobs is to change how Singaporeans look at Singapore. “We’re proud of what we’ve achieved,” he explains, “but there’s a risk in becoming too comfortable in the niche we’ve carved out for ourselves—especially when the pace of change in our region is accelerating so rapidly.”
Of all the continents on Earth, Africa is particularly blessed with an abundance of natural beauty and resources. Often, it is heralded as the cradle of civilization. There is no dearth of human talent in any sector of this, the world’s second largest and second most populous continent. But for all its vast potential, Africa seems to be beset by the greatest number of challenges, one of which is the war on drugs.
Kofi Annan, SF ’72, former Secretary-General of the United Nations and chair of the Kofi Annan Foundation, questions whether Africa should be waging a war on drugs—or a war on the war on drugs. At least as that war has been fought for the last generation. After years of witnessing the escalating drug crisis, Annan, a native of Ghana, is convinced it should be the latter. “The ‘war on drugs’ strategy, which focuses heavily on the suppression of drug shipments, has not enabled West Africa—or any other region of the world—to meet and overcome the drug threat,” he said recently in an official statement.
Pointing to a United Nations report that estimated cocaine trade through West Africa at $1.25 billion a year, Annan notes that the sum is higher than the combined government budgets of several countries in the region. The situation, he says, threatens to corrode institutions and the culture itself, undermining economic progress and democratic practice in a region that has only recently emerged from decades of violent conflict and instability. “The region’s political and security institutions are struggling to respond to these threats,” he points out, “and are not always well equipped to mount adequate preventive measures.”
Autonomy is so 20th century—at least in terms of governing nations. A half century ago, governments were relatively independent entities. They could make fairly autonomous decisions about their nations’ economic futures. MIT Sloan Senior Lecturer Otto Scharmer, a noted economist, sees a new world order today in which individual governments no longer enjoy the same kind of economic independence they once had.
A world economy, Scharmer explains, is one in which capital accumulation proceeds throughout the world, while a global economy has the capacity to function as a single unit “in real time on a planetary order.” A world economy has existed for five centuries, he points out, but a global economy has been in place for only the last two decades, driven by new infrastructures built on advances in information and communication technologies.
It’s common to criticize many of the world’s mega-organizations for being resistant to change, but reinventing large organizations—across borders, across cultures, across governments—can be a daunting feat. Nevertheless, the World Bank Group, with 188 member countries, is tackling an unprecedented reinvention in an effort to boost the organization’s impact.
As the Middle East North Africa regional manager for the Trade & Industry Competitiveness Program of the International Finance Corporation (IFC), the private sector investment arm of the World Bank, Hazem ElWassimy, SF ’09, is on the front lines of the historic transformation at the World Bank Group (WBG). For the last two decades, he has been working for and with multilateral organizations and government entities to generate investments and spark innovations that help countries modernize and expand economic opportunities.