It’s the Talent, Stupid

At a recent meeting I had with the Chairman of a global consultancy company… actually, before I go into what happened at that meeting, it’s worth just pausing to ask a question: what on earth is the Chairman of a global consultancy company doing, meeting with me? I mean, it’s only me and this is someone accustomed to networking with the elite of the elite. Which I am most decidedly not.
I was asking myself this question as I walked towards the big glass and steel building, to what turned out to be a memorable meeting. He’d heard me pitch B Corps at a small exclusive event and approached me afterwards. He didn’t say so, but he must have a problem, and saw something in the B Corp pitch that could help him solve it. The core value proposition of his business is talent. Hiring and then contracting out superior talent. Part of the value proposition of B Corps is that the very best young talent doesn’t want to work for old fashioned, exclusive shareholder businesses – they want to work for forward looking, inclusive stakeholder businesses.
“So I’m guessing you asked for this meeting because you have a problem. Your business model is like a giant pyramid scheme for talent, where all the fresh young minds join at the bottom of the pyramid and get plugged into the matrix for 10 or 15 years. At which point, if they’re still able to function, they have risen sufficiently high up in the pyramid to share in the proceeds. The people at the top of the pyramid rely on fresh young minds joining at the bottom. But is the best of the young talent joining? Or, to be more specific, is it joining with the intention of leaving after a couple of years because it wants your brand on its CV – but has no intention of spending 15 years in a pyramid scheme?” Or something to that effect.
Him, sitting opposite, open mouthed. Followed by a conversation of considerable energy, exploring the why and the what’s-to-be-done.
Why would the talent want to serve, and then become, another tentacle of “the great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”? (Matt Taibbi, Rolling Stone Magazine, July 2009)
These youngsters spent their formative years watching the greatest wealth transfer in history undertaken from the taxpayer to the already-wealthy – first through the bank bailouts, and then through quantitative easing. In the process, they experienced the state losing its ability to fulfil the social contract, most directly for them by being unable to continue paying for their tertiary education.
So I thought I’d ask around a bit. And what should I find? A Chief Human Resources Officer of a FTSE 100 company who says that retaining talent has become a major business issue for them and is now considered one of their top risk factors. They feel like they are becoming unable to do it. The levers that used to work (money, status, trinkets etc) do not seem to have the same effect, not like they used to, and especially not on the most talented people. The CHRO is realising that in order to compete for talent, the company needs to be able to articulate some sort of purpose, some sort of usefulness to society. Creating shareholder value just doesn’t get the best of the millennials out of bed any longer.
More and more research is bearing this experience out, like toniic’s recently published ‘Millennials and Impact Investment’ Report:
“Millennials are very concerned about an eroding quality of life. As a result, their priorities include “staying close to family and friends, having free time for recreation, and working in creative jobs”. This quest for balance and alignment is commented on broadly in research on millennials. “If the financial markets are going to be volatile, the most secure thing you can do is find a life and
work that you love,” says Megan Hellerer, a personal and executive coach in New York City
and a former Google executive. These priorities influence what millennials perceive as the primary roles of business: to improve society, to make profit, and to drive innovation. According to a Morgan Stanley study, millennials are three times more likely to seek employment with a company based on its stance on social and/or environmental issues (14% of millennial investors, compared to 5% of the total individual investor population). Organizations in the UK, like Finance Matters, working to put sustainability at the heart of finance, and Escape the City, a platform to connect job seekers with purposeful career opportunities, are responding to the growing demand from millennials to find value alignment in their financial careers.

The glorious problem that is increasingly facing old fashioned, exclusive shareholder companies is that the best talent doesn’t want to work for them. More and more, emerging leaders are abandoning these lumbering monoliths with their moribund corporate cultures and making the decision to live free. Either by working for forward-looking, inclusive stakeholder companies or by working for themselves.
A couple of years ago on these pages, I celebrated the coming Dawn of the Civil Economy. We are increasingly able to ‘vote’ for the world we want to live in through our savings decisions and our consumption decisions. This, in our age of dysfunctional government, arguably has a greater impact on the world than our actual vote. In making this point, I missed perhaps the most profound ‘vote’ we have – our decision as to who gets to benefit from our talent. Do we offer it to the vampire squid? Or do we use it to “improve society, make profit, and drive innovation”?
The business case for taking an inclusive, stakeholder approach is strengthening by the month. Attracting the best talent is the coup de grace for that business case.
I have no idea whether the global consultancy company will figure out their problem. The solution for them, I suspect, is to put the improvement of society at the heart of their business. Not in the too-often patronising, window-dressing, power/ego, cringe-worthy way that they sometimes do. But truly, madly, deeply. With all of their considerable brains. And in all of their consultancy work. All. Of. It.
If they don’t someone else will and whoever does will win – because that’s where the best talent will be found, and where the greatest value will be being created.

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Contrasting Refugee Camps of Calais & Dunkirk

Andy Matheson, Panahpur Chairman, has a surprising reflection after visiting the refugee camps in Calais & Dunkirk earlier this month

It is often in the midst of suffering that we discover the strength of the human spirit. I have seen that with my own eyes on many occasions as those in situations that appear hopeless find the inner resources to do something that will make a difference to themselves and others. Most recently I saw that in Calais as migrants who had come from all over the world were camped out in tents, shacks and caravans all with the minutest chance of ever making it across the Channel. The human spirit was evident there in the number of enterprises launched in the midst of that transient community. People making a little money from cooking and serving food to the supply of hot water for showers and even some programmes of entertainment. The circumstances were basic but you can’t stop people having ideas or using their initiative when given the opportunity. In fact, the contrast from the Calais camp to the newly built government facility at Dunkirk could not have been starker. In Dunkirk everything was ordered and similar, from the small wooden houses to the queues for getting your food. In that camp everyone had what they needed in terms of food, clothing and shelter and the place was clean and tidy but there was also a sense in which people were being robed of their dignity. Here were people with nothing to do being served hot meals prepared and served by western volunteers. Yet, I bet you that in the queue for food were some outstanding cooks who would have loved the chance to prepare a meal for themselves and their fellow refugees.

When we give people the basics of life but not the opportunity to use their gifts and abilities or to think and plan and design we rob them of their humanity for we are all programmed to be creative – it’s a part of our nature. This is such a tension for those working in relief and development because the line between them can be so thin. Relief is the provision of the basics to enable people to live and not die but as soon as people have the basics required they soon become restless for the deeper more meaningful parts of their existence and then we are in a ‘development’ scenario. Good ‘relief’ work is about supplying what people need, good ‘development’ on the other hand is about never doing for someone what they can do for themselves. John McKnight in ‘The Careless Society’ talks about how in inner city America people are emasculated because a relief approach is in the on-going DNA of the government’s response to what is a ‘development’ scenario. As I left the Dunkirk camp those I travelled with asked me for my reflections on what I had seen. Now, my experience is in the Global South so I have no pretension to be an expert on Europe or the needs of refugees. My response was simply that having a large group of young men in a situation where everything they require to live is provided but where they have no opportunity to make a contribution is a ticking time bomb. Something will erupt at some point. Even those who have been through incredible trauma just to make it to France will, at some point, need the opportunity to create and contribute. That is why business and job creation and entrepreneurship is so important in building a better world.

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The Charge of the Lightweight Brigade

In October 1854, Lord Cardigan’s Light Brigade charged the Russian artillery at Balaclava, on the Crimean Peninsula. They were composed of Light Dragoons, Lancers and Hussars.
“Into the valley of Death
Rode the six hundred”.

Over the summer, the Labour Party establishment has charged into pretty much the same place. Tony Blair et al can look blinking around them through the smoke and bullets, and exclaim that this valley of Death is ‘Alice in Wonderland politics’. But it is they who so gravely misunderstand the ground on which they now stand.
“Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die”:

Equally striking, behind the Labour Lancers are the Conservative Hussars, yet to start their charge. They gleefully look on as their old rivals are obliterated right under their noses. It seems not to have occurred to them that they will be next. They are, after all, to all intents and purposes the same.
“Not tho’ the soldier knew
Someone had blunder’d”:

It is certainly New Labour that is being crushed. But it is more than that. It is what they represent: Insiders operating a state apparatus. Political oligarchy in thrall to debt (and hence bankers). The Establishment. Stasis. Hand of narcissism in glove of neo-liberalism. The polling shows that it is not just New Labour whose core vote is splintering. The General Election this year bucked this trend, because the Labour Party contrived to offer the worst of both worlds. But things have changed irrevocably. And the British public see the Conservative Party in much the same way as they see New Labour. Right now they are savouring the spectacle of New Labour squealing like the stuck pig that it is. Doing the same thing to the Tories will be just as sweet.

Fundamental changes are underway in the world and of course this changes how people see politics: The death of a 25 year neo-liberal economic consensus; deep questions being raised about how we might collaborate, and so change an institutional structure designed for competition and antagonism; a social contract – and a union – so clearly under strain; the early years of a Technology Revolution which will prove every bit as profound as the Industrial Revolution; Globalisation; Sustainability challenges; Migration. What is our Purpose?
The failure of the political establishment to engage with and respond to these things is not restricted to New Labour. It is a peculiar spectacle, to watch the equally lightweight Conservative Hussars peering through the smoke, laughing at the misfortune of their ancient rival, failing to even realise that they in the same place.

Our society desperately needs our politicians to tool up with some serious intellectual, moral and philosophical hardware if they are to stand a chance of getting out of this place intact. If they don’t, they will increasingly be shot to bits by forces they can barely see, let alone understand. “Ce n’est pas la guerre: c’est de la folie”

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Might Foundations Be Truly Transformational?

A wonderful group of people are coming together to ask some searching questions about whether the way that foundations work is fit for purpose. Maybe we need to fundamentally re-think. Maybe doing so might offer the prospect of transformational (rather than incremental) change for our beneficiaries. As business and government re-think their roles – increasingly openly and intelligently – has the time come for foundations to open up to an equally deep and thoughtful reappraisal?

Check it out, join the conversation. 

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Oasis Coffins experience of the Nepal Earthquake

Panahpur is the largest investor in Oasis Coffins, based in Northern Bangladesh. This is Helena’s story; she is a Bangladeshi staff member of the business, responsible for community impact and Fair Trade. She describes what happened in the production unit the day the Nepal earthquake struck. Our facility in northern Bangladesh is 1000Km from the earthquake epicenter.


For most people living in Nepal, North India, Bangladesh, parts of Bhutan, China and Pakistan, Saturday the 25th of April, 2015 will always be a memorable day, the accounts and stories from which will be shared for weeks if not months and years to come. Like many others, I re-live the moments as we felt the impact of the 7.8 magnitude earthquake in Nepal, 1000 km away from our production centre. I work for Oasis Coffins and was in a meeting on the 2nd floor of our building in Bangladesh’s northern most manufacturing zone.


It was close to noon and I was in a conversation with Shima*, one of the factory production workers. Initially, I paid little attention to the shaking furniture, but as the seconds ticked by, I realized that we were in the throes of quite a long and powerful tremor. When I stopped talking and calmly told Shima what was going on, I saw fear and uncertainty in her eyes, the very emotions I felt but didn’t have the luxury to express (my response might possibly affect that of many others). Outside the room, I heard people shouting and running down the stairs in order to exit the building. As Shima and I joined them, my primary concern was to prevent a stampede. With encouragement from some of us to maintain a calm and orderly descent, everyone was safely downstairs and outside the building in a matter of minutes.


The layout of the buildings within this purpose built area, allows for margins of ample proportion between and in front of factory buildings, making these open courtyards the safest spaces to evacuate to during emergencies such as earthquakes. Once the building had been evacuated, the staff assembled in groups according to their areas of work so that everybody could be accounted for. This was followed by clear instructions to the teams on evacuation procedures in the likely scenario of aftershocks. We had two clear aftershocks in the days following the earthquake, the epicenter of each quake becoming progressively closer to Nilphamari where we were. The epicenter of the last aftershock we felt was only 250km from us in India’s Sikkim.


When the earthquake struck, fear and shock registered on most faces. I overheard some of the workers saying that they hadn’t been aware of the earthquake because they had been working on heavy machinery. Had it not been for the alarm raised by some of their co- workers they would not have known at all. Bangladesh is not new to building collapses where many people lose their lives (the most recent shocking and globally publicized being the Rana Plaza factory collapse in 2013). Not far from every employee’s mind are images of destruction and loss of a hope and future that occurs when a building comes down. Poor quality construction can often lead to this but add an earthquake to the mix and it turns lethal. Aware of the need for staff to have the comfort and presence of family after an event such as this, as well as the necessity to evaluate the building, our production was stopped immediately. There were reports of cracks having appeared in parts of the building that warranted expert analysis and advice, and so, the EPZ civil engineer was invited to evaluate the building. His verdict was that any marks were superficial and not structural and only after this was verified and the building deemed safe for work, has production resumed.


It is with pride and gratitude that I say that all our staff and production workers conducted themselves in a worthy manner that ensured safety and life in a time of fear and likely danger.


*Name has been changed to protect the identity of the person.

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Not Fit For Purpose: Why I’m Done With the Foundation World

Not my words, but the words of Jake Hayman. His full blog can be read here. Something is definately up. Change, one senses, must come – quite big change – because so many of the problems identified by Jake are not caused by bad people but by a system that no longer works as it was supposed to.

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Mutual Capitalism?

Bruno Roche, Chief Economist from Mars (not the planet, I assumed) said something strikingly simple and powerful at an event last week:

There are three inputs that need remuneration: Capital, Land, People.
• Marxism only wanted to pay the people at the expense of the others
• Greens only want to pay the land at the expense of the others
• Modern capitalism only wants to pay the capital at the expense of the others

We need a new Mutual Capitalism which wholistically optimises value for all three.

(Bruno Roche calls this ‘the economics of mutuality’, more here)

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The Social Business Frontier

We were pleased to Chair the Working Group on the Social Business Frontier for the UK Advisory Board to the G8 Social Impact Investment Taskforce. Our report, along with the main Taskforce reports and the reports of the National Advisory Groups and other Working Groups were all launched yesterday by Chancellor George Osborne and Sir Ronald Cohen at an event in Downing Street, and can be found here. This is from the introduction to The Social Business Frontier Working Group report:

What is the purpose of business? What is it there to do? Who is it for?

Business lies at the heart of society – as an employer, a provider of goods & services, a wealth creator and an innovator. In return, society gives business a licence to operate, offers its labour and consumes its goods and services. A healthy society relies on a healthy relationship with business, and vice versa. This interdependence creates a covenant between business and society.

Business has historically been the greatest driver of economic prosperity and social progress. However, recent history indicates that if business does not honour the covenant between business and society, it risks destroying value for both parties. Defining success in business in exclusively financial terms has introduced exactly this risk. It has made the question of how to better align the interests of business and society a pressing issue of our time.

It is therefore timely and welcome that the G8 Social Impact Investment Taskforce has been established to examine this, alongside other related issues. This paper outlines thinking and practice at the frontier of this field. It is relevant to everyone who invests in, is employed by or operates a business. It is tactically relevant because any loss of licence-to-operate is an important risk for businesses to understand. It is strategically relevant because successfully addressing this question has the potential to create substantial value for both shareholders and society as a whole.

Commenting on this report, James Perry said: “The legal and regulatory environment for business and charity in the UK was established in an analogue age where profit and social good were conceived as separate.  Certain sectors of business and charity have now moved into the digital age. Entrepreneurs, investors, charities and governments are collaborating and aligning to create profits with purpose – delivering measurable social value alongside financial value. New structures, such as Benefit Corporations, Social Impact Bonds and Community Interest Companies, are being conceived and adopted around the world, and offering the promise of a step-change in the ability of charities and businesses to create social value . The time has come for a strategic response in the legal and regulatory environment so as to support, rather than inhibit, these developments”.

It will be interesting to see how policy makers respond to the substantial recommendations made by the Taskforce. More on that later.

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Social Entrepreneurship Is A Distraction

It is rare for us to reproduce someone else’s blog in full. But in this blog first published a couple of weeks ago on the Oxfam blog, Pamela Hartigan, Director of the Skoll Centre for Social Entrepreneurship at Oxford’s Saïd Business School, elegantly says what we have been trying to say here.

“The first time I heard the term “social entrepreneur” I thought it referred to business people who liked to party. That was about twenty years ago, when the term was just beginning to surface, said to have been coined by Bill Drayton, founder of Ashoka. Ashoka was the first entity that identified and supported such individuals – innovators with a “bold idea” aimed at changing a system that was at the root of a major social or environmental problem.

Twenty years ago I fell in love with “social entrepreneurship”, its promise, and most of all, the stories of the champions that practiced this approach.   They didn’t take “it can’t be done” as a deterrent – in fact, as one of them described to me, “’it’s impossible’ is our clarion call to action”.   As the first Managing Director of the Schwab Foundation for Social Entrepreneurship, an entity supported by World Economic Forum’s founder Klaus Schwab and his wife, Hilde, I spent eight years identifying, celebrating and supporting such individuals, providing them with opportunities to enter the coveted corporate enclave that is the annual meeting of the WEF at Davos – which in turn gave them access to networks of power they had never been able to tap. Many of these social entrepreneurs formed strong and lasting relationships with members of the corporate C suite, heads of philanthropic foundations and the media leaders that attend Davos.  It was difficult not to become infected with the bug of “social entrepreneurship”.

money v missionThe Schwab Foundation certainly was not the only social entrepreneurship organization on the scene.  A host of other organizations were created at around the same time, including Echoing Green, the Skoll Foundation, the Omidyar Network, Acumen, Mulago, to name just a few. These were primarily based in the USA, but the UK quickly followed suit along with countries on the European continent, Asia, Latin America, Africa and Australia.  Governments, led by the UK, embraced “social enterprise” as the “third way” – income-generating charities that did not depend wholly on public coffers but dealt with the increasing number of social problems that defied government solutions.

My main concern about this viewpoint is that it stripped the notion of innovation and systems change – the essence of social entrepreneurial endeavour – right out of the approach.  In the UK and those countries that have followed, social enterprises have become part of the “social enterprise industrial complex”,  sub-contractors to government and feeding into a dysfunctional system.  But that is for another blog.

The point is, all of a sudden, social entrepreneurship was everywhere and everyone wanted to be one.  But there was one question that was raised at every national and international gathering of social entrepreneurs.  As former President Bill Clinton noted in a speech about the challenge of school reform “Nearly every problem has been solved by someone somewhere.  The frustration is that we can’t seem to replicate [those solutions] anywhere else.”    Why is it that the only system-changing approach that has managed to go to scale is microfinance?  Yet we forget that it took 30 years and an estimated US$20 billion in subsidies from major foundations and individual philanthropists to transform microfinance from an undefined effort sitting between philanthropy, aid and the market, to something much closer to mainstream investing.

This begs the question as to whether the only way social entrepreneurship will scale is by becoming part of the mainstream market system.   As someone who is now working in a business school environment, this idea carries significant weight.

I do believe that transformational systems change will never be achieved on a massive scale by non-profit organizations or even by well-meaning “hybrids”.  I very much

Which needs fixing first?

Which needs fixing first?

believe that the way forward is through business. And so I have come to feel increasingly uncomfortable with the term “social entrepreneurship” and its main actor, the “social entrepreneur”.

But the reason is not because I have bought into the notion that capitalism as we now practice it is the solution – but because I firmly believe that every entrepreneur has to be a “social entrepreneur”.  The way business has operated in the last 50 years must be disrupted because we will not survive as a society or a planet if we do not tear down the walls that compartmentalise economic, social and environmental activity.  That is why I am now working in business schools.  The way we approach business education has to change.

There is no doubt that the term “social entrepreneurship” served its purpose at one point in time, mainly because we needed to highlight what type of entrepreneurial practice we were referring to – but today it only serves to further dichotomise entrepreneurial practice into the “social” and the “commercial” (“non-social”?).   It creates a false separation between “this is where we make money, and this is where we do good”.  And that is EXACTLY what is wrong with capitalism today.

It is hard for us who have been born and raised under capitalism and the large corporation to reflect on the fact that it was only relatively recently – not many centuries ago – that humankind finally began to achieve a surplus, something more than the necessities for survival.

The central precept of all early corporations that began to take shape around the 16th century was that even though they were chartered as private entities and possessed special privileges and monopoly rights, they were still expected to carry out activities with a public purpose. That has changed and needs to be revisited if the world is to advance.

Yep, maybe it is

Yep, maybe it is

There is no doubt that the modern corporation as we know it today has empowered individual genius and bestowed great social benefits.  Yet it has also done social harm. Many of the ills of modern life – non-sustainable levels of personal and institutional debt, toxic air and water, workplace injury, loss of livelihoods for communities, political bribery – can be traced to corporate lack of responsibility to one or more constituencies.  This is not intentional.  No one wants to cause poverty, pollution, disease, unemployment and corruption.  Rather, they want to make profits. But in that pursuit, they may find anti-social behaviour pays. To achieve profits in the short term, corporations exact a “social and environmental price” and that price is high and rising.

The key to sustainable capitalism is reasonable profits as opposed to maximizing profits.  In the current system, a segment of society is trying to maximize profits without concern for the impact on the well being of the society as a whole, while another segment of social organizations have to deal with the fall out.  The system is not working.

Fortunately, there are a growing number of people, particularly among the young, who embrace the notion of “entrepreneurship for society” rather than commercial or social entrepreneurship.   They are not waiting until they are 50 years old when they have “made their money” and can “give back”.  I am optimistic that through the new breed young professionals, we can go back to the future and base our economies on activities that uphold social and environmental goals without eschewing financial sustainability”.

– Pamela Hartigan

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