Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.
Oxford MBA Candidate 2016-17 at the Saïd Business School, Devin Rebello, gives her perspective on the Skoll World Forum session “Designing Sustainable, Inclusive Cities of the Future”.
The story of a broken city began as a fault line of inequity and exclusion ripped apart the urban centre of Medellin, Colombia. Faced with rapid urbanisation and population growth, the city was sent into extreme economic upheaval spurred by lack of jobs, failing infrastructure, and inadequate city services. The most disenfranchised and vulnerable populations fled into the mountains where they were soon preyed upon by drug cartels and caught in cycle of violence and extreme poverty that made Medellin the most dangerous city in the world. As Liz Agbor-Tabi, Associate Director of 100 Resilient Cities, tells it, Medellin was a city with a master plan. Local leaders had gone through the exercise and set a vision. Unfortunately, they had planned for the city they had, not for the city they would need. This story, though extreme, is all too familiar to those working to design sustainable, inclusive cities of the future.
As I sat in the room and listened to the tragic impact of failing systems and the hope for a better way forward, I was struck by the conflict between formal and informal communities and the role of government in creating their own problems. The outstanding, passionate panellists drove a resounding point home: there are social structures, laws, and physical spaces within growing cities that inherently expel people to the fringes. The more a city treats the marginalised like a problem, the larger the problem becomes. A city cannot ignore the pain and suffering of those existing in informal spaces, such as slums, nor can it take a wrecking ball to these informal communities and expect them to go away. The marginalised will not disappear by being ignored or physically threatened; instead, like in the example of Medellin, they will find ways to try to survive that can be devastating to formal structures.
The big question is, how do you change this? How can cities get out ahead and build something that will grow with a surging population? The overall sentiment in the room was that we need to break through silos and take a systems approach to building more inclusive cities. This starts by bring those living in informal spaces to the table and including them in the planning process. It starts when we demand governments change arbitrary laws that lock the marginalised into poverty by disallowing them from being entrepreneurial. It starts when we recognise that natural disasters disproportionately devastate the marginalised and fight to change systems that currently make them ineligible for aide. It starts when we design cities that focus on creating easy access to education, health care, and transportation for everyone. And it continues when we constantly remember that design is not neutral – it can help or it can hurt.
What is most inspiring is that this can be done. Looking back to Medellin as our example, it is an amazing story of a phoenix rising. Liz Agbor-Tabi told us that from the ashes of violence and extreme poverty, the city was able to turn things around by bringing marginalised citizens into the planning process along with NGOs, businesses, and civil society. Medellin built infrastructure to physically connect those living in the mountains to the main city allowing easy and safe passage between locations, which led to more employment and more spending that would boost the overall economy. They also put a deliberate emphasis on creating community spaces to rebuild the connectivity and trust between and among citizen. Medellin is now a rising hub of social entrepreneurship that has an intentional focus on poverty alleviation and inclusion.
This last thought is an interesting one – with the government taking the first steps to build an inclusive foundation to alleviate violence and poverty, local businesses are emerging that are determined to take care of the community. But does it really have to get that bad for businesses to take responsibility for the communities in which they work? Do we really have to rely exclusively on NGOs and social entrepreneurs to be the ones to take action to prevent another city from falling?
I think back to the opening plenary of the Forum when Hamdi Ulukaya, Founder and CEO of Chobani spoke about employing refugees within his factories well before the current refugee crisis hit. In the process of employing those in need of a job, he built critical foundations that enabled his employees to become thriving citizens. Hamdi learned that transportation was a challenge, so he provided buses. He learned that language was a barrier, so he provided translators. He learned that factory skills were lacking, so he provided training. And in doing all of this, he removed large numbers of refugees from the fringes and helped them integrate into the formal economy. This, in turn, supports the job markets and overall health of the cities in which his factories operate. We applaud Hamdi for his work because it is truly remarkable. But we cannot simply view Hamdi as a caring heart amongst stone-cold corporates. His actions made economic sense to his business and, even with the additional expenses of transportation, training, translators, and paying his staff twice as much as what his competitors were paying, he is still making a profit. Chobani is the example that we need to point to and demand that all businesses responsibly participate in the health and safety of their communities. This is critical to the design of sustainable, inclusive cities of the future. We cannot speak about an inclusive planning process for the future of our cities and give big businesses a pass from sitting at the table side by side with those most in need of employment.
Macarena Hernandez de Obeso is passionate about the economic opportunity for Mexico’s deprived communities. She is also our 2016-17 Skoll Scholar and Oxford MBA student. Her journey from Guadalajara started with a simple Skype call. Macarena shares the story.
Two years ago I had the luck to have a conversation by Skype with Pamela Hartigan. At that moment I had no idea this call will change my life to the point that today I’m writing this blog from Saïd Business School, at the University of Oxford, 5,605 miles away from the place I was born and raised, Guadalajara, Mexico.
Macerena joined Prospera in 2011, the first social enterprise in Guadalajara, Mexico.
One would think that it is almost impossible to build a social enterprise in a conservative region, in a country that has not been growing strongly for the past 30 years. But, in spite of all this I have not allowed the circumstances to define what I can or cannot achieve. To the point that in 2014, Prospera, the social enterprise I was leading, was recognised as one of the top 10 favourite social enterprises in Mexico, according to Forbes, and the best social enterprise in Mexico according to the Suzie Bank UBS.
Prospera became my passion. But, passion alone gets you nowhere.
My unconformity and the pursuit of challenge and intellectual growth led me to join the team of Gabriela Enrigue to build Prospera, the first social enterprise in Guadalajara. At that moment, I did not know anything about entrepreneurship or social enterprises. But a hunch and a desire to learn made me spend all my time building Prospera from the beginning. At Prospera, our mission is to serve single moms in poor communities who start small businesses from home. Our vision is to disrupt the entrenched male-dominated social structures that have been in place for the past 500 years in Mexico. We have trained more than 7,500 women and increased their incomes eight times. Prospera became my passion. But, passion alone gets you nowhere.
Generating opportunities for women is a profound reason that deserves my time and work. But if I fail to better combine the social mission with a sustainable business model, I will be designing solutions that nobody will pay for and the impact will never scale. I came to this awareness after I led a Prospera project as part of a Fund developed by Alsea Foundation and Starbucks Mexico. This project changed the way I see the world.
Alsea Foundation and Starbucks Mexico Project at Prospera [Photo source: Prospera]
The project’s goal was to add a productivity component to Alsea Foundation. It was the first project of this kind done in Latin America and we expected it to be scaled to six more countries. We trained 33 poor, single moms from one marginalised slum around Mexico City. They were recipients of philanthropic aid and the purpose of the project I designed was aimed at transforming them into small vendors at Starbucks. The women produced 3,300 customized notebooks that were then sold in 80 Starbucks. These women improved their income by 700%. Despite that the notebooks were sold to Starbucks consumers in less than a month, Starbucks only made this one purchase. Why? Neither the notebooks sales nor the productivity of these women were related the Starbucks core business model and the Foundation could not drive the corporate goals.
I decided to start looking for MBA programmes that would help me design business to solve the most challenging social problems that we face today.
As a result of this project I have been studying start-up business methodologies and working on the development of Prospera’s business model. I want to generate benefit for both the community and enterprises. If an enterprise increases income while solving social problems, they are willing to pay for this solution. That’s why two years ago I decided to start looking for MBA programmes that would help me design business to solve the most challenging social problems that we face today.
Talking with Pamela Hartigan not only helped me to understand how the Skoll Centre supports social entrepreneurs inside Saïd Business School, but she also made me believe that one day I could become an Oxford MBA student. The day has come I am grateful and ready for the challenge.
Recent graduate of Oxford Saïd MBA 2015-16, Andres Baehr Oyarzun, spent his Summer Consulting Project in Mexico with 2015 The Venture finalist, Echale a tu Casa. Andres shares his story.
“Echale, echale!”, screamed a child behind us, while we watched Mexico City’s Lucha Libre. Chubby wrestlers kept slapping each other’s chests while we sat next to our supervisor. This was not your average MBA consulting project, I thought.
It was the first time we heard the word Echale outside of the context of ‘Echale a tu Casa‘, which can be translated as ‘Throw your Heart at your House”. Echale is Mexico’s first B Corp, a finalist in Chivas’ The Venture competition in 2015, and the recipient of the ‘Best of the World’ award by the Rockefeller Foundation. The organisation works to provide affordable housing through an innovative and effective model. We were in Mexico to help them prepare for releasing an investment prospectus – post- competition support that was financed by Chivas after Echale’s participation in The Venture. We hoped to learn more about an innovative social business model while using our skills to add value to the Echale team’s work.
And learn we did – the model works as follows: imagine you are a low-income homeowner in need of a new home or home improvement work. Due to lack of access to finance, you will usually be limited to making necessary changes to your home as your savings allow – on an ongoing/ ad hoc basis, rather than during a singular, planned project. In many cases this leads to substandard home conditions and overcrowding. With Echale’s model, families only have to finance and carry out 30% of their home construction and Echale helps them to complete the rest. By creating access to both a government subsidy and a credit service, Echale enables homeowners to complete a new home or improve an existing one, in a sustainable manner. The impact goes beyond housing. Families get access to financial advice and products, they are active participants in the building of their own homes and the environmental impact of home construction is reduced by the use of Echale’s eco-friendly construction materials.
We drove with Alejandra, Director of Promotion, into Jocotitlán, one of the rural communities where Echale operates. “I wasn’t too sure about social entrepreneurship” she said, “until I met Francesco (Echale’s CEO and a regional celebrity of sorts). After speaking with him, I knew I wanted to be part of the team, so I contacted him again, and again, until he just said ok, ok, come work with us”. 50 houses have already been constructed in Jocotitlán and the team is aiming to construct 500 more. This is just a small portion of the 30,000 completed homes, 150,000 home improvements and more than one million lives already positively affected by Echale.
Alejandra pointed at the steel beams that can often be seen poking out from the roofs of half-constructed houses. “You see those? They call them the ‘beams of hope”, she said. “Owners leave the beams in case one day they can afford a second floor”.
We visited Maria del Carmen, one of the homeowners who had recently moved to an ‘Echale’ house. She walked us around her old home. We looked at the blue cracked walls, dirty floors and pierced tin roof. The contrast with the tiled based and firm structure of the new house was remarkable. Maria represents one life improved, but a sea of homes is waiting to be built; in Mexico, an approximate 4.9 million families live in substandard housing.
After two weeks of bilingual Skype teleconferences, research, modeling and writing, we finally had to say good-bye to the Echale team. During our last meeting with Francesco we felt a combination of sadness, gratitude and excitement.
“Social impact is like a quantum gate”, said Francesco and raised his palm. “Once you touch it, you can’t go back. Once you have experienced it, you can’t go back”.
We packed up our bags and made our way back to Oxford. Back in Mexico, the luchadores would keep slapping their chests, the beams of hope would still stand high and the Echale team would still be there, throwing their hearts at it.
The Venture is looking for social businesses from around the world that are using business to help create a better future, if you are interested in applying or know of someone who should, head to their site to learn more www.chivas.com/the-venture.
It’s not a topic you would usually think elicits much inspiration. (Nor be a fitting topic for a discussion over lunch!)
But last week, order Albina Ruiz opened up our eyes to the incredible potential of leveraging this dirty business into transformational change.
Albina Ruiz, ailment the Executive Director of Ciudad Saludable, buy visited us from Peru. She shared valuable insights on how Ciudad Saludable has helped small micro entrepreneurs build a community-based waste management system whilst improving the social and environmental status quo of communities.
So what is the key to their success? Obviously, there are many factors. But her main insight: you need a holistic approach.
Almost a decade ago, Albina and her team saw a large problem: public- sector solid waste disposal services in Lima were not functioning. But they realized if they could flip this gap into an opportunity, they could create employment for local citizens whilst providing a public service for the community at large.
Today, Albina works across the board with social leaders, local and national governments, waste collectors, teachers, the media, and communities at large. (And of course don’t forget the ever important change agents at even the smallest levels, e.g. mothers.) In the process, Ciudad Saludable has changed national policy around sanitation and waste collectors rights, provided educational training (about waste, health and the environment), and generated serious profits, for government and families alike. What started as a small initiative in Peru has now been scaled to several countries in Latin America and most recently in India.
With an approach like this and tremendous results in scaling successfully, it’s no wonder that Ciudad Saludable has won several international awards. It’s a model, I believe, that has the potential for even greater adoption. As mega-cities around the world continue to boom, Ciludad Saludable shines a light on how to build sustainable cities, in terms of its public, environmental and financial health.
Are entrepreneurial approaches to development bringing impacts to children fast enough?
At the latest Skoll Centre Speaker Series brownbag, viagra Patrick McDonald, CEO of Viva, led an intriguing discussion on social ventures working with vulnerable children. He shared his experience (yes, the ups and the downs!) of over 20 years in the field, and then posed the question of how we can continue to move forward, faster. Can a funding and incubation platform supporting child-focused social ventures be the answer?
What transpired was a brainstorming session on how to scale successful models, barriers to progress, and new insights on how to collaborate. We broke down our assumptions (what is “scale”? what is “success”?) and shared ideas for redesigning the flow of support and funding from ideation to scale.
Have any ideas? Get in touch, as the conversation will be continuing among Patrick and the students as his new venture evolves.
Don’t miss your chance to be a part of the next Skoll Speaker Series event! Albina Ruiz, Executive Director of Ciudad Saludable, will be here on the 25th November at 12:30-1:30. Bring your lunch and appetite for all things related to social entrepreneurship!
There is no denying the prevalence and prominence of the impact investing discourse these days. A hot topic? Absolutely. A brand new conversation? Not even close.
So, when you can hear from one of the early pioneers of the industry, it is always insightful.
This week we hosted Tammy Newmark and Michele Pena of EcoEnterprises Fund who joined us as part of the Skoll Centre Speakers Series. They have been investing growth capital in sustainable businesses in Latin America for over a decade – and have the battle wounds to prove it.
Not that it’s been all setbacks and scars — but because they simply are open and transparent about the challenges they (and other risk-taking impact investors) have faced over the past 10 years.
Set up in 2000, EcoEnterprises Fund provides long-term investment capital and business advisory services – one without the other would be ineffectual and downright bad business, they say. The Fund has invested in 23 companies from ecolodges to organics, sustainable forestry to aquaculture. Most of these investments have been wildly successful (20 companies still in operation, 11% p.a. return, and most importantly, measurable social and environmental impact) but of course, there have been challenges.
Which is no surprise, seeing that they are injecting risk capital into companies that are, well, risky. They bet on the companies that are first-movers and market makers, whose products and services have yet to gain market acceptance. As such, they are cultivating new demand and a vibrant marketplace that moves these eco-enterprises from the outskirt to the mainstream.
What’s next for EcoEnterprises Fund? Be on the look out for their book this fall called “Portfolio for the Planet”, which is an open playbook to their tools, indicators and investment cases. Also, they are currently raising $30 million for a new fund EcoE II, which will target 10-12 small and growing community-based businesses via mezzanine investment instruments.