archive: strategy

Rebuilding Haiti – A Unified Strategy

Monday, January 18th, 2010

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When you see the level of response from the US and nations around the world to the tragic earthquake that rocked Haiti only a few days ago, it is hard not to feel proud of the quality of global citizenship displayed by so many.  Individuals and organizations have been sent to help with security, medical care, food distribution, general aid, and journalistic coverage and they should be commended for their commitment to humanity.

However, as an economist who was working on economic development in Haiti before the tragedy, I know that the strategy and model used for rebuilding is the key to success.  Despite good intentions, the developed world does not have the best track record for helping under-developed countries gain any significant traction.  There has never been a lack of funds or good intention, but there has been a lack of effective and unifying strategies designed with the population’s physical and cultural needs in mind.  This unfortunate and tragic earthquake has presented the world and Haiti with an opportunity to set the rebuilding of Haiti on a course that will have long term significance for its people, if we are all willing to try something new and think about building sustainable economies with a new perspective.

There are a number of areas that will obviously require simultaneous focus, however the primary force and core strategy should be helping Haiti to rebuild their own country, with their own hands, and resist the temptation to do it for them. Often our own need to help gets in the way of truly understanding what is needed.  This may sound over simplified or inconsequential to many, but I assure you it is not. The rebuilding must be done in a way that unites and aligns citizens, government, businesses, investors, and aid organizations.  Without unity, there will be continued factions, hoarding, corruption, and minimal progress.  This monumental task requires a top-down strategy with a bottom-up implementation plan.  I have faith that with the assistance and guidance from the rest of the world, Haiti can rebuild itself and become much stronger than it was before the earthquake.

We must avoid simply jumping in with quick fixes and rebuilding everything back they way it was.  A master infrastructure plan that is comprehensive in its ability to connect the disparate parts of the country and support agriculture and other industries is critical.   It must take into account the reverse urban migration that is likely to occur as a result of the earthquake.  Many people will go back to the small towns and villages where they are from because they no longer have homes and jobs and have nowhere else to go.  The people in Haiti’s countryside are generally the poorest of the poor — why so many migrated to the big cities in the first place.  Supporting agriculture, tourism, and arts industries in the countryside will provide people the means to stay, to start over and to allow the country to grow in a more balanced way.

Agricultural Development Aid is a crucial component, and it will be required in a way never seen before.  With the traditional strategy of sending a disproportionate amount of food aid compared to Agricultural Development Aid, we generally set a country up for failure.   Sending only food aid does serve an immediate need and feeds people today, but it can also destroy what markets still exist.  Building chicken farms, developing farm land and building other food production facilities puts people in business so they can build up their own markets allows the aid to continue to churn through the economy and even increase economic activity over time.  Simply handing out food produced elsewhere and brought in through an outside distribution channel fills an immediate need, but if it is not balanced with other strategies eventually also feeds the equation of poverty.

Businesses must be created and financially supported so they can hire local employees and begin the re-building process.  Contracts must be structured with built-in profits from the rebuilding efforts that can be used to create further self-sustaining economic activity.  The banking industry must be supported such that the bankers can make enough profits to stay in business and grow while providing heavily subsidized loans for building businesses and rebuilding structures.  The World Bank and the IMF need to find creative ways to support industries and businesses directly as opposed to giving the lions share of funds directly to the government.  When businesses begin to grow and more money is invested in capitalistic endeavors, the government’s revenue will grow in sustainable ways and can it begin to rely less and less on foreign hand-outs.  The government should be orchestrating, aligning, and ensuring coordination of all efforts.  The government should be making master plans and ensuring long-term strategies are properly focused on growth.  Groups like Aimer Haiti, who can help build and mentor businesses, should be working with the government, the World Bank, the IMF, the US, foreign investors and domestic investors to develop completely new strategies for growth.  Aimer Haiti has already been working on such collaborative and creative economic development strategies since their launch in 2009 and for years before as concerned citizens and Haitian business owners.

Energy has been a growing issue for Haiti as its population rises, and is now even more critical.  Electricity has never been reliable and is often supplemented with large battery stores powered by diesel generators.  The good news is that technology has advanced enough that a country like Haiti can leap-frog many of the evolutionary steps in energy that the developed world could not.  It’s a matter of getting the brightest minds together, inside and outside of Haiti, to come up with the best solutions given the unique conditions of the country.  Before the earthquake Aimer Haiti was exploring the possibility of using small solar energy units in some of the poorest areas to provide light, refrigeration, and power. With refrigeration, people can store and sell perishable products such as produce and fish.  With power people who cannot read or write can begin the process of building an education base through radio and television.  Mobile phones can be powered and connect people to markets to sell their goods.

Solving the energy issue is also the key to stopping deforestation.  Until there is a reliable source of energy to replace charcoal, and until there are jobs and small businesses to give people a means to survive, deforestation will continue.  Deforestation causes rapid erosion, which leads to road and bridge destruction, and leaves the land unsuitable for farming ensuring the cycle of poverty continues.  The cutting down of trees does not happen because Haitians do not care about their land, it happens because it has become a means of survival for so many people.

The interconnectedness of all of these major issues in Haiti is another reason why getting the overall re-building strategy right is so key to its long-term future success.  Every solution and every single effort of aid and rebuilding should be viewed as an opportunity to put Haitians in businesses that will create jobs.  For example, the distribution of food and creation of helicopter landing sites, which is happening right now in Haiti, is a huge opportunity to employ people and allow them to feel a part of the solution and not a part of the problem.  There shouldn’t be such a stark line between those giving aid and those receiving aid.  This is an example of the change in thinking and the change in mindset that is needed to change the trajectory of how under-developed countries are assisted, particularly in times of need.

This type of re-building is not done from an office or over the phone, it is done by creating relationships on the ground, building businesses, one at a time, and helping families, one at a time.  It’s about doing, creating, uniting, and elating in each small success that both dedication and determination will bring.

History has proven time and again that capitalism and the building of a significant middle class are still the best ways to bring people out of poverty.   Before the earthquake, one of the first billboards you saw when you were leaving the Port au Prince airport, was the large unity triangle of Aimer Haiti, which of course translates to “Love Haiti” in English.  I hope it is still standing!

Posted in Courage, Haiti, economy, global, political, strategy, success | 3 Comments »

Realistic Impossibilities

Friday, January 8th, 2010

This week YURU is guest blogging on Blogging Innovation, a leading innovation and marketing blog from Braden Kelley of Business Strategy Innovation.  We are honored to be a guest blogger as this is one of the best places on the web to find latest discussions on business innovation.

Click here to read Realistic Impossibilities

Posted in business, creativity, strategy, success | No Comments »

What Does the Debate on Climate Change Have to do with 21st Century Business Models and Global Economic Development?

Friday, December 18th, 2009

think create exp

The short answer is EVERYTHING. The long answer is what this post is all about.  These are three of today’s most pressing issues that are all too often discussed in a vacuum.  The best progress will be made at the margins where each of these pressing issues overlap.  When we begin to see them each as an integral component of global economic progress and prosperity and not discrete issues, much will be gained.

Perhaps the inclusion of 21st century business models is a surprise to many lumped in with the other two that get a lot more focus and media airtime, but please notice that I use the predication “21st century”.  If we want to do something about the ramped greed and selfish strategies that exist in many of today’s firms, then it must be added to the mix.  If created correctly, new and improved business models can be a large part of the solutions to climate change, global economic development, and their own perils of decreased employee morale and disgraced public opinion.

  • They all require new, passionate, and innovative solutions. In fact, we must assume that the very best solutions are not yet known.  Thus, the solution frameworks that are being bantered around today need to accommodate the unknown solutions of tomorrow.  It’s beyond out of the box thinking and into a world without the constraints of boxes of any sort.  It’s about unleashing the mass of untapped potential and productivity that lies dormant inside people and organizations around the world.
  • They are each integral to the success of the others. Slowing population growth in the developing world is one of the keys to avoiding a climate catastrophe down the road.  Economic development and the creation of a middle class is the most effective way to slow population growth in the developing world.  Private sector ingenuity is key to new technologies that will reverse the current trajectory of climate change as well as promote economic development in the developing world.
  • Alignment is key to effective solutions in each case. Businesses are learning how to align their shareholders, employees, customers, and the public in ways that will dramatically increase productivity.  When transparent alignment and partnerships are created between foreign aid, domestic and foreign private investment, and public money, global economic development will become significantly more efficient and effective.  Unless we properly align the big players in the world on climate change soon, it will likely suffer the same fate as the Green Revolution in Africa.

The most successful businesses models in the 21st century will be those that realize contributing to the creation of new markets is a winning long-term strategy, that focusing on something besides growth and profits is the key to engaging employees and winning the hearts of customers (yours as well as your competitors), and that how you decide to be in the world can be just as important, if not more important, than what you sell.

Too often when these topics are discussed in the media, there is too much focus (in my opinion) on the facts known today which narrows the conversation and too little focus on what we want to create.  In other words, discussions and potential solutions are being filtered based on what we know how to do today and not on whether or not they fit what it is we are trying to create.  All great movements start with an unadulterated view of what should be created, if anything is possible.  There isn’t much humans can’t do once they set their minds to it.  Some things take a few months and others a few generations.  The problem is that we sometimes lack the belief that it can be done, which ends up being the biggest thing that holds us back from succeeding.

Posted in business, creativity, economy, global, political, strategy | No Comments »

Looking for Profits in All the Wrong Places

Wednesday, December 2nd, 2009

imagine

Investment comfort in the world of high finance all too often comes from fast profits in known and proven markets.  The never-ending game of offering higher profits at lower [apparent] risk to attract capital was certainly alive and well before the global economic crisis.  The question is, why does it appear to be coming back?  Didn’t we learn anything?

A global economic recession of epic proportions should have taught us a few lessons, but the days when CNN is glued to the US consumer expenditure figures as if it were the only barometer in existence, it seems it isn’t so.  Too much investment comfort will lead to not enough investment in the future and much greater economic turmoil down the road. For economies to flourish they need to grow, and we seem to continue to look for growth in places where the potential is quite low.

One of my mentors used to always say that if you aren’t feeling nervous and agitated about a deal, then it’s probably not a good one.  We were investing Goldman Sachs money, so the deals we worked on weren’t small and were often the first of their kind in that country.  A healthy amount of discomfort means we’re forging new territory.  Forging new territory in a world that primarily relies on capitalism to make the wheels go around is a good thing.  Running in the same old markets over and over and over again may move the wheel around, but it does little to make the wheel bigger.  In a world where we are slated to break 9 billion inhabitants in the next 40 years, we will definitely need a bigger wheel.

There is an inherent flaw in this mindset of investment comfort.  It stays in the world of what is known and it over-exploits markets such as US housing, US consumer, and luxury hotel.  While billions of dollars were being invested by countries all of the world in relatively finite (but comfortable) markets, much of the world’s potential new markets were being ignored.  I would argue that it is actually riskier to invest in false markets (backed by too much debt) that are unsustainable and maxed out on growth than it is to invest in creating completely new markets in the emerging and developing world that are backed by sustainable commerce.  It doesn’t feel riskier because it is known territory and feels comfortable, but from a purely economic system point of view it is, definitely riskier in the long run.

I believe this will be the biggest lesson of the 21st century for both the private and public sectors around the world.  During the 20th century, there was adequate growth potential in the population and quality of life in developed countries to support investments shrouded in the comfort of known markets.  This will not be the case for the 21st century.  The 21st century requires new investment models, new leaders, and new perspectives on globalization.

I predict that the very best Wall Street firms will turn from security selection and asset management in known markets to designing unique investment solutions that build entirely new markets around the globe.  They will bring public and private money together in ways that have never before been attempted.  The old model of trying to build nations through foreign aid and local (sometimes corrupt) governments alone clearly doesn’t work.  We need new models that forge new territory and challenge conventional thinking.  The potential and the opportunity are there.  The question is are we going to seize the moment and begin to look at the world differently?  Are we going to set future generations around the world up for success or for failure?

An uber-macro-global economic view of the world indicates that with stagnant population growth and an already high quality of life in much of the developed world, the economic progress and growth necessary to continue building global wealth must come in large part from under-developed countries.  In other words, the developed world is becoming over-saturated with capital.  The excess capital is creating false markets in many cases because new markets are unobtainable.  Companies are either stealing customers away from the competition or simply swallowing the competition because the markets are not big enough to support them all.  We also saw this play out over the five years prior to the recession where cheap debt allowed for an ever-increasing portion of returns to come from debt arbitrage as opposed to real investment fundamentals, which basically masked the issue.

Though, without the comforts of known markets, the developing world represents a significant potential for entirely new markets.  These new markets won’t get created overnight; however, they will require long term commitments and a lot of hard work.  The ones we are seeing pop up in China and India have been in progress for decades.  Creating entirely new markets requires both time and investment in infrastructure to create an environment where a middle class can flourish and grow.  Investors are starting to consider places like China and India, which is good, but they must realize that though the business mechanics are similar, the subtleties, relationships, and manner in which business is conducted is quite different.  There is still much work to be done in these markets and well as smaller ones that get far less attention but hold an equal amount of promise.

Success in creating new markets and building a middle class in nations void of one will require new and innovative ways of combining public global aid with both foreign and domestic private investment. Creating partnerships that promote food security, business investment, and job creation to jump-start capitalistic activity seems far more beneficial than the old ways of shoring up the local government and banks.  When businesses are sustained, tax collections will shore up the governments in much more sustainable ways, and citizens will gain more political power to avert corruption.  It’s about starting an economic cycle, not circumventing it.  Governments generally do not produce economic activity, but they do benefit greatly from it.  It starts with building business, not building governments.  We need an entirely new perspective on how we can work together to build markets and bring people out of poverty and increasing the quality of life of those who currently reside at the bottom of the pyramid.  This ultimately requires a broadened view of capitalism.  Creation of the haves and have-nots does not have to be a side effect of capitalism.  We can choose a different path for the future of our world.  This is what it means to start thinking like a global citizen.

Posted in business, economy, global, political, strategy | 1 Comment »

Innovation From the Inside Out

Tuesday, November 3rd, 2009

Innovation MindsetIf your company is following suit in a growing trend and starting an Innovation campaign, beware of the pitfalls.  Many companies assume they can create a few goals, advertise the idea, provide a bit of training, and expect that greatness will appear.

If it is unbridled success you are after, and you are trying to create a stark competitive advantage, it is critical to start by innovating your management strategy.  Asking employees to be innovative and contribute to the next competitive advantage while employing a management strategy left over from the Industrial Revolution is like asking your 1960’s percolating coffee maker to give you a triple shot skinny vanilla latte with extra foam.  You will be lucky to get a decent cup of joe and a monstrous mess.  However, if you are willing to entertain at least some components of a 21st century management strategy, you will likely be blown away by the creativity that in many cases lies dormant.

Many modern companies employ management strategies based on command and control techniques designed to encourage employees to do only what they are asked, which translates into turning off their creativity as they enter the building.  Hierarchical organizations, not matter how progressive, generally promote a unidirectional flow of information.  The clock watching tendencies of most managers and requirements to account for every minute of every day, do nothing to build a culture of trust.  I know how it made me feel to be a grown woman (having put myself through graduate school, and learned how to do business in 6 different countries with little direction) forced to ask permission to take my child to the doctor and watching my “boss” decide whether or not it was convenient for him.

There is no shame, blame, or guilt intended here.  We’ve all been doing as we were taught in business school when in comes to organizing and managing companies.  The difference now is, we know there is a better way and with it comes higher productivity, greater enjoyment, and less turnover.

Without creativity, a collaborative flow of information in all directions, and trust, all attempts at suddenly becoming an innovative firm that is competitive in the ever-changing world of the 21st century will likely fail.  The essential ingredient for creating an innovative work environment is the courage of the folks at the top to change the rules of the game.  With that one ingredient, everything else will come naturally.  Not without hard work and dedication, but without friction.  Your team will amaze you, inspire you, and keep you humble enough to savor every moment, even the ones that aren’t so great.  It is possible to create an environment where failure is understood to be a key to success and support is as normal as gossip is today.

If you want employees to think creatively, design solutions to fix problems beyond the ones you know about, collaborate, and generally bring their A-game, you must be willing to give them the freedom to do those things in their own way and with their own style.  People are only going to give you as much as you believe they can deliver and no more.  If you believe your team is invincible and you tell them often, then that is what they will aspire to be.

Posted in Courage, leadership, management, strategy | 2 Comments »

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