Wednesday, January 23, 2008

"Do Good" Businesses Must Be Sustainable

This post was recently submitted to the Next4Billion and is re-posted below.

It was with keen interest that I read the Atlantic Monthly article “Scents & Sensibility” published in December 2007. Being a fellow importer--with the mission of providing economic opportunity to artisans in developing countries--it was great to read of the efforts of the author, Sarah Chayes, to give Afghan men and women viable employment opportunities creating handmade soaps from local materials. In addition to being relevant to my work, the article itself was an entertaining account of one woman’s passion to “scour this harried land for its (licit) bounties and turn them into beauty products.”

A theme throughout the piece was the difficulty in working with the local consulting firm that administers USAID’s alternative income generation program. While I can appreciate the frustration in dealing with a bureaucracy like USAID (or in this case the consulting firm managing its contract), something else tugged at me when reading this article. Namely, that when it comes to companies trying to do “good,” as well as do well financially, people often assume that an unsophisticated business approach is acceptable.

There is no doubt in my mind that Ms. Chayes works very hard and that her motivations are certainly commendable. I'm also confident that the consulting firm could likely have made things a lot clearer and helped her through the process in a less convoluted way. However, if we had been reading an article about a traditional company looking for investment dollars and the future CEO said the following: “And with zero experience, I was going to try to create a product for which conventional wisdom said the market was saturated. To launch this venture, I had $25,000 from a private foundation in Chicago, and a single collaborator back in the United States—a 16-year-old high-school student from outside Boston...,” no one would be outraged when a potential investor said, put a business plan together and then went on to ask for more numbers.

Again, I commend Ms. Chayes for her perseverance in the face of many difficult hurdles. My point is not so much aimed at this particular instance, rather I believe that fair trade, environmental or otherwise mission-based companies need to start acting more like businesses and less like nonprofits if they are going to be taken seriously by investors or customers. The world needs more people like Sarah Chayes, but it also needs more “traditional” business people to partner with her to build sustainable organizations that deliver on their missions as well as their bottom lines. This is the combination that will lead to real, lasting change.

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