It may not seem obvious as to how experience in management consulting and managing high-tech companies can directly contribute to world peace. However, a few years earlier, I had read Tom Friedman’s The Lexus and the Olive Tree, and in my opinion, he had defined the path to world peace. Paraphrasing, with apologies, his idea was to get everyone doing business with each other to generate economic benefits for all parties. Once people got significant benefits from doing business with each other and developed strong stakes in preserving society, they wouldn’t go to war against each other because they would understand how devastating it would be to their lives. In other words, the idea is to create enough economic incentives not to go to war that they offset the many other causes that push people to war. It all seemed very logical to me—create economic development to decrease the possibility of war and, along the way, reduce poverty.
I wasn’t so naive to think that this was an easy path to solving all the world’s problems, but I do believe that one person can make a difference. My philosophy is to light one candle rather than curse the darkness. When confronting difficult or undesirable situations, I hate feeling hopeless. I always look for a solution, and the solutions to difficult problems are often complex and difficult themselves. If I was going to pursue this path, I didn’t want to be simple-minded or foolish. I really wanted to know what the experts said about how to foster economic development. If I was going to put a lot of effort into something, I wanted to be contributing in the most productive way.
So my next step was to study. I read over twenty books related to international economic development. Some were academic; some were inspirational. Some were very hopeful, others just the opposite as they recounted all the mistakes that continue to be made in the name of trying to help poor people and developing countries. As I read the books, I continued to focus my direction, but I didn’t find anything that made me change my course.
The first thing that I learned from all my reading is that the experts don’t have a clear, consistent recipe for successful economic development. However, as I read, I became convinced that building private enterprise was the best way to achieve sustainable success. There are too many stories of grand government schemes costing hundreds of millions of dollars that have failed to make a difference or just failed outright. Also, with large government projects, there are too many people who can benefit whether the project is successful or not. Naturally, this includes the graft that is endemic throughout the world, but it also includes all of the people who get an income from contracting to do the work whether the work generates real benefits or not. But for independent businesses, there will ultimately be a success or a failure, and it is not hard to measure the successes and keep score. You can keep doing the things that work and stop investing in the things that don’t. Independent business development also promotes freer societies as we’ve seen in many developing countries, such as South Korea and even China. Once again, don’t get me wrong. I know that there has been a lot of exploitation of people and resources by business. However, on balance, free-market economic development is good, and independent businesses with some government regulation are the ways to make it happen.
Fortunately for me, and probably not coincidentally, I had a lot of experience in private business. I knew how to help businesses solve problems, and I knew how to help businesses grow. So my skills aligned with where I saw the best opportunity to contribute. I had theoretical convergence, but I had no idea as to where to apply my theoretical solution. I didn’t know if any real-life organization doing international development needed my skills. I also had no experience in international development or the whole nonprofit arena, and I didn’t even know most of the major players in the field.
I needed to do more research, so I went to the web, and I started networking in person. On the web, I started researching the larger organizations that I had heard of such as CARE and Heifer. I also read about the Peace Corps, USAID (United States Agency for International Development), and various agencies within the United Nations. I asked all of my friends who they knew who might be in the field, and I went through the alumni directories of MIT and Harvard Business School to find fellow alums who worked in international development. As I talked to all of these people, I asked them for additional contacts. I eventually talked to over eighty different people about what I wanted to do. Some were in government, some in academia, some in large nonprofits or NGOs (nongovernmental organizations), and many were in smaller NGOs. They all gave me ideas about organizations that might be of interest to me. Then I researched those organizations on the web and made contact to find out more. Thank goodness for the Internet.
After making contact, I visited a number of organizations where I thought I had relevant skills and experience and interviewed for potential job openings. Although people were impressed with my background and experience in business, I kept hearing the same refrain, “But you have no experience in international development or even the nonprofit arena.” There was a terrible mismatch. Without the international development background, no organization was going to hire me into a senior-level position despite all of my business experience and accomplishments. On the other hand, it made no sense for the organizations, or to me, to hire me into an entry-level position. It was a frustrating dilemma.
As I spoke to knowledgeable people in the international development field and explained to them specifically what I wanted to do, a number of them recommended that I talk to an organization called TechnoServe. TechnoServe’s tagline was “Business Solutions to Poverty,” and their mission was to grow businesses that could provide livelihoods for the poor. It sounded like a good match, and so I contacted them.
TechnoServe was located in Washington DC, and I was going back to the DC area for Thanksgiving, so I arranged to meet with Bruce, TechnoServe’s CEO for an informational interview. With TechnoServe’s approach to international development, my business background was highly relevant. However, I knew that my lack of international development experience would still be an issue, so I explained to Bruce the challenge that I had been having with other organizations. Bruce had a solution immediately. He agreed with the position taken by other organizations, but he also saw that I had important qualifications and experience. He said that with my background in business, it would only take a year or two of international development experience for me to develop the credibility I would need for a senior-level position in an NGO. And he had a solution for where to get the experience.
TechnoServe had a volunteer consultant program wherein people with business skills volunteered on TechnoServe projects to provide business insight. TechnoServe provided housing and twenty-five dollars per day for food and incidentals. Participants in the program were called “volcons” (volunteer consultants), and most were young people in their twenties or early thirties who had worked for prominent consulting organizations. Many of the volcons worked at TechnoServe for three to six months right before or right after getting their MBAs. Obviously, Wendy and I were older, but that also meant we had a lot more business experience. We could also devote a longer period of time to an assignment. I told Bruce that the opportunity sounded interesting and that I would discuss it with Wendy.
While I was doing all of my research, Wendy was still working for Junior Achievement. She wasn’t quite ready to leave her job, but she knew the time would be soon. Since we would eventually be undertaking our international venture together, I had continued to discuss my thoughts with her, and she was supportive. She had always wanted to try living in another country but had mostly been thinking about locales like London, Paris, or Hong Kong. Living in a developing country hadn’t really crossed her mind, but she was brave and willing to try a new adventure. Since she was still working, she was happy to have me do all the research and planning. One time, as we were discussing my latest findings and thoughts while I was preparing dinner in our kitchen (she was working full-time and I wasn’t), she told me to choose where we would go and she would go along.
She said, “I have just four requirements for any place where we will live: First, there can be no flying bullets. Second, the name of the country must not end in ‘stan.’ Also, there must be flush toilets, and there must be hot showers.”
I had no problem with these minimal restrictions since I knew by focusing on business, that we wouldn’t be living in a mud hut in a rural village. As I continued my discussions with Wendy, I told TechnoServe that we would be interested in the volcon program, but just not yet. Seven months later, Wendy was finally ready to leave Junior Achievement, and I called TechnoServe to tell them that we were ready to take on overseas volunteer roles. They told us they would send out our résumés to their local country directors to see if there were any opportunities that would fit our backgrounds. Within two days, we heard back from Leslie, TechnoServe’s country director in Swaziland. She had started up TechnoServe’s new program in Swaziland just a few months earlier and was still recruiting staff. She was very excited about our skills and background and explained that she had openings that would be a perfect fit for each of us. She also thought we could help her immensely.
The primary focus of the Swaziland operation was to help small businesses to be successful and create jobs and economic growth. For this focus, my management consulting experience was very attractive because most of Leslie’s staff would be consulting to small businesses. My background was particularly attractive because I had been a consultant for many years and most of her staff members were very young. Although they were smart, they had limited experience, and Leslie thought that I could be a mentor to them. Another objective of the Swazi operation was to set up a program of youth training in business skills and entrepreneurship. With her recent work in Junior Achievement, Wendy was a perfect fit for this initiative. Leslie wanted us to fly to Swaziland immediately. We weren’t ready to take off immediately, but in less than a month, we were on a plane. After all the research and waiting for Wendy to be ready, everything seemed to happen very quickly. We just packed our bags and moved to Africa without a very clear idea of where we were going or exactly what we would be doing. We did limit our initial commitment to less than six months, just in case, but our friends were still amazed. For us, it wasn’t that difficult to commit. We were confident that we could survive for six months. More importantly, we knew that we would be working for a social benefit, and that the whole experience would be an adventure.
Settling in
Familiar Work in an Unfamiliar Environment
On our first morning in Swaziland, we both suffered from serious jet lag caused by the nine-hour time difference from California. We had essentially switched night and day. I got up in the middle of the night to read for two hours before returning to bed, and we both slept in until 10:30 a.m. After breakfast, we weren’t sure what to do. While we were in a beautiful setting, we were basically trapped because there was nowhere to easily walk, and we didn’t have a car. We had been told that the conference center had a workout facility, so we asked for the key. We walked to what turned out to be a one-room cottage with a few dumbbells and an all-purpose exercise machine with missing parts. We hadn’t expected much, and so we weren’t disappointed, but we never went back. We exercised briefly with a set of elastic tubes that I had brought from home, and both of us tired really quickly.
We didn’t have Internet access at our cottage, but we had heard that we could get on and check our e-mail at the Mountain Inn, a very pleasant sixty-two-room hotel at the top of the Malagwane grade overlooking the valley below. Many years earlier, the family who owned the Emafini Christian Center where we were staying had purchased the Mountain Inn when it was a famous brothel and converted it. Liz, our landlady and the matriarch of the family, volunteered to drive us up the two miles to the inn.
As we arrived at the Mountain Inn, we breathed a sigh of relief after the quick trip up the Malagwane grade, a very steep and winding section of the highway to Mbabane. The Malagwane grade would never exist on a four-lane highway in the United States. It was too steep and had excessively sharp curves. The speed limit was ostensibly 60 kph (36 mph), but as we learned from experience, no one drove that speed. Drivers in the powerful Mercedes and BMWs that could climb the grade without downshifting would roar up the hill at 120 kph (over 70 mph). (These people, often members of parliament or government officials, were known locally as members of the MBenzi tribe, even if they drove BMWs.) But in addition to the MBenzis, the grade was always sprinkled with massive, overloaded trucks going 20 kph (12 mph). I later had many chances to drive up the grade and personally experience the excitement and danger! The dual challenges were to not slam into the slow trucks as I came up rapidly from behind and to not get hit in the rear by a fast car as I passed the slow trucks, all the while maneuvering around the sharp curves. Every trip up or down the grade was an adventure, and soon it became our daily commute.
On our second morning, Sunday, we got up late again, still struggling with oppressive jet lag. We had breakfast at 11:30 a.m., so we decided that it was our lunch as well. While I was lounging in the living room with a book, I got another indication of the local similarity with California. As I looked out of the glass French doors, I noticed a large plume of smoke from the forest across the valley. I didn’t panic immediately, but I knew the brush was dry and the thought of California forest fires came to mind. I had observed that we were surrounded by tall eucalyptus trees, and I remembered that they burn easily and very hot. I began thinking about what I would pack if we had to evacuate in a hurry. I went outside to survey the situation. At the base of the huge smoke plume, I could see some low flames in the brush. There was no fire higher up in the trees themselves, so I decided not to get too excited. I would just watch calmly and patiently. I figured that if there was an emergency, someone would warn us.
I went back to my reading but got up periodically to observe the fire. While the smoke plume remained huge, the fire didn’t seem to be moving. After a while, Liz drove by. She was obviously observing the situation as well. I flagged her down and asked if we should be concerned. While visibly showing some concern, Liz said that we shouldn’t worry. If the fire did start moving our way, she felt the fire breaks on their property would stop it before it became threatening. She also indicated that her son Patrick would certainly be the first to raise an alarm since his house would be the first to be in danger, especially considering his thatch roof. Her primary concern seemed to be with the environmental impact that all the smoke was having. She said that the fire was probably started by locals seeking honey from beehives. Evidently, their tactics consist of generating smoke to get the bees to leave their hive so that the honey can be removed without interference. Liz was upset not only with the impact that these methods generate, but also that the honey seekers don’t always put out their fires.
I returned to reading and began to speculate what work would be like when we started in the morning. After two weekend days, we were very content with our surroundings. We felt as if we were on vacation in a small cabin in a California state park. The small stove in the kitchen required a match to light the bottled gas, and there was no dishwasher. There was, however, a clothes washer and dryer. We decided to give them a try. Although the controls on the washer had unfamiliar symbols, we pretty much figured it out. We put in the clothes and the detergent, and when we pushed one of the buttons, it started. Unfortunately, I came back later to find the floor flooded. After investigating, I determined that the drain hose from the washer had come out of the drain pipe and irrigated the floor. I went over to Liz’s house to get a mop and then got up all the water. At least we knew the floor was really clean.
Wendy had been quietly working on her computer in the kitchen, periodically staring out of the window through the steel bars that prevented burglary. At one point she detected a slight shadow and lifted her head to see a vervet monkey calmly sitting on the window ledge outside the bars. He stuck his hand through the bars and reached around a bit, but he couldn’t reach anything of interest. (The bars were configured to prevent nonhuman burglary as well.) After the two stared at each other for a while, the monkey calmly left. It was just a brief encounter but was one of the many small clues that reminded us that we weren’t in California. As we settled in over the next few weeks, we frequently saw families of monkeys playing among the eucalyptus off to the side of our house and occasionally in the mulberry tree in our front yard. It was almost like a visit to the zoo every day.
On Monday, we started work, and the first thing we saw when we went to the office was the morning paper. The front-page story, complete with picture, was about a woman who was seriously burned in an outhouse explosion. As the very detailed article explained, evidently someone had been using gasoline to clean grease off some car parts. After completing the cleaning, the excess solvent and dissolved grease had been thrown down the local outhouse. Shortly thereafter the unsuspecting woman had sat down to do her business, and while sitting, lit up a cigarette and threw the match down the hole. The resulting explosion did extensive damage to the outhouse and seriously burned the woman in some sensitive areas. However, she was expected to fully recover. That was the major national news story in Swaziland that day.
We learned that the flavor of Monday’s front-page story was typical, and Tuesday’s front page didn’t disappoint as it combined human interest with politics. It was about the speaker of Parliament and his speech on the sexual performance of Swazi men. Swaziland had the world’s highest rate of AIDS with its resulting mortality. The death rate from AIDS was of great concern to the government since it typically killed young adults in their most economically productive years and often left orphans behind. It was well known that the major cause of the AIDS epidemic in Swaziland was multiple concurrent partners engaging in unprotected sex. The parliament was debating whether they could do anything to remedy this situation and reduce the rate of AIDS. At this point, the speaker of the Parliament arose and gave an impassioned speech. He said that the major problem was that too many Swazi men did not know how to sexually satisfy their wives. Consequently, the women were seeking satisfaction with other partners and causing the AIDS problem. He exhorted Swazi men to do a better job of satisfying their wives and keeping them at home. We learned that stories like these or features on domestic violence and corruption frequently grabbed the daily headlines because Swaziland did not play a major role in geopolitics. For us, the novelty of reading the local tabloids quickly wore off.
Getting down to work, we spent our first week getting started on our primary projects. Wendy began working with Atiba, a TechnoServe colleague, to create a School-Age Youth Entrepreneurship (SAYE) program to inspire a pool of school-age (teens and early twenties) Swazis to become entrepreneurs. The primary activities within the program would be to introduce these youth to the business world and the skills necessary to create a business. Although the government, banks, and the local offices of a few international corporations provided good jobs for some of the best students, the country had 50 percent unemployment, and many people felt that they had to leave for South Africa to find a decent job. The hope was that with business knowledge and especially entrepreneurship skills, young Swazis might find or even create economic opportunity in their own country. Wendy was a perfect fit for the role, and Leslie was happy to have someone with Wendy’s prior experience in Junior Achievement.
For their first activity, Atiba and Wendy met with several groups in rural and urban areas to understand how to leverage any existing youth-oriented business/entrepreneurship activities, especially the already-established “pre-voc” (prevocational or school-to-work) pilot schools. Their experience in visiting two of the “pre-voc” schools and meeting with some of the graduates quickly convinced them that this was a “big aid” experiment that had failed.
The pre-voc program had supposedly been catalyzed by Mozambicans’ migration to Swaziland during their civil war. These refugees came with nothing, but many started their own tiny businesses and over time began to hire Swazis. Seeing the immigrant Mozambicans hiring Swazis made the Swazi government very uncomfortable, and so they decided that their students needed better classes in entrepreneurship. They received a big grant from the Africa Development Bank. Farm machinery, farm animals, new labs, and classrooms were purchased and placed in sixteen pilot schools across the country. After only a few meetings, it was clear to Wendy and Atiba that the “pre-voc” programs had significant problems. Among the obvious problems were the four large tractors that were purchased for training students but never delivered to the high schools and the minimal animal husbandry that could be taught because the animals at many schools were exclusively female.
According to the teachers, the program had been imposed on them and the schools from above, inadequately marketed to parents and teachers, and implemented with minimal teacher training. Also angering parents and teachers was the lack of impact measurement or additional certification for students who completed the program. The pre-voc program originators also improperly set expectations by promising but then not delivering financial support for graduated pre-voc students to start businesses.
As Wendy and Atiba continued their research, another visit was hosted by a native Swazi who had graduated from Colorado State University and then earned a master’s degree from Colorado School of Mines before returning to Swaziland. Five years earlier, his village’s young boys had banded together to explore how to create businesses so that they could become employed. As expected of many group efforts, less than 20 percent of the students did more than 80 percent of the work on the initial bean-growing project, but the project still achieved a $100 profit. Five years later, the profit had not been used, no other businesses had been started, and the bean-growing success had not been sustained. It was clear that the youth did not understand how to create a viable business. The young men were still living at home with no income source of their own. Although some of the young men had once displayed initiative, the Swazi host for the visit felt that most of the young people lacked motivation.
The next meeting occurred between TechnoServe and LULOTE, a training firm that TechnoServe had identified as a potential local partner. Everyone in the meeting agreed that the pre-voc education was not adequately preparing students for entrepreneurship and was unlikely to become the foundation for TechnoServe’s planned youth program. They also discussed other possibilities. No one knew of any existing program in Swaziland that actually provided hands-on learning about business such as how businesses start and how the money system works. Any advice for small businesses and the few entrepreneurs in the country was offered only by paid consultants. Even UNISWA (the University of Swaziland) only offered theoretical courses on business without any experiential content. From her prior experience, Wendy knew that Junior Achievement had established successful programs in multiple African countries as well as in numerous developing countries in Eastern Europe, Asia, and Latin America. After further discussion, there was agreement that Junior Achievement would be the best platform on which to build the Swazi youth program. Wendy was assigned to make the initial inquiries to Junior Achievement about starting a new country program in Swaziland. For her first step, she arranged for Atiba, Leslie, and herself to meet with the director of the JA South Africa office in Johannesburg. On the same trip, they also planned to visit a one-stop business center, cofounded and cofunded by multiple financial and consulting organizations, that helped budding entrepreneurs in Johannesburg to get information and the support they would need to start and operate businesses.
Later, the combined TechnoServe and LULOTE team met with the chief inspector in the Ministry of Education and four of his key staff to validate their findings on the pre-voc program. The role of the chief inspector is to monitor the quality of secondary education across Swaziland. The discussion was frank, and despite some finger-pointing at teachers and the poor marketing of the program, the inspectors seemed to agree that the pre-voc program was not successful and unlikely to change without a major overhaul. Additionally distracting to the inspector’s staff was a concurrent initiative to implement the new International General Certificate for Secondary Education (IGCSE) based on the British education model. The ministry seemed to look to TechnoServe and LULOTE as experts to help solve their problems, and the team did agree to come back to them with some possible strategies.
While Wendy was starting on the youth program, I learned that my focus would be on working with specific entrepreneurs who needed help creating or growing businesses, consistent with TechnoServe’s local mandate. In many countries, TechnoServe worked primarily with smallholder farmers and agro-processing companies since 80 percent of the world’s poor were farmers. However, in Swaziland, the focus was on helping people to start or grow small and medium enterprises in any industry, which could also include agriculture. Since the program in Swaziland was new, we had a two-pronged approach. We accepted requests for help from anyone with reasonable business prospects while at the same time we broadly researched the local economy to see what industries or agricultural sectors in Swaziland might be able to become reasonably competitive.
My first two clients had come to TechnoServe for help. Prior to my arrival, they both had met briefly with Leslie and dropped off their business plans. I spent my first week familiarizing myself with their plans before meeting with them in person. The first one that I studied was MPE Timbers. Their plan was to pressure-treat wooden poles with preservatives. Pressure treating allows electric and telephone utilities to put poles into the ground where they resist rotting and destructive insects for many years. Swaziland didn’t have a high-quality pole treatment company, but they had lots of raw timber for poles. A large portion of Swaziland is covered with commercial forests, also known as timber plantations. As we later drove through these areas, we saw miles and miles of straight trees growing in straight rows at regular spacing. It was obvious that Mother Nature had some help in creating these forests.
Swaziland’s electric utility company was conducting a program of rural electrification using imported pressure-treated poles. With seemingly ready access to raw material and no local competition, our entrepreneurs, Brian and Robert, had seen a business opportunity. They had found a used pressure-treating facility that was for sale, so they put in some of their own money, recruited some investors, took out a loan from the local development agency, and started a company. The loan was secured by the equipment to be purchased, but also personally guaranteed. As Brian and Robert surveyed their market and access to further capital, they heard nothing but good news. Their business plans showed high profitability and a very quick payback on their investment, especially for large utility poles, which were in high demand as both Swaziland and South Africa expanded their electrical transmission grids. The used equipment that the entrepreneurs had located was larger and more expensive to purchase and install than what they had originally planned, but it would allow them to treat large utility poles, so they expanded their plans for the factory and moved forward with confidence. As they installed the equipment and constructed the required buildings for the plant, their cash began to run low, and they sought additional financing. Although the climate for investment had seemed very bright before, it suddenly became dark, and they could not get funds. They tried many sources, but although they were complimented on their business plans, every institution turned them down.
After much searching, they were introduced to a local investor who said that money would be no problem and agreed to give them what they needed. They verbally agreed on a disbursement schedule, and the pole plant again started moving toward production. Very quickly, the investor said that he was having problems collecting amounts due him from government projects, and he could not deliver cash in the amounts and on the agreed to schedule. Although the investor ultimately gave our entrepreneurs 80 percent of what he had initially promised, they again ran out of cash, having only performed test runs at the plant with no significant sales.
MPE Timbers had come to TechnoServe to help them find financing for a project that still looked very favorable on paper; although the estimates of the capital required were now triple what they had been originally. We all agreed that our review and recommendations on the project might lend it sufficient credibility to get a better chance at funding. I felt the whole story was strange because it had been six years since the company had been formed and over four years since they had taken out the original loan. This was a different business world for me. I was accustomed to the pace of Silicon Valley where things happen fast, and when you run out of money, you sell the furniture, vacate the premises, and move on to your next job within a few months. If this was such a good business, why hadn’t it succeeded? Or if it wasn’t, why hadn’t it been put out of its misery? This was a very different animal, and I was intrigued to figure out what could and should be done.
As I asked questions around the office, I learned that from the perspective of local economic development, everyone was enthusiastic about this project and still wanted it to succeed. It would provide over two hundred jobs in Swaziland, including harvesting the timber. It would also provide the local utilities with home-grown poles at a much lower cost. It looked great on paper. I thought maybe I could apply my consulting experience to understand the situation and create a potential solution.
As I puzzled over MPE, I read the business plan from my second client. He wanted to start a bottled water company. A group of college students had done a study for him of the local bottled water market and found that there were approximately eight companies competing, including Coke and Nestle. They also found wide discrepancies in the prices that these companies charged and consequently concluded that the price that is charged doesn’t matter much to consumers. Our entrepreneur thought he would be able to capture 20 percent of the market. He owned some land with a well that would be his source of water and had analyzed what equipment a bottling plant would need and what it would cost to purchase and operate it. He had committed to putting up 15 percent of the total investment himself and was looking to borrow the other 85 percent. Because this was already a large amount of money, he decided that he couldn’t afford to set up his own distribution capability, so he planned to subcontract it.
In business school, we occasionally got cases like these, often on exams. They were great vehicles for demonstrating everything you knew about an area of business because there were so many things that you could explain were wrong and why. Sometimes after discussing a case in class, the professor told us what had happened to the company. With this type of case, we always hoped it wasn’t the one exception in a million that was successful despite violating every known business principle. I don’t remember a single case that surprised us. knew the right answer for my client. My challenge was how to tell him in a credible and empathetic way.
