Qi Contributor Blog Series 4: The Business of Development (Part Two)
Tuesday, November 29, 2011 at 4:25PM Chandran Nair, CEO of Global Institute For Tomorrow (GIFT) talks about his revolutionary executive education programme called the Global Young Leaders Programme, which equips business leaders with a sophisticated and honest understanding of socio-economic development and a new mindset to look at previously neglected market.
By Chandran Nair, and includes contributions from Ho Yeung Liu and Nina Jatana, both from GIFT.
Since 2006 when GIFT ran its first YLP, we have based our methodology on the importance of key soft skills business leaders must acquire to succeed in today’s world. Intimate knowledge of both the local market and the political economy, together with a nuanced understanding of its cultural context are requirements and not luxuries. Communication and empathy, both personal and cross-cultural, are also paramount. Without the flexibility and skills to be able to communicate with people from different backgrounds, it would be impossible for business people to acquire the knowledge that enables them to create new goods and services catering to local consumers. This is especially important in the context of operating in Asia where numerous cultures intermingle often in messy ways, and have to work with each other despite language barriers and dramatic differences in working styles.
Each YLP involves 20 to 25 young executives (usually between 29 and 35 years old) from both Asian and non-Asian companies. GIFT facilitates a process whereby they work to create commercially viable outcomes for social-oriented projects with strong project partners, which range from NGOs, social enterprises, SMEs to governmental organisations. The YLPs are held in a growing number of developing countries in Asia, from the busy streets of Ho Chi Minh City in Vietnam to the rural areas of Mongolia. Participants work in a variety of environments, from classroom sessions to conducting market research at project sites. They are encouraged to use their own business acumen to work with each other to create or expand on plans for the partner. Their output is typically in the form of a business or an action plan, and is presented in a final conference to locally invited stakeholders and potential investors.
"The Global Young Leaders are held in a growing number of developing countries in Asia, from the busy streets of Ho Chi Minh City in Vietnam to the rural areas of Mongolia. Participants work in a variety of environments, from classroom sessions to conducting market research at project sites."
YLP participants working together to produce a business plan for the project partner, Integrated Farmer’s Association of Heshuiping region (IFAH), in Hubei, China
In return, the project partners are given the opportunity to acquire much needed external advice from professional business talents. It is common for many of these organisations to have little to no access to this. Many NGOs rely heavily on donor contributions and thus may not have the comprehensive set of business skills that the participants offer. The YLP gives these partners a fresh perspective on their project whilst at the same time providing participants with a wholly new insight into a variety of alternative business models, such as cooperatives, community of interest companies (CIC) and social investment funds. More importantly the YLPs provide a continuous platform for executives to learn about new opportunities in socio-economic development.
Improving Public Health through Commercialisation GIFT recently conducted a YLP on Vietnam’s public health issues in November 2010. Participants worked with international NGO IDE and USAID’s WaterSHED initiative to find a solution to the persistent challenge of increasing rates of hand washing with soap in rural parts of the country. This is sorely needed in a country where less than one-tenth of people wash their hands with soap before eating. According to the World Bank, the economic costs incurred due to poor sanitation amount to 1.8% of Vietnam’s GDP. Setting an enabling environment for people to wash hands fulfils a tangible social need, yet there was no market demand for a product. It was decided that a low-cost hand washing device would be the most ideal solution.
The device holds enough clean water to support a family of four for 24 hours, and is meant to serve as a reminder to encourage adequate hand washing at various crucial points, such as after feeding livestock or handling waste. It is made from durable material and most importantly has a tray underneath to store soap and drain wastewater.
Participants agreed that a different approach to promotion and distribution would be required in order to deliver the device at an affordable price. Through a week of in-depth field investigations, including site visits to rural villages and interviews conducted with front-line supply chain members such as factory owners and small-scale shop owners, the participants concluded that a social enterprise had to be set up to oversee management and distribution of the product. The atypical aim of this enterprise was not to satisfy an existing demand, but to create a new demand for something that at the time no one had even heard of.
A member of the Vietnam Women’s Union trying the hand washing device prototype, October 2010
Based on findings the group decided to enlist the support of the 13 million strong nation-wide network of the Vietnam Women’s Union. These women are opinion leaders in their respective villages and have strong personal ties with many of the end customers. As well as providing legitimacy to the project, members of the Union would also assist in selling and delivering the hand washing devices directly to rural families.
This programme also illustrates how large companies can help in societal development by leveraging existing projects, instead of creating their own from the ground up. In the months leading to this YLP, GIFT approached Unilever Vietnam to support the project partner and subsequent action plans produced by the YLP participants. Unilever pledged to fund the production of the first batch of hand washing devices, as well as providing in-kind support such as soap, staff training and market insights.
Conclusion: Business’ Role in Creating Fair Shares Prosperity It is clear companies are capable of playing a more strategic role in tackling developmental issues in Asia. We at GIFT would go as far to say that the development process would never be complete without the widespread involvement of commercial interests, but that which is not driven simply by profit maximisation. To enable this, current mainstream executive education needs a radical re-think in order to further business leaders’ understanding of the nuances of development and their role in influencing it. For the past five years during which GIFT has run 21 YLPs, an alumni with over 500 members has learnt and recognised the many complexities that exist within Asia’s social framework. Companies are beginning to invest time and resources to better understand underserved markets and discover new customers. GIFT’s goal is to raise awareness of what local people need, and how businesses can adapt and create opportunities that complement their existing resources. Above all, the aim is to advocate a more equitable development within Asia, an Asia where the majority of people can access a fair share of the prosperity that is currently, and perhaps unfairly, enjoyed by a minority.
"GIFT’s goal is to raise awareness of what local people need, and how businesses can adapt and create opportunities that complement their existing resources. Above all, the aim is to advocate a more equitable development within Asia, an Asia where the majority of people can access a fair share of the prosperity that is currently, and perhaps unfairly, enjoyed by a minority."
About Chandran Nair
Chandran Nair is the founder of the Global Institute For Tomorrow (GIFT), an independent social venture think tank dedicated to advancing an understanding of the impacts of globalisation through thought leadership and positive action to effect change. Chandran was chairman of Environmental Resources Management (ERM) in Asia Pacific until 2004, establishing the company as Asia’s leading environmental consultancy.
About Qi GLOBAL
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