Story-telling at the EVPA Conference

The EVPA conference had three outstanding featured speakers. I have to admit that I am not a sucker for plenary sessions and guest speakers usually as I tend to get bored quickly during those. Jacqueline Novogratz, the founder and CEO of Acumen Fund, Percy Barnevik, ex-CEO of Swedish giant ABB and founder of Hand in Hand, and Sir Ronald Cohen, founder of European PE pioneer Apax Partners and social investor with BridgesVentures, were the featured speakers. They are pretty extraordinary individuals and each talked about his/her own organization that occupies a specific segment in the broader venture philanthropy and social investing universe.

It was quite interesting to hear how differently the three conveyed their message to the audience. Jacqueline and Percy mainly used story-telling while Sir Ronald was much more fact-based. Jacqueline told her usual Blue Sweater story which is her life story really as it starts in her early childhood. Barnevik did the same though he did not go as far back as Jacqueline did and started with his corporate days. Sir Ronald told us about his background growing up in Egypt and having to flee the country with his family after the Suez Canal crisis but the rest of his presentation focused on his last 10 years in the social sector trying to develop hybrid business models and, more recently, financial products targeting the social sector (social bonds).

All three got a pretty enthusiastic response though I felt (but I may be biased) that Cohen was the one best received. Also, I am used to seeing a much more emotional response to Jacqueline’s speeches across the pond in the US where it is not rare to see standing ovations and teary eyes among audience members after she has told her story.

The art of story-telling is based on the premise that the listener will come up with his/her own interpretations and draw conclusions and implications of what s/he hears. In contrast, the more factual presentation feeds information to an audience, thus lending itself to more limited interpretation. Also, personal stories in particular draw on others’ empathy. We tend to put ourselves in the shoes of the one telling his/her story. By eliciting our emotions the one relating her story will seek to compel us, to draw us to her, and also to possibly make us experience a a-ha moment of sort.

Therefore, there is much more processing going on with story-telling and that processing is often done through a very personal and subjective filter, especially when a personal story is involved. The audience has to work harder and the range of lessons and conclusions drawn will be wider than in the case of a factual presentation. But in the end listeners will be more engaged if they feel resonance with the story that they have been told. However, if they do not connect with the story the rest of the process, i.e. drawing lessons and conclusions and possibly experiencing personal growth thanks to a light bulb moment, will not happen.

Convergence around Social Investing at SOCAP10 and EVPA Conference

I attended SOCAP10, the conference on social capital markets (“at the intersection of money and meaning”), last month in San Francisco and the annual EVPA conference (European Venture Philanthropy Association) last week in Luxembourg. Reflecting its membership the EVPA conference was mostly attended by intermediaries (on the financial / grant-making and advisory fronts) whereas in San Francisco there were also a number of social entrepreneurs.

Coincidentally, social investing was this year’s topic at the EVPA conference. It is a sign of how lines are blurring ever more between grant-making and investing in this increasingly populated pond between charity gifts and traditional investments seeking maximum financial returns.

It is actually ironic to think that impact investing is a relatively new notion for EVPA that happens to have been founded by veterans of the private equity industry in Europe, thus folks who lived and breathed investing for most of their careers but who have defined their involvement in the social sector in the form of philanthropy. I don’t know whether they will be interested to go back to investing – albeit of social nature – and, if so, how big an adjustment this will constitute for them.

Jean-Marc Borello, the CEO of Groupe SOS, was one of the rare social entrepreneurs present in Luxembourg but that may change if social investing becomes a significant area of interest for EVPA members. I frankly find it much more compelling to hear about an entrepreneur’s (or grantee’s) adventure related by him/herself than “derivative” stories told by funders or investors about their beneficiaries’ experiences in the trenches – but one degree removed from the action.

Thus, EVPA will probably have to strike a better balance as far as opening the floor to investors / funders vs. investees / beneficiaries.

Another major difference that I saw between the two conferences was the geographic scope of the actions that were presented. Whereas most of those who attended SOCAP seemed to be working on projects or ventures focusing on emerging markets / developing countries EVPA members have kept a domestic focus, thereby reflecting their geographic preferences historically. But this is changing – Jacana Venture Partnership is a case in point. Jacana’s objective is to promote the emergence of private equity fund managers in Sub-Saharan Africa. Its co-founder Stephen Dawson is the former chairman of London-based Impetus Trust, one of Europe’s premier venture philanthropy funds and one that focuses just on Britain.

Talking about emerging markets and developing countries, it struck me how little those regions were represented at both conferences. Granted, it is expensive for folks to travel from Asia, Africa, and Latin America to Europe or North America and also, a lot of ventures focusing on those areas that I heard about at SOCAP are based in the US or Europe – which itself poses a question.

But a higher representation is needed (through invitations or sponsored participations) for northern countries’ people to hear a different perspective (even for those working in emerging markets / developing countries) and to make sure that conferences in glitzy San Francisco or Luxembourg do not become private club-like gatherings happening behind closed doors.

There was little reference in Luxembourg to a topic that was very present at SOCAP, i.e. current efforts revolving around building the enabling context for the social investing sector. B Corp, an innovative kind of company focused on doing both well and good, was recently created by B Lab and new reporting standards are being developed by GIIRS (Global Impact Investing Rating System), another creation of B Lab, and by IRIS (Impact Reporting and Investment Standards), a project of GIIN (Global Impact Investing Network – a network of social investors). The two sets of measurement systems and standards have different purposes, one (GIIRS) centering on social investing per se while the other one (IRIS) aims to come up with a common language for describing social and environmental performance in general for any organization.

Putting together a robust enabling context is the prerequisite for significant financial resources currently invested in other asset categories to flow towards the hybrid sector between traditional grant-making and investing. It is great that things are moving forward in the US - and the impact of those actions intends to be global (the G in GIIR and GIIN). But Europe has to take notice and be aware of what is going on across the pond.

The upcoming SOCAP Europe in Amsterdam in early May will be a good opportunity to bring the two continents together and I know that the EVPA folks have already started talking with the SOCAP organization about how to collaborate best for that event and beyond.

Chile: Proud Miners and Populist President

It is fascinating to see how the odyssey of the Chilean miners has captured the world’s attention for several weeks and how their rescue conveyed a message of hope – mining accidents do not end well in general as the most recent ones including in the US (in West Virginia last summer) constituted a painful reminder. Especially after the earthquake that struck their country in early 2010 this victory over fate is what Chileans needed the most.

I lived in Northern Chile for nearly two years – not that far from Copiapo and the location of that mine. I saw every day the faces of those folks from the North, the so-called Nortinos (Northerners), who for the most part have a mixed European and Indian (Native American) background. Despite Chile’s economic takeoff since the early 80’s and continued economic progress since the return of democracy the Northern provinces (Chile’s First and Second Regions) are still populated by mostly poor people. So, the mining industry in spite of its very tough labor conditions that still result in shorter than average life expectancy, continues to represent a major draw for the population as salaries paid tend to be higher than average.

Also, the mining industry that remains the main production of the country is an immense source of pride for all Chileans. Ironically enough, beside state-owned Codelco most mines belong to foreign interests but Chile is proud to be the world’s largest copper exporter.

The national sentiment and love for the flag (there is a holiday called Day of the Flag - “Día de la Bandera” – in Chile and elsewhere in the region) run deep in Latin America. Chile in particular – and you will excuse the generalization here – has always suffered from some inferiority complex towards its bigger and more buoyant neighbors, mainly Argentina and Brazil. This is partly due to Chile’s long isolation – the long strip of land by the Pacific Ocean near the tip of the continent was not an obvious destination for world travelers for a very long time.

Today, while keeping some of that low-key national character and inferiority complex, the country is mightily proud of its economic successes (at least compared to those of its neighbors and case in point of Argentina, the land of booms and busts - for instance the country’s national airline company Lan and its retail giants have expanded throughout the continent), its mining industry’s world leadership, and its political stability since the fall of Pinochet.

All of this explains why Chileans remained riveted by this story for weeks, why soon after the miners were found to be alive spontaneous celebrations erupted akin to those only seen after la Roja (Chile’s soccer national team) victories, and why the country literally exploded in joy, emotion, and pride when all the miners were brought back to the surface alive and well.

In the process, Chilean President Piñera demonstrated how he has understood Chile’s soul as he got extremely involved in the rescue efforts. First – and to his credit – he held himself accountable by saying soon after the accident that those guys would not be abandoned under his watch but then when the happy outcome was soon to become a reality insisted to be there in person for days on end and was the first in line to greet each one of the rescued miners (even the young Bolivian guy… inside joke for those who know about the acrimonious history between Chile and Bolivia).

Piñera acted as a big-time populist here. He is no Chavez and no Castro – his politics or rather his economics are exactly the opposite of his Venezuelan and Cuban counterparts’ but my god, did he force himself on the media stage – prime time, national TV, the country’s hero in short (“Heroe de la Nación”).

He has bought himself enough political credit to withstand whatever crises (economic or political) may strike the country in the next 2-3 years…

Kudos to Piñera for standing up and putting his rear end on the line as he did – but let’s also recognize how he chose to politicize the miners’ rescue.

Good Hair Day

On my way back from Asia the other day I watched Chris Rock’s documentary Good Hair (see wikipedia page) that depicts the obsession of a lot of African American women about having “good hair”. Good hair means straight hair basically and the film does an excellent job of describing everything that so many women are willing and ready to suffer though to get their hair as straight as possible. Chris Rock has that charisma, charm, and instant connection and chemistry with folks so that he manages to get both women and men, as well as celebrities and no-name people in the movie to speak with their hearts about what “good hair” means to them – those comments are both funny and moving.

Incredible coincidence - my neighbor actually works for one of those LA-based human hair (from India!!) wholesalers. What were the odds, right? He said that the movie was quite accurate – so great job, Chris Rock, and a shout to my neighbor’s company…

Rent or borrow this move if you can. It says so much about the American psyche and about the complexity of social justice, i.e. the fascination of those African American women for straight (in other words Caucasian-looking) hair.

Absolut (sic) Double Standards!!

I laughed the other day when I saw the Harvard subway station (T station) in Cambridge covered with big Absolut vodka posters. From time to time the Boston subway strikes a deal with a company to put its posters all over some given T station – and not only in the dedicated spaces. It is a little bit of an overkill from a subway rider’s standpoint but at least you can’t miss these ads…

Anyway, I was laughing when I saw Absolut going bezerk MBTA (Boston transit system) style because it made me think about how differently alcohol and cigarettes are treated in the US. Tobacco might well be another word for devil in this country…

Pointing to the addictive power of tobacco, its role in causing lung cancer and respiratory disease and other ailments such as heart disease is certainly the right thing to do. We don’t want our kids to start smoking, nor our grandmothers to smoke, nor our work colleagues, nor anyone around us for that matter because cigarettes stink. Alright…

But what about alcohol? How is alcohol less addictive than tobacco or less damaging to people’s health – to name a few possible repercussions, liver cancer, high cholesterol and heart condition due to alcohol high sugar content, and any dangerous situation that drunk folks can put themselves into?

I just don’t get it. Now, my point is not to discuss whether or not those among us who smoke or drink should be left alone as to how they choose to conduct their lives, what constitutes an addiction, or how much drinking and smoking cost to society from a public health standpoint.

What boggles my mind is just how smoking has been vilified whereas drinking is very accepted in this country’s culture. When I walk around in some Boston neighborhoods (you know who you are, Southie friends) and I see all those folks whose faces are totally ravaged by alcohol (and probably smoking too), I don’t understand how we as a society feel that it is ok. I live next door to a bar – a lot of folks are drunk when they leave. You find people going into bars and taverns at all times of day in certain neighborhoods. And this is more acceptable than people smoking a pack a day? I don’t see how.

In contrast, Europe has been as aggressive in its prohibition of alcohol advertising as it has been with smoking. Western European governments appear to consider that both drinking and smoking can have negative public health repercussions and thus, neither is encouraged – on the contrary high taxes on those products and limited advertising intend to curb consumption.

Why such a different outlook on drinking vs. smoking in the US? I don’t know... Enjoy the good times, Absolut!!

France is Hurting

I was in France for a few weeks over the summer and the level of discontent I saw among most people there struck me. I know the stereotype about French folks complaining and whining all the time – or at least a lot. This is not necessarily inaccurate but today it seems to have reached epic proportions. And what I heard behind the complaining was quite alarming: widespread sheer unhappiness and fear about the future.

I tried to figure out where all this malaise – uniquely French word indeed… - comes from.

1) Increased stress at the workplace: this is an unintended consequence of the shift from the 39- to the 35-hour workweek several years back. The new law reduced the work time but employers were obligated to keep salaries at the same level. This brilliant economic calculation logically resulted in employers not recruiting anyone for a while – even though the 35-workweek was at its core a measure intended to promote job creation… So basically, folks were told, you may work fewer hours but you’ve got to do the same amount of stuff.
And the headaches and increased stress were not limited to employees. Managers find themselves having to deal with their employees’ increasingly complex and ever-shifting schedules. Those who continue to work through the week without stopping at 35 hours get comp time – 2 days a month (24 days a year – 5 weeks!!!) on average. The comp time generally has to be taken the same month it is granted so that people can’t accrue too much vacation time (which is about 5 to 6 weeks already). Thus, any given day at least one team member is likely to be absent and the job still needs to get done…
What is more - as a consequence of having so much free time, organizing that extra comp / vacation time has become a substantial activity for a lot of folks – and certainly a distraction at work… While they are thinking about when it the best time to go to Musée du Louvre to avoid the long lines, they still have work to do… bummer!!

2) Ambivalent position towards reforms: I feel there is a broad understanding that reforms are needed, especially regarding pensions that are a ticking time bomb in France like in other industrialized nations. That being said, there is widespread concern that today’s benefits – whatever they are because they vary from company to company and quite significantly for those who work for the civil service - will be paired down a lot, which would mean for instance that a 55-year-old having worked hard all his/her life would have to wait until 65 instead of 60 to retire with full benefits if the retirement age was to be increased. The frustration and concern are understandable.
What adds to the frustration of most is that there will be double standards in the way reforms will come to pass. Civil servants working for ministries like the Ministry of Education or large state-owned companies like SNCF, the railway system operator, make up an ultra-sensitive group of stakeholders whose salaries have historically been pretty low compared to private sector compensations but in return whose benefits were quite good. The current administration knows from experience that this group is willing to go on strike and paralyze the country – an effective blackmailing strategy. Thus, those who are not in the civil service or do not work for large Fortune 100-type companies (that tend to offer more generous benefits than small and medium enterprises) feel as though they will be the ones who will pay at the end so that others can keep their benefits - or not lose as much as they will.

3) Lack of prospects: for most young people unemployment seems to be the likeliest prospect unless they graduate from the best Grandes Ecoles, the Ivy League-like graduate schools offering their students the best job and career prospects for that age group. Unemployment among youth has been at an all-time high – and poverty among young people (between 18 and 30) has become a nation-wide issue. It was heart-breaking for me to hear from the adolescents I spoke to (they have not even finished high school yet) that they were certain to be unemployed at some point in the next 10 years… Unemployment is a major concern but beside that concern young people don’t seem to believe that they’ll be able to have great careers and exciting jobs – not even that they will be able to make that prospect happen by themselves. What about a cool start-up? Certainly the French education system is generally not very good at fostering kids’ creativity - but it is still scary to think that the concept of being in control of one’s own fate, namely if you work like a dog things are pretty likely to turn out fine at the end, just seems foreign to most.

4) Too much aggressiveness in labor relations: I don’t know if this is because of the added stress that I mentioned above but I’ve been amazed at how aggressive relations between people have become, and in particular in the work place. In most stories I hear about relations at work, especially between manager / boss and employee, a win-win outcome never seems to be in the cards. Either one or the other is going to get screwed. And that happens mainly because folks will tell you that they know for a fact that the person across the table just wants to take advantage of them. Wow…

5) Middle class feeling squeezed: in a trend similar to the US and Britain in the past 15 years – but very uncharacteristic of France’s long period of growth following WWII that put the country solidly among the richest industrialized nations – the gap between the rich and the middle class has widened as the middle class’s real income has remained flat while that of the richest experienced a substantial growth. Like in Britain and the rest of Europe the expansion of professional services firms (consulting and banking) and to a lesser extent the increase in executives’ salaries in Fortune 100-type companies have broadened that gap while ordinary people were supposed to be content getting the inflation as an annual increase on their pay. Central Paris has become as closed to the vast majority of the population as are most downtown areas in New York, London, Boston, etc. With real incomes staying flat and quite a bit of inflation on some food staples like milk, meat, or vegetables in the past several years (overall inflation figures show modest increases but the consumer price index includes such sectors as tech products or cell phones whose prices have tended to go down for the same set of specs) the middle class is definitely feeling the pinch – and they think it is unfair.

6) Lack of leadership: Nicolas Sarkozy’s Dr Jekyll and Mr. Hyde personality does not inspire his countrymen and women. He can be visionary and innovative but also paranoid and controlling - and most people in France, even among his supporters, now see through his dual personality. Ironically, the country that produced Louis the XIVth (14th), Napoleon, and more proudly General de Gaulle is not big on leadership – probably some libertarian resentment toward the boss figure (the French invented the Guillotine after all). But still – whenever French people look toward the top and get confusing signs from a leader whose powers are immense (France’s “Fifth Republic” has fewer checks and balances to counter the President’s power than most other industrialized nations), that does not help them feel good about their future.

I am not sure where the country will go from there. It is indeed very French to worry about the country’s “decline” (from its powerhouse status dating back to the 18th century…) and I’ve heard heated arguments about this supposed decline for years. But this time it is different. French are frustrated, anxious, and often plain mad (as a result, racism is going up these days) and they generally don’t have the Americans’ optimism and resiliency to envision – and more importantly – work hard for a brighter future.

Quran Burning – Really?

I was shocked in the past few days that that pastor in FL who wanted to organize a Global Quran Burning Day (!!!!) on September 11th got so much press coverage and such mellow reactions at first. Granted, the US is a country where freedom of expression is sacrosanct – that is how it is possible for Ku Klux Klan advocates or those nostalgic of the Nazi era to demonstrate unopposed by the police. But the KKK / Neo-Nazi folks are exactly in the category where I put that pastor and his crazy and dangerous idea.

This is serious and worrying anti-Moslem sentiment – the worst example of racism. Period.