CHAPTER 1

Convergence

Creating Opportunities Across Sectors

What do a Pakistani dreamer, a Swahili-speaking ex-marine, and an investment banker have in common? In many ways, not much. Their careers have been as messy and, at times, unfocused. But they share a common desire prevalent among many of today’s young businesspeople to work across sectors—managing careers in the for-profit, nonprofit, and government arenas—often building both financial well-being and a legacy of social good.

Fortunately for them, the world seems to be moving in the same direction. In the United States, GDP grew 36.6 percent between 1994 and 2004, but, according to the Urban Institute, nonprofit revenues grew an astounding 61.5 percent over the same period; and in 2005, more than 61 million Americans volunteered.² While private sector employment collapsed in the most recent economic crisis, public employment in the United States remained relatively stable—with high-profile public sector agencies like the U.S. Treasury attracting top talent from private industry, and public sector salaries surpassing those of employees in the private sector.³ Simultaneously, the past several decades have seen the privatization of many previously government-operated activities—in transportation, utilities, and warfare—even as sovereign wealth funds, public-private partnerships, and other hybrid organizations have begun to gain prominence on the international stage. The approaching reality is that, in many cases, meaningful distinctions between these sectors and their activities are disappearing even as talented young professionals seek to chart careers that cross traditional boundaries.

This is certainly not a novel concept. Business schools have produced a number of notable participants in the public and nonprofit spheres, including Hank Paulson, Robert McNamara, Mitt Romney, Michael Bloomberg, George W. Bush, Elaine Chao, P. Chidambaram, and Antony Leung, to name a few. But the prevalence with which graduates actively seek cross-sector careers seems to be growing.

HBS’s Social Enterprise Initiative, founded in 1993, now has nearly a hundred involved faculty and more than four hundred cases and notes for use in classroom environments; the student-run Social Enterprise Club is one of the school’s largest, with more than four hundred members.⁴ The mission of the Yale School of Management—“to educate leaders for business and society”—explicitly outlines this cross-sector focus. And many of today’s top social entrepreneurs are business school grads, like Stanford’s Jessica Jackley, cofounder of Kiva.⁵ HBS saw a 106 percent increase in the number of students finding employment in the government and nonprofit sectors between 2008 and 2009.⁶ And many business and law schools support this transition with various loan forgiveness and fellowship programs that encourage work in the government and social enterprise sectors.

In our own survey, we found an astonishing amount of interest and experience in cross-sector careers (see figure 1-1). Despite the fact that all of our respondents were students of self-described business schools, 30 percent had worked in the public sector prior to school and 30 percent in the nonprofit sector. Thirty-nine percent believe they will have worked in the nonprofit sector within ten years of graduation, with 33 percent predicting work in the public sector.

FIGURE 1-1

---

Employment experiences and expectations

---

Further, 11 percent of those surveyed had worked in all three sectors, and of those who worked in the private sector prior to school, 24 percent had also worked in the public sector and 30 percent in the nonprofit sector.

When asked about the nature of this overlap, the response was even more astonishing (see figure 1-2). Fully 88 percent of respondents answered “agree” or “strongly agree” when prompted with the statement, “Most business principles can be transferred to the public or nonprofit sectors,” with rates not differing appreciably depending on whether the respondent had worked in the public, private, or nonprofit sector. And 84 percent answered “agree” or “strongly agree” to the statement, “It is essential for business leaders to understand the public and/or nonprofit sectors.” Further, 84 percent of respondents saw “increasing overlap between business, nonprofit, and the public sector.”

FIGURE 1-2

---

MBA views on cross-sector interaction

---

This shouldn’t surprise us. Our generation has been raised in an era of global privatization of public utilities and in an America where banks and even automakers have been “bailed out” by the federal government. We’ve seen arguably the greatest businessperson of recent decades, Bill Gates, become the world’s most prominent philanthropist; and we’ve seen next- generation businesses, like Google, frame their mission statement in social terms: “Don’t be evil.” Democratic revolutions are now facilitated by social networking sites like Facebook and Twitter. And while not all of this convergence is necessarily good, it’s happening. What should you do about it?

Managing the Next-Generation Career for Convergence

For young professionals, this convergence alters the landscape of career opportunities and changes the ways in which we seek training, education, and mentorship.

First, successful young businesspeople will need knowledge of how the nonprofit and public sectors work, and employees in those sectors will need a better understanding of business. Some graduate school programs, like Harvard’s, offer joint master’s degree programs from their business and public policy schools. Stanford offers a similar joint program with its school of education, and many young professionals are seeking such cross-sector work early in their careers to cement their credibility across sectors.⁷ Young professionals can scarcely hope to operate effectively in private sector enterprises like finance, health care, or even agriculture without an extensive knowledge of the public sector, and the increasing relevance of models like microfinance make nonprofits relevant to those businesses as well. For the next generation, cross-sector training and understanding will be essential to effective leadership—particularly because best practices can and should be shared between sectors.

Second, the “boxes” into which professionals once conveniently confined their careers are not as relevant or constraining as they may have been for previous generations. Businesspeople don’t have to either relegate their nonprofit and public sector work to nights and weekends or to later in their careers. Private sector organizations themselves increasingly incorporate positions that intersect closely with social and public sector work—in government relations, social initiatives, sustainability, and other areas. For instance, TOMS shoes promises that for every pair of shoes bought by a consumer, it will give away one pair to a needy child.⁸ The structure of the firm allows it to increase its brand recognition through its social initiatives and free media, while doing good and attracting employees who are looking for purpose-driven careers. Many professionals are also finding value transitioning between public and private organizations early in their careers. For those seeking to chart careers, these options should gain increasing consideration.

Managing the Modern Organization for Convergence

Similarly, managers will have to acknowledge these trends and work to position their organizations for an environment that reflects them and a labor force that desires them.

From the perspective of current executives, those tasked with managing the next generation should seek to use these young professionals’ interest and experience in cross-sector initiatives to their advantage. For generations, business has recognized the valuable leadership experience provided by the U.S. military, but understanding more broadly the role that those who have worked in emerging markets, public organizations, FOPSEs (for-profit social enterprises), political campaigns, think tanks, and academic organizations can have in private sector organizations will be essential to managers who wish to navigate a new environment where the sectors are more closely intertwined. Similarly, managers in nonprofit and government should continue awakening to the increasing usefulness of private sector experience, models, and best practices in their organizations. In a 2007 Atlantic Monthly article, journalist Jonathan Rauch noted the ways in which Bill Clinton was incorporating private sector practices, employees, and models into his own nonprofits; and organizations like the Gates Foundation and governments like Singapore have followed similar paths. Multinational organizations in particular—which must often interact with hybrid government/private sector industries in a multiplicity of countries, from China to Great Britain—must be keenly sensitive to this transition.

These managers should also seek not only to hire talent that understands the cross-sector perspective, but also to train their workforce to value these experiences and offer opportunities to young professionals to pursue jobs—temporarily or permanently—that suit their passions. The consulting firm McKinsey & Company, for example, offers professionals an opportunity to do private, public, and nonprofit work simultaneously (as law firms have done for many years); and organizations like Bain & Company offer opportunities through partner or sister organizations that allow professionals to work on social problems about which they are passionate while gaining valuable experience they can later transmit back to the firms for which they work. Public organizations and political bodies—in Singapore, Brazil, and even the United States—seem to be placing a higher premium on business experience, with many policy makers moonlighting in the private sector between appointments and administrations. The result is a different way of thinking about value creation in businesses. Senior managers create value not simply by defining an opportunity, crafting a strategy, and allocating economic and human capital. More and more, the real challenge of leadership lies in creating roles, organizations, structures, and belief systems that allow disparate individuals to work together in pursuit of a common vision.

Organizations in every sector would be better served by acclimating to a new environment in which all three sectors are gradually and in certain ways, converging—and organizations can use the talents and passions of a new generation of cross-sector professionals to help them chart their courses. And young leaders should feel empowered to find their passion and purpose in cross-sector careers.

Floating Above the Boxes

Business, Nonprofit, and the Age of Falling Boundaries

Born in Pakistan and raised in Saudi Arabia, UMAIMAH MENDHRO was the first woman in her family to leave the country for higher education. She studied human development at Cornell University and completed her MBA from Harvard Business School as a Baker Scholar. Umaimah is currently a senior manager at Microsoft Corporation, where she leads corporate entrepreneurship and incubation efforts. She is also the cofounder of thedreamfly.org, a global initiative that strives to create human connections across communities in conflict around common causes.

Nothing but the bleak darkness of a starless night. Deafening thumps of what felt like a thousand elephants marching into our living room. Shrieks of panic. My first reconstructed memory of life. “What did my father do? Why are all the soldiers after him?” In 1980, when Zia Ul Haq proclaimed a military coup, my parents, young aspiring revolutionaries-cum-physicians, escaped Pakistan with their two toddlers in the middle of the night to buy survival in return for a life in exile in Saudi Arabia. “It must’ve been something all the big, powerful people despised,” my five-year-old self thought. “Interesting . . . we’re all somehow alive and doing fine.”

My ten-year-old self, covered from head to toe in an ultraconservative Arabic garb, holding tight to my mother’s hand, walking and dodging strange men’s nasty stares. Sitting cross-legged on princely rugs in the vast, serene, open spaces of Haram-al-Sharif, observing rows of women in black and men in white, now heads on the ground, now standing upright, now hands on the knees, connecting with their creator on command. Makkah looked to me like an exotic and spectacular world of contradictions, a place where I clung to any opportunity to form, rather than find, an independent identity. With manufactured dreams and opinions, which the big people might honor or despise, I began to love the feeling of freely floating in thin air, right above the borders of right and wrong as defined by a people, charting out my own rules of good and evil. We returned to Pakistan after eleven years, when democracy was finally restored.

“Duck, now!” my father exclaimed to all of us in the backseat. I peered out the window, terrified. A growing crowd of angry young men, with clubs and arms. The driver hit the gas pedal. None of us said much. We didn’t play our favorite tunes. Just waited for the shrill silence to dissolve. Once we left the outskirts of the city, Karachi, we left the home we had built with half a decade of savings, yet the air felt more breathable again. Ethnic violence between the Sindhi-speaking and Urdu-speaking populations had reached a crescendo. Families were stopped, commanded to say words only Sindhis knew how to pronounce, and depending on which side the other side was on, were harassed, mugged, and often enough, shot on the spot. That year, the year I turned thirteen, we ended up making a life for ourselves by my father’s village, Akri, in a town named Badin. Some five hours away from the civilization I knew, Badin allowed our parents a life they had been wanting to come back to—one where, through their chosen profession, they could care for the sick and helpless who have no place else to go. We children were home-schooled and determined to prove to the world that we could and would go places. I always liked intellectual exploration, but it was in the solitude of a life with virtually no visitors to host or places to visit, no cliques to try to fit into, and no norms to sport, that I fell in love with education for the sake of exploration and illumination of the mind. With squealing chirps of rodents as my backdrop and a gentle feeling of suffocation on warm summer nights, I’d sit on my bed and imagine my fifty-year-old self giving interviews, reflecting on a lifetime of achievements, a Nobel Peace Prize winner one night, CEO of a conglomerate that brought the country to prosperity another, while carefully name-dropping some of the world’s best universities, usually Harvard, that I was supposed to have attended.

I graduated from Cornell with a major in human development; married a wonderful, wise person who speaks Urdu and cannot pronounce those words only Sindhis are supposed to say; took a job in consulting and, in the wake of the dot-com bust, got laid off within nine months; and then fast-tracked my career with a company I fell in love with, Microsoft Corporation. Microsoft allowed me the freedoms to chart my destiny and be rebellious with reason. Outside of my job as a product manager, with strategic business management and P&L responsibilities at age twenty-six, I headed up Microsoft’s women’s employee group, representing over five thousand members and twelve thousand female employees around the world—and in the process fought for simple rights that questioned age-old company policies that did us no good. I felt I made a difference. That it mattered that I was there.

I traveled to the pits of Sindh and the brinks of Pakistan and Kashmir, working for an education not-for-profit and a microfinance organization. This was not part of my strategic life plan. No form of nonprofit was. During my third week of Harvard Business School, I was forced to take a medical leave of absence and rejoin the program almost ten months later. Unemployed in the United States, between a work and student visa, and eager to make something of the days handed to me, I took the first flight to Pakistan so I could force myself into a corner to do something I would never otherwise have done in my now interesting-on-paper life. I found myself among half-naked children running on the streets, with glimmers of rebellion in their eyes and dreams of doing something they will one day be truly proud of. I visited my cousins in our village, whose eyes and smiles reminded me of my four-year-old self, and that the life I was living now was alien to me as a child. I saw my aunts and uncles, who didn’t know what or who Harvard is or even how to spell that word, who had likely never owned an independent thought or harbored any reason to reason.

Crack of dawn. I was driving Mona, a dear friend, to Akri. No one outside my family—none of my friends, nor my husband—had ever visited my family in Akri. She had flown in from the United Kingdom after a brief conversation about whether she would join me in founding an organization that would plug into communities around the world, give them the option and ability to think for themselves, and create better alternative realities. We stood in the heart of my village—in front of children young and old. With glazed eyes in an inaccessible world, the older ones looked through us. We met with the village elders. They complained about lack of education. About the government. About the state of the country and how we’re all heading toward disaster. They complained, and my heart sank in my chest. I felt privately and acutely embarrassed.

And then we met the little ones. Girls and boys five, six years old, in their orange shalwar qameez and big, wide-open eyes. Some with their hands on their mouths covering their giggling teeth. Others elbowing their neighbors, pointing at us. I stood in front of them all, taking in the distinct energy in the room. Mona threw a question to the room, “So, can anyone tell me what you want to be when you grow up?” A little voice at the back said out loud, “A heart surgeon.” Mona and I stared at each other. Other voices joined. “A teacher—for the little children,” said a little girl, fixing her head scarf. “A lawyer, like in the movies, to arbitrate justice.” We found that for the little children, the realities of Akri and of their destined life in this village had not yet set in enough to convince them how unreasonable their dreams sounded. Images of young Bill Gates flashed before my eyes—with big, round eyes, and too much energy for his slender little body to hold in, saying, “We will have a computer on every desk!” Gates morphed into Sam Walton, who faded in and out with Warren Buffett. “We will make a school for you here,” I blurted out to little Atta, “so you become all that you said.” “Really?! Here? When?!” he exclaimed back. And we never looked back.

Thedreamfly.org, the organization we founded that day, exists to bring together communities in conflict to coinvest in each other’s success for a better common future, one where drive for personal distinction, appreciation of differences, and thoughtful, independent reasoning prevails. It exists to create a human connection that’s inviolable by culture, religion, and politics. We chose business and education, not charity or literacy, as the means to achieve this goal.

I was on one knee, looking at young Nazeem through the eye of my SLR camera. We had gone for a stroll in the village and I wanted to capture the moment. “Remind me what you want to be when you grow up?” He smiled at the camera, looking calm and confident; he must’ve grown several inches since the last time I had seen him with Mona several months ago. “Last time I wanted to be a pilot but I now want to be a scientist.” I was moved. You, Nazeem, are why we’re doing what we’re doing, I thought to myself, and looked to find my voice. “That’s fantastic! Do you know what kind of a scientist?” Looking straight in my lens with his beautiful smile that belied his words, Nazeem said, “Ones that know how to make bombs. So I can bomb India.” And you are why we’re doing this.

August 2008. I had returned to HBS, completed my first year and I was now standing on the ground inside the dreamfly school in Akri. I could hear uncontrollable excitement and energy everywhere. Kids were laughing, signing, playing, learning. My throat kept lumping up with overwhelming emotions of excitement, astonishment, and gratitude. I stepped into Class One, Section Blue. The class seemed to be having a discussion about whether kids should ask the teacher for permission before they have to step out of the class. “If anyone can go at any time, there will be no rules,” one said. “That’s a good point, but why do we need rules?” asked the teacher. The class paused for a moment. And my eyes immediately teared up. They weren’t just learning A-B-C’s and 1-2-3’s. They were . . . thinking. “Maybe to avoid chaos?” said another student, “because sometimes when there are no rules, every man thinks he’s the boss.” The class fell into a fit of laughter and applauded. I was seeing the HBS case study method in action in Akri in Class One. We weren’t imparting knowledge to our children, we were merely inviting them to learn for themselves. As the class settled down for a bit, a hand went up in the air: “Teacher, why did we all clap this time, when we didn’t clap when Syed had the right answer earlier to your question?”

We are now looking to take dreamfly to Afghanistan. Adopting a for-profit business model that can help us ensure that our efforts can be self-sustainable and self-propelling, we want to establish an organization that outlives its founders. We are using technology and social networking to sew the seams between communities at war, giving each exposure to the world outside the one they most comfortably fit in—connecting Pakistan with Afghanistan with the United States, humans with humans, really, regardless of where they live or stand.

Graduating from HBS, I didn’t explicitly consider going into the not-for-profit sector. Neither was I thinking I was going into the for-profit sector. The incredible freedoms that come with floating across and above boxes—the boxes of business and social good, of cultures we must fit in, of beliefs we must abide by—and the courage and power to look through sacred norms, that’s what I care to build into myself and the world around me.

I decided to come back to Microsoft Corporation, to a rebel organization within the company that runs internal groups like external start-ups unhindered by the large-company mentality and practices. We’re looking to break a few rules, fall on our faces, pick ourselves up, learn, reason, and march ahead. I take my dreamfly spirit to work and my work ambitions to dreamfly. I take my ability to manage with near-zero resources to my Microsoft start-ups and my business savvy to Afghanistan. And my anxious energy to do more, my fervent desire to make an impact, my unsystematic at-the-edge-on-the-border-of- boxes thinking to everything I do.

More and more, I feel, we must define ourselves by who we are, our deeply personal naked self, and what we want to do, rather than by which professional hole the peg fits best. And we must find our way to our vision through our own crooked path, exposing possibilities we never imagined might exist.

I don’t know where the fullness of my life will take me. If I will become that CEO. If I will win any accolades. If I will die when I’m forty. But I know I want to live a life that gives people reason to reason; to pause and question the comfortable assumptions, to form and inform beliefs, and never give up common sense for common opinion.

Learning from Kibera

Nonprofit Lessons for Business from East Africa’s Largest Slum

RYE BARCOTT cofounded Carolina for Kibera in 2001. He graduated from Harvard with an MBA and MPA, is a TED Fellow and a World Economic Forum Young Global Leader, and works at Duke Energy. His first book, It Happened on the Way to War: A Marine’s Path to Peace, was published by Bloomsbury in April 2011. He is passionate about participatory development.

“Vipi beshte?” I asked over Skype. Something was wrong. Cantar’s voice was tense. “What’s up?”

“Si poa hapa. Hakuna panga iko Uchumi,” he replied from Kibera in Swahili, referring to Kenya’s largest grocery store. “It’s not cool here. There are no machetes left at Uchumi.”

It was January 2008, and Kenya had just held a disputed presidential election.⁹ Kibera was an ethnic fault line, a slum in Nairobi, Kenya, where more than three hundred thousand people resided in an area the size of Central Park. In the next thirty days, more than ten thousand residents would be displaced, and the medical clinic a widowed nurse named Tabitha Atieno Festo had founded with a $26 grant would treat more than a thousand patients wounded by gunfire and pangas.

I was in my first year at Harvard Business School. It was Christmas break, and I was preparing to return to Kibera to welcome a delegation from the Bill & Melinda Gates Foundation to Carolina for Kibera (CFK), the organization I founded in 2001 with Tabitha Festo and the community organizer Salim Mohamed to build a better generation of African leaders.

“It might not be good to bring the Gates people,” Cantar, our sports program officer, warned.

I did not want to cancel the trip. We had courted the Gates Foundation for two years, and they were interested in how our model of participatory development could be used to prevent violence and empower youth living in abject poverty worldwide. However, Cantar and I had worked together for over eight years. I trusted him. I had learned from him, and he had learned from me. That was the key to participatory development, an approach that is rooted in the conviction that solutions to social problems must be driven by the affected communities, not outsiders.

I cancelled the Gates Foundation visit. The following day Kibera’s largest church was looted and set on fire, igniting weeks of vicious bloodletting and ethnic cleansing.

I had decided to attend HBS to better understand business management after having founded and helped lead CFK as a volunteer while serving on active duty in the U.S. Marine Corps. CFK needed better management practices, having grown from a start-up reaching two hundred children in its inter-ethnic sports program to a fully integrated leadership development program involving more than thirty-five thousand residents. I arrived at Harvard thinking nonprofits had more to learn from business than vice versa.

My business education has since suggested to me the learning can go both ways.

I think there are three broad areas where business best practices can greatly assist nonprofit organizations like CFK: cost-benefit analysis, strategic planning, and accounting.

Nonprofit managers typically need to take into consideration factors that cannot be easily quantified, such as community support. Nevertheless, cost-benefit analysis is a powerful way to think through trade-offs systematically. Over the past year CFK has implemented basic cost-benefit analysis at a programmatic level. The results have been encouraging. Our program officers have found that cost-benefit analysis is a tool that helps surface healthy debates and keeps us grounded and focused on our core mission, which is to help create a better, more ethically guided generation of African leaders from an unlikely place—East Africa’s largest slum.

An excellent business education can also equip nonprofit managers with useful tools for strategic planning. Many of my nonprofit colleagues think they need to hire expensive outside consulting firms to manage the strategic planning process, and they fear that their organization will lose operational flexibility and initiative once a plan is complete. I held similar viewpoints before I attended business school. I now see strategic planning as a vital and dynamic process that should be prioritized in an organization’s growth. Too often nonprofits such as CFK simply fall back on the “founders’ stories” for guidance. Founders’ stories are important. They are part of the culture of an organization, but they are not a strategic plan. When effectively conducted and used, strategic plans help organizations maximize their impact.

Finally, many nonprofit managers with whom I’ve worked have never been formally educated in accounting and thus cannot properly supervise their finance departments. Most of my classmates at HBS took only one accounting course during their two years, a first-year course called Financial Reporting and Control. That class taught the basics, and although it was not a favorite class among my peers, it was among the most important courses that I took. I entered business school without the knowledge of how to prepare and read financial statements, and these are skills that most, if not all, managers need.

Shortly after the postelection violence in Kenya threw the nation into turmoil, the real estate bubble burst and the U.S. economy imploded. It was a unique time to be at business school, especially a school like Harvard, which had educated many of the CEOs whose firms destroyed staggering amounts of value, and who came under the fiercest public criticism for their failed leadership. It was in this context that I revised my initial presumption that nonprofits had more to learn from business than vice versa.

Nonprofit best practices can greatly assist business, and they merit more examination at business schools. Specifically, there are at least two broad areas where nonprofits may offer substantial insight for corporate executives and entrepreneurs: values and stakeholder outreach.

The financial crisis occurred in part because American firms were guided by poor values. CEOs sent the wrong messages when they incentivized productivity primarily though financial bonuses. In any industry, nonfinancial factors should be more powerful motivators for employee retention. This is true even for employees who were primarily motivated by financial gain when they first joined the business. Nonfinancial factors are cultural, and they include pride in the product delivered, the strength of firm identity, unit cohesion, and the integrity of the organization. Exceptional nonprofits have their values aligned with their missions and rely on nonfinancial incentives to keep their employees and volunteers motivated. At CFK, for example, our teenage members must participate in community clean-ups in order to compete in inter-ethnic soccer tournaments, and winning teams receive soccer balls and uniforms, not financial rewards.

Second, business should learn not to overemphasize shareholder value at the expense of broader stakeholder outreach. Donors are the nonprofit corollary of shareholders to business. Exceptional nonprofits ensure that their donors are not prioritized over their other stakeholders. This can be challenging, because many donors exert pressure on nonprofits to alter their service delivery. For example, CFK once received an offer from a foundation to build a vocational school for older women. The initiative would have detracted from our mission and core competency of youth empowerment. We turned it down. It was a difficult decision, because the grant was large and would have provided a substantial contribution to our overhead. Business executives also must make difficult decisions to balance shareholder demands for profit maximization with their duties to serve a broad base of stakeholders. Best practices in nonprofit management can assist businesses in better measuring and evaluating their impact and contributions to all of their stakeholders.

I finally had a chance to return to Kibera during spring break in 2008. Although I continued to volunteer much of my life to CFK, the violence made me question what we were actually achieving. The most ravaged parts of Kibera reminded me of Fallujah, Iraq, where I had served with the Marines in 2005 and 2006. The buildings around our youth center had been reduced to charred rubble. I became depressed looking at the damage, and after a day I confided my feelings to my cofounder Salim Mohamed, who was CFK’s executive director.

“What are we really doing, man?” I asked Salim.

“Bro, even me, I have to ask myself the very same question,” Salim replied. “But it’s the tough times when we have to push, and let me tell you something that gives me hope. When things were really bad, the community united.”

“What do you mean?”

“You know, thugs, they came here. They wanted to take our stuff and burn our buildings. The community though, it stopped them. They protected this place. A group of mamas and youths faced those men with their pangas. They risked their lives for this place.”

Salim’s words gave me peace of mind. We will never be able to measure the depth of community support for CFK displayed through the actions of an anonymous group of residents. Their actions were profound, and I interpreted them as an indicator that we were doing the right things for our most important stakeholder, our reason for existing—the community.

As much as Harvard Business School made me a more effective nonprofit manager, my experiences in Kibera did much more to equip me with the core values and skills that will keep me grounded as a leader as I pursue a new stage of my career, building and growing companies in North Carolina that exist to serve American communities.

I feel fortunate to have been able to work across the public, private, and nonprofit sectors at a young age, and I aspire to continue to incorporate such a balance throughout my life. The solutions to our world’s toughest problems, such as the growth of megaslums, require full engagement and collaboration from each sector, and we have no time to waste.

Commerce and Culture

Combining Business and the Arts

Originally from Lansing, Michigan, CHRISTINA WALLACE now lives in New York City where she is the cofounder of Quincy, an early-stage online women’s professional apparel company. She holds a BA in mathematics and theater studies from Emory University and an MBA from Harvard Business School. She has worked as a professional musician, actress, theater director, and arts administrator at organizations including Theater Emory, Georgia Shakespeare, Actors Express, the Schwartz Center for Performing Arts, and the Metropolitan Opera. Contact her through www.christinamwallace.com.

I arrived at the T stop in Central Square on a stiflingly hot day in August 2008 carrying a rucksack overflowing with dirty clothes and smelling like a Latin American hostel. Although I had just endured the heat and humidity of Nicaragua, there was something about the air in Boston that day that felt heavy as I walked the mile from the station to the Harvard Business School campus, white sand leaking through the seams of my pack and dusting the pavement with each step. In just three days I would start the Analytics Program at HBS, which would prepare us “nontraditional” students to begin our MBAs in September.

I was certain I was about as “nontraditional” as they come. I had studied first as a classical pianist and cellist, then as a mathematician and actress, and I had a tattoo of a Fibonacci spiral on my right shoulder blade. I was sure I wouldn’t fit in. But that didn’t matter. I was on a mission to figure out what business had to offer the arts.

My life in the arts began early, when, at the age of five, I insisted I begin piano lessons so I could be just like my big sister Stephanie. Music quickly gained a prominent place in my life. After a decade of lessons, master classes, competitions, and recitals, I decided to spend my last two years of high school at Interlochen Arts Academy, a preconservatory arts boarding school in northern Michigan. It was there that I realized I did not want to make my career as a professional pianist. I loved music, and it would always be a part of my life, but I longed for something different.

So I went to college instead of conservatory and spent four years diving into number theory and discovering theater. I fell in love with Paul Erdos, Richard Feynman, Richard Greenberg, and William Shakespeare; with cryptography, directing, dramaturgy, and Mersenne prime numbers. I toyed with a career in theater or a PhD in math, but knew neither was a great fit. With experience in music and theater and a brain that delighted in quantitative problems, the true match for me was arts management. It combined my artistic passion with a love of planning, producing, strategizing, and communicating. After internships with two theaters in Atlanta and a one-year fellowship with the Schwartz Center for Performing Arts at Emory University, I was hooked. I moved to New York to see what it was like in the “big leagues.” On a whim I applied to a job at the Metropolitan Opera and, unbelievably, I got an interview. I was speechless. The Met isn’t in the big leagues; it’s in a league all its own.

In my interview for a rehearsal associate position with the Met, my potential supervisor and her boss made me promise that I would not try to change a thing in my first year. The fact that this request did not trigger a flashing neon warning sign is a testament to how ingrained and pervasive that attitude is in many of our cultural organizations—and how anxious I was to simply be part of such a legendary institution. Peter Gelb, who had served for a decade as president of Sony Classical, had just been named the new general manager of the Met. It seemed like the dusty institution was poised for a renaissance. Surely 2006 would be an exciting year for a young person to help revitalize one of the country’s most important arts institutions.

The HR manager thought otherwise and did his best to scare me off. He said the days would be long, the pay terrible, and the pressure unyielding. He said I would not be promoted until someone died or retired, since people rarely left the company for any other reason and openings were scarce given that the Met was long past its growth phase. I would have the worst job in the house, he insisted, and be stuck there for a while. I took it anyway. I was certain I could make a difference.

Yet on my first anniversary with the opera, leaving work frustrated by my ineffectiveness for the fifth time that week, I wondered if this was what a career in arts management really meant. I had completed my one-year trial period and was excited to share my ideas to innovate and transform the stodgy Rehearsal Department. There were processes that could be streamlined and structures that could be created to systemize much of the repetitive and error-riddled work streams. The department had one central database with 90 percent of the information we needed to access over the course of the day, yet we repopulated that data into schedules by hand, increasing the likelihood of human error along the way. We ran the same handful of reports every week by marking up documents with a highlighter and adding figures with pencil and paper, burning through hours behind a desk that could be better invested in face time with the artists. We spent the bulk of our day in our “command center” buried in a corner of the administrative wing while most of the rehearsals were going on three floors below.

Yet when I approached my manager and the head of our department with ideas to improve our processes, my proposals were deflected one by one: there was a certain way that things were done here. I just didn’t understand the customs yet. Making suggestions, it was pointed out, was not in my job description.

This culture seemed at odds with the strides Gelb was making at the helm of the Met. In his first year as general manager he had focused on reinvigorating the repertoire with new theatrical productions, reconnecting with the public through a provocative outreach plan, and establishing an innovative new-media strategy that ultimately set the bar for all other arts organizations. His sharp business acumen was unquestionably foreign to the velvet-cloaked halls of the Metropolitan Opera. The speed with which he enacted his ideas felt like Mach 5 in a company that was still using typewriters in many departments through the end of the twentieth century.

Just two months after officially taking the reins in 2006, he opened the theater to the public in an unprecedented event by holding a free open house for the dress rehearsal of Anthony Minghella’s production of Madama Butterfly. Partnering with a longtime board member, he launched a rush ticket program with $20 orchestra seats available two hours before curtain for most performances. To celebrate the season’s opening night in September, Gelb simulcast the performance both on the Web and on the big screens in Times Square. Days later he announced a dedicated Met channel on Sirius satellite radio, and by Christmas the Met was broadcasting a live performance of Julie Taymor’s The Magic Flute in high-definition video to movie theaters around the world.

It seemed so easy for innovation to blossom at the top of this prominent institution, but from where I sat, I felt like I didn’t have a voice to contribute to the momentum. Gelb’s passion from atop was translating into an external revitalization, but it wasn’t affecting the internal culture one whit. And I wasn’t the only one whose passion was dwindling. The few Met employees under the age of forty were growing frustrated and leaving in rapid succession. Moreover, this wasn’t just affecting the Met; my colleagues in comparable roles at other cultural institutions were feeling similarly disillusioned. An entire generation of passionate nonprofit kids was transitioning out because they felt they had so much to offer, yet no one was willing or able to harness their zeal. Surely there was something I could do about it. There had to be.

I briefly considered master’s programs in arts management but quickly realized it wasn’t the “arts” I needed to learn—it was the “management.” I wanted to learn the best practices of companies that are ultimately responsible for a bottom line. So I applied to business school.

My subsequent experiences in business have confirmed my belief that private sector frameworks, tools, and best practices can fundamentally contribute to the social sector, even the performing arts. In my HBS class on managing high-performing nonprofits, we read a case study on the Edna McConnell Clark Foundation. This innovative foundation offers grants to support organizational development, insisting that nonprofits prioritize structural health alongside program expansion. In general the philanthropic capital markets still penalize nonprofits for significant overhead costs, but it is heartening to see one leading foundation acknowledge that overhead is essential to the development of controls, processes, and human capital. Overhead like employee training and mentoring is what allows nonprofits to create a pipeline of leadership and establish succession plans. Clearly defined processes and well-developed controls strengthen organizations, providing employees with necessary resources and setting them up for success in achieving their mission.

I’ve also been inspired to learn about the significant growth in the for-profit social enterprise space. Cochairing the 2010 Harvard Social Enterprise Conference exposed me to companies that are eradicating diseases, increasing access to financial services, and supporting at-risk youth with more success than their nonprofit counterparts. In many cases the profit motive can support a social agenda by encouraging innovative business models wherein the people controlling the cash flow (usually by buying a good or service) are the same constituents receiving the benefits of that enterprise. This stakeholder alignment translates into a more sustainable funding model than exclusive reliance on government or foundation support, replacing a charitable relationship with a customer relationship.

To be clear: social enterprise is not about balancing the double bottom lines of social impact and profit as though they are equally important. Profit, in these sectors, is ultimately a means to achieve social impact, not the end itself. But it is a mechanism to encourage growth, innovation, and evolution.

On an even more basic level, however, I learned that businesses really do aim to create value. In the traditional sense, they create value for their owners or shareholders. But they can do so only by encouraging the types of ingenuity and entrepreneurship that impact the broader world. Translating and adapting business frameworks and best practices for the social sector means leveraging these resources to create value for society. From this perspective it becomes absolutely necessary for leaders in the social sector to utilize business tools, not only to create innovative enterprises but also to scale high-potential organizations to maximize social impact.

Over my two years at HBS I learned that there isn’t simply a place for businesspeople in our cultural institutions; there is a desperate need for them. The integration may be difficult since there is currently little dialogue across the nonprofit/for-profit divide, but it is in our best interests to foster such collaboration.

Peter Gelb began that collaboration when he brought to the Met the marketing and media savvy he developed while at Sony Classical. There is no doubt that the “new Met” has been wholly transformed from the audience’s perspective. But there is more that can be done internally. The cultivation of human capital should be one of the company’s priorities, by mentoring and coaching employees to think beyond their job description and understand more than just their corner of the company. And the Met is not alone.

Moreover, in an organization that spends about 75 percent of its operating budget on payroll, the Met must consider how sophisticated planning techniques and other applications of technology could transform their costs. Adapting tools and analysis from the business world could improve the coordination and utilization of their large union groups and help reduce the need for expensive overtime. With seventeen unions and a century of data to analyze, the impact of such tools could be substantial.

It seems like an eternity since I plodded that first time from the subway in Cambridge to my new home at HBS, but my experiences have led me to believe ever more firmly that business is how I can help build and sustain the vitality and accessibility of arts institutions in a world that needs them more than ever.

Iraq, Afghanistan, and the Business of Peace

JAKE CUSACK is a former Marine Corps officer who served in Iraq as a sniper platoon commander and intelligence officer from 2005 to 2008. He graduated with a joint degree from the Harvard Business School and Harvard Kennedy School in 2011, and has written extensively about entrepreneurship and economic growth in Afghanistan. He is passionate about economic development in conflict zones.

My idea of war in Mesopotamia was so steeped in mythology that I felt the laws of gravity might be upended when I landed as a marine in Al Taqaddum, Iraq, on Christmas Day 2005. I thought I was being transported into a world of legend, populated with heroes and filled with pageantry amid chaos. But I soon learned the difference between my abstractions and reality.

I found the same laws of physics that applied to me growing up in Michigan applied in Fallujah. There was no particular romance or mystery as to how battles were won or why people died. Small projectiles ripped into skin in combat the same way twisted metal cut through flesh in a highway car accident. Fighting the insurgency was blue-collar work, sweat and tedium under a hot sun. Hours of patrols, census-taking, and conversations with local elders over warm tea were punctuated by the briefest moments of extreme violence.

I was woefully clumsy navigating a war so unlike the one I had imagined. Two months into my first deployment, I remember standing with another Marine lieutenant on a rooftop in a city of over twenty thousand Iraqis. Both in our early twenties, we were the senior officers present, working for the security and welfare of the city. We discussed the current problems: complaints from the city council, closed markets, illicit trades, the virulent imam, unreliable electricity, and undrinkable water. I realized that while I knew how to employ a machine gun or call in air support, I was completely unprepared for the full spectrum of modern conflict.

Economic factors were fundamental to the surprisingly base logic undergirding the war. Profit—not just nationalism, religious fervor, or need for honor in battle—motivates behavior under even the most anarchic of circumstances. In Al Qaim, a dusty Iraqi town on the Syrian border, a local tribe became one of the first to turn against Al Qaeda in 2005. The tribe was driven neither by patriotism nor by fear of an extremist Islamic state, but by its desire to regain control of lucrative cross-border smuggling routes.

On another hot summer day two years later, I sat in a meeting of senior Iraqi leadership discussing problems in the Ninewah province. Little of our conversation actually stemmed from typical security or military issues. Instead, the topics were the price of refined and unrefined oil; infrastructure at the points of entry; taxation schemes; the relative health of agricultural commodities. I was the only one present who wanted to talk about foreign fighters or illicit weapons smuggling. Everyone else was concerned with business.

In the peak of the insurgency, senior military leadership advocated a “carrot and stick” approach to bringing the populace to our side. But initially, our sticks were frail and our carrots were stale. We found we could never win an intimidation battle with the insurgents: if Iraqis gave information to us, Al Qaeda would come in the night and kill their families; if Iraqis passively cooperated with Al Qaeda, we might be able to detain them for two weeks. Too often, our enticements were equally weak: to an unemployed Iraqi, pencils and soccer balls for schoolchildren or a few meal packages tossed from a Humvee seemed at best platitudinous and at worst insulting.

We eventually realized that robust funding and effort at the lowest levels could show a road to a more tolerable future—one with electricity, jobs, and education—than the lawless bloodletting that Al Qaeda’s Islamic State of Iraq offered in the territory it controlled. Although the endless raids and captures of insurgents were important, I saw subtle political and economic shifts rapidly yield more significant results. The infamous Sunni “awakening” that turned Al Anbar province against Al Qaeda went beyond local leaders finally banding against foreign fanatics—it was also a jobs program, pumping millions of U.S. dollars into the hands of military-aged males who had formerly been our foes.¹⁰

In 2009, I returned to academic study with a desire to gain new perspectives on the interaction of business, governance, and security at the edges of chaos. After subsequently finishing the first year of the joint MPP/MBA program, I spent the summer in Afghanistan. A fellow student, Erik Malmstrom, and I hoped to explore private sector growth and constraints in the country from the perspective of the indigenous businesses. We worked to find Afghans who had stayed clear of the easy short-term money suckled from international forces and instead launched more sustainable ventures in industries like carpets, dried fruit exports, and light manufacturing.

Landing in a war zone as an independent researcher was a jarring departure from my time as a marine. At first, I felt almost naked without a bit of body armor or the camaraderie of fellow armed men. In tense situations, my hand moved unconsciously to my right hip, grasping for the 9-mm Beretta that was no longer there.

But I soon felt far more comfortable wearing local dress than I ever did with Oakleys and fatigues. I relished spending hours in conversation with locals in their homes without having to mentally count down the time it would take for the insurgents to set an ambush or lay an IED outside. I even enjoyed it when Afghans refused to speak to me—a leveling of roles that had not generally been possible when I showed up for meetings carrying a semiautomatic weapon.

Time spent with businesses was also more uplifting than my old pursuits hunting “high-value targets.” Although the summer of 2010 was a tumultuous time—the relief of General Stanley McChrystal, rampant intelligence leaks, and a growing chorus labeling “failure”—I left more optimistic than I had ever felt about a conflict zone. The reminders of war were still there: the owner of a flour mill in a large city near the Iranian border answered a question about his company’s growth by dividing it into “before and after I was kidnapped” (he escaped and moved to Kazakhstan for a year, shutting down a portion of the business). But good businessmen are by nature optimistic about the future—their money is tied up in it, after all—and their entrepreneurial enthusiasm and willingness to invest was contagious.

Even in Kandahar, where the local Pashtun tribesmen who accompanied me to meetings carried Glock pistols under their long dress—not just for my protection, but for theirs—I found enterprises still growing. The risk, substantial of course, could be overrated. The chairman of Afghanistan’s first insurance company explained to me how they had gradually been able to lower the annual property premiums they passed on from Lloyd’s of London from 12 percent to around 1 percent. Though the governance and regulatory framework could be massively unpredictable, outsiders generally overestimated the actual physical threat to normal business.

As in combat, the test of a chaotic environment revealed character. Some businessmen were entrepreneurial in the worst sense, staging attacks to drum up business for their security company or monopolizing control of scarce resources for personal power. But this made the fortitude of others all the more impressive: a television station refusing to bias its news coverage despite relentless political pressure; a clothing manufacturer employing hundreds of women; a custom-made carpet manufacturer providing jobs to thousands of rural families; a supplier forgoing a contract rather than paying a bribe.

After six years in and out of conflict zones, I have learned that people can continue to respond to economic incentives in rational ways, even in the most dangerous of circumstances. Outside forces conducting ambitious interventions desperately require private sector expertise in order to reconstruct failed states. Nascent local government leaders need to remember that businesses—their success staked to overall stability—can be an invaluable support.

An infusion of private sector talent could benefit our national security apparatus. Specifically, I can offer a few examples of what government might learn from a private sector mind-set:

• Focus on ensuring predictability and stability to enable economic growth. Contrary to expectations, neither physical security nor corruption is the primary constraint on business in Afghanistan. Instead, over and over again, entrepreneurs complained about the overall uncertainty of the business environment. Tax structure, custom tariffs, local power brokers, American force posture, financing, government officials—all were in constant flux. Just like in Western markets, uncertainty is even worse than a large but specific downside. When given a specific threat, business can adapt or hedge by shifting operations, becoming more liquid, or paying bribes (a form of tax). As one of the most adept businessmen told me: “The problem is not the variables themselves, but the variability of the variables.” International forces can help mitigate such uncertainty by making public long-term policy commitments, providing advance purchase financing, and incorporating private sector considerations into even low-level military planning.
• Be willing to make long-term investments. Ironically, I found the American government—which should be looking toward long-term, regional implications—to be absurdly short-term in orientation. Quarterly reporting deadlines and year-long deployments lead to a culture where everyone is looking for the fix that will pay off on their watch. This in turn makes the businessmen focused on the quick dollar (often from trading), when they otherwise would be willing to make three- or five-year investment (in fixed-capital production facilities).
• Allow reasonable profits. Despite working on behalf of a country that was built on capitalism, some in the State Department and USAID (U.S. Agency for International Development) seem fundamentally uncomfortable with the idea that a good business will enrich its owners. They sometimes seem to perceive profit as illegitimate and immoral, and feel that the best small business projects should verge on socialism. This has created a culture where Afghans applying for a grant hide the “profit” part of their business plan because they think the donors will not support an enterprise that may reward the owners. Interestingly, the reverse is true for contracting in the security, transportation, and construction sectors, where international forces turn a blind eye to blatant rent-seeking and windfall returns.
• Abandon failing projects. Unlike a business, which will cut its losses and move on, each layer of a traditional development project has no incentives to acknowledge failure. Elegant reports with glossy pictures substitute for real performance. Donor, implementer, and beneficiary often maintain the facade of obviously flawed projects because evaluation is based on money spent—“burn rates”—and vague social metrics.

From the other perspective, Western business can find it both financially and socially rewarding to be a partner in the rebuilding of a sustainable economy amid conflict. There are lessons the private sector might find useful for doing business in chaotic countries:

• Do not make risk assessments from media reports. Western companies often significantly overestimate the physical security risk and avoid even safe areas of Afghanistan. At this very moment, Turkish, Chinese, Lebanese, and other investors are seizing business opportunities because they are more realistic in their assessments. If Westerners travel and act in a low-profile manner, some areas of Afghanistan seem safer than some American urban centers.
• Vertically integrate and replicate missing government functions internally. In the absence of contract sanctity, the best way to know the transport trucks for your goods will always show up is to own the trucks. Bereft of government protection, industrialists are forced to replace government functions with their own. Effectively, they develop internal police forces (Ministry of Interior), external protection (Ministry of Defense), independent communications, electric and water infrastructure, and so on. This actually can be a sustainable business model, so long as the profits are sufficiently strong.
• Ensure security by working with the community. The largest company in Afghanistan, Roshan Telecom, used to hire outside security contractors to protect its numerous cell towers. Faced with rising costs, they switched to a model where they paid local villagers to guard the towers, and offered incentive benefits for the community. The new “socially responsible” initiative resulted in lower costs and improved security.
• Be proactive in finding entrepreneurs and investing in local human capital. In a conflict climate, the men who show up at your doorstep asking for investment money often cannot be trusted, as they are often locals who have become expert at gaming a donor system. It is better to identify the sector you are interested in, then go scour the countryside for the entrepreneur already making progress in that area. Once you find a good one, keep investing—human talent is the hardest to find and the most irreplaceable factor. Those who rely too much on outside consultants discover that as security worsens, the outsiders leave and will not return except for exorbitant fees.

I find my classmates at Harvard, with significant business expertise, unaware of how much their skills can help in our current global struggle with terrorism and our efforts to rebuild failed states. The tools of national security are far more diverse than those of the military or even development aid. The capacity to build a secure world will not be found only in West Point or unleashed from afar by unmanned technologies. Now, more than ever, the call for service in national security can be answered by everyone.

Business in the World

How Corporations Can Be Change Agents

KELLI WOLF MOLES worked in investment banking at JPMorgan in New York before graduating from Harvard Business School with the class of 2011. Kelli is founder and CEO of Project Spark, a nonprofit that promotes sustainable philanthropy and organizes volunteer trips. Kelli is passionate about helping businesses give employees greater purpose through public service.

In 2006, my husband and I took our honeymoon in Africa. We went on a safari, and then spent two weeks volunteering at an orphanage in Uganda. Nine months after our trip, while working in investment banking at JPMorgan, I began to feel ill. For two weeks, I refused to take time off from work, trying a few outpatient visits to remedy my flulike symptoms. Finally, I went to the emergency room. With a team of ten to fifteen doctors surrounding my bed, I was diagnosed with an advanced form of malaria. This deadly disease had lain dormant in my body since our return. My tests showed a life-threateningly low white blood cell count, and the doctors determined that my spleen had ruptured and was pouring toxic blood throughout my body.

In my darkest hours, I found myself drawing on my faith. I had to believe that something positive would come from this, and looking back, this experience changed my perspective forever. My brush with death reminded me that life is short. I realized I want to change lives and influence people more than I want power or wealth. Wall Street is an exciting and challenging place to work, but making a positive impact on communities and individuals is equally important for bringing meaning to my life.

Soon after I recovered, I began raising funds and awareness for malaria prevention. After raising $5,000 for malaria nets in 2007, I was asked to host a booth at JPMorgan’s volunteer fair and speak on a panel about my project. I quickly realized how many of my colleagues also appreciated the fact that life should not be taken for granted and were interested in leveraging business to change the world.

Business and its leaders play a powerful role in shaping society. This has always been a core belief of mine, and it is the reason that I chose a career in business. In my travel to more than forty countries, I have seen firsthand that businesses and corporations are often more powerful than governments. Whether you believe that business is only for profit maximization, or that it has a broader role, it is undoubtedly a force producing many effects—both positive and negative—in the world.

After talking with my colleagues and friends, we organized a group we called Project Poverty to serve two goals: (1) to raise money for sustainable development projects and (2) to organize trips to developing countries to see the work firsthand. In the first year our team planned six events, from a three-on-three basketball tournament to a cocktail hour. JPMorgan supported our work in many ways—from featuring us as a “Project of the Month” to matching donations to helping with publicity of our events. It was great to see the positive results when competitive businesspeople unite toward a common goal. The friendships and camaraderie we developed through Project Poverty stuck with us as we worked through challenging client situations.

After the success of our fund-raising, we wanted to take Project Poverty further. We suspected the investment of “sweat equity” into the clinic’s construction would help us all connect with our cause. My first visit to Africa had changed my life, and I knew the same would happen to my colleagues. In September of 2008, thirteen professionals, including five coworkers from JPMorgan, traveled with me to Ghana. We spent five days carrying stones and mixing cement by hand to build a health clinic.

Since that time, Project Poverty has brought forty-five people to developing countries and raised over $100,000. Of the people who have gone on Project Poverty trips, all have found their lives impacted in very different ways. Many of us learned about ourselves and the world during our time abroad, and brought the insights and stories back to our jobs and clients. Managers today have to understand the diverse, interconnected world we live in while still paying respect to national pride and cultural sensitivities. More than ever before, we will be managing global teams with people very different from ourselves. Understanding and appreciating other cultures and people more deeply makes it easier to work together.

Soon after that trip, I also got involved in a program called Bankers Without Borders and served as one of the inaugural volunteers. This is a program set up by the Nobel Prize–winning Grameen Foundation to utilize private sector resources to make a difference by helping the poorest of the poor. JPMorgan gave me time off and sent me to Africa to serve as a project leader for a technology pilot at a microfinance institution. Using banking skills halfway around the world was an interesting learning experience. I learned as much as I helped, and came back with new ideas and a greater appreciation for banking in emerging markets.

I believe this tendency among large corporations and professional firms to devote more resources to giving their employees life-changing experiences in the public and nonprofit sectors is both growing and incredibly valuable to the firms themselves. The company I am now working with, McKinsey & Company, offers opportunities for interested professionals to take sabbaticals, and through various secondments and externships, consultants are able to take time off to pursue their passions.

To keep a dynamic workforce, these options are important. These types of programs truly set employers apart. They attract talent, motivate employees, and transform workforces. Not only do they show commitment to employees and provide meaningful and valuable options, but they also demonstrate cutting-edge thinking, a willingness to try new things, and flexibility. All of these options then equip employees to become more thoughtful, engaged leaders.

In my experience with Project Poverty, Bankers Without Borders, and McKinsey, I’ve noticed a few patterns in the way managers and organizations have successfully imagined and executed these public service programs. A few of the key elements each program seems to contain are partnership with first-class organizations, easy and accessible options for involvement, senior leadership support, publicity of events and impact, and inclusion in a formal review process:

• Partnering with first-class organizations allows companies to do what they do best, while lending talent to nonprofits that are best in class at fulfilling their mission. Bankers Without Borders allows the Grameen Foundation to join forces with those working in traditional banking areas. Many of these public service organizations have formalized programs that limit the administrative burden for companies building new programs. These organizations often have successful models that can be leveraged for everything from selecting volunteers to choosing projects. Partnering with these top organizations also provides employees the best opportunities to learn and to develop new skills to bring back to the workplace.
• Easy and accessible opportunities for employee involvement are also key. It is a big commitment to take time away from personal obligations and an already busy workload to participate in volunteer activities. The volunteer fair my company held over lunch enabled me to recruit employees interested in getting involved with Project Poverty. Providing opportunities such as volunteer fairs, lecture series, benefit happy hours, and companywide service days allows employees to find out more and consider further involvement. We found that shorter events over lunch or breakfast encouraged employees to stop by without making a large upfront time commitment. This also broadens the reach of the programs and allows greater awareness and participation.
• As with any major corporate initiative, senior leadership must buy in and be personally committed to ensuring the success of the programs. Senior leaders who are excited about the public service programs spark enthusiasm from employees. Executives must be flexible and willing to support employees’ involvement. Senior involvement helps to work through any problems with the initial implementation of the program and ensures it is institutionalized for years to come.
• Publicity of events and impact is crucial to communicating the success and importance of the work with a broader audience. When Project Poverty was selected as Project of the Month, we were featured in the company newsletter and on the website. A short video and pictures were included to show firsthand the work being done. This kind of publicity provides a platform to share the impact not only with employees but also with customers and clients. With the rise of social media, there are many low-cost ways companies can showcase the work being done and garner further support for future initiatives.
• Last, inclusion of the employee’s involvement in the formal review process also helps to build a successful program and a company culture that promotes participation in volunteer opportunities. This is usually done as a “back page”—additional information to accompany the core performance review. It showcases employee leadership and involvement in company programs outside of the basic day-to-day activities. It shows a true commitment on the part of the company to encourage employee participation. It also provides additional incentives for those considering whether or not they will have the time and the ability to volunteer in addition to their current jobs.

Corporations are vast and often untapped resources for sustainable solutions to the world’s greatest social and economic ills. I have learned this lesson firsthand through my fund-raising work and my current role in management consulting. Companies that support and empower employees to take on challenges they care about will win in the long term. We will bring our experiences out in the world back to our jobs, while developing loyalty to the companies that are determined not just to make money, but to leave a positive footprint along the way. As I learned through my brush with death—life is short. Each day should be treasured and our talents used to their highest purpose. Imagine the impact of more companies lending top talent to good causes. Through partnerships and public service programs, we have the opportunity to leverage business to play a positive role in society.

---

INTERVIEW WITH . . .

David Gergen

Adviser to four presidents, Director of Harvard’s Center for Political Leadership, and Senior Political Analyst for CNN

David Gergen discusses a new, cross-sector generation and what the increasing convergence of the public, private, and nonprofit sectors will mean for the world.

David, over the course of your career, you have interacted with a lot of influential leaders—of previous generations and of the current generation. What do you see as some of the primary differences or similarities between those groups?

There are some similarities. The leaders of past generations whom I have known led incredibly demanding lives. They had to put in long hours, often at the expense of their families, and they had to dig deep into complex questions—often not knowing what the answers would be. Complexity is not new. It comes back to us in different forms, but it’s not new for leaders. Another thing that hasn’t changed is that leaders have always had to have a set of values and to be deeply rooted in values. The context has changed but the importance of integrity, courage, and fair play has not changed—over time or across countries.

But there are also notable changes in the context of leadership today that place fresh demands on young leaders who are emerging from business schools and other institutions of higher learning. For one, the pace of change has quickened dramatically in recent years so that young leaders today have to be much more adaptable than leaders of my generation. It’s unimaginable now that if we were faced with a missile crisis coming out of Cuba—or today, in Iran—that any president would have thirteen days to resolve it. Modern technology and other changes demand that you act much more quickly. And a modern president wouldn’t be able to maintain the privacy that Kennedy had.

Henry Adams famously wrote in his memoirs that the nineteenth century was when things really began to speed up. Prior to that, what the father did was what the son tended to do, and what the grandson tended to do. But in the nineteenth century, things started moving more rapidly, and now in the twenty-first century, we’ve reached warp speed. You have to have much broader, wider bandwidth to deal with it.

In my generation, you tried to be an expert in a field. You might, for example, be an international relations specialist focused on Sub-Saharan Africa.

Today, you must know not only international politics but also international economics, health care delivery, issues related to education, and so on. Knowledge has spilled out of individual fields and there’s much more need for knowledge across fields. Universities today are developing more and more interdisciplinary studies. Someone coming out of businesses is expected to understand the government and the civic sector. And inevitably, people are finding their careers span sectors far more than they did in the past. Now there is a real premium on an education that allows you to build foundations across sectors.

This is not to say that an individual doesn’t need some specialized knowledge. I still think it pays rich dividends for a leader to have at least one or two areas in which he or she has made a deep dive. To be a generalist who skims across things on the Internet or depends on another person’s knowledge is insufficient in today’s world. You can’t simply rely upon the competence, knowledge, or backgrounds of those who work with you or report to you. As you rise to leadership, the decisions that come to you are always very close calls. They’re often 51/49 and you find that your advisors are divided about them. Somebody has to make the ultimate decision. And that requires a person who has training or at least a capacity for judgment that goes beyond “front porch” understanding. George W. Bush, for example, was a man of integrity but often had divided advisors and had to make decisions on his own about things he hadn’t really had the chance to study deeply.

So you’re driving toward a point here about the increased bandwidth that a lot of young leaders need to have, both because of the pace of change and because there’s so much interaction now between the different sectors?

I think that’s right. They’re all in partnership now: the civic sector, the private sector—you know, companies today operate internationally and have to be worried about issues of sustainability, and inevitably that brings them into close contact with NGOs. And then the web of regulations—government regulations and government engagement—is growing. Companies have a lot of international bodies to deal with and an increasing number of financial rules and regulations that impact them. You can’t operate a modern environment as a corporate leader without having a very clear appreciation of that. A lot of leadership studies talk about leadership as a matter of concentric circles. The inner circle is the individual; the first circle out is the people in that leader’s organization or the team. Most of our earlier studies focused on those two circles. Now we concentrate on a third circle as well, and that is working outside your team, with leaders of other teams, and with other organizations. You increasingly have to learn how to align yourself with others in order to tackle the major problems.

It seems like you’re driving toward different skills younger leaders will need in a cross-functional world. Do you think there are a lot of skills that are transferable between these sectors?

There are definitely some skills that are transferable. For example, a capacity to work with and to lead through the Internet is transferable. You see that with social media in Egypt. It’s also extremely important for politicians running for office, as we learned with Barack Obama. And social media has become important for corporations to understand as an offensive and defensive tool. Corporations are ill-designed to defend against online attacks. They are in the situation that if they make one mistake or they leave themselves vulnerable, then suddenly a mass movement can be organized against them on the Internet. They’re scrambling to figure it out. But corporations are also scrambling to figure out how they can use the Internet offensively. Starbucks, for example, has developed a network of people online who have come to appreciate its special culture. Other companies in the apparel industry use the Internet to have interactions on questions on fashion. There are a lot of imaginative uses that could cross the sector boundaries we’ve been talking about.

You’re kind of driving to some of the differences between sectors, too. Are there things that you think the sectors can learn from one another? We’ve seen deficiencies in each sector in its own way over the past decade or so. And I think that young people are acutely aware of that, particularly in business. Are there key lessons to learn?

You have to learn across sectors. For example, the pioneers who are really challenging the status quo in public education are rarely public employees. They tend to be coming out of the civic sector. And certainly government has a great deal to learn from business about efficiency, technology, and setting concrete goals and achieving them. Think of health care in the United States. We pay twice as much as any other mature economy and get less for it. There’s a widespread feeling now that the health care industry has to learn from the competition that exists in the business sector. And that people who come out of business schools can make excellent hospital administrators and directors. They might also make very good school administrators. Look at the number of cities now looking to MBA graduates and lawyers to help run public schools.

Are there examples where you think leaders in the public sector or the nonprofit sector could make a big and positive change in business the same way you’re highlighting the ways in which businesspeople might be able to come into sectors like health care and education?

The transfer is not as easy as it looks. I can’t remember a senator becoming a CEO in recent years. There are some things that don’t transfer there. But yes, I do think that business can learn a great deal from some aspects of work in government or nonprofit. A CEO in a field like health care may, from years in a NGO, understand what a patient may need or what a society may need and from there, figure out how to make money doing it. I was just talking with Coca-Cola two weeks ago and had dinner with their advisory board and sat with the chairman of the company. Coca-Cola is now deeply engaged in sustainability projects in which they make money. They’ve got whole areas where they’re working with farmers and developing new ways to produce things—their bottling, for example—and they’re finding that these are profitable enterprises. It goes to the heart of what Michael Porter argues—that a growing number of companies are finding ways to solve societal problems and make money at the same time.

Renewable energy is potentially one of those areas. In that case, many of the people solving the energy problems are coming from universities, coming with ideas just as they did with the Internet. A lot of those ideas came out of government. As you know, the Defense Department was the originator of the Internet. And that created a whole industry. And now there are areas where energy research is going on, sponsored by government in major universities like MIT. Twenty percent of the allied key faculty at MIT now work in energy research. There are also private companies that are in the renewable energy field that have great promise.

Can I ask a question from the young business leaders’ perspective? You’re talking about all the ways in which companies are beginning to interact more fruitfully and more consistently with the different sectors . . .

This is not entirely new. If you look at where the real growth areas have been, they have often been clustered around major research universities, whether in Silicon Valley, Austin, the Research Triangle, or the Harvard-MIT area. They all have this synergy that occurs among knowledge workers who cut across sectors.

If you were a young businessperson now, but you did have some kind of passion for the other sectors, how would you get involved? Through universities? Through internships? Is it through their extracurricular activities? Or through sustainability programs within companies? Are there ways you see young people, especially in business, beginning to get involved in those sectors outside of business—in the public or nonprofit sectors where they can make an impact?

I think it begins in the university days. You open yourself to trying to understand not just one field but to develop secondary interests in other fields. I do think it’s important to exit your formal education with an area in which you’re strong and you’ve really gone deeper. But I think in today’s world, it pays to have a secondary field or even a third field that may or may not be related. You may find somebody who majors in physics but also has an interest in the arts. She can suddenly start making connections across them that may seem unlikely at first but may actually turn out to be more helpful than they look. I think of our friend Sidney Harman, who passed away in his nineties. Sidney was a renaissance man who believed that CEOs probably ought to hire poets because they think outside the box. I think that someone who comes into the business who graduated in the arts and then goes on to business school has got a very strong background. If you have time and are inclined, it’s good to get a double major or joint graduate degree far more than it was when I came through. I went to law school and if I were coming through now, I would probably get a law or business degree but then look for a joint degree in another field—maybe in public policy. I would definitely think about trying to get that dual degree.

In business, you have to manage your career. If you’re a young rising star, it’s wise to have some exposure beyond your own area and not get too specialized too early. You certainly have to make your mark somewhere. And that often requires you to pare down and really go deep into some area of the company and be content spending three to five years doing it in order to build something or create something. I think it’s really important to get your hands dirty and understand that things get more complex as you get deeper. And I think that’s valuable work. What is important, though, is even as you professionalize yourself, to maintain a curiosity toward life so that you’re continually reading, learning, growing. You know, the best businesspeople I’ve met—I’m incredibly impressed by how much they read, and not necessarily just in their fields. David Rubenstein [co-founder and managing director of The Carlyle Group] probably reads fifty books a week. I’m astonished, really. I don’t see how they find the time to do it, but I do see that it broadens them, and I think they see themselves as on a learning journey. Les Wexner [founder, chairman, and CEO of Limited Brands] is a veteran CEO who built a retail empire, but he’s still very much on a learning journey.

One criticism of younger leaders today is that they sometimes lack focus—the ability to drive deeper or maintain an attention span. Are there any words of caution you would have for young leaders?

Don’t be afraid of failure. The metaphor for my generation was “climbing ladders”; the metaphor in your generation is increasingly “riding waves.” You have to ride waves as they go. You’re often going to find them collapsing underneath you, and you have to ride the next one when it comes. That’s the nature of careers today. Companies come and go quickly. People are CEOs for only—you know, a twinkling of an eye—and then they have to start over. And you’ve got to be prepared. I don’t know what the latest numbers are in the Department of Labor, but a few years ago they were projecting that someone graduating with a degree today would hold at least seven or eight jobs over the course of a lifetime—three of which would not have been invented when they graduated from college. It just goes back to bandwidth and adaptability. One must be prepared to take risks, to take the fall, pick yourself back up, and start again. It is also important to build some financial security very early if you can, so that you have reserves and can afford to take risks. When you’re doing the start-up, you know, it’s almost a badge of honor to have a couple of start-ups that fail. But if you’re going to do that, it helps to have some financial reserves to fall back on.

And so you’re driving a little bit toward dealing with the obstacles, especially dealing with failure. A lot of young people, particularly in business, have been a little discouraged by the difficulties of the past five or six years as we have been coming of age. Do you have a word of encouragement or hope for this generation as we try and move forward, and especially as we try and correct some of the difficulties that we’ve encountered politically and economically?

We’re entering a period that will be one of the most unpredictable, fast-moving, and toughest we’ve ever seen. But at the same time, it’s one of the most fascinating because so much is uncertain that if you choose to lead, you can have a tremendous impact on reshaping the future. For those of us who are older, one of our greatest regrets is that we may not be here to help and to see how this turns out. I think we’re just at one of those hinge points in history in which mankind can go in more than one direction. And it’s the younger generation that really could shape what those answers are, what direction we should take. We talk about people in their twenties being the leaders of tomorrow. But with everything we’re seeing now—especially on the streets of Cairo and elsewhere—I believe that people in their twenties can and should be the leaders of today.

---