Private Equity Support (PES) (Kenya)

Work with PES is focused on  developing a systematic approach for assisting locally (Kenyan) owned small and medium enterprises by equipping them with the necessary training and skills, providing one-on-one support and then developing a template for providing such assistance in the future based on the learnings from the one-on-one offerings.

Performance Measurement
& Improvement

Study after study has shown that investing in women living in low- and middle-income countries (LMICs) has a strong ripple effect. When women earn more money, either as entrepreneurs or employees, they tend to place more of their economic gains back into their children’s education and health, and also strengthen local economies.

However, there is far less evidence on how gender-focused investing and gender-diverse teams within businesses lead to better financial and social outcomes, and how to go about achieving those goals.

This is the aim of the Gender-Smart Enterprise Assistance Research Coalition (G-SEARCh) which includes six impact investors: AlphaMundi Foundation, Acumen, SEAF, Root Capital, AHL Venture Partners, and Shell Foundation. Impact investors seek social and/or environmental gains in addition to financial returns on their investments. The group came together with a shared goal of supporting small- and medium-sized enterprises (SMEs) in emerging markets to incorporate gender across their respective business models. In addition to providing direct investments, these impact investors are also providing subsidized technical assistance focused on promoting gender equity as a core business principle to these SMEs. The G-SEARCh consortium also seeks to build the evidence base and business case for gender lens investing and this approach.

As the research partner behind the 18-month project, WDI’s Performance Measurement & Improvement (PMI) team is exploring the financial and social performance results of gender-smart technical assistance (TA) provided to these SMEs. These practices can range from internal focused interventions such as recruiting more women employees, refining policies and procedures to skills development, as well as a host of external practices such as conducting market research to better understand women customer needs, and adapting product and/or service offerings to women customers.

“The most exciting part of this research is uncovering the possible links between social and financial performance,” said Yaquta Kanchwala Fatehi, program manager with the PMI team. “We want to better understand if gender inclusivity through technical assistance leads to improved financial performance for these businesses—and subsequently improved returns on investments.”

The project focuses on 29 SMEs across multiple LMICs in Africa, Asia and Latin America. These businesses work in a variety of sectors, including microfinance and financial inclusion, food and agriculture, and renewable energy and climate. WDI will investigate the outcomes of gender-smart TA provided to SMEs supported by their investors. To do this, the team is conducting extensive interviews and surveys to gather data with the additional goal of strengthening interventions. WDI also will investigate the effectiveness of different approaches and tools that the G-SEARCh consortium members are deploying to incorporate gender-smart practices across their respective investees. The research will take into account existing data gathered by investors and SMEs to reduce the burden of data collection.

“The long-term goal of this research is twofold: First, to provide SME leaders with the knowledge and tools to become more inclusive, gender-equitable, and profitable,” said Christine Roddy, Executive Director at AlphaMundi Foundation, which is the lead administrator of G-SEARCh. “Second, we hope to provide tested tools, approaches and frameworks to impact investors as they allocate resources to gender-smart interventions across their portfolios.”

This will provide crucial knowledge to help scale gender lens investing in emerging markets to deliver on gender equality.

— Carolina Robino, International Development Research Centre

WDI’s team is working closely with G-SEARCh partners to develop a gender lens investment toolkit along with multiple case studies to illustrate various interventions and analysis. These details will be summarized in a report capturing all the insights and recommendations, including the surveys and frameworks. The report, scheduled to be released in late 2021, will be made public so other investors can apply the knowledge toward their respective investment and business practices.

The research fits within WDI’s mission of helping the key players within any business ecosystem understand and utilize the tools of commercial success. The G-SEARCh consortium is supported by Canada’s International Development Research Centre (IDRC) and the Powering Agriculture Investment Alliance, which is funded by USAID, the Swedish International Development Cooperation Agency, GIZ in Germany and Duke Energy.

“The impacts of the COVID-19 pandemic have exacerbated pre-existing gender inequalities, and women and girls in developing countries are the most affected,” said Carolina Robino, Senior Program Specialist at IDRC. “This is timely research that will allow the impact investing industry to learn and share the most effective ways to integrate gender into SMEs. This will provide crucial knowledge to help scale gender lens investing in emerging markets to deliver on gender equality.”

Another intended outcome is to provide best practices and lessons learned to SMEs as they seek to become more inclusive and gender-equitable, as well as to impact investors, who increasingly see the industry as a mechanism for improving gender equality. In its 2020 industry report, the Global Impact Investing Network (GIIN), which includes nearly 300 investors, reported the global impact investing market exceeded $715 billion.

Notice: The views expressed herein do not necessarily represent those of IDRC or its Board of Governors. This work was carried out with the aid of a grant from the International Development Research Centre, Ottawa, Canada.

Winning case writers will be published and could receive up to $10,000 in prize money

In recognition of recent events across the world, it is an extremely important time to support and strengthen diversity, equity and inclusion (DEI) skills and knowledge for today’s students, who will become tomorrow’s global business leaders. That’s why WDI Publishing and the University of Michigan’s Ross School of Business, and its Sanger Leadership Center are joining together to address this important movement by launching the Diversity, Equity & Inclusion (DEI) Global Case Writing Competition. 

Open to university students and educators from around the world, this competition is seeking academic case studies about a DEI-related business dilemma within one, or across multiple, business disciplines. It is designed as a catalyst to generate new teaching materials that increase student understanding and inspire critical thinking for implementing effective DEI within businesses and organizations – across the globe.

“With this global case writing competition, we aim to support and augment the DEI commitments of Michigan Ross as well as the University of Michigan,” said David Wooten, Michigan Ross associate dean and co-chair of the Michigan Ross DEI Curriculum Task Force. “The competition is an exciting strategy to generate new, relevant cases about DEI that can then be adopted into courses at not only Michigan, but universities around the world.”  

The contest is divided into two tracks, each of which will award prize money of $10,000 for first place, $5,000 for second place and $2,500 for third place, and an honorable mention, as deemed by the competition judges. The top three winners for each track also will be honored with the publication of their cases by WDI Publishing or the Sanger Leadership Center.

“It is very gratifying for WDI Publishing to help support and manage this global DEI case writing competition,” said Sandra Draheim, WDI Publishing manager. “For nearly three decades, the William Davidson Institute has worked to provide students in the U.S. and globally with the educational tools for commercial success. A strong understanding of how to build and sustain DEI in a business or organization is critical to that success.” 

The competition’s first track involves the creation of a traditional business case study and an accompanying teaching note. The second track requires a submission for the Sanger Leadership Center’s flagship Leadership Crisis Challenge (LCC). An LCC case is based on a traditional case study, however, is written and designed as a real-time, role-playing event that offers students a rigorous opportunity for action-based learning.

Initial “intent to enter” forms are due Dec. 31, 2020. Final submissions are due March 24, 2021. 

“Sanger is very excited to support the DEI case competition,” said Lindy Greer, faculty director of the Sanger Leadership Center and associate professor of management at Michigan Ross. “Our center is committed to teaching and advancing inclusive leadership. Publishing the winning cases in a future LCC will help all students who take part think critically about the ways their actions can contribute to a more just, tolerant and diverse society.”

 

Competition Tracks and Global Eligibility

Key details on eligibility: 

  • Individual students or student teams (graduate or undergraduate) may enter but must enter in collaboration with a faculty member or instructor from an accredited university/college, in the U.S. or internationally.
  • Individual faculty/instructors or teams from an accredited university/college (in the U.S. or internationally) may enter.
  • Others may enter, but must do so in collaboration with a faculty member or instructor from an accredited university/college, in the U.S. or internationally.

Key deadlines and dates: 

  • Dec. 31, 2020: Entry forms due. (Entry form only, NOT final submissions.)
  • March 24, 2021: Final submission documents due.
  • June 2, 2021: Public announcement of winners.

 

For more information, please contact: 

Case Publishing Manager Sandra Draheim: 734-615-7319; draheims@umich.edu

About Michigan Ross

The Stephen M. Ross School of Business at the University of Michigan is a vibrant and distinctive learning community grounded in the principle that business can be an extraordinary vehicle for positive change in today’s dynamic global economy. The Ross School of Business mission is to build a better world through business. Through thought and action, members of the Ross community drive change and innovation that improves business and society.

Ross is consistently ranked among the world’s leading business schools. Academic degree programs include the BBA, MBA, Part-Time MBA (Evening, Online, and Weekend formats), Executive MBA, Global MBA, Master of Accounting, Master of Supply Chain Management, Master of Management, and PhD. In addition, the school delivers open-enrollment and custom executive education programs targeting general management, leadership development, and strategic human resource management.

 

About the Sanger Leadership Center

At the Sanger Leadership Center, we believe that leadership is a skill, like reading or math, that everyone can learn. We seek to democratize the leadership development process by providing students, alumni, and external affiliates with the bold ideas, transformative experiences, and inclusive communities needed to self-guide and accelerate leadership development. Empowering students across diverse backgrounds to develop the character and skills needed to become principled, inclusive leaders is now more important than ever in today’s unpredictable world.

 

About WDI and WDI Publishing 

Established at the University of Michigan in 1992, the William Davidson Institute is an independent, non-profit research and educational organization. Serving both profit-seeking and non-profit firms, WDI is guided by our founding principle that thriving businesses drive economic development and improve social welfare in low- and middle-income countries (LMICs). With a unique blend of field-based experience and academic rigor, WDI works to build stronger economies and healthier societies.

Established in 2007, WDI Publishing is part of the William Davidson Institute at the University of Michigan. We work with faculty to professionally edit, distribute, and market high quality, cutting edge, business case studies for adoption into courses at top-ranked universities globally. Through our e-commerce site, wdi-publishing.com, we offer a large, searchable catalog of over 400 cases within core business disciplines, as well as international business and social impact topic areas. WDI Publishing cases have been adopted by over 400 universities worldwide.

 

Performance Measurement & Improvement

Why Small and Growing Businesses Should Lead the Researchers—
Not the Other Way Around

This article was originally published on NextBillion, WDI’s affiliated media site. 

All too often, global development research hinges on the interest of researchers, rather than the knowledge needs of small business people and, most importantly, their impacted communities. The actual methods for data collection and analysis are also kept within the research domain, leaving an entrepreneur or small business manager with plenty of reports, but no practical tools for continuing to collect and use data themselves.

The Aspen Network of Development Entrepreneurs (ANDE), a global network working to advance emerging market entrepreneurship, recently partnered with the International Development Research Centre to support a set of partnerships explicitly designed to help small and growing businesses (SGBs) improve their own approaches to collecting and using data on gender to increase their impact. These projects were more than an exercise in changing perspectives. Instead, we collectively and purposefully attempted to “flip the script” toward empowering business owners and managers with the agency and tools to harness their data – not for the researcher’s benefit, but for their own business and community development.

As part of this process, we considered several questions relevant to SGBs that are collaborating with researchers to generate data on their work and impact. We’ll explore these questions below.

What should an SGB consider before leading an engagement with a researcher?

Before engaging with a researcher, SGBs should have a strong sense of their main goal and audience for the research. For instance, is it to inform decision-making, or to understand and share their impact? Is it to better frame their storytelling—both to inform existing stakeholders and possibly to attract new investors and/or consumers?

Often SGBs have multiple goals for data collection. While that is understandable, multiple goals can compete with one another and result in outcomes that do not fully meet any particular goal or resonate with any particular audience. A clearly articulated principal goal for data collection will help an SGB select a research partner, and set clear expectations with that partner for the type of guidance that will be most helpful in accomplishing their shared goal(s).

How relevant is a researcher’s advice to SGBs?

When an SGB leads a collaboration, researchers need to be prepared to adapt their recommendations based on the SGB’s needs and realities. While researchers may be used to applying rigorous methods in a particular way, when they place an SGB’s needs at the forefront, that approach may need adjustment. In such situations, it is helpful for the researcher to work closely with the SGB to adapt data collection to the SGB’s reality – while maintaining as much rigor as possible. While providing such guidance, researchers should explain if the adaptations will create any limitations on how the data can be used or what can be concluded from it.

For researchers’ advice to be relevant, it is also important for them to be proactive in asking questions related to the context, and to clarify any assumptions. After all, SGBs are not in the business of research, and therefore may not recognize the value of information that’s relevant to a researcher. Although SGBs are incredibly busy, it is important that their managers conduct regular meetings to provide updates and changes to the research plans. For their part, researchers should also proactively assess if and how conditions related to the research may have changed since the last conversation.

Researchers must also bring themselves closer to the areas where the SGBs work, whether that is through travel or through virtual means. Frequently, research methods are developed using desk-based work, literature and methodology review, or strategic planning sessions. But the simple act of attempting to implement these methods in the field often shatters pre-conceived notions about how realistic such methods are in the first place. Indeed, testing tools and methods before collecting data is important, as it allows researchers to adapt them to the context in order to collect useful data. For instance, in one project we supported, the team discovered a disconnect between theoretical ideas about how easily research tools could be applied, and the actual reality and context of the SGB. Recognizing this early on helped the research partners design more flexibility and validate those tools in the field.

What are some of the challenges of researcher and SGB collaborations?

Without a well-established partnership, developing a new researcher and SGB engagement will likely take more time and resources than either party expects. Both parties should anticipate spending additional time on project administration throughout the engagement.

It’s easy for things to get “lost in translation” across different national and organizational cultures. This issue is compounded when conversations involve technical language associated with research, and exacerbated when partnerships are new and communication is reliant upon e-mail, WhatsApp and other text messaging platforms. Confusion over of roles and responsibilities will almost certainly arise, much of which will not be fully anticipated. Sometimes prioritizing live voice or video calls, even when schedules are busy, can preempt or clear up misunderstandings before they solidify into conflicts.

Furthermore, when the partnership requires data collection from the local community, external researchers are unlikely to have the existing relationships and social capital of an SGB. It is important for the SGB to work with the researchers to ensure that data is collected in a way that is comfortable and respectful for community members and their cultural norms, to avoid losing trust with the community.

Are SGB-led research collaborations worth this extra effort?

Yes! These engagements can take more resources (including time), and some individuals within the SGB may not initially buy into the research process. But once the engagement concludes, most stakeholders see the value of the data gathered and are interested in continuing or even building upon the data collection processes. Indeed, in one of our projects, an SGB owner realized that the additional resources required to collect impact data from women in the coffee value chain (such as women who harvest, thresh, roast or work as baristas) yielded the added benefit of improving their understanding of these women and the challenges they face. As a result, the company (Gente del Futuro, based in Colombia) is seeking to develop new training efforts to improve the value chain. Researchers can also gain value from SGB partnerships, through field validation of their methods and being exposed to real-world implementation challenges.

How can SGBs maintain the momentum after the end of an engagement?

For busy SGBs, it can be frustrating to have piecemeal engagement with researchers on fragmented projects. To create continuity of implementation, such that researchers can further build their data collection efforts and help guide SGBs as they make decisions based on the data gathered, it is worth considering a long-term relationship with a particular research organization or individual. In order to build on the success of an engagement, researchers and SGBs can partner on the dissemination of toolkits, learnings or other project outputs through webinars or other events.

Moving research tools out of the strictly academic domain and into the hands of SGBs and other practitioners requires a spirit of patience and collaboration. But when everyone commits to the undertaking, we know the effort will lead to long-term and impactful improvement. But even more importantly, flipping the narrative and putting the power to drive research in the hands of SGBs and on-the-ground actors can enable these businesses to better meet the needs of the communities they serve.

Heather Esper

Heather Esper is the Director of the Performance Measurement and Improvement team at the William Davidson Institute at the University of Michigan. 

Additional contributors to this article include: Vava Angwenyi,  co-Founder and Director of Gente Del Futuro; Monica Cuba, Head of Communication at Practical Action; Matthew Guttentag, Research and Impact Director at the Aspen Network of Development Entrepreneurs; and Mallory St. Claire, Impact Analyst at the Aspen Network of Development Entrepreneurs.

Photo courtesy of Gente del Futuro.

Business team work image

 

By Kristin Babbie Kelterborn

An entrepreneur producing rose essence for cosmetic use has a vision to scale her business and provide jobs to refugees. Another entrepreneur, offering healthy pizza on a vegetable crust, has a mission to provide more nutritious lunch options in schools. These two entrepreneurs, Zeinab and Mahmoud, are Syrian refugees in Mersin, Turkey who have taken part in the Livelihoods Innovation through Food Entrepreneurship (LIFE) Project, funded by the U.S. government. They demonstrate how owners of small and medium-sized enterprises (SMEs) are in the position to practice responsible leadership and be agents of change in their communities.

Responsible leadership, broadly defined here as having the mindset to address societal challenges, is relevant for all businesses – no matter the size, sector, or growth stage. It is not exclusive to only those who identify their businesses as social enterprises or multinational corporations (MNCs) with a wide reach to influence. All businesses can exercise responsible leadership and seek to have a positive impact on society and the environment.

This is one of the points I made on a panel about the intersection of responsible leadership and entrepreneurship at the Academy of Management’s (AOM) Specialized Conference on Responsible Leadership in Rising Economies held in Bled, Slovenia last fall. Academics and managers convened to discuss how to support the development of responsible management and sustainable innovation in rising economies. The conference took place following the statement from the Business Roundtable (BRT) which called for a redefinition of the corporation – shifting from serving only its shareholders to realizing the need to modernize and  promote “an economy that serves all Americans.” This means delivering value to customers, investing in employees, doing business responsibly with suppliers, and supporting people and the environment where businesses operate – all the while generating long-term value for shareholders.

The Coca-Cola Company, one of the 181 companies that signed this statement from the BRT, was the topic of the conference’s keynote address. Therese Noorlander, Sustainability Director of Europe at Coca-Cola, stated that sustainability is no longer a topic for academic and activist circles on the fringe – it is now a central topic for CEOs and employees at all levels. Noorlander pointed to how the past decade has been transformative as natural disasters and environmental uncertainty have contributed to an increase in activism and consumer engagement. Coca-Cola’s vision is to achieve a world without waste and, as the world’s largest beverage company, sees itself as playing a key role in inspiring people to “close the loop” and reduce, reuse and recycle.

Following the presentation from Coca-Cola, a panel representing academia, politics, and business[1] discussed how each arena is thinking about responsible leadership for a common future. Discussion topics included:

  • Critiques of corporate efforts to exercise responsible leadership:
    • A gap exists between what businesses promote to stakeholders about sustainability versus what is actually understood and practiced by its employees.
    • Even businesses with the best of intentions need to be aware of unintended impacts. A campaign to work with local organizations to collect waste, for instance, can displace those who rely on collecting waste for their livelihood.
  • Importance of global cooperation for working toward a common future:
    • The UN Sustainable Development Goals (SDGs) facilitate this by offering a roadmap and broad language for all stakeholders and countries to work together.
  • The role of universities in cultivating responsible leadership:
    • SDGs should be integrated into curricula, and there is a need for both professors and students to be educated on them.
    • With regards to the BRT statement and its impact on business schools, one panelist commented that there was never business education without social impact, noting that some impacts are against the greater good. While discourse is currently focused on positive social impact, this is recent, and business and social impact have always been linked.
  • The challenge of measuring impact:
    • Facts and figures hinder success for advancing sustainability agendas. Danilo Turk, former President of Slovenia, suggested that we “go beyond this theory of what we cannot measure, we cannot manage.”
    • From a business perspective, metrics are important to investors and more than anecdotal stories are needed as a basis for accountability.

As the world continues to experience extreme environmental events, global healthcare crises, and social conflicts, calling for us to scrutinize our own human actions, more companies and entrepreneurs will need to approach business practices as responsible leaders. Productive discussions involving cross-sector representation, such as the case with the AOM panel described above, will continue to bring sustainability issues to the forefront and advance the relevance of responsible leadership in business.

At the William Davidson Institute at the University of Michigan’s Entrepreneurship Development Center, we often integrate responsible leadership concepts into our programs, which are designed for entrepreneurs in low- and middle-income countries (LMIC). For example, during a four-month entrepreneurship incubation program, participants of the LIFE Project in Turkey learn about topics such as emotional intelligence, leadership roles and styles, how to develop mission statements, valuing employees, and creating a social or environmental impact through business. By covering such topics in entrepreneurship development programs for SMEs in LMICs, we equip entrepreneurs like Zeinab and Mahmoud to be responsible business leaders and make a difference in their communities.

It is clear that responsible leadership is a concept relevant to all business leaders, no matter the size or mission. SMEs practicing responsible leadership are effective in identifying local problems and serving the unique needs of their communities and employees, while responsible leadership in MNCs can result in significant changes across expansive supply chains, influence on public discourse and policy, and more. All leaders of businesses from small to large should consider how they can be responsible leaders within the context of their own businesses, with the understanding that their actions have a long-lasting impact on the people and environment around them.

 

[1] Panelists included: Danilo Türk, former President of Slovenia
Danica Purg, President and Dean of IEDC-Bled School of Management

Therese Noorlander, Sustainability Director Europe of the Coca-Cola Company
Mollie Painter, Coca-Cola Chair of Sustainable Development at IEDC-Bled School of Management
Arnold Smit, Associate Professor, University of Stellenbosch Business School
Frank Barz, Head of Industrial Internet of Things at T-Systems
Liangrong Zu, Senior Program Officer of International Labour Organziation

Moderator: René Schmidpeter, General Secretary, World Institute for Sustainability and Ethics

 

 

Kristin Babbie Kelterborn
Kristin Babbie Kelterborn is a Senior Project Manager for Grants Management & Entrepreneurship Development Center.

 

 

 

Image courtesy of Uber.

 

Competition launched by WDI Publishing at the University of Michigan rewards unique academic case studies about doing business in the MENA region

 

WDI Publishing, part of the William Davidson Institute at the University of Michigan and publisher of cutting-edge business cases and teaching materials for business schools around the globe, today announced that authors from Kent State University in the United States have won its first-ever MENA case competition. The winning case, “Careem: MENA Ride-hailing leader Acquired by Uber” was submitted by Professor Chris Groening and PhD student Ahmad Al Asady.

Under the theme, “Doing Business in the Middle East and North Africa Region,” the case competition was launched to shed light on the unique and realistic challenges and advantages of doing business in MENA. The Careem academic case study, analyzed issues related to Careem’s growth options after it had been acquired by Uber. The terms of the Uber acquisition dictated Careem would continue to operate as a separate entity, so its CEO must present Careem’s forward-looking strategy to relevant stakeholders in a very short time frame.

WDI Publishing received over 44 entries and 23 final submissions, representing more than 15 countries and over 25 universities around the globe. The three winning cases are currently being edited and will be published at WDI Publishing by the end of June. The contest was sponsored by Executive Education at the University of Michigan’s Ross School of Business.

“With the MENA region growing rapidly in terms of business innovation and maturity, the energy and interest in our first-ever MENA case competition was extraordinary. Through this initiative, we intended to reward the development and publication of unique academic case studies about the MENA region and use it as a tool to develop the critical thinking skills of higher education students. I’d like to thank all of our competition participants for submitting a variety of truly remarkable cases about doing business in MENA,” said Sandra Draheim, WDI Publishing Manager.

The winning authors were awarded $5,000, while second and third place won $3,500 and $1,500, respectively. The other winning cases include:

Second place: “Building the HR Function at Oman’s Port of Salalah” (Authored by Profs. Dana Sumpter and Mona Zanhour, California State University-Long Beach, USA)

Third place: “Etihad Airways: Rethinking Internationalization and Growth” (Authored by Prof. Mukund Dixit and case writer Sanjay Kumar Jena, Indian Institute of Management, Ahmedabad, India)

“At Michigan Ross, we have always believed in elevating the quality of education and equip students in MENA and beyond with teaching materials that gives real world examples. We would like to congratulate all the winners and hope they become leaders who drive change and innovation in business across the globe,” said Gene Mage, Managing Director of Custom Programs for Michigan Ross Executive Education.

WDI Publishing handpicked an esteemed group of academic professionals to select the winners including, Hagop Panossian, Lecturer – American University of Beirut Olayan School of Business, Kim Bettcher: PhD, Director Knowledge Management – Center for International Private Enterprise (CIPE); Andrew J. Hoffman, Holcim (US) Professor of Sustainable Enterprise – University of Michigan Ross School of Business; and Manel Khadraoui, Professor – University of Tunis/Tunis Business School.

About WDI Publishing

WDI Publishing produces and distributes high-quality, cutting-edge business cases and other teaching materials for business schools around the globe. It offers a large catalog of international business and social impact materials, in addition to cases within all core business disciplines. WDI Publishing is part of the William Davidson Institute (WDI) at the University of Michigan. WDI is an independent, non-profit research and educational organization focused on driving economic development and improving social welfare in low- and middle-income countries.

About Executive Education at the Stephen M. Ross School of Business at the University of Michigan

Named a Top 5 global provider by the Financial Times, Michigan Ross Executive Education provides transformational experiences that elevate thinking and enable breakthrough business results.  Michigan Ross is a vibrant and distinctive learning community grounded in the principle that business can be an extraordinary vehicle for positive change in today’s dynamic global economy. The Ross School of Business’ mission is to develop leaders who make a positive difference in the world. Through thought and action, members of the Ross community drive change and innovation that improves business and society.

 

 

Note: This page has been updated with the above video, it was originally published on Feb. 19, 2020. The competition took place over 24 hours, Feb. 13-14.

 

Bakulu Power is a young company focused on building a renewable energy “mini grid” for residents of Lubya Island in Uganda’s Lake Victoria. The company has promising technology, has completed fund-raising rounds, has garnered interest from customers and has the support of the Ugandan government. But Bakulu Power still has a big challenge: When its mini grid is constructed, how can the company build additional demand for electricity?

Eight teams of University of Michigan students worked furiously to answer that question in WDI’s first-ever 24-Hour Case Competition, held last week at the Institute. The teams had just 24 hours to research the company, the island and its would-be customers, and prepare a compelling solution or series of solutions, to Bakulu Power’s quandary. 

Vital to the competition was the fact that all solutions had to generate sustainable profits, rather than relying on grants or government funding, to operate the mini grid. The competition also challenged students to consider risks associated with new strategies and what partnerships might be required to carry out their solutions. 

As she explained the challenge to students, Lucia Bakulumpagi-Wamala, CEO of Bakulu Power, noted the Ugandan government has set a goal of providing energy access to the entire country in the next ten years. Some 40% of the new electricity connections in Sub-Saharan Africa will be provided through mini grids in the next decade, she said. The sparsely populated Lubya Island has about 1,200 energy connections, but according to a survey of island residents 45% have no energy access and 70% are dissatisfied with their current energy sources. 

The company, which will begin construction on its solar-enabled mini grid in the third quarter of this year, has explored other productive uses for renewable energy, including ice production. But in describing the challenge, Bakulumpagi-Wamala explained the importance of bringing in outside points of view. 

“When you’re really close to something you can miss something very obvious … (Students) can look at this from a fresh perspective,” Bakulumpagi-Wamala told the competing students. “I think it’s important that the teams had such a short time frame because that’s really how this kind of work actually works. There are so many things that can change … you have to learn how to think really quickly.”

After Bakulumpagi-Wamala detailed the challenge, student teams immediately hunkered down in WDI conference rooms to start their research and begin formulating proposals. Most worked through the night and returned the next morning ready to explain business models in polished presentations. 

In their 15-minute presentations, students showcased a wide variety of solutions, many of which looked to harness the dominant industry on the island: fishing. Students presented a variety of solutions, including developing new fish processing plants, or using power loads to refine plastic from discarded fishing nets into new products. Other teams explored solutions such as building up grain milling operations or creating a mixed use community/industry center.

Bakulumpagi-Wamala, WDI President Paul Clyde and Mike Kosonog, a partner in the Deloitte & Touche LLP Audit and Enterprise Risk Services group, all served as judges in the competition.  

 

The Winners

First place ($3,000)

Maneel Grover and Avinav Sinha (pictured right and left, with Bakulumpagi-Wamala at center), both MBA students graduating in 2020 and both originally from Delhi, India, took first place. Their winning solution focused on equipping fishing boats with electric motors and helping to develop the businesses necessary to service those craft. The team made the case that electrification would ultimately save the local fishing industry money compared with using diesel. 

 

Second Place ($2,000) 

Coming in second place was the team of Gerasimos Dedes and S. Aris Mitropoulos, both majoring in engineering at U-M. The team presented ways to use energy to expand fish processing facilities and recycling discarded fish nets into other goods.

 

Third Place ($1,000)

A team comprised Ashley Hwang, Haotian Jiang, Maya Malouin, and Brian Zhao – all undergraduate students, came in third place. All team members are pursuing Bachelor of Business Administration degrees. Their solution explored incentivizing electric cooking instead of the more commonly used charcoal, implementing water purification systems and developing new cold storage systems.

 

Implementing Ideas

 

Bakulumpagi-Wamala said she was overwhelmed by the students’ questions, their presentations and the energy they brought to the competition.

“Twenty-four hours later, I cannot believe the level of detail in the research the students did and I think I actually learned more than they did,” she said. “This challenge has been incredibly timely, we still have time to make adjustments and deploy some of the ideas we heard.” 

Bakulumpagi-Wamala said several of the ideas presented by the teams had previously been discussed by Bakulu Power’s management team. In fact, the winning team’s concept of electrifying boats had been introduced by one of her colleagues not long ago. 

“Based on my experience with this 24-hour challenge, working with the students, the Michigan Ross faculty and the team at WDI, I would strongly recommend it to any business,” Bakulumpagi-Wamala said. “The more great minds you can bring to the table, the more solutions you can deploy.”

Clyde noted that the idea for hosting the competition came from one of this year’s Davidson Field Scholars, students who have conducted multiple projects with WDI. 

“The student teams came from different schools across the university, representing a wide breadth of experiences and a depth of expertise – and they came up with a wide array of potential business models for this Ugandan business to try,” Clyde said. 

Clyde also said WDI is interested in hosting similar competitions in the years to come. 

“This competition drew upon the strengths of the Institute in a way that is clearly in line with our mission to equip decision makers with tools that will allow them to succeed commercially,” he said. “This event also provided a blueprint for future case competitions, in which we are able to engage students with some of WDI’s partner organizations in addressing their business challenges in a live setting.”

 

A food entrepreneur works in the shared kitchen at the Food Enterprise Center in Istanbul, part of the Livelihoods Innovation through Food Entrepreneurship (LIFE) Project.

 

Note: This article was originally published in Business Fights Poverty. 

 

By Kristin Babbie Kelterborn and Amy Gillett at WDI, and 

Johanna Mendelson Forman, The Stimson Center

 

The global refugee population is at the highest level on record and there is no sign of the crisis abating. The most common private sector response is donations to address immediate humanitarian needs. But, with the average displacement ranging from 10 to 26 years, support is also needed to build sustainable livelihoods for refugees, especially as they experience cultural and legal barriers to securing a job in a safe environment in their host countries.

While the Sustainable Development Goals drive some private sector interest in contributing to the refugee crisis response, companies do not always know what concrete steps to take. As members of the United States government funded “Livelihoods Innovation through Food Entrepreneurship (LIFE)” consortium, we have seen firsthand how supporting refugee food entrepreneurship is “one entrée” into promoting livelihoods for refugees. The food sector is attractive for refugee entrepreneurs because of its lower barrier to entry, its accessibility for women, and its opportunities for impact. We call on the private sector to join efforts to make these new businesses successful.

How the business community can provide support to refugee food entrepreneurs

General recommendations for how the private sector can assist refugees have been provided by the United Nations Higher Commission for Refugees, and in a report by the International Finance Corporation and The Bridgespan Group. Yet, guidance to the business community specifically on supporting refugee food entrepreneurship is lacking. What can the private sector do to engage?

  • Support refugee entrepreneurship development programs in the food sector. With a new market and regulations to navigate, even the most experienced refugee entrepreneur can benefit from support with starting a business in their host country. American ice cream company, Ben & Jerry’s, provides such support. Ben & Jerry’s is partnering with The Entrepreneurial Refugee Network to offer entrepreneurship training and mentorship, as well as part-time employment, to refugees through Ben & Jerry’s Ice Academy. In addition to programs, private sector partners can provide mentorship, pro bono legal advice, and financial assistance. Offering such support is also way to engage employees in service.
  • Source from refugee food entrepreneurs for catered events and meals. Maide Mutfak, an Istanbul-based catering business supported by the BBVA Momentum social entrepreneurship program, employs disadvantaged women (including refugees) and also provides them with culinary and entrepreneurship training. Companies can support such enterprises by selecting them to cater their events. Eat Offbeat, for example, is a New York social enterprise that offers refugee-cooked meals to corporate clients like Estée Lauder, Google, and KickStarter. Food can promote awareness among employees, as well as encourage social integration of refugees.
  • Build partnerships with local NGOs serving refugee food entrepreneurs. Food is a bridge for uniting stakeholders across sectors and interest groups, making projects in the food sector ripe for cross-sector collaboration. Engage with what local NGOs are doing and seek opportunities for participating in open-door events. At its Food Enterprise Centers in Turkey, the LIFE Project offers events such as Demo Days and community meals attended by the project’s members, government officials, and food sector representatives.
  • Provide financial support to programs with finite donor funding. Companies can support revenue-generating development projects with donor funding coming to an end. These could be projects with feasible business models that are not yet fully self-sustaining. Examples include food incubators that charge membership fees for kitchen usage or entrepreneurship incubation programs that can lead to investment opportunities.
  • Identify new food products to bring to scale. LIFE Project member Meyas Saati is introducing makdous (stuffed and pickled eggplant, a regional dish from Homs, Syria) to the market in Mersin, Turkey. Taking advantage of the growing interest in ethnic food products, private sector entities can source food products from refugees like Meyas and introduce them to new markets. For example, a frozen food company could partner with a home kitchen entrepreneur like Meyas, work with them to adjust recipes for large-scale production, and package the dish for distribution across Turkey. They would have a unique product with a compelling story — maybe the basis for an entirely new product line!

With the support of the private sector, food entrepreneurship as a source of livelihoods will grow. By starting food businesses, refugees can better integrate into a new society and be viewed in a more positive way. The growing field of gastrodiplomacy has emerged as a powerful tool for social integration. Food becomes not only a source of income for refugees, but also a way to promote the tastes and flavors of their culture into a new homeland. Their successful social and economic integration leads to richer, more stable communities – and that benefits us all.

 

Kristin Babbie Kelterborn

Kristin Babbie Kelterborn is the senior project manager at WDI’s Entrepreneurship Development Center.


Amy Gillett

Amy Gillett is the vice president of WDI’s Education sector.


Johanna Mendelson

Johanna Mendelson Forman is a distinguished fellow at the Stimson Center, where she heads the Food Security Program.

 

CANCELED! Canceled! We're sorry to announce this event has been canceled. We hope to reschedule Juan Carlos Thomas at a later date. Thank you for your interest! Be sure to follow us for future events and news.

 

CANCELED
Canceled! We’re sorry to announce this event has been canceled. We hope to reschedule Juan Carlos Thomas at a later date. Thank you for your interest! Be sure to follow us for future events and news.

Juan Carlos Thomas, Director of Entrepreneurship at TechnoServe, a nonprofit organization focused on harnessing the power of the private sector to help people lift themselves out of poverty, will be the next WDI Global Impact Speaker. TechnoServe was recently rated the No. 1 nonprofit for reducing poverty by ImpactMatters.

Juan Carlos Thomas

Thomas’s talk, “Local Businesses, Global Entrepreneurship: A Journey to Build Impact,” will explore effective ways to support entrepreneurs and small and growing businesses around the world. It is scheduled for 5-6 p.m., March 12 in Room B1560 (Blau Building) at the University of Michigan’s Ross School of Business. The discussion is free and open to the public.

Thomas leads the development and deployment of best practices in the support of entrepreneurs and small and growing businesses in the organization’s projects. Before assuming his current role, he served as TechnoServe’s Chile Country Director. Among his accomplishments in that role, he led the first inclusive business development program in Chile; the first small business accelerator program in Patagonia; several economic development programs in communities surrounding energy and mining projects; and the design of business development methodologies now being used in Latin America and Africa.

Before opening the TechnoServe office in Chile in 2008, Thomas served as a TechnoServe Fellow.  He previously worked in the Corporate Finance and Capital Markets division at Bank Boston Chile. He has lectured on finance, entrepreneurship and social entrepreneurship at various universities. Thomas holds an MBA from INSEAD and a bachelor’s degree from Universidad Adolfo Ibáñez.

 

By Paul Clyde and Colm Fay 

Pay as you go (PAYG) off-grid energy access business models are often vertically integrated, in that they include elements of manufacturing, distribution, consumer financing, payment collection and after-sales service. A topic of some debate within the PAYG sector is whether unbundling these business models, perhaps more accurately described as “disintegration,” is good or bad for the sector. Disintegration, or the outsourcing of aspects of the business model to service providers, provides more opportunities for specialization, which can result in more cost-effective business models. Indeed, some wonder whether companies in nascent energy markets might be better off avoiding vertical integration altogether and moving straight to disintegrated models.

We argue that vertical integration is neither inherently good, nor bad. It is a strategic decision for a business that depends on the presence of potential service providers, and the perceived risk of investments specific to that particular context. In the case of nascent markets like household energy access in low- and middle-income countries (LMICs), vertical integration may be a necessary step to overcome the reluctance of service providers to make these investments early in the life cycle of the market.

 

VERTICAL INTEGRATION ACROSS THE CENTURIES

This debate has played out in many other industries. Perhaps the most examined example is General Motors’ purchase of Fisher Body one hundred years ago.[1] According to one version of the story, General Motors wanted to begin selling metal closed-body cars – a completely different body style than used by any other automaker at the time, and a component that required very expensive stamping equipment to make. Fisher made the investment in the equipment, but only after assurances that it would be able to recover its investment and GM would not take advantage of it. These assurances came in the form of a 10-year exclusive contract for Fisher Body to supply car bodies to GM. However, GM’s sales volumes were much higher than expected. At the high unit price that Fisher had negotiated to protect its investment, Fisher was making a huge margin, much larger than either GM or Fisher anticipated. The difficulty in addressing this by revising the contract to account for all possible contingencies ultimately led GM to vertically integrate by purchasing Fisher Body in 1926.[2]

Since the initial article by Klein et al., many more have been written on the GM story, some disputing the facts and conclusions.[3] Nonetheless, the concept illustrated by the GM-Fisher Body story took hold.  Specifically, a driving factor in the decision about whether or not to vertically integrate is the degree to which investments in assets to provide a critical service or input are tied to a specific context, a concept known in economics as asset specificity.[4] Vertical integration into specific assets has been shown in a wide variety of other industries including aerospace, shoes, textiles and pharmaceuticals.[5]

VERTICAL INTEGRATION IN OFF-GRID SOLAR

It is also similar to any number of present-day sellers and distributors of solar home systems (SHS) who may decide to incorporate consumer financing to deliver a PAYG value proposition. Generating revenue from SHS requires a component (e.g. hardware or software) that integrates solar panels with a consumer payment platform. That component would be specific to the SHS provider. The SHS provider could offer to pay a third party to develop the technology and the accompanying financing system, but any potential third-party provider would be justifiably concerned by the notion of making a big investment in the technology, only to see the SHS provider refuse to pay the initially agreed-upon price. If that happened, the technology/financing provider, having no viable alternatives, would be compelled to take the lower payment because it’s better than nothing. In the economics literature, the technology/financing provider is described as being “held up.” Realizing this, a technology/financing provider would require some assurance that they would be able to recoup their investment before they make it. This assurance could be very costly to provide, and the SHS provider may determine that developing the technology and the financing themselves is a better option.

Vertical integration can happen in either direction from a firm’s starting point in the value chain. Backward integration implies engaging in upstream activities that would previously have been executed by the supplier of an input or service. Forward integration implies engaging in downstream activities that would previously have used a product or service provided by the firm. When it comes to PAYG, one might look at provision of financing as an inseparable input into a value proposition that includes both product (solar panels, invertors, appliances) and service (financing, remote management) components – and therefore an example of backwards integration. Thomas Edison did something similar when he built his own electric utility to support the lightbulb he invented. Without the service provided by the first grid in downtown Manhattan, Edison’s lightbulb would have had limited appeal and market potential. Given that the success of the electric utility was tightly coupled to the success of the first lightbulb, it’s also not surprising that Edison himself was the only one willing to make the investment in such a specific asset.

Forward integration is prevalent in the household energy access sector as well, with many SHS providers also acting as distributors of consumer appliances. Investing in an appliance distribution network that can reach new energy consumers tied to an unproven SHS provider may be too specific an investment and therefore too risky for traditional appliance distributors. However, appliances ultimately drive demand for energy. With greater insight into the end customers and needing fewer assurances, forward integration could become feasible for that SHS provider – and perhaps even necessary. Indeed, it is entirely possible that as it develops more knowledge about the distribution of appliances, and as the industry moves towards disintegration, this same company may emerge with its comparative advantage being appliance distribution rather than, or in addition to, energy provision.

VERTICAL INTEGRATION ACROSS THE CENTURIES

This debate has played out in many other industries. Perhaps the most examined example is General Motors’ purchase of Fisher Body one hundred years ago.[3] According to one version of the story, General Motors wanted to begin selling metal closed-body cars – a completely different body style than used by any other automaker at the time, and a component that required very expensive stamping equipment to make. Fisher made the investment in the equipment, but only after assurances that it would be able to recover its investment and GM would not take advantage of it. These assurances came in the form of a 10-year exclusive contract for Fisher Body to supply car bodies to GM. However, GM’s sales volumes were much higher than expected. At the high unit price that Fisher had negotiated to protect its investment, Fisher was making a huge margin, much larger than either GM or Fisher anticipated. The difficulty in addressing this by revising the contract to account for all possible contingencies ultimately led GM to vertically integrate by purchasing Fisher Body in 1926.[4]

Since the initial article by Klein et al., many more have been written on the GM story, some disputing the facts and conclusions.[5] Nonetheless, the concept illustrated by the GM-Fisher Body story took hold.  Specifically, a driving factor in the decision about whether or not to vertically integrate is the degree to which investments in assets to provide a critical service or input are tied to a specific context, a concept.

 

“Rather than being an inherently good or bad thing, vertical integration in off-grid energy (or any industry for that matter) is often a necessary feature of early-stage market development…”

MATURING PAST THE NEED FOR VERTICAL INTEGRATION

As markets mature, the degree to which asset specificity requires integration can be expected to wane, allowing for vertically integrated models to be disintegrated, or for new entrants to avoid vertical integration altogether. There are a few reasons for this.

First, mature markets are generally characterized by a larger number of buyers and sellers. If there is more than one trading partner, the asset is no longer specific to a particular trading partner.

Firms subject to the risks of asset specificity have developed some clever ways to increase the number of potential trading partners. For example, in 2013 GE introduced a platform called CNG in a Box that opened up many markets, including many markets in LMICs, to its compressed natural gas (CNG) products. The box was a standard shipping container easily loaded on trains, on the back of a typical 18-wheel truck or in an ocean-going container ship. Inside the box was a motor, a compressor and everything else needed in a compressed natural gas fueling station. Before CNG in a Box, customers were asking for CNG sellers to invest in stations that could deliver compressed natural gas in a specific location, using connections that might be specific to the customer. GE could produce and deploy CNG in a Box without any concerns of being “held up” – if a buyer tried to lower the price, GE could just pick up the box and take it to a different customer.

Second, mature markets allow buyers and sellers to develop reputations – reputations that can overcome some of the concerns related to specificity. For example, even if an SHS provider remains the only electricity provider in the area, it has the incentive to increase demand for services by supporting complementary product or service providers, such as appliance distributors. Over time, the SHS can develop a reputation for continuing to transact without exploiting the appliance provider, and the SHS has the incentive to maintain that reputation in order to encourage other appliance providers to enter the market.

Rather than being an inherently good or bad thing, vertical integration in off-grid energy (or any industry for that matter) is often a necessary feature of early-stage market development that gives way to disintegration as the industry matures. Indeed, this cycle may happen multiple times, as innovations disrupt an industry and introduce new business models.[6] By looking to the experience of other industries, we can better understand where we are in these cycles – and how best to make the investments that will accelerate the development of efficient markets.

[1] Klein, B., Crawford, R. G. & Alchian, A. A. 1978. Vertical Integration, Appropriable Rents, and the Competitive Contracting Process. The Journal of Law & Economics Vol. 21, No. 2 (October 1978). pp. 297-326

[2] LaFontaine, F. & Slade, M. 2007. Vertical Integration and Firm Boundaries: The Evidence. Journal of Economic Literature Vol. XLV (September 2007). pp. 629–685

[3] Klein, B., Crawford, R. G. & Alchian, A. A. 1978. Vertical Integration, Appropriable Rents, and the Competitive Contracting Process. The Journal of Law & Economics Vol. 21, No. 2 (October 1978). pp. 297-326

[4] Klein, B. 2007. The Economic Lessons of Fisher Body–General Motors. Int. J. of the Economics of Business, Vol. 14, No. 1, February 2007. pp. 1–36

[5] Coase, R. 2006. The Conduct of Economics: The Example of Fisher Body and General Motors. Journal of Economics & Management Strategy, Volume 15, Number 2, Summer 2006. pp. 255–278

[6] Foster, J. & Metcalfe, J.S. 2003. Frontiers of Evolutionary Economics: Competition, Self-Organization, and Innovation Policy. Edward Elgar Publishing, Incorporated. pp. 56-59

 

Paul Clyde, President of WDI

Paul Clyde, President
William Davidson Institute

Paul Clyde is the president of WDI, the Tom Lantos Professor of Business Administration and the Movses and Maija Kaldjian Collegiate Lecturer of Business Economics and Public Policy at the University of Michigan’s Ross School of Business.

Colm Fay

Colm Fay, Program Manager
William Davidson Institute

Colm Fay is a program manager leading the Energy Sector at WDI.  He leads research projects focused on identifying innovative approaches to power generation and designing commercially viable business models.

 

 

Photo courtesy of andreas160578.

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