Business Takes on Poverty

Is using business practices to address poverty an idea whose time has come? One indication is that the top two gurus in the The Thinkers 50 biennial poll are C.K. Prahalad, who wrote The Fortune at the Bottom of the Pyramid, and Bill Gates who is now increasingly known for his focus on global health, development, and education. What unites these two individuals is the sense that we need new approaches to dealing with the issues of poverty.

Here’s what Gates had to say on the subject at his 2007 commencement address at Harvard University:

We can make market forces work better for the poor if we can develop a more creative capitalism – if we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities. We also can press governments around the world to spend taxpayer money in ways that better reflect the values of the people who pay the taxes. If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politicians, we will have found a sustainable way to reduce inequity in the world.

Prahalad is perhaps the leading agent of this line of thinking. In his landmark book The Fortune at the Bottom of the Pyramid he argues:

For more than 50 years, the World Bank, donor nations, various aid agencies, national governments, and lately, civil society organizations have all fought the good fight but have not eradicated poverty ... If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up. Four billion poor can be the engine of the next round of global trade and prosperity ... [and] a source of innovations.

Prahalad was spotlighted in a 2006 BusinessWeek profile that offered a compelling case for why the BoP matters to business. More recently, Prahalad looked ahead to the future at the 2007 BOP conference, paying special attention to environmental concerns (an hour-long video clip of his presentation is posted online).

The focus of the best business minds on ending poverty is cause for optimism, not only for their ideas and actions but for their ability to inspire many more of us to lend our own efforts to this great cause.

Can You Relate?

Increasingly in our world, large and small organizations are seeking alliances to create and deliver goods and services. At the same time, the failure rate for corporate alliances is in the range of 60% - 70%. An article in Harvard Business Review (Simple Rules for Making Alliances Work) suggests that too much emphasis is placed on strategic aspects of the alliance and too little on building the relationship between people within the two entities on which the alliances ultimately thrive or flounder. The authors, Jonathan Hughes and Jeff Weiss, suggest that a shift in emphasis is required (see graphic).

In the social sector, the importance of alliances is far greater, as is the desire to focus on the important outcomes. Yet, weaving the fabric of the joint relationship is essential. Rebecca Gajda in the American Journal of Evaluation (Utilizing Collaboration Theory to Evaluate Strategic Alliances) states, “Without a basis for trust and healthy inter-personal connections between people, strategic alliances will not have a solid foundation on which to stand. Collaboration depends upon positive personal relations and effective emotional connections between partners. Trust is only developed between partners when there is time, effort and energy put into the development of an accessible and functioning system for communication, and interpersonal conflict needs to be recognized as normal and even expected as the level of integration and personal involvement increases.”

The ability of people to build relationships and trust is linked to emotional intelligence and the ability to navigate differences. The Center’s work in the Leadership Beyond Boundaries effort is very much about helping individuals enhance their self-awareness and interpersonal skills. This is a growing imperative as we seek to accomplish more through collaborations, alliances, and partnerships. In the end, our ability to make grand cross-institutional relationships work rests on the humble ability of the individuals involved themselves to relate and collaborate.