Women - Business: It Doesn't Have to Be Puzzling
[Editor's Note: This topic is the theme of our International Women's Day Event on March 8 at the United Nations, titled "The Role of Business in Empowering Women" (tweetchat: #CSRwomen).
The author, Taryn Bird, is BCLC's senior manager of corporate citizenship. She is currently in Kigali, Rwanda, on sabbatical and working for Indego Africa, a fashion and women’s empowerment nonprofit social enterprise.
Crossword puzzles: A life skill and activity that I have never seemed to master.The New York Times will always stump me, as I find it so terribly difficult to match words with clues and connect them all together.
Although I might never master the game of Crossword, it strikes me as the perfect metaphor for challenges faced over the past decade in women’s economic empowerment. What has been the missing word to complete the puzzle?
It has become common knowledge, thanks to the outstanding work of Nicholas Kristof, Sheryl WuDunn, Isobel Colman and many others, that investing in women is a key component to unlocking a country’s economic potential. Success models have been seen with microfinance, which exploded in rural India where lendees were 97% female. Governments in China and Rwanda (recently named the African Singapore) have made significant investment in women in their respective countries and their economics have benefits positively accordingly.
Very few would argue that investing in women is not a smart business decision. In fact, many companies and social enterprises have refocused business investments on gender based initiaves. Why, you might ask? I would argue that there is a clear business connection behind generating economic return and investing in women in markets that are of key importance for a company or social enterprise.
However, we must also be realistic that the issues that women face around the world are more complex than many of us will ever truly understand. Cultural barriers that will take years to change. However, the business-grounded solutions offer a very different approach and have become a game-changing component in closing the gender economic gap.
What makes a business-based solution different?
1. Leveraging Core Business Assets for Social Advancement
Isobel Coleman said it best in her 2010 article for Council on Foreign Relations, “Directing resources to women is good for business.” The term "resource" means more than just money. It used to insinuate a check from a U.S. or European-based multinational written to fund an NGO working in another country. I believe cash is actually the least effective resources companies around the world have at their fingertips to solve social issues. If you look at the most recently designed private-sector women-investment programs, you will see a stark difference in HOW companies are investing in women.
Companies like Goldman Sachs are leveraging their core competencies as a business entity to empower women entrepreneurs by educating and supporting them in becoming stronger businesswomen. Goldman professionals are using their expertise to advance the skill sets of women entrepreneurs in over 20 countries. In fact, I recently attended the 10,000 Women Program graduation ceremony here in Kigali, Rwanda for a class of 60 women entrepreneurs. I was there to support Therese Iribagiza, a member of a partner cooperative of Indego Africa. The opportunities that these women now have at their fingertips because of the 10,000 Women Program is immense. And every women in this graduating class placed great importance on the mentorship of other women.
The talent that sits within companies and social enterprises has been totally under valued in the past and this expertise and knowledge transfer is paramount to creating self-generating economic prosperity.
2. Scale of Impact
The global supply chain of companies all over the world has long been (and will continue to be) an issue of complexity. The words” global supply chain” have long been associated with a negative connotation and in some cases rightfully so.
However we are starting to see companies, with the world’s largest supply chains, utilize these business relationships for the advancement of women.
Take a company like Walmart. In the United States last year, Walmart spent about $2.5-billion with women’s businesses. In 2011, the company unveiled a $20-billion initiative to empower women economically across the globe. It now plans to spend $5 billion annually by 2016 in the United States, and double sourcing from international suppliers run by women. The company will also increase grants to $100 million in 2012 from the Walmart Foundation, which will go directly to women run businesses.
The positive externalities of this kind of investment are so extremely large and will directly impact the bottom line of women-run SMEs all over the world.
Multinational companies already have hundred of thousands of business relationships that can be leveraged for social progress and the effect of one business decision permeates very deep into the supply chain. I challenge other firms to start thinking of their supply chains as an asset for social progress.
3. A Change in Incentives
When you look at the economics of investing in women it has been proven that once you invest in her, she will in turn invest in her family. A $1 investment could return $4 in value; by investing in one person, you are investing in many.
Companies have a long-term interest in educating their potential customers and or future employees. The incentive for businesses and social enterprises to invest in women is not one of a short-term publicity gain but a long-term investment in the economic health and viability of a key-growth market.
Dermalogica has partnered with Kiva to create a platform called FITE (Financial Independence Through Entrepreneurship). FITE is women-based web platform that empowers women entrepreneurs all over the world through microcredit. And while these women-run SMEs gain access to capital and increase their business profits, they then reinvest those profits into the education and sustainability of their families and communities. This is a positive externality that will occur again and again without the reinvestment of seed capital.
As Jane Wurwand, founder for Dermalogica said in her recent blog for BCLC, “The small act of lending empowers her to build a better life for herself, her family and her community, and we all benefit when we invest in the women shaping our collective future."
4. The Measurement of Success
Companies run their business based on account statements. I am currently in Kigali, Rwanda working for Indego Africa, a social enterprise that connects women-run cooperatives with large brands in the United States, while also providing training programs in English and business management.
Now while Indego Africa might not technically be a multinational company, it sure operates like one. The CEO, Ben Stone, runs this social enterprise like a Fortune 500 company and has the numbers to back it up. Last year Indego grew by 110% and increased its client base in the U.S. to include million-dollar brands like Nicole Miller, Anthropologie, Madewell, and J. Crew. All of these brands are sourcing from Indego not through altruistic means but because consumers buy the products; in fact, the products sell out.
In addition, ICRW conducted an evaluation of Goldman Sachs’ 10,000 Women initiative in India to identify early results of the program on women entrepreneurs’ business skills, practices and growth.
The Indian School of Business (ISB) implements 10,000 Women in several major cities. Working with classes of 30 women in each cohort, the program includes 150 hours of training in entrepreneurship and business management, including business planning, marketing, finance, accounting, and human resource management. I found two findings to be very telling of the impact of the program:
- Half of the graduates who reported data saw revenues at least double in an 18-month period.
- In the same 18-month period, graduates who reported data said the median number of employees in their businesses increased from six to 10.
What is the missing word from the puzzle of women’s economic empowerment? It is BUSINESS. It was the word holding up 7 across, 5 down and everything in between.
So if you are struggling to solve your puzzle, try inserting business. You might be surprised how easy the rest of the puzzle turns out to be.