Social Enterprises and the Expat factor

I worked for a corporate company where local human resource was a great asset to the Organization. The company valued having local staff albeit being foreign and having other affiliates around the world. This was very encouraging as it created jobs for the local staff who were qualified to do a great job with an International company. This, however was about to change when another company bought majority shareholding stake in our company.

All local ‘Chiefs’ were replaced with expats and soon every top title was owned by an expat. The underlying truth is these expats were paid a lot of money to leave their countries, they had the best housing and received insane commissions to lead teams of local staff who ended up doing the job. At the end of the day, they spent 90% of their time learning from local staff who were paid pie-nuts to educate them on how things are done.

In a nutshell, they were placeholders who were earning a good life in Africa, taking expensive vacations and enjoying a great pay that was not hustled for.

But why am I bringing this up? I see this as a growing trend with Social Enterprises that have a foreign entity and local staff. One of the biggest mistake these social businesses are doing is hiring someone foreign and expect them to learn the business and perform well in a culture they are not familiar with. I believe that there is power in using local people to solve their own problems. They need to understand their own challenges to be able to address them to scale.

Hiring an expat will not solve the problems a Social Enterprise is facing locally. To be more precise, every business needs to understand their market, who are you serving and what makes you unique from all the other players. Understand your market segment well and find an innovative way of solving a problem. Key word here being Innovative.

Please note that Innovation too can grow old. Maybe when you started your social business you were the only player doing what you do in the market, but as the world becomes more alert, a lot more other businesses are knocking you out of the park because they can do what you do and even do it better. There is need to constantly re-assess what your value proposition is for your target customer, and why your customers will still need to buy a product from you and not your competitors.

A lot of social enterprises get stuck in the idea phase and forget about execution. One biggest mistake is thinking that one size fits all. If you tried out a model in one country and it performed incredibly well, that’s no guarantee that it will succeed in a different market. It is therefore essential for you to assess every market independently and figure out what your value addition will be.

Back to Innovation, if your Innovation is old and no longer relevant — you have to start thinking about investing in talent to re-define your niche. You can’t expect to do the same thing and get different results. You can not scale that way.

Here are some of the common mistakes we see today in a lot of Start-up Social Enterprises

It works on paper, it should work in implementation
I’ve got news for you. If you haven’t gone out to the people you intend to serve and learn more about what they want, you will never get it right. If you assume that 5 days a week you expect your entrepreneurs to be out there selling a product for you and forget that when they lose someone in the village as a priority they will all out for a funeral, you will never know why what you have on paper does not translate into sales in reality. You need to build a model that allows you to effectively involve the staff and customers in the decision making. A lot of times founders think they know it all, and they have figured out a way to do it — so the staff should go out and implement. Big mistake. Your staff are your greatest asset — use them, which brings me to the second point.

Under valuing of staff
Most social enterprises that have foreign roots tend to under value their staff. Emotional intelligence is one of the key aspect that will help you get the most out of your staff. Your staff members should be treated as partners in the business because they bring a tonne of wealth and information if you know how to use them. They speak to customers everyday, they do the work, you need to find a way of showing them that they are an asset and are valued. A lot of mistakes founders do is looking at staff as implementers. If you look as your staff members as implementers that’s all they will be. But if you bring them to the table as valuable partners by giving them power to be creative, you will get the most out of the team.

The fire and hire syndrome
Your business is not failing because you have terrible staff, your business is failing because of so many aspects that need to be addressed. Is the innovation relevant? Are we responding to what the market needs? What sets us apart? If you have loopholes in your business mode, no amount of staff will fix it. You can fire the entire team and replace it with new people but you will get the same results or even worse. Understand why you are not hitting your targets and start addressing the issues one by one.

Let’s hire an expat — locals don’t know what they are doing
This of-course sums it up. Bringing in an expatriate to solve local problems will not change your traction. Deal with the real issues and then equip your team to succeed. The biggest problem with some of these social businesses is that they are driven so much by what their donors wants, so if the donor says we need to see X amount of results by this date, the founders in quest for money will do anything to promise what can not be achieved to get that funding. In practice, you need to realistically have these conversations with the donors and team doing the work to figure out if it is doable in the promised time. After all they say, it’s better to under promise and over deliver.