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“Send money home.” That was the simple idea behind M-PESA, a service that lets people transfer money with their cell phones at the touch of a button. Thirteen years after its launch in Kenya by Vodafone—the fourth largest mobile phone company in the world by number of subscribers—this service now reaches 30 million people across 10 countries. But it all started with a simple idea driven by a small, enterprising team with free rein to bring that idea to fruition.
M-PESA is a classic case study for intrapreneurship—an entrepreneurial venture that flourishes within the walls of a well-established business. Intrapreneurship is a win-win for the business and the employee alike; it allows smart, talented people to apply the resources and networks of an existing organization to “passion projects” that make that business better.
Layer in the impact angle, and the case for social intrapreneurship becomes even more compelling. Just take a look at M-PESA. Sure, the venture was great for the Vodafone brand, and it brought in a swathe of new customers. It also brought simple banking services to millions of people who had previously been unbanked. Leaders of mission-driven organizations, take note. Intrapreneurship changes businesses for the better; social intrapreneurship changes the world.
Twenty years ago, I founded a nonprofit called Root Capital with the mission of investing in agricultural businesses that generate outsized impact for rural communities in low- and middle-income countries. Over that time, Root Capital has been blessed with a number of social intrapreneurs with game-changing ideas. Some of these innovations became “business as usual” that fundamentally changed the way we operate; some of them grew beyond Root Capital and are well on their way to transforming our entire sector.
Here are three concrete examples of social intrapreneurship at Root Capital—and as many lessons learned about how mission-driven leaders can make this innovation happen.
Lesson: Recognize What Others Bring to the Table
Example: The Women in Agriculture Initiative
Around 2011, Root Capital team members started noticing a trend among our client businesses in rural Africa and Latin America: whether as enterprise leaders or as hidden influencers operating behind the scenes, women were playing a critical, but often unrecognized, role in the success of rural enterprises. Our former director of impact assessment Patty Devaney, executive vice president Catherine Gill, and senior partnerships officer Asya Troychansky led the charge to celebrate the stories of these women leaders and encouraged us to bring a gender lens to our organizational storytelling.
However, Patty, Catherine, Asya, and other pioneering minds at Root Capital quickly realized that this gender lens could—and should—be applied to much more than our communications. Through several field studies, they validated that rural women are held back by barriers that men don’t face: radically lower levels of access to land, credit, education, and technology, to name a few. Celebrating women’s accomplishments despite these barriers wasn’t enough; in order to help correct these systemic imbalances, we needed to apply a gender lens to everything we do.
When my colleagues presented me with these findings, I had to confront some hard truths. While Root Capital had pioneered a novel approach to financial inclusion, we had a lot of work to do when it came to gender inclusion—both in our programming and in our own organizational structure. I grew up in a family with strong women role models and have always believed in equal rights for men and women, but my privilege had blocked me from seeing the gendered implications of our own work.
So I got out of the way. The team launched a participatory process that leveraged the insights of women—and male allies—across Root Capital and the businesses we serve. Seven years after we launched Root Capital’s Women in Agriculture Initiative, it has expanded far beyond what I imagined. We began studying, learning, and collecting data on all the roles of women in agriculture. We doubled the number of women farmers reached by our programs to 246,000 in 2018. We launched a Gender Equity Grants program that helps our client businesses implement specific solutions to barriers faced by women in their communities. And we internalized gender equity as an organizational value—revising our compensation philosophy, improving gender balance in our leadership team, and launching a set of leadership principles that prioritize inclusion.
After a decade of running a social enterprise, it was difficult at first to let my colleagues truly take the lead. But when I recognized the limits of my own expertise and listened to different perspectives, Root Capital became a stronger organization.
Lesson: Don’t Be Afraid to Take Risks
Example: The Efficient Impact Frontier
A few years ago, our former senior impact director Mike McCreless spearheaded a plan to maximize the impact and cost-effectiveness of our lending: calculate an “impact score” for each loan based on a set of objective criteria, then graph that score against the loan’s financial return. By splicing our impact score with the financial information we already had, we could greatly improve understanding and transparency around social and our financial returns across our entire portfolio.
As he was workshopping this idea, Mike quickly realized that other impact investors could learn from our findings, and suggested that we make them public. I was hesitant. Lending in agriculture is always challenging—even more so in the world’s most vulnerable places—and some of our past loans had neither made a return nor maximized their impact. That wasn’t exactly the type of result I wanted publicized!
Ultimately, Mike and his team convinced me that we needed to share these results for the good of the sector. While I was apprehensive about admitting that we had made mistakes in our lending, I recognized that sharing our lending data could help other social lenders achieve impact at scale.
In late 2016, Mike published an article about the “Efficient Impact Frontier” in the Stanford Social Innovation Review. Within a few months, he was presenting this idea to MBA programs across the country, and later to asset managers, foundations, and family offices. Today, leading impact investors from across the spectrum are adapting the framework to their investment strategies. Thanks to Mike’s smarts and perseverance and an environment conducive to intrapreneurship, current and next-generation impact investing leaders are learning an innovative new model for balancing social and financial returns. It’s reaping rewards for Root Capital, too; over the years since implementing the Efficient Impact Rating, we’ve improved our portfolio’s financial performance without sacrificing social or environmental returns.
When Mike first told me that we needed to publish our data—warts and all—I nearly said no. Instead, I swallowed my pride, and gave him the space he needed to develop a stellar idea. I was tempted to stand in the way of progress, but the right thing to do was to encourage the impact sector to learn from our mistakes. I think we’re all better for it.
Lesson: Know When to Let Go
Example: The Council on Smallholder Agricultural Finance
In 2012, Root Capital became a founding member of the Council on Smallholder Agricultural Finance (CSAF), an alliance of social lenders determined to develop a thriving and sustainable financial market for agricultural businesses that aggregate smallholder farmers. With backing from The Skoll Foundation, a long-time supporter and thought partner to Root Capital, CSAF’s original members came together as a pre-competitive network with no formal secretariat or official support staff. Members came to the table out of enlightened self-interest, with the goal of exchanging learning, identifying best practices, and developing industry standards that would benefit all.
The primary champion of CSAF within Root Capital was our former Chief Innovation Officer, Brian Milder. With an internal mandate to advance field building, Brian coordinated stakeholder workshops, spearheading an annual analysis of members’ lending data and pushing both Root Capital and CSAF to think bigger and bolder about systems change. As CSAF expanded, his role in encouraging that change grew.
The organization CSAF had become was simply too expansive to be run part-time. So together, Brian and the CSAF members decided to take a vital step toward independence. I initially struggled with this transition, as it implied ‘losing’ one of our most valuable colleagues to the industry alliance. But ultimately, I embraced the move.
Earlier this year, CSAF officially transitioned to the Global Development Incubator with Brian at its helm, gaining dedicated resources and an institutional home. This transition quickly began to bear fruit. After a year of project incubation, CSAF recently announced Stawi Africa, an initiative that seeks to create an enabling environment for agriculture to flourish in sub-Saharan Africa by catalyzing a massive increase in agricultural finance on the continent. While Root Capital may have lost a valued member of our executive team, the social lending sector as a whole came one step closer to improving livelihoods for millions of farming families. As a CEO, letting go was tough; as the leader of a mission-driven organization, I knew it was necessary.
Encouraging social intrapreneurship sometimes feels completely counterintuitive. When one of our employees suggests an idea for how Root Capital could be better, the little voice in my head might urge me to stick to the status quo. But when I shut that voice down and trust in my team’s capabilities, everyone wins. My colleagues are happier, our organization performs better, and my own vision becomes one step closer to reality.
Considering the expertise of others is challenging. Allowing your employees to take risks is intimidating. Letting go of good ideas and great people is painful. But when we create that enabling environment for social intrapreneurship, we foster the mission-driven innovation that makes the world a better place.
May 30, 2019 at 12:40PM
Forbes – Entrepreneurs