Management per objective: the art of stupid

Here is a video I’d like to share with you. It is a splendid introduction to new ways of managing companies by Daniel Pink at a Ted conference. It sheds a positive light to how to change – may be not the world – but at least the place where we all spend 70% of our awaken time, the office. It applies wonderfully to the little sector we speak from, social enterprises.

What’s the pitch? Basically that management per objectives and incentives are making people dumber, less productive, because it inhibits their creativity. What sort of statement is that? Some pinky wishful thinking? Not at all. It is actually based on science, and a new specific branch to economics, the first real scientific one to my opinion, behavioral economics, a discipline in which economic assumptions are actually being tested, quite a blow in the economic world where ideologies are hidden behind non-experimented complex equations on how economic agents should behave and react, and where prizes are given to authors that would explain of human nature should be changed to comply with their obnoxious theories. And by the way, it is the MIT that is the leader in that new exciting domain.

To fellow social entrepreneurs

As our reputation is slowly growing up, I am getting more and more questions from social-entrepreneurs-to-be and friends from the NGO and the private sectors on the implications of operating a social enterprise, on how we can factor in primary business rules and our objectives. Hence, I would like to start sharing a bit of what I had to learn since I created our company. And I’d like to start with the concept of values, because, well, you know, we are a SOCIAL enterprise. So values are somehow important, right? Yes, but mere pragmatism too.

Urban Care is, indeed, a social enterprise. What does that mean practically? That we are at the crossroads between classic business management and an “NGO-orientated” way of thinking in term of values and objectives. And this requires a fair dose of flexibility and pragmatism, especially as our primary market, Vietnam and South-East Asia, is now subject to consequent macro-economic pressures… The current inflation rate in Vietnam is close to 21% on an annual rate, with little evidence it would slow down the next few months. The national Vietnamese debt is rated at junk level with 5-year CDS soaring way above 300 points, international investment is plummeting in the region, and business creation is down 50% from its 2010 level in the country. And now even China is promised by some analysts a hard-landing within 3 years… let alone the current situation in Europe and in the US… it’s all good.

So what does it mean for our operations here? What does it mean to a young company like ours? Would our values shield us from the bad weather? Do values give us business? Is that scary out there? How does it feel just right now?

Oddly enough, it feels good. Real good. Yet, may be not the way one might expect. And I trust it all lies within a strange mix of values and business thinking.

Because this environment pushes us to be fit and flexible, to pay an even greater attention to our clients and our internal functioning. It is the best remedy for self-leniency, and it teaches you the hard way that having “nice values” is just not enough to build a sustainable and efficient structure.

Unlike for most INGOs, our “funding” cycles are short. Whereas a development program sponsored by an international donor would typically be funded for a 3-year period, we mostly rely on short-term contracts – with an average duration of 4 months – although we are luckily moving into developing long-term relations with our biggest clients. Hence we have to be cost-effective. Always. And you can be sure that we are our first customers in term of allocation-resources optimization.

I guess this is the most challenging aspect of running a social enterprise. You have to be consistent, and analyze your environment very pragmatically as a private, for-profit business would. There are excellent lessons to draw from the private sector. I guess it relates to self-reliance, paying real attention to the needs of your clients, and having a strong and adaptive business-model. The bottom line there? Core values. But too often well-intended organizations might fail because of a lack of realism.

As a matter of fact, we are driven by an ideology. To make it short, I would say “earning a decent salary doing a decent job”. Obviously, decent is the operative word here. Yet, what you quickly realize is that your clients simply expect a service, a good service. They need a return on their investment. And your values are just not what they are buying. They might not even pay attention to your greater plan, whether it is making health care more accessible, or clean water, or education. Of course, they might share your values. And practically, all our clients do. Yet, when they contract you to perform a task, they just want your company to deliver something they need. And do not expect any indulgence from them because at some point you trust you are Mr Nice Guy. They need professionals, because they are.

Initially, when setting up our company, I was expecting our values would give us a hedge in term of publicity. I was even considering they could be a component of our marketing plan. And you know what? We have clients because we offer a suit of advanced analysis and M&E services we are the only ones to provide. And we do it well. I quickly realized that, at best, our model was anecdotical to our clients. What they appreciated was the analysis we provided them with. So, we dropped entirely the idea to market our values.

Values are your driving force, they make your ethos concrete. Values translates into the way your team is operating, values infuse into the quality of your work. And this is fair enough. If you uphold those values and put them at work, if your team share them, why would you need any further endorsements from others?

I strongly believe in the development of alternative forms of capitalism. I trust there is out there a place for companies like ours, companies for which the community they live in is the objective, not the mean. Yet, if we want this movement of social companies, coop, and non-for-profit businesses to gather speed and gains for itself a fair place in our greater social system, we have at some point to accept the inner darwinian nature of our daily environment, and be fit.

And let’s rejoice, our values can make us the fittest.

Hello world!

Building at a crossroad.

Well, finally we made it. The site is functioning; we could work out a server and a proper domain name altogether, finish the design of the first version of our site, and put all that online.

That was quite an adventure. And a long one with that. About 7 years to come up with the right concept, 3 years to gather up the seed capital, and 9 months to finally obtain the investment certificate from the Vietnamese administration.

And now Urban Care is born and real and breathing.

Creating this company was a bit of a dream you know, it is not exactly a cash-machine which would buy me a Porsche Cayenne or a SUV I wouldn’t be able to steer out of central Hanoi. Nope. It is an old dream. Setting up something at the crossroad of capitalism and social action. Private means, public purpose. Bones and flesh. I think I would never really quite understand the concept of dividing the society into two antagonist groups, the private sector in one corner of the boxing ring and the public in the other, with all the drama and cultural war between them. Here, we are trying to reconcile those two sides of human societies, and to participate to the renovation of the economic system, in our domain, health care. And I hope this blog, along with our core work, would do its share.

In that blog we will propose you to follow two main threads, a first one linked to the development of social enterprises in general, and this one in particular, and a second one giving you fresh news and analysis from the health aid & development sector.

To organise that, we will use 4 key tags:

New economy: posts on other organisations defining themselves as social enterprises, thoughts on the concept and its place in a post-industrial society

Urban Care: all critical information on the development of our social enterprise, results, challenges and policies

Trends: important publications and reports concerning the aid & development sector and its evolution, and our comments and analysis

News: direct links to selected newspaper articles covering the health aid & development sectors with some minimal inputs from us

As for the frequency of publications for that blog, we would post a homemade text every Monday or so, and we will share news with you the rest of the week.

Well… there it goes.

Your comments are not moderated ex-ante. Trolls, thanks for clicking off.