01 Mar 2012
Putting Ghosts to Rest
How cows and co-ops are paving the way for genuine reconciliation in Rwandaby Chris MaloneyTopics:
A new book about dynamic young Harvard Business School MBAs, Passion & Purpose: Stories from the Best and Brightest Young Business Leaders (Harvard Business Review Press), presents some two dozen personal stories revealing how a new generation’s aspirations and actions are reshaping business and our understanding of leadership. Coauthors John Coleman (MPA/MBA 2010), Daniel Gulati (MBA 2011), and Oliver Segovia (MBA 2010) spanned the globe to assemble the accounts. Excerpted here is the story told by Chris Maloney (MPA/MBA 2006), who reflects on his experiences in Rwanda and how unfamiliar environments abroad can lead to reevaluating traditional notions of business risk and social return.
It was late at night, and I was tired. Perfect timing for my inner consultant to become narrow and critical. I had come up to Rwanda to look at ways in which the main agriculture challenges in the country were being addressed by both the government and foreign donors. I was knee-deep in documents, sitting outside on a typically breezy, eerily silent Kigali evening. As I read through the reports, my mind started raising red flags on two programs in particular:
The “one cow per poor family” program intended to get every poor family in Rwanda a cow—thereby increasing the amount of milk, protein, and fertilizer available to the average family, which sounded good on paper. But this was in the most densely populated country in Africa, where almost everyone was poor (living on less than $1 per day) and stuck on tiny hillsides. How on earth would this work? There were few people with the skills to care for the cows, little land for grazing, little land on which to use the new source of fertilizer, and little credit to allow the farmers to expand their activities once they had the cow. It was hard to see how this program could be sustainable.
In the government’s action plan, the co-op approach seemed to be the main way of solving problems—a tough way to go. For farmers to move beyond subsistence, they need to be able to buy the right inputs to grow more and access the right markets to sell more. Co-ops are one way to do this (form a group to access credit for inputs and sell products in bulk), but they are notoriously messy and hard to sustain. There are challenges with misaligned incentives, poor leadership and management, and too many stakeholders. Individual entrepreneurs, on the other hand, were more what I was used to seeing in African agriculture transformations—individuals who would have private-sector incentives to work with farmers to help them access inputs, and aggregate their output to help them access markets in bulk and get better prices for everyone. But such entrepreneurs seemed to figure only vaguely in the Rwandan government’s plans, and I couldn’t figure out why. Why take the riskier co-op approach?
My mind started to wander. As with everything in Rwanda, one cannot ignore the 1994 genocide, in which Hutus, the largest ethnic group, systematically slaughtered a million Tutsis in 100 days under an extremist Hutu government. This led to the displacement of millions of Rwandans, both Hutu and Tutsi, before Tutsi rebels came in and stopped the genocide. This was a brutal time, involving machetes and constant fear, where friends and neighbors somehow switched off their humanity for four months.
The hotel where I stayed—the Serena, Kigali’s main business hotel—was called the Hotel des Diplomates during this awful period.... It served as the genocidal Hutu government’s headquarters as the Tutsi rebels eventually closed in on Kigali. It was here at the Diplomates...where many grisly executions were carried out on the top floors. But now, 16 years later, I couldn’t even fathom such a thing. The hotel had since been bought, gutted, and transformed into a modern facility that could have been anywhere in the world. Today the place was sterile, and it was comfortable. And just below this shiny surface, it was filled, like everything in Rwanda, with the ghosts of the past.
How does a country begin to put such spirits to rest? Perhaps, amazingly, the way the government was going about its agriculture transformation activities was one such way. As I thought about these programs, and as I pressed for more feedback in interviews with various people around Rwanda over the subsequent days, I realized that both the cow program and the co-ops were trying, perhaps, to use business as a means of reconciliation. To me, it was a startling idea.
Spending some time in the rural villages and meeting with farmers themselves painted the picture for me. After the genocide, many villages’ lands had to be completely reconfigured as many families had been killed, or fled, while other people, sometimes totally new, came to the village for the first time. In a few places I visited, genocide victims were given plots of land right next door to someone who had been a perpetrator of the genocide, thereby encouraging some form of reconciliation since they had to see each other every day. It was not easy....
How does one rebuild in a setting like that? It was here where I began to see that the cow program had a part to play in this story. A program rule in many places was that the first calf of the cow must be given to a neighbor. In this way, the cow program was not just a subsidy or a “gift from the government,” but rather an asset with a strong future value that brought neighbors together and gave strength to families where so much had been lost. This gift of the first calf was incredibly significant. A cow, it turns out, can often provide a family with just enough cash to access higher education, and have a steadier, more diversified diet, among other benefits. As I began to understand it, the gift of a cow could change lives, as it would work across families and help, in some small way, to aid in reconciliation—if nothing else, it would certainly help bind neighbors together.
Rebuilding communities was the other big challenge. The fractured villages needed something to pull them together—not just at the family-to-family level (as was being done with the cows) but at the community level. This is where the co-ops came in. As tough as they are to build, manage, and sustain, the role of co-ops in a Rwandan village was more than just helping farmers improve their income. Looking closer, I saw that the co-ops would give farmers a common sense of purpose, an incentive to want to work together and achieve a positive outcome. A co-op changed the lives of farmers economically and socially. It could be a critical tool for pulling a community together and provide an incentive for it to rebuild itself. It also avoided the appearance of favoritism. If the government was seen as supporting one individual entrepreneur over another in some of these places, the fractures in the community could grow. But the co-ops could avoid all of this, as they would first pull the community together, and maybe at a later point spur more individual entrepreneurship.
Stepping back, I realized that the co-ops and cows were important in ways that no IRR (internal rate of return) or competitive strategic analysis could measure. I learned that, as with so many things in Africa, the context was everything. It is hard to put a number on the “value” of reconciliation, but it is here where measures like social return on capital and deeper cost-benefits would be critical. Indeed, the amount of effort that would be needed to make “one cow one family” and the co-ops work would be high, but the value it could create was socially tremendous, and something I might have missed had I not gone into the villages themselves, or thought more deeply about the programs’ unspoken motivations. ...
For me, the lessons from this experience are twofold. First, business can be used to create incentives not just for economic return but also for social return. This is happening all over Africa and across the world, but Rwanda was the first place I saw business used as a cornerstone of such broad social transformation. Second, it is not always easy to see this idea of “social return,” nor is it easy to quantify. The risks of “social business” are high, and likely require some economic cost to capture the value of increased social return. Efforts need to be placed on understanding how to mitigate these risks to maximize the social return, and shed new light on what might have originally been a questionable business case. For young managers seeking to grow global careers, this implies several things:
First, working in environments completely different from the ones you are used to requires you to push harder to understand the context and keep an open mind. Though difficult, you must think through the project from the point of view of “the other side,” looking at all the players’ motivations and incentives, or else you might miss the whole point. No one ever explicitly told me these projects were about reconciliation—my realization came through getting out into the field and interacting with a range of people, from individual farmers to political and social experts. What would the government want? A country put back together and moving forward. What did the villagers need? A stronger social fabric and a way to start lifting themselves out of poverty. Using this lens, I began to see how these projects were using business to achieve such outcomes.
Second, because projects in areas with profound social challenges may have positive externalities that are hard to quantify, the process may be as valuable as the end product. While the programs are rolled out, the “cow annuity” and the small businesses formed by the co-ops bring families, neighbors, and communities together.
Therefore, when weighing the risk of a particular project in such a situation, one must consider all of the possible effects that might come out of the process of implementing it—and what might happen if it is not implemented. This then needs to be weighed against what the project will ultimately create, to see if the trade-offs between the various costs, risks, and returns are worth it.
While perhaps stating the obvious, when you work in socially troubled areas, there is a high risk of failure. Alternatives to achieve the implicit outcome (in this case, reconciliation), as opposed to just the explicit outcome (income generation for poor farmers), should be explored up front, to see which approach makes the most sense. From the cows to the co-ops, many of the programs I saw in Rwanda are risky and difficult to implement. But the social return I believe is worth the risk, and we need to shift the focus to ways to increase the likelihood of success and to solve the execution problems during rollout.
What I love about working in Africa is that I am constantly reminded that I don’t know what I don’t know, and that with every project there is something more to learn, a new perspective to add to my toolbox as I work on various projects around the continent. In the end, I cannot guarantee the cows will turn Rwanda into the next Wisconsin, nor can I guarantee that every co-op will run smoothly. However, I do believe that the process of working through this venture can help put many of Rwanda’s ghosts to rest.
Chris Maloney (MPA/MBA 2006) is a management consultant on projects for public- and private-sector clients across Africa, especially in agriculture, health care, and policy. He was based in Johannesburg, South Africa,Â from 2006 to 2010.
Class of MBA 2010, Section J
Class of MBA 2011, Section J
Class of MBA 2010, Section B
Class of MBA 2006, Section E