Private Sector Leaders Pivoting to the Social Sector

A business person leaves the office for a bright exterior environment

(Photo by Luca Di Bartolomeo)

After five years running everything from procurement to distribution to licensing in the UK arm of Nando’s, a South African fast-food chain with more than 1,200 locations in 30 countries, South Africa-born Gary Campbell thought he knew the business of large-scale food delivery inside and out. But in 2007, when he and former Nando’s colleague Charles Luyckx launched a nonprofit called FUEL Trust to help fix South Africa’s failing school feeding program (in one province, 5,000 schools had received no food for three months), the pair quickly became, as he puts it, “quite unstuck.”

They soon realized that FUEL’s top-down plan—to work with a handful of people to influence providers and procurement systems—would not succeed in a system of 20,000 schools in nine provinces. Instead, the colleagues turned their plan on its head: they implemented a change management strategy by working with the 500 government employees tasked with holding schools accountable for serving nutritious on-time meals every day. The approach paid off: In 2009, just 55 percent of primary schools in South Africa’s North West Province were serving a nutritious meal before the 10 a.m. target. By 2016, that figure had risen to 82 percent.

Pivotal Moments on the Leadership Journey

Pivotal Moments on the Leadership Journey

This series, sponsored by the McNulty Foundation and Aspen Global Leadership Network, explores pivotal moments in the leadership journey through the eyes of funders, practitioners, and others who share the mission of catalyzing and sustaining high-impact leaders.

“As with many leaders with a business background, they learned that social sector work calls for agility and willingness to adapt,” says Aprile Age, executive director of the McNulty Foundation, which recognizes and supports breakthrough leaders who have turned private sector talents and resources toward tackling tough global problems.

Campbell and Luyckx are not alone in trying to apply—and then adapt—business knowhow to social sector challenges. A growing number of former business executives are starting to enter the impact arena. In making the shift, they encounter hurdles and make mistakes. But their business experience and outsider’s perspective are helping them find innovative solutions to social challenges.

“They’re a unique community,” says Age. “They think differently about how their skills, expertise, and networks might lend themselves to engaging in social impact. We’re fascinated by what happens when that spark is ignited, when people see a new vision for what their skills can accomplish and what they bring to their work in terms of having a completely outside view on a problem.”

This is not to say that private-sector leaders have all the answers, or that a market-based approach can solve all social problems. “Private-sector leaders can bring some efficiency to organizational structures,” says Age. “But that’s rarely the main stumbling block with these big, intractable problems. Almost invariably, there is some deep human nature to the challenges, and social problems require building social power within those systems.”

Some even think business should steer clear of such problems: In a 2020 survey by Independent Sector, a US coalition of nonprofits, foundations and corporate givers, business came at the bottom of the list of institutions seen as best positioned to address societal challenges.

Yet for business people shifting their focus to social problems—whether through public-private partnerships, by creating new organizations, or by inspiring change from within large corporations—gleaning insights from both worlds can prove highly effective.

Driving Impact Through Partnership

At their nonprofit FUEL Trust, Campbell and Luyckx saw an opportunity to work with South Africa’s Department of Education and private-sector food distributions systems rather than working within government themselves or independently through a nonprofit service provider. “If you’re trying to help the government whose job it is to do this, that’s different from an NGO running a soup kitchen, where you’re doing it outside of any system,” Campbell says.

They soon realized, however, that this would not be easy. “We were chartered accountants with a very green-behind-the-ears understanding of how government works,” explains Campbell. “What we underestimated was the protocols and policies that go with government procurement.”

The solution was to empower program managers and field workers to measure their own effectiveness and to take measures to fix the problems—whether in terms of food nutrition levels or on-time meal delivery. Here, the FUEL team turned to their business background and their understanding of the power of key performance indicators. “Having scoring mechanisms is one of the things I took from Nando’s,” Campbell says. “We built      red, yellow, and green schools” to clearly communicate which cafeterias were failing, middling, or excellent, “just like we had red, yellow, and green restaurants.”

It also meant working with each of South Africa’s nine different provinces, all of which had unique procurement systems and political priorities. “We built a monitoring and response methodology that’s been rolled out to the whole country, and we built it piece by piece, province by province,” Campbell explains.

For Campbell and Luyckx, answering the call to dedicate themselves to impact and figuring out how to adapt their business skills experience to a new context didn’t happen overnight. They both applied to the Aspen Global Leadership Network (AGLN) at the Aspen Institute and went through a thoughtful program designed by people who’ve spent decades studying leadership in the social change sector. Like many other transformational leaders, they learned that starting with deep introspection into their own values and life experiences provided a core conviction that motivated them to navigate around any roadblocks in their way. “Having space for deep critical reflection enables leaders to feel less bound by ‘private sector’ or ‘social sector’ demarcations, and more interested in aligning their strengths with the transformations in the world they’d like to be a part of,” says Dar Vanderbeck, vice president of the AGLN. “They find new ways to operate within or disrupt systems.”

Starting from Scratch

In 2005, when Mehrdad Baghai set out to tackle prejudice and hatred, something that had prompted his Baha’i family to flee Iran to escape persecution for their faith, he and his wife Roya decided to co-found a new organization.

Based in Australia but working globally, High Resolves has developed a curriculum designed to teach middle and high school students the principles of citizenship and social justice that uses classroom learning as well as innovative educational techniques such as simulation workshops and real-world projects. In countries across the world, for example, a televised competition called Videos for Change challenges students to raise awareness of an issue through storytelling.

Baghai recognizes that philanthropy can play a critical role in social innovation, particularly in the early stages of developing an idea (during the decade in which High Resolves embarked on its steepest learning curve, he and his wife funded the organization) while market-based models can drive the scale needed for impact.

This meant developing a model in which High Resolves Group functions as a holding company managing a portfolio of about a dozen entities, each with its own appropriate operating model. Some are for-profit tech ventures that are equity funded, others are service companies reliant on fee-for-service revenues, and others are nonprofit entities with philanthropic support driving their growth initiatives.

Unlike Campbell and Luyckx, Baghai was able to develop his model without some of the constraints of working within an existing system. First, by conducting pilots at private schools, Baghai had relative freedom to develop the model before subjecting it to the stress test of the public sector and achieving material impact through global growth as a vendor to both public schools and private schools.

Using skills from his business background—leading technology ventures and at McKinsey—Baghai embarked on a period of experimentation before scaling up the model. “In business parlance, we were pivoting a lot,” he explains. “We learn fast and depend on an iteration model based on customer feedback, and that’s not the way most nonprofits think because sometimes they have an answer they’ve fallen in love with. That’s their hammer and they go looking for nails, whereas everything we’ve done has changed dramatically based on what works and what does not work.”

For example, after building a platform designed to give teachers one-stop access to learning experiences from 35 providers, user feedback pointed to a need for something easier to use, since downloading lessons and teaching them to students took about 14 hours. So High Resolves built a successor that incorporated a      learning management system—an education platform with centralized content that students can directly access and teachers can easily monitor—teachers can now assign lessons for self-directed student learning followed by teacher debriefs, taking just two-to-three hours.

Perhaps unsurprisingly, since Baghai previously co-led the growth practice at consultancy firm McKinsey, his enterprise has achieved significant scale: High Resolves has now engaged more than 5 million young people with its programs, something he has achieved by using tools from business such as diligent cost controls and agile innovation techniques.

Last year, for example, the organization shifted to a digital-first approach in its flagship educational program. “Our face-to-face model was extremely effective but it was costing $23 per student, per experience,” he says. “In the digital world we can deliver it for 20 cents per student, per experience, so it’s less than 1 percent of the cost with similar learning outcomes.”

Continuing exposure to what works in for-profit enterprises—as chairman of Alchemy Growth, the boutique strategy firm, and Alchemy Tribridge, its venture investment arm—enables Baghai to be innovative as he scales up High Resolves; its hybrid model—operating as a nonprofit in some countries, and as a for-profit entity in others—is one not often seen in either business or the social sector.

“We’re bringing disciplines from the world of business in terms of the science of management into what we do,” Baghai says. “But we also want to build a broad ecosystem to drive collaboration in the sector and to build shared platforms so our nonprofit brothers and sisters have greater impact collectively.”

Working From the Inside

If this new breed of leaders is combining the strengths of for-profit and non-profit models, another cohort is trying to harness the power of big business as “intrapreneurs”—social innovators who are pushing for change from within a corporate-sector organization.

This was the case for Gisela Sánchez, an industrial engineer with an MBA from Northwestern’s Kellogg School of Management, when in 2013 she launched a social business called Nutrivida from within Costa Rica’s Florida Ice & Farm Co (FIFCO), where at the time she was director of corporate affairs. Working in partnership with microfinance pioneer Muhammad Yunus, Sánchez saw an opportunity to provide a range of affordable nutritious foods for low-income families as a way to address a dire need: widespread malnutrition.

Insider knowledge as a FIFCO executive was critical to Sánchez’s success, giving her an understanding of what food products would appeal to low-income consumers, how to use marketing and distribution to ensure the products reached target communities, how to maximize production efficiency to produce high-quality fortified foods at an affordable price, and how to minimize costs by designing powder-based products that need no refrigeration and have long shelf lives.

Corporate-sector experience also helped her ensure that the enterprise survived after Nestlé and other large companies, seeing Nutrivida’s success, launched fortified food products of their own—competition that many nonprofits might have been unable to withstand. Not only was her team able to minimize costs, the company’s marketing expertise meant it was able to develop attractive looking brands that would not seem too sophisticated or costly while appealing to low-income communities. By July 2016, Nutrivida had sold more than 8.1 million portions and today the company is expanding across Central America and Haiti.

Sanchez, who is now head of strategy and corporate affairs at BAC, a leading Central American bank, argues that the efficiency of the private sector is something to be celebrated. “The mindset and mentality of the business world is amazing,” she says. “If you apply that to a social challenge, it’s really effective.”

However, like others, Sanchez also believes it is wrong to assume business can do everything more effectively than the nonprofit sector. “Every sector has its own core competencies and different things they can add value to,” she says. “Not all the answers are in the private sector.”

She points to the fact that companies often try to tackle social challenges through corporate philanthropy rather than by using core skills and resources to promote change. “If initiatives are only based on giving away money, it’s not sustainable,” she says. “Because if a business has any financial challenges, it will abandon these projects in a minute.”

However, from her position within a large financial institution, Sanchez has watched significant changes sweep across business that could have implications for the way social impact is executed. She sees capitalism undergoing a shift whereby the push for quarterly profit maximization is starting to give way to a more long-term, purpose-driven model—something that is not always recognized in the nonprofit sector.

Toward a Mutual Understanding

For Sanchez, Campbell and Baghai, the ability to bring business experience to a social mission has proved highly effective. All three have used their outsider’s viewpoint to powerful effect. Yet, while being an outsider helps a leader see new solutions to old problems, Sanchez, Campbell and Baghai also recognize that, in the end, all sectors need to gain a better understanding of each other and the unique capabilities they bring to social challenges.

In South Africa, for example, the past failings of government should not obscure the fact that most public-sector workers are trying to make things better, argues Campbell. “People assume that everyone who works for government is inefficient, doesn’t want to do better, and is on the take,” he says. “But most of the people I’ve worked with want to improve things.”

For Baghai, social and for-profit missions are not mutually exclusive. “They’re always portrayed to be in conflict with each other,” he says. “But it’s a false tension. You get strong reinforcing links if you can design for both.”

Mutual understanding across the different spheres of society is something Sanchez believes is essential, since no one sector can solve all the problems the world faces. “We need to know each other better,” she says. “We need to find places where we can meet in the middle of the bridge.”

Read more stories by Sarah Murray.


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