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Enterprise Excellence 2
Stories of Excellence Combating trauma with hope Decades of armed conflict have left Colombia with the third largest displaced population in the world (only Angola and Sudan have larger internally displaced populations). Two to three million people in Colombia have fled their homes because of threats, fear, assassinations and massacres associated with guerilla warfare, lawlessness and drug-trafficking. James Morris, Chief Executive of the UN World Food Programme says of this situation: 'Life for the displaced is extremely harsh, with most living in conditions of extreme poverty and struggling for access to sufficient food.' Despite this crisis, Opportunity International has managed to make small loans available to help displaced people set up their own businesses. This is helping to transform the trauma of the past into a future of hope. One such displaced person is Dona Cecilia. With her small loan she has set up a kiosk selling household goods. Read about her here. Flourishing under Flores In the last twelve years, El Salvador has seen unprecedented prosperity: the poverty rate has dropped from 60 percent to 30 percent; infant mortality rates have plummeted; unemployment rates have halved; school and health care availability has increased dramatically. From 1999 to 2004, this reconstruction was overseen by President Francisco Flores. After finishing his term as president, Flores continued his work for freedom by founding the America Libre Institute in Washington, D.C. He spoke with the journal Religion & Liberty of the Acton Institute in Grand Rapids, Michigan. Read the interview here.Incentives for enterprise solutions to poverty A critical factor in poverty alleviation is access to modern energy services. Around a third of the world's population, situated largely in the rural areas of developing countries, lack such assess. Because of the high costs involved, the private sector is generally uninterested in investing in this sector. Evidence from Chile suggests, however, that significant public financing can encourage private companies to develop rural infrastructure. For more than a decade, the government of Chile has used domestic resources and international aid to award subsidies to private electricity suppliers that undertake projects that are financially unrewarding but produce a positive social return. Subsidies are awarded on a competitive basis, according to best scores achieved in a cost-benefit analysis. As a result, the coverage of electricity supply in rural areas increased from 53% in 1992 to 76% at the end of 1999. End users pay for less than 10% of connection costs, and their repayment can be spread over time. This is an example of how well-targeted public funding can facilitate efficient private sector delivery in situations where market incentives are too weak to provide viable business solutions to poverty. For more on this story, see chapter nine of the World Bank report Energy Services for the World's Poor. Capital cappuccino According to research carried out on Fortune 1000 companies at the Kellogg School of Management, top-performing companies focus on moving beyond a transactional mindset to develop trust-based and long-term relationships with key constituencies: customers, employees, suppliers and alliance partners. Starbucks is one of the companies that excels in this area, which it terms 'relational capital'. In a document entitled 'The Barista Principle: Starbucks and the Rise of Relational Capital', Starbucks writes: 'How did a small Seattle company turn itself into a global synonym for Java and Joe? The answer, we believe, lies with an ingredient as central to Starbuck's business as the premium coffee beans it roasts: relationships.' Read the document here. Social capital in development If Starbucks considers relational capital a crucial part of its commercial success (see previous story on this page), the World Bank sees social capital – to which relational capital is closely associated – as crucial to poverty alleviation. Understanding social capital as the norms and networks that enable social cohesion and collective action, the World Bank claims that increasing evidence shows that social capital is critical for sustainable human and economic development. The Bank has set up an excellent web site to link external partners, researchers, institutions, governments and others interested in understanding and applying social capital for sustainable social and economic development. Click here. Via the web site you can even watch an 80 minute online video on Social Capital, Empowerment, and Community Driven Development. Drop in the market The World Travel Market (WTM) is the largest and most successful business to business exhibition for the global travel industry, attended by 5,000 exhibitors and 45,000 industry professionals. As such it represents the flagship event of Reed Exhibitions, the world's foremost company specializing in the organization of exhibitions. WTM staff decided that this event presented a unique opportunity to unite the sector behind a dedicated charity. They therefore created Just a Drop, a charity aimed at providing clean water, sanitation and health education programmes in developing countries. This, the staff felt, would have synergy with the global travel industry. By helping to support and sustain developing countries, the industry would be able to expand into new destinations and introduce new products. In fact the creation of Just a Drop has spearheaded a new and innovative marketing and public relations dimension in the intensely competitive world of travel exhibitions, which is thought to be to the benefit of all parties involved. The WTM team organise a series of heavily promoted charity events to raise money for Just a Drop. These events benefit the business by bringing together senior industry figures. The impact, the team believe, is as follows:
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