<h1 style="text-align:center;">Never Waste a Good Crisis</h1>This entry is cross-posted on <a href="http://www.nextbillion.net/blog/2009/03/17/never-waste-a-good-crisis">NextBillion.net</a>.President Obama and Secretary of State Hillary Clinton are fond of <a href="http://www.reuters.com/article/environmentNews/idUSTRE5251VN20090306">reminding</a> the press that leaders should “never waste a good crisis.” During times of upheaval, people are scared, but they’re also willing to try something different. That applies in both the political and <a href="http://hbr.harvardbusiness.org/2009/02/seize-advantage-in-a-downturn/ar/1">business worlds</a>.RENEW was launched in the midst of upheaval. Incorporated two years ago because we saw an opportunity to grow small businesses in developing markets, RENEW was designed to implement a set of new ideas about what investors who rethink their model can accomplish in markets largely “hidden” by their lack of structure.Of course, another sort of upheaval quickly followed. Just as RENEW launched its on-the-ground operations in East Africa in November, global markets fell into disarray. The fallout is still falling out. In the meantime, RENEW, one company among many in the burgeoning BOP/double bottom-line/social enterprise/pick-your-descriptor marketplace, is determined not to “waste” the present financial crisis.First, the basics: RENEW is a social investment intermediary that sources SMEs for U.S.-based investors, conducts due diligence, manages the investment, and provides life of the investment consulting to support business growth and gauge social impact. In the strictest sense, those are its service offerings. But during the two years that the company has been working with investors and entrepreneurs, we’ve come to envision more than the addition of an investment intermediary to the marketplace.We see an opportunity to create a new set of expectations between capital and the entrepreneurs and managers who shape investment capital into enterprises that create value and generate return. We believe investors should be able to generate meaningful financial return and see sound governance at work when they deploy capital to SMEs in developing countries. And we believe that managers of these SMEs should hold themselves and their employees to the sort of ethical and operational standards that will allow them to compete globally in the 21st century.We’re not the only ones. Last summer, a group of 35 scholars and business executives assembled to lay out a road map for reinventing management to make it more relevant to a volatile world. (These findings comprise a February 2009 Harvard Business Review article titled <a href="http://hbr.harvardbusiness.org/2009/02/moon-shots-for-management/ar/1">Moon Shots for Management</a>.) The group, which included luminaries like C.K. Prahalad and others familiar to NextBillion.net readers, was inspired by a collective desire to help managers overcome what they call “ambition-deficit disorder. What, we asked ourselves, was management’s equivalent to unpacking the human genome, inventing a cure for AIDS, or reversing global warming?”The group synthesized its discussions into a list of 25 grand challenges for managers in the 21st century. At least half of these will make immediate sense to many NextBillion regulars. (For example: "#1 Ensure that the work of management serves a higher purpose; #2 Fully embed the ideas of community and citizenship in management systems; #13 Develop holistic performance measures; #22 Enable communities of passion; #23 Retool management for an open world.”)Similarly, throughout the course of RENEW’s initial market research on investors in the United States and managers in the developing world, we saw “ambition-deficit disorder.” To be sure, in some areas investors exhibited <a href="http://www.wired.com/techbiz/it/magazine/17-03/wp_quant">too much ambition</a>; financial markets are undergoing severe corrections as a result. But when it comes to the fundamentals of finding, investing in and building ethical, well-managed businesses, capital markets have not been keeping up with what’s going on in developing countries. To a large degree, illusory returns in developed capital markets obscured real opportunities in new markets. Take this growing business in Kampala, for instance. In fact, the same February 2009 issue of the Harvard Business Review cited above featured an article titled <a href="http://hbr.harvardbusiness.org/web/2009/hbr-list/now-the-time-to-invest-in-africa">Now’s the Time to Invest in Africa</a> as one of HBR’s “Breakthrough Ideas for 2009.” The managing director of the International Monetary Fund, speaking this week at a conference in Tanzania to examine the effect of the financial crisis on low-income countries, <a href="http://www.imf.org/external/np/speeches/2009/031009.htm">said</a> much the same thing.There is opportunity aplenty in the midst of this crisis. The “Moon Shots” group and others working to create a shared code of conduct for managers, taken together with recent studies on the prospect of a true impact investing marketplace (see the Monitor Group’s excellent report) offer an alternative to the myopic view that investors and managers tend to suffer from as they evaluate investment opportunities and craft strategies for business growth. Renew aims with its services to provide a template — and real-life examples — of how impact investing meets better management in practice. But we are one small part of a large marketplace. No one with similar goals should waste this crisis.

During times of upheaval, people are scared, but they’re also willing to try something different.

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Never Waste a Good Crisis

<h1 style="text-align:center;">Company Profile: A Case for Impact Investment</h1>It’s no wonder there’s an air of helplessness that lingers over the streets of Kampala, Uganda. Negative messages abound. One source of these messages comes from an unexpected and unintentional place. At any moment a pedestrian walking along the street can read names like “Save the Children”, “Food for the Hungry” or “Mercy Corps” bannered across the side of white sport utility vehicles as they speed by. These vehicles roam the city and town centers of the roughest parts of the world, carrying people who deliver services to those in dire need. Pedestrians walking to work, teens hawking goods or students waiting patiently for their bus may see these vehicles and think “the people sitting inside are here because we, Africans, need help.” I wonder if these rolling billboards tell them “there’s a problem here, and foreigners have come in to fix it.”The words jump out at you. “Save”, “Feed” and “Mercy.” It’s clear these words originate from a legitimate need for NGOs to ensure that donors in the U.S. and other developed countries know that what they are doing is critical. These donors, and the NGOs they support, are making a difference. No one would argue that. Read through their annual reports and you’ll be happy to learn about the tons of food that have been distributed with their help. Or the thousands of vaccinations that have been given to children. Or, even the number of lives that have been saved from the streets. It is truly impressive. What these donors and NGOs may not realize is that on the other side of the world, there’s another side to this story that isn’t being told. A story that warrants not only our attention, but also an innovative response.The story begins by asking some questions. What impact is this NGO having on the rest of the population who does not receive direct benefits? What does the street peddler, the university student, or the local business owner feel when they see “Save” and “Feed” drive by them day-in and day-out? Do these names empower people to be agents of change?Let’s follow one such pedestrian. She is on her way to work at a small business situated tightly on a small plot of land in the industrial area of Kampala, just over the railroad tracks. Her company–let’s call it “Up and Coming”–has been in business eight years, but lately times have been hard. Employees receive decent salaries and most of the employees are doing their best to live out their dreams of educating their children and owning homes. The business pays taxes, and now employs about 20 men and women who work ten hours a day.When Up and Coming started there were only seven employees, and it achieved impressive year over year growth of 35 to 50%. But now things have slowed. The business has graduated from micro status and is at the threshold between a small and medium size enterprise. To pay Up and Coming’s staff and keep its margins, the company must bid on bigger projects. In order to meet the demands of these contracts, they need to buy the supplies, and because Up and Coming does business in a cash economy, it is forced to take out short-term loans from a local bank. The rates from the bank are 28%. The business targets a 33% margin and must now make a decision: not to compete and lose the contract, or take the loan and pray all of the other factors that impact their cost (electricity, gas prices, grain costs, a riot in Kenya) don’t strike. Up and Coming has 5% wiggle room.Management decides to take out the loan and satisfy the obligations of the contract. But because of the bureaucracy, red tape and forms, the customer [an international organization] takes four weeks to pay. Time is expensive due to the bank’s terms, and the business nearly goes under. Up and Coming must hold off on paying its employees, and a few (the more talented) get frustrated. One even leaves.After that, Up and Coming can’t compete on a number of government contracts because it can’t handle the size or the intense requirements that are embedded at the bottom of the request for proposal (RFP). So, the enterprise see a modest 5% growth.Now let’s follow Up and Coming for the next two years. Growth remains tiny in comparison to the early years. But the business has saved enough to buy another machine that will increase production to a point where Up and Coming can finally compete on something bigger. Up and Coming changed how it packages product, and the business achieves certification from the International Organization for Standardization (ISO). Management keeps accurate books so that they can offer audited financial statements—a definite badge of honor. They play by the rules and work hard to pay employees on time. Things start looking up.Finally, the day comes when they get a break. A government request for proposal (RFP) has been released asking for help with some development work financed by an international government grant. It’s perfect, and appears to be written to Up and Coming’s strengths; there is no question that it can meet the terms of the contract. Up and Coming has significant inventory, it’s hired 30 more staff, and established itself as a quality company with a good brand. Management prepares a sales pitch and gets ready for a chance to present.As they arrive at the meeting, the sales team finds out that a few other companies are competing on the same RFP. Two of the companies are known competitors which Up and Coming is positioned to beat. The other, however, is a newer company that has a government minister “consulting” for them. The company has some impressive marketing tools but no real track record. The minister, who is with the new company’s team, walks out of the room just as Up and Coming is entering to give its pitch. He’s laughing and shaking hands with the members on the panel. The sales team’s sprits begin to flag; they fear this sale won’t have much to do with their ability to deliver.The team does its best though, and they can confidently propose the lowest price among the bidders. As the team from Up and Coming leaves the building, it’s a bit more hopeful. But they call a week later to find out that, sure enough, the company with the minister on board was awarded the contract.Within another year the business is experiencing severe financial problems. Up and Coming is on the verge of going under because of the high cost of capital on their remaining loans.This is when I meet with them. I go to their office, on a hot day in January. I find their managing director waiting for me. She’s strong and proud, yet clearly veneered with a layer of bitterness and doubt. I can see it in her body language, and I’m mentally preparing myself for a battle. Business awards and pictures of her with the President of Uganda are hung around the office. Samples of her product are neatly displayed on a rack, and the table is tightly kept.“So. What are you looking to do?” she asks as we sit down. I can sense that she knows (she later told me she read through our web site), but wants to hear it from me. I ease into my story that I have given at least a hundred times. I speak for about five minutes and she listens patiently. I reach the end of my introduction and finish by saying that what we really look for, most of all, is good, ethical leaders that our company can support as they grow their business (I’ve already done some background checking on her and she comes highly recommended).My closing line must have finally done it, because she starts shaking her head and laughing. “I don’t believe that leadership is what a business needs anymore.”“I’m sorry - What?” I ask. I really thought I had misheard her.“I’ve tried ethics. I believed in leadership,” she continues. “I don’t think LEADERSHIP is what is required for a business to succeed here. You don’t win with ethics. People that cheat are the ones that get contracts.”I cautiously sympathize with her, and she goes on. “The U.S. doesn’t want to see Africa improve. You’re here to have jobs. The U.S. has been in Africa a long time. So, tell me. Why just now do you want to invest? What are your motives? Is this some ‘out of the box’ thinking that has resulted from your poor economy?” I was intrigued by her logic.I reassure her that we are trying to lay the groundwork for a new model: market-driven development. I tell her that there are groups in the U.S. that have slowly been organizing–that are trying to find new ways to partner with the businesses in developing economies. People that want to support small and medium-sized businesses. People who understand that it’s time for a change; the African business world must catch up. I closely manage my tone as not to imply too much hope.She nods her head, like she’s heard this all before. “Are you just going to talk about changes like you always do? Or are you serious, and want to have a real discussion?”I’ve heard this under the breath of many of the business owners I’ve been meeting with for the past two years, but she was one of the few that came right out with it. I have begun to realize that RENEW is at an interesting place, sitting between two skeptical players that want to work together, but don’t know how. The idea sounds great, but instead of business, we’re playing poker—each side wondering if the other is lying or really has a hand worth playing.A strong part of me believes that we can successfully broker a relationship between these players. Another part of me fears she’s right. That our work may not play out, that this idea might be too early or that excuses will always come up—a down economy, not quite enough information, or “just a little more time.”Having had to set clear expectations with everyone that I meet with, I’ve practiced my answer to her question more than once. This time however, I feel a bit more convicted. I look her in the eyes and say, as honestly as I can “I don’t know the answer to that. I don’t know if I can do anything for you. I’d actually ask you to expect that I can’t. We have a long way to go and a lot to learn.” But I tighten my grip on my chair, lean in and deliver a line that every member of our team has said at some point when things get rough: “All that I can ask is that you let us try. Change has to start somewhere.”She studies me for about ten seconds (felt like two hours), and then seemingly satisfied with my answer, slowly straightens up in her chair and lets a warm smile creep across her face. Pushing back her hair, she shifts focus to her laptop and says, “Would you like a presentation on our company?”Relieved, I smile and politely nod with a soft “Yes.”She delivered an impressive PowerPoint presentation; an honest display of her company’s business model (with flow charts), their financials, there strategy for the future, and the challenges they are up against. I am impressed, and we agree to have RENEW represent Up and Coming in the U.S.“I’ll keep you posted” I say, and desperately hope that I am able to come back with good news. As I pull out of the plot, I take notice of the cars on the road. There are large, beat up flat-bed trucks creeping slowly around massive pot holes. There are smaller cars running goods back and forth between warehouse and supplier. There a boda bodas weighed down by large steel rods, wood, and boxes. But, in this industrial area I don’t see any white SUVs around. As I played our conversation back in my head I wondered if the words on the sides of those SUVs had finally gotten to her. I went back to her question. I truly hope we are not just talking...

It’s no wonder there’s an air of helplessness...

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Company Profile: A Case for Impact Investment

<h1 style="text-align:center;">Financial Services Over the Longhaul: Lessons from Recessions</h1>There’s no question that portfolios managed by financial services and wealth management firms have taken a nearly unrelenting beating in the past six months. That bodes ill for everyone, from retirees to entrepreneurs just starting out. In some ways, all the red ink can make impact investing seem like an indulgence–an idea only fit for flush times. But as Kevin Jones at <a href="http://www.goodcap.net/">Good Capital</a> writes, “When the existing system is at risk, people are willing to ask a new set of questions and take a look at new ways of doing things. For the people who believe you never could divorce economic from social value, the new reality creates a window of opportunity.”As social value becomes more “real” to investors, RENEW sees a window of opportunity opening for wealth managers, who can now offer to capture and present social returns as part the portfolios they build for clients. The prospect of capturing social value in client portfolios provides a distinct competitive edge at a time when wealth managers are reeling from losses and defending their value to clients. Social value, approached with the same thoughtful, measured method that financial firms are now re-emphasizing in their portfolios, amounts to a new service offering that can help investors capture and enjoy all the value their investments are creating.Not only is the economic crisis forcing investors to consider the social impact–positive and negative–of finance; we’re also learning that a range of investments, particularly those outside of sectors and regions traditionally regarded as “safe,” can actually insulate investors against downturns. This was one of three findings in a study published in the December 2008 Harvard Business Review, titled “Lessons from the Past for Financial Services.”Authors Matthew Sebag-Montefiore and Nuno Monteiro analyzed seven downturns affecting 600 North American and Western European companies in banking, asset management, consumer finance, insurance, investment, and specialty finance over the past 28 years. Among the recommendations that emerge from this research: “Banks that were high performers in the early phases of the current downturn drew, on average, nearly 10% of their revenues from outside North America and Western Europe prior to the softening. That’s compared with 4% for low performers.”Investments in small and medium-sized businesses in emerging economies certainly come with their own set of risks. But if the recent financial collapse is teaching us anything, it’s clear that creatively diversified portfolios are more valuable than ever.

There’s no question that portfolios have taken beating in the past six months.

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Financial Services Over the Longhaul: Lessons from Recessions

<h1 style="text-align:center;">Rethinking Risk and Return</h1>The New York Times reported Friday in an article entitled, <a href="http://www.nytimes.com/2008/12/13/business/yourmoney/13wealth.html">It’s the New Economic Reality. Work With It.</a>, on the lessons that wealth managers are learning from their failed risk assessments and troubled portfolios:Very few believed a financial disaster like the one we are living through could actually happen, according to a forthcoming paper by Robert Seaberg, head of the wealth planning group at Citi Global Wealth Management. Or put another way, the risk models that high net worth and ultra-high net worth investors trusted to insure their portfolios failed.Seaberg discusses four overall lessons that high net worth individuals and their wealth managers should be taking away from their recent losses. Among them, he urges HNIs to “redefine a safe investment” and “diversify more broadly.” Specifically, “Mr. Seaberg said investors now need to look outside the United States and Europe to emerging and frontier markets in all aspects of their portfolios to create the greatest diversification.”In other words, while investors are doubling down on Treasuries as a safe place to wait out the storm in the short term, the smart money will not stay there, particularly as the yield for Treasuries dwindles to almost zero. Rather, HNIs and funds should seek out new and growing markets, like Africa. While these markets carry risks of their own, they are subject to a different set of risks, some of which can be offset by careful due diligence and local representation.At RENEW, we aim to provide HNWIs and funds with the option to diversify their portfolios, thoughtfully and strategically, beyond U.S. and European markets, while at that same time offering the prospect of demonstrable positive impact on the local economy and community as a result.

Very few believed a financial disaster like the one we are living through could actually happen...

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Rethinking Risk and Return

<h1 style="text-align:center;">U.S. Investors Offer Something Different to Africa</h1>“The U.S. wants to invest in Africa? [pause] Really?” Looking slowly over his shoulder, he leans in and whispers…”It’s about time. Where have you been?” These are not the words of one of the hundreds of small- to medium-size business owners RENEW has been meeting with. These are the words of a well-established business man who has worked relentlessly for years, and long since transcended the upper echelons of the Ugandan society. I have seen and heard variations of this same astonished reaction from many meetings with business men and women here in Uganda. Many are in no need of investment capital. They are not trying to impress me. They just want something different. They generally describe this difference in two forms. The first has to do with the U.S. brand. The U.S. brings with it standards and ethics like no other country in the world (these are their words). Other countries that have successfully been investing in Africa for years, don’t generally focus on raising the standards and ethics while simultaneously making profits. Rather they focus on the latter. This is understood, they recognize, but not optimal. I’ll save the elaboration on this point for a later post.The second reason, which I will go into, is that the current approach the U.S. takes with Africa is not working (again, their words). U.S. resources, both money and people, flow into Africa in large quantities in the form of aid. The target recipients are the poor (a large and in-need group) and the government (a small group). We’ve seen results, true. But are they the best return on the dollar and manpower?Well, let’s take a closer look at this equation. One can quickly see a critical sector that misses the direct benefits of these U.S. resources. The business community. One could argue (and some try) that business owners are a benefactor of aid through things like improved roads, clean water and electricity that the government provides. Take one drive around Kampala and you will have some questions. No. The reality is businesses fend for themselves. Being a capitalist I am OK with rough conditions; it drives innovation. But, for capitalism to succeed — and thus create taxes, provide jobs and build up a stable middle class — you need capital. So, banks start growing, and charging handsome fees to outweigh their risks. If a business is lucky enough to get a loan it most likely goes towards expenses that could be minimized by an effective government. Namely they buy generators to keep their manufacturing plants operational because electricity shuts off multiple times a day. They pay for vehicle maintenance because the roads rattle their cars apart. They pay for unhealthy and sick workers because waterborne pathogens and malaria are commonplace.So, one could deduce that the current flow of resources into Africa has not targeted the one group that could potentially be the solution for advancing development, making it “sustainable”, and directly eliminating all of those wonderful problems that many NGO’s build their mission statements around. But, there is doubt in the voice of my affluent friend who is clearly wondering if this new approach will really happen - this “U.S. investing in Africa.” They naturally go onto to ask “How will you do it?”For the past two years RENEW has been diligently trying to build a business-understanding of Africa. We recognized early on just how important it would be to “go slow to go fast” with this new approach. We knew that well before we could operate in Africa, we would need to understand our stakeholders’ wants and needs; we would need to have a strong formal and informal networks within each country to advise us, guide us and vet opportunities with; and we would need an information technology- and process-driven system that would make our operations efficient and cost-effective to the IAN. After over two years of focusing almost exclusively on working “on our business”, these three pillars (service, relationships and systems) have become the foundation of our operational model. And since RENEW has been operational in East Africa since October, this model has proven itself to be very successful.With our fundamentals in place, we have been busy defining our country-strategies for Uganda and Kenya. Starting from the top, RENEW’s desire is to help build amazing businesses by using an investment approach that ensures both a financial and social return. This is done by directing U.S. resources (money and people) towards businesses with high growth potential. Although new, this model of market-driven development has been proven to be successful by many other brilliant scholars, and continues to be written about in the news. Therefore, I will not go into unpacking the details of this model here, but rather say RENEW is focused on putting it to work.We are looking along strategic supply chains like healthcare, agribusiness, land development and energy. We seek out the ethical, visionary and strategic. In just under two months RENEW’s business model has borne fruit. We have found some diamonds in these rough middle markets, and it is time to change the hesitation in the voice of our affluent, local friends by showing them that the U.S. is ready for change—that we see the potential and that it’s time for a new equation. One that bring ethics and standards with capital. One that is sustainable. One that works.

”It’s about time. Where have you been?”

U.S. Investors Offer Something Different to Africa

<h1 style="text-align:center;">Building a Global Company During a Tough Time</h1>To be sure, a recession poses plenty of challenges to a young company like RENEW. Many investors will hunker down and focus on businesses and business models with which they are comfortably familiar. But, as Daniel Roth of Wired writes <a href="http://www.wired.com/culture/culturereviews/magazine/16-12/st_essay">Back to the Garage: How Economic Turmoil Breeds Innovation</a>, the instinct to turn insular during economic difficulty leaves the playing field wide open for up-and-comers:With the world’s economies apparently snowballing into a deep recession, it feels uncomfortably Pollyannish to see signs of hope. But for the bravest inventors and entrepreneurs, conditions are ideal to pounce on a business opportunity. In periods of economic turmoil, people are hungry and work cheap, and entrenched companies often concentrate on in-house cost-cutting instead of exploring new markets, which can explode with the next turn of the business cycle. When VCs from Foundation Capital met with their nervous investors recently, the partners advised them to stay the course rather than follow their peers into the bunkers. “Our strongest companies have the potential to be whales when the market opens up,” partner Paul Holland told the group. “This is the crucible that forges great companies.”Between a Wall Street full of talented people tasked with selling junk and a development field searching for a way to kick its aid addiction, the RENEW team sees tremendous opportunity in linking investors searching for solid businesses with entrepreneurs searching for the capital and management expertise they need to grow their businesses.Impact investing, currently regarded as a niche market, will not stay that way for long. As Western economies emerge bit by bit from economic turmoil, solid businesses in new markets are becoming viable candidates to enter the global economy as fast as RENEW builds the mechanisms to plug them in.

To be sure, a recession poses plenty of challenges...

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Building a Global Company During a Tough Time

<h1 style="text-align:center;">Developing Critical Thinking Skills</h1>Observations here in Uganda continue to confirm our thoughts about the value addition RENEW offers to businesses in Africa. Our ability to provide management consulting expertise to growing enterprises is not only sought after by our partners, but by the local leaders whose businesses they fund. Many business owners and local executives are desperate for a management-class workforce here in Uganda — managers that understand and apply analytical thinking to solve the many problems that arise daily in the developing world as a business grows. Electricity shuts off, orders change, a machine breaks down or a customer asks for something other than what is exactly on the menu of offerings. When this happens you will almost always see operations and customer service come to a screeching halt. An innovative solution or answer to either fix the problem or meet the needs of a customer is hardly considered and rarely conceived. The result? The hallmarks of “brand Africa” — poor customer service, poor product quality, inefficient operations and missed deadlines.One could argue that part of this problem starts very early in the development of the working class. Local education often requires students to memorize information, including tables and equations. Rarely are students pushed to understand the why and how behind the information they are given. Students are rewarded on standardized exams. There is only one right answer, never partial credit for understanding the logic needed to get to the answer. Years later, these issues show up on the streets of Kampala. It is very common to find ten identical businesses operating side-by-side one another; always eager to replicate, rarely able to innovate.Instilling analytical thinking and problem solving skills in management teams will undoubtedly increase a company’s ability to provide excellent customer service in a world where meeting the needs of each customer can make the difference in a company’s success. These thinking skills can no longer be confined to the front office, but must find their way to the production floor. When this happens, middle management will gradually shift away from acting as task drivers over their staff, to focusing their time on developing ideas and plans for improving numbers, beating targets and developing their employees.But there is a paradox. The answer to “how does an executive instill analytical thinking into middle management?” points to the management systems. The executive and his or her team must move away from putting out daily fires and reinvent the management systems. If this is done properly, you will no longer hear “if you want it done right, you have to do it yourself,” or “when I leave everything stops. I can’t get away,” coming from the front office. A true management system anticipates problems and develops options for middle management to follow in order to meet them. Middle managers become empowered to make decisions, while executives focus on creating and enhancing the systems. Their focus becomes increasing on gaining market share and meeting new customer needs. Analytical thinking doesn’t develop overnight. Entrepreneurs that start successful businesses have it. They must use that thinking to develop systems that allow the managers to operate in an environment that anticipates problems, provides options and allows the business to live. Thus the paradox: like local education, the executive must shift their focus away from providing their staff with the answer, and move toward developing a system that empowers them to choose options given a number of variables.Helping executives to accomplish this shift is RENEW’s passion. More to come…

Observations here in Uganda continue to confirm...

Developing Critical Thinking Skills

<h1 style="text-align:center;">Innovating Investor Options By Going Back to the Basics</h1>Last month, Warren Buffett, writing in the <a href="http://www.nytimes.com/2008/10/17/opinion/17buffett.html?scp=3&amp;sq=buffett&amp;st=cse">New York Times</a>, counseled investors to ”Be fearful when others are greedy, and be greedy when others are fearful. And most certainly,” Buffett continued, ”fear is now widespread, gripping even seasoned investors.”Investors’ new-found caution is an important corrective in overheated markets flush with capital but short on solid, grounded analysis. The flipside, of course, is that opportunities missed during the “greedy phase” come into focus when events force a re-valuation of the market. That applies to investors and businesses alike, says Steve Prokesch in his Harvard Business Review article, Recession: The Mother of Invention? Writes Prokesch:"I was astonished to learn how a number of enterprises outperformed competitors and actually grew during [the Great Depression] by excelling in understanding and satisfying customers’ changing needs… What lessons can managers glean from the 1930s? The main one, of course, is that the current wave of market upheavals and shifts are providing opportunities for innovations and growth."One of the areas Prokesch highlights as ripe for innovation is the ability to bring products and services developed for emerging economies to serve newly-felt needs in mature economies. (I’ll set aside for another blog post a discussion of how investors can create value in mature economies by investing in emerging ones - lots to explore there.)But RENEW’s approach to core services — the way we Find, Assess and Grow businesses in markets that are unaccustomed to thorough vetting – is itself an innovation, answering investors’ newly-felt need for rigorous, grounded analysis. As we work to establish RENEW’s Africa-based operations, our team in the field is designing systems and cultivating local networks that will reduce the cost of due diligence while improving its thoroughness.RENEW’s focus on overlooked businesses in unfamiliar markets means that we must find value in the fundamentals of each business we evaluate. RENEW sees no substitute for face-to-face, hands-on analysis. In fact, our business is founded on the premise that global investors will not engage seriously with small and medium enterprises in emerging economies until the need for quality information and clear, timely communication with these businesses is met.Our team sees the current economic downturn as an opportunity: the sooner investors in the West regain their focus on fundamentally solid businesses with significant potential to grow and change their communities for the better, the sooner these businesses will have a chance to prove their viability and gain the means to achieve their potential.

What lessons can managers glean from the 1930s?

Innovating Investor Options By Going Back to the Basics

<h1 style="text-align:center;">Want Encouraging News? Look to Africa.</h1>According to a recent article published in The Economist, Africa is expected to withstand the current economic decline better than many other parts of the world. Entitled “Opportunity Knocks,” the article appeared in the magazine’s October 9, 2008 print edition.The author comments that “Despite the litany of problems, the 48 countries of sub-Saharan Africa are, by several measures, enjoying a period of unparalleled economic success. And despite the turmoil in the world’s financial markets, international investors still think they can make money there.”“In 1990-94 annual GDP growth was a weak 0.9%; since then, growth has averaged closer to 5%. Before this autumn’s financial meltdown, the IMF was predicting GDP growth of 6.6% this year; now it is predicting only a slightly lower rate,” the article continues.