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Thursday, December 6, 2012

To Build Your Dream Venture, Look to the Streets 12-06

To Build Your Dream Venture, Look to the Streets
by Rosabeth Moss Kanter  |  11:00 AM December 4, 2012

The holiday season in the Northern Hemisphere is often a time for talk of miracles and displays of lights. Richard Fahey's story involves both.

It takes place in Africa and involves solar technology, but the miracle of getting the lights to work contains a widely applicable leadership lesson: surprising solutions from using what I call "street strategy."

Fahey is a successful corporate lawyer who had been a Peace Corps volunteer in Liberia. In 2010, ready for another career of service, he came to Harvard as an Advanced Leadership Fellow (in a calendar-year-long program I head) to gain background for an alternative energy venture for Liberia. After Fahey had started to line up partners in Liberia, he was joined by Robert Saudek, a 2011 Advanced Leadership Fellow and former managing partner of a large law firm.

The challenges were daunting. Liberia lacked efficient logistics systems and business or consumer finance and was fraught with bureaucratic entanglements for importing and exporting. But in the absence of effective systems, Fahey relied on people on the street, with creativity and local knowledge to found LEN (Liberia Energy Network,  ).

Fahey enlisted Abubaker Sherif as the operational chief. Sherif had been his wife's student when she was a Peace Corps teacher. His sons, whom the Faheys helped send to university, became LEN'sde facto middle management. Working out of a basement storage room in Monrovia, the capital, LEN soon purchased its first shipment of 200 made-in-China solar lights. This represented the entire asset base of the company at the time.

In February 2012, the lights finally arrived after a five-month journey from China via Hamburg to Monrovia. Fahey arrived in Liberia to clear the lights out of customs at the port — a difficult experience in itself. But not a single one of the lights worked. Not one. Fahey contacted the Chinese manufacturer who referred him to the electrical engineer in Denmark, a run-around that could cost months and lose everything.

Though things looked bleak, Fahey and Sherif brainstormed before giving up. Perhaps the lights resembled the electrical system of a car? Fahey recalled, "Abu said, 'Let's go to Benson Street,' which is where there are just kids, young men, former fighters, all up and down the street with their heads underneath cars up on blocks. And the kids are all filthy dirty. We start asking for someone who knows about the electrical systems. This leads us to David and then William." Between David and William, all the lights were rebuilt and started working.

Rehabilitation of the lights helped the venture continue. But the most important outcome was the discovery of resources on the ground. Instead of bringing in foreign technicians, LEN could do product support and provide youth employment at the same time. Less then a year later, Fahey accompanied David to the interior and watched him demonstrate solar lights in a remote village to potential consumers with great confidence and purpose.

LEN distributed 2000 solar units in 2012 on a rapid sales cycle, expecting to reach 10,000 in 2013 and 100,000 by 2017. There is a new headquarters and showroom in Monrovia's commercial district and a rural distribution pilot with the World Bank. A partnership with Save the Children, Liberia's largest provider of maternal and child health, supplies solar lights to their 150 clinics. Reliable lighting enables clinics to provide services at night without relying on dangerous kerosene lanterns, and the solar lights can recharge medical workers' cellphones.
Street strategy is the ultimate in creative problem-solving. Being connected on the ground is only the starting point.

The opportunity lies in valuing unexpected talent from outside the mainstream and listening to wisdom from the bottom up.

In American hospitals, orderlies and laundry room staff create their own safe, efficient ways of working around overly-cumbersome formal hospital procedures, according to research by HBS colleague Anita Tucker. Chinese factory workers making American consumer electronics deploy their own unofficial productivity-boosters when given a chance for their groups to work in private and raised performance with no loss of quality, as HBS doctoral student Ethan Bernstein showed. When French champagne maker Moet Hennessey started its first sparkling wine label outside of France in Napa Valley, California, the American manager who established the Domaine Chandon operation politely ignored many corporate directives and relied on street wisdom among Napa networks, picking people without formal training and listening to novel ideas.

Street strategy is implicit in many successful business actions. Companies entering new communities, especially in emerging markets, increasingly tap their new local employees to help them with grounding. Procter & Gamble sends employees to live in the homes of people in new markets, to see the world from the street up. For some companies, community service via employee problem-solving teams is a street-level window into needs and opportunities that might trigger innovations.
The lesson for leaders who seek innovation and impact: Instead of spending all your time with elites, connect with the streets. That can produce seeming miracles to light the world.

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