Archive for September, 2011

Insights from “The Female Vision” for Fonkoze and Microfinance

September 24, 2011 3 comments

Despite my busy fall schedule working as CEO for Grameen Foundation, the book on Fonkoze is advancing in exciting ways.  I’ve written a draft of the first chapter and gotten helpful feedback from my writing guru Mark Levy.  I’ve talked to Jessica Papin, the woman who is likely to be my agent, and she had some great feedback on the overall project. 

One of Jessica’s recommendations is that for the book to have the best chance of success, Fonkoze needs to become better known prior to publication.  So, she suggested that I first write a 10-15,000 word “long form article” for publication in something like Harpers or the New York Times magazine.  (This could push back publication of the book by a year while giving me more time to do research next summer.)  On first blush, I think this sequenced approach is a great idea and most of all, I like the energy and ideas she brings to the project.  It’s exciting to see the team of people who believe in this book and are helping it succeed grow each and every month!

One of the most important and enjoyable parts of writing a book is reading other books whose content and/or approach is helpful.  I recently finished The Female Vision by Sally Helgesen and Julie Johnson after someone who read my earlier blog on Fonkoze as matriarchy.  It helped clarify and sharpen my thinking on this dimension of the organization’s story.  The basic theme of the book is that historically, organizations have evolved to emphasize and reward masculine workstyles and perspectives – not surprising since having women in the workforce in large numbers is a fairly recent phenomenon.  The authors don’t say that male approaches are wrong, just that they are incomplete.  The feminine style/perspective can complement it – but only if it is allowed to.  Companies that leverage both, they argue, are going to succeed. 

As relates to Fonkoze, and its culture rooted in strong female leadership, a couple of passages in the book stick out.  In one, a woman who climbs the leadership ladder in the corporate world slowly loses her ability to use “female intuition” (i.e., the ability to focus broadly rather than narrowly and to digest verbal and non-verbal cues – especially about emotional states – alongside other stimuli much better than men typically do).  The woman reflected on her time in the company and said, “After a couple of years on the job, my noticing capacity got stripped out of me.  My ability to read verbal cues and discern context just seemed to dry up….  It took me years to get it back.” 

I sense that part of what feels liberating to work as a woman in Fonkoze is not getting ones strengths “stripped out” and seeing one’s ability to contribute “dry up” as often happens in patriarchal (i.e., “normal”) organizations.  (At the same time, I have been wondering how my own organization, Grameen Foundation, and others that I am associated with score on this spectrum, and on the experiences of women staff at all levels.)

Other portions of The Female Vision focus on the masculine tendency to emphasize (a) financial incentives for employees and (b) institutional growth.  In one case, senior women resisted an executive’s frenetic drive to grow their company through painful acquisitions (which, in microfinance, is roughly the equivalent of adding the branches needed to double every year, year after year).  “The women knew their company had to keep growing … but they viewed growth as a means to an end rather than an end in itself,” Helgesen and Johnson write.  “Hearing growth itself described as a vision, a purpose, a dream, and a commitment raised for them the inevitable question: Growth in the service of what?”      

I think that microfinance institutions in India and Morocco, almost all of which are led by men, would have been well served by asking these kinds of questions before they embarked on unsustainable and/or unplanned growth in recent years.  (I am seeing a paper I wrote in 2006 urging MFIs to grow rapidly in a new light these days!)  Anyway, Fonkoze has had its own debates about how fast it should grow.  Adding clients to boost numbers and market share never took precedence over quality of service and impact considerations.  (Though, in the eyes of some, it briefly did at the urging of an otherwise well-respected interim CFO who was, as it happens, a man.)  If anything, the concern for doing right by its existing clients has led the organization to become somewhat overextended in terms of numerous pilots and a few large-scale programs that made it through the testing stage.  (By the way, CFI‘s Beth Rhyne has written several excellent commentaries on this subject, including this one in the Huffington Post.)      

Other books I am reading, mostly on the suggestion of Mark Levy, are The Courageous Follower by Ira Chaleff, Writing to Change the World by Mary Pipher, two books about liberation theology (which is critical to understanding certain aspects of Fonkoze and Father Joseph’s enduring fingerprints on it), a book about creative non-fiction technique, and Mark’s own Accidental GeniusThe Courageous Follower is relevant because of the unique – and to me, still rather mysterious – way that the senior staff (again, mostly all women) relate to the de facto leader of the Fonkoze family, Anne Hastings.  (They are dynamic and effective relationships, but for a non-Haitian man they are not easy to comprehend.) 

By the way, there has been a late-breaking development in the careers of one of those followers with potentially major consequences for Fonkoze and Haiti.  Stay tuned…

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Microfinance, Short-Cuts, and Fonkoze

September 9, 2011 2 comments

A natural question people in or close to the microfinance movement could ask me is, “Why write a book on Fonkoze when there are so many outstanding microfinance institutions in the world?”  There are many plausible answers. 

It is operating, with considerable success, in a so-called “failed state” and working with very poor people – at a time when many question whether microfinance can be effective in either context, let alone both.  Furthermore, it is populated by some fascinating people and its history is punctuated by dramatic events.  And as noted in an earlier post, it is a women-led organization in a sense that goes far beyond who the CEO is, and extends to who occupies the vast majority of leadership posts and, not unrelated, who defines the cultural norms. 

For me, the most interesting aspect from the perspective of a microfinance professional  is that Fonkoze has avoided most of the traps that I would broadly categorize as “taking organizational short-cuts” that stunt long-term performance, especially (but not only) social impact outcomes. 

Earlier this year I wrote a paper that will be part of a book published by the Microcredit Summit Campaign and be the basis for a plenary discussion at the Campaign’s meeting in Spain in November.  (Anne Hastings will also deliver a major address there.)  The paper was about how microfinance field staff could help solve the proverbial “last mile problem,” especially in terms of bringing clean/renewable energy solutions and actionable information about agricultural and health care best practices to the poor.  (Fonkoze does a little of the former and a lot of the latter, but it is not a major focus of my paper, which his titled “Towards Reinventing Microfinance through Solving the “Last Mile Problem”: Bringing Clean Energy Solutions and Actionable Information to the Poor.  There is an advanced draft online.)

In an effort to create some urgency for MFIs to provide new products and value in these areas, I prefaced the main part of the paper with a discussion of what was wrong with microfinance today.  The first of five examples I listed was that MFIs’ “products are poorly designed and overpriced, and oftentimes limited to credit.”  This represents one of the common microfinance short-cuts.

It is also an area where Fonkoze excels.  First, it complements credit with other financial services – savings, insurance, money transfers and foreign exchange conversion.  Importantly, it continues to add new financial services – and to refine old ones – to better meet client needs.  Second, it has different bundles of financial products for four different sub-segments of the poor, as their needs and opportunities are not the same (though many MFIs behave as if they were). 

Here are some other short-cuts I jotted down this morning:

  1. MFIs often don’t take the time to develop products (and provide related training to staff) that take advantage of the frequent contact points between clients and front-line employees, in order to maximize client benefit and loyalty.    
  2. Clients are not adequately consulted about the direction of the organization.
  3. MFIs under-invest, if they invest at all, in social performance metrics and performance that can ensure accountability to “social bottom line” goals and improve product design.
  4. Especially in India, MFIs have seemingly raced to add clients and secure “market share” in ways that compromised the quality of service provided. 
  5. Though this is slowly changing, client protection measures, designed to ensure that MFIs “do no harm” to their clients, have been paid lip service but not much else.    
  6. MFIs bypass the lowest-income groups and those who live in the most remote areas in an effort to reduce short term costs and increase revenue.

Mostly due to its own values and culture (rather than as a result of external pressure), Fonkoze has taken a different approach on each of these issues:

  1. Fonkoze aggressively bundles adult education modules with its financial services, on topics ranging from basic literacy, children’s rights, environmental stewardship, disaster preparedness and maternal and child health.  The curricula are developed by adult ed experts and front line staff members are provided training about how to deliver them.  In addition, clients receive other services as resources permit.  When I was in Okay branch in June, we observed children receiving vitamins during a center meeting.  If anything, Fonkoze bundles too much with its financial products and does it in a somewhat fragmented way.
  2. Clients and their elected representatives have multiple opportunities, especially through branch level and later national assemblies, to participate in the process of governing Fonkoze.  This, along with the availability of “bundled services” that are generally of good quality, helps ensure strong client loyalty despite increasing competition and occasional breakdowns in the quality of financial services provided.
  3. Fonkoze has a well-earned reputation as a leader in social performance measurement and management.  They use an international standard tool, Grameen Foundation’s Progress out of Poverty Index, enhanced by additional survey questions that are linked to organizational goals for client benefit.  The data is used in serious and creative ways and flows back into product design.  Social impact monitors work throughout the branch network to audit and advise branch directors. 
  4. While Fonkoze has grown steadily over the years, fragile information systems, risk management, concerns about the need to further refine products, lack of trained middle managers, and overall organizational culture has militated against rapid growth.
  5. Fonkoze has long had a culture where there are frank discussions about how to avoid the “dark side” of microfinance.  Once a global campaign was launched by the Center for Financial Inclusion to standardize a code of ethics (also known as consumer protection standards) for microfinance, Fonkoze was asked to serve on a global steering committee.  Fonkoze’s rapid integration of the evolving code/standards has made it a “poster boy” (or, more plausibly I suppose, poster girl) for client protection in microfinance. 
  6. As mentioned above, Fonkoze has specially designed programs for the poorest people, programs that are clearly priorities of senior management.  Their employees go to great lengths to reach isolated communities (as anyone who has ever done a field trip with Fonkoze can attest). 

Don’t get me wrong.  Fonkoze has many problems and deficiencies.  (What organization doesn’t?)  But even before you take into account the harsh environment it works in and how that impacts talent recruitment and development, loan portfolio performance, and a myriad of other factors, Fonkoze’s “take no shortcuts” approach makes it an impressive and important case study for how to take the concept of “microfinance with a social purpose” or “double bottom line microfinance” to the next level.

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Reflections on Book-Writing

September 6, 2011 2 comments

Today’s blog will be about the book writing process.  I am working on another post related to Fonkoze and how it stands out in the fast-changing world of microfinance.  It will appear in this space later this week. 

Ah, my journey with writing.  To take you back a bit in my life, I transferred from a public to private NY City school in 1978, and it took me more than half a year to catch up with my fellow students.  Many of them had enjoyed enriched educational opportunities from kindergarten.  The one subject I lagged in for my first three years at Horace Mann School was English.  Like many students, I started to simply assume that I was a bit dull when it came to understanding literature and writing.  I took on the persona of the classic male child who was numbers/math oriented.  Whether for rich country students like me or a poor woman in a less developed country, such stereotypes can become self-fulfilling prophesies that stunt latent potential.   

In my case, I lucked out and had three years of exceptionally good English teachers in tenth through twelfth grades: one year with Randal Castleman and two with Robert McCardell (both have sadly passed into the big classroom in the sky).  As a result, I came to love literature and, even more, writing.  This “voice finding” process culminated when I was in Bangladesh in 1988-9 as a Fulbright Scholar.  I wrote long, hand-written letters to Sam Daley-Harris, the founder of RESULTS (an anti-poverty advocacy group), and he had them typed up and sent to hundreds of his volunteer activists around the world.  The experience of observing, reflecting on and writing about positive social change — and then having people read and be energized by what I wrote — was almost intoxicating.  And it still is. 

When I began contemplating this book on Fonkoze, I tried to be realistic.  I had not written a book in the “creative non-fiction” genre from scratch since the mid-1990s.  If this was to be the next “Mountains Beyond Mountains” (Tracy Kidder’s critical and commercial success about Paul Farmer), I probably needed access to a  publishing/marketing expert. 

Voila!   On the advice of Meredith Kimbell, a first-rate management consultant who has been working with me since 2005, I reached out to Mark Levy, the best-selling author of “Accidental Genius” and a marketing and writing consultant.  Mark agreed to take me on for half his normal fee because he believed in the cause of self-help through microfinance.  We had several conversations over the summer leading to a two-day workshop/boot camp in his home in New Jersey last week.  A few days earlier, I decided to extend my collaboration with Dystel and Goderich Literary Management and sent them a draft of my book proposal. 

My time with Mark was an intense, fun, enlightening and humbling experience.  We talked writing, Haiti and, from time to time, baseball.  (He is a die-hard Mets fan.  I have been following the Phillies since 1975.  Need I say more?)  When my housing plans fell through due to damage from the recent hurricane and local hotel prices shot up, he and his lovely wife Stella graciously agreed to host me in their home during my stay in the area.   

The most valuable insights I took away from the workshop were:

  1. As a self-taught writer who has never taken a creative writing class, I realized that while I have a certain degree of natural talent I could also benefit from some of the blood and guts of “Writing 101.”  Mark gave me a crash course including some exercises, books, and things to think about in the months ahead.
  2. Serious writers read a lot more than I do.  And when they read, it isn’t always for the content, but it is often to immerse themselves in good writing regardless of the subject. 
  3. Writing is often more compelling when the strongest word in a sentence is also the last.
  4. Especially in certain types of non-fiction, such as instructional or self-help books, it is important to write down the key idea(s) before starting to write — and then make sure that they are reinforced on virtually every page.  This is also true, though perhaps to a lesser extent, in the kind of book I am setting out to write. 
  5. Recalling techniques I used researching Small Loans, Big Dreams, I realized there is no substitute for attentive observation of telling detail and painstaking research into every aspect of a story. 

I have a lot to think about as I try to move this project forward while back in the role of leading Grameen Foundation through an exciting and challenging time in its history.  Thanks to Mark for igniting a renewed love of reading and writing, while at the same time causing me to wonder if I am up to the job of producing a great book on Fonkoze and its microlending adventures. 

One final note: In 2007, I was honored to receive Horace Mann School’s Distinguished Achievement Award.  In my Acceptance Remarks I mentioned — among many others — the influence of my English teacher Randal Castleman.  He was in failing health at the time, but elevated the evening by somehow taking part.  If I pull this project off, I’ll have him to thank along with Mark and many, many others.

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