Henry Ford once said that “a business that makes nothing but money is a poor business.” With environmental and social conditions encouraging consumers to look more closely at the businesses they choose to support, this statement has never held more true.
At the Allan Gray Orbis Foundation, sustainability is more than a buzz word. Indeed, the organisation was born out of the drive to create sustainable social and economic impact. By creating a vehicle that would do more than generate funds; it would also help to address the triple scourge of poverty, joblessness and marginalization that afflicted black South Africans at the time (and which continues to undermine the country’s economy). This was the sentiment which prompted our founder, Mr Allan Gray, to write to government in 1984, asking for permission to create such a vehicle. Mr Gray envisioned a fund that would make it possible for more black South Africans to participate in the formal economy, thus helping to alleviate many of the challenges the country faced. Given that apartheid was at its zenith during this time, his request was summarily dismissed – but his desire to create change remained unabated.
We are lucky that Mr Gray remained so intensely focused on this goal, because in 2005 – several years into our democracy – poverty and inequality remained entrenched in South Africa, destabilizing both its society and economy. The Allan Gray Orbis Foundation therefore was birthed with the goal of responding to both of these concerns, by working towards an entrepreneurial, equitable South Africa flourishing with meaningful employment. Leveraging the legacy of the financial organisation which spawned it, it also continued Allan Gray’s value system; most notably, upholding his goal of effecting systemic change through entrepreneurship. With this in mind, since inception, the Allan Gray Orbis Foundation has focused unwaveringly on the development of high school and university programmes that combines a great educational foundation with it’s core focus to cultivate an entrepreneurial mindset in all its beneficiaries.
But this isn’t simply about raising a generation of business owners. Our goal is to create a cohort of people who are aware of the problems facing society, and who are eager – and able – to find ways to solve them.
Sustainability: Part of our DNA
This points to the fact that sustainability is in our DNA. For many, the concept of sustainability is a tricky one to comprehend fully, because we’re accustomed to looking at it through the lens of the environment – but sustainability is, in fact, a far broader issue, and should be looked at in the context of Environmental, Social and Governance (ESG) criteria. In fact, this framework may be considered the foundation of any sustainable business. After all, for true sustainability to be achieved, each of these pillars must be addressed. Each is intrinsically linked, and one invariably impacts on the other.
In South Africa, the burden facing businesses in terms of sustainability is an especially significant one, encompassing as it does issues related to B-BBEE – not to mention the social challenges that continue to hamper our growth and development.
This is why the Foundation’s definition of entrepreneurship extends beyond traditional models, or even the idea that grabs most young aspirants; that of founding a “sexy” startup, attracting venture capital and retiring at a young age. For us, it’s about harnessing the power of entrepreneurship as a tool that may be able to solve those social problems; not only the ones that make headlines daily, like poverty, but those which affect the overall wellbeing of our communities, country and planet, such as health and energy alternatives. At the same time, we’re well aware of the contrast between the glamour that surrounds startups and the realities of this brand of responsible entrepreneurship; just as we’re aware that unethical behaviour such as corruption have greater appeal than the hard slog of chipping away at a problem until you find the solution. Our challenge, therefore, lies in making responsible, ethical entrepreneurship something to feel excited about.
This task is made more complicated by a world where even some of our major companies fail to set an example. Indeed, many of the behemoths that currently shape not only our economies but also our thinking falls short – despite their undoubtedly honourable intentions at inception. This is where sustainability really starts kicking in, because all too often, companies are built on foundations that appear solid, yet slowly start to erode in pursuit of growing a profit.
Keeping our promises
Granted, living up to the claims made early on in a company’s life is a big responsibility, and can be difficult to navigate. Doing so requires a lifetime commitment to being mindful. And to honour this commitment, it’s necessary to first acknowledge that business doesn’t exist within a vacuum. More than this, with the business environment in a state of constant flux, companies are under pressure to evolve. One look at the changing priorities of organisations confirms this: a few years ago, racial, rather than gender, diversity topped the list of concerns. Now, the absence of the female voice in the workplace leads the agenda. This points to the importance of keeping track of societal injustices.
Again, this speaks to our ethos: it’s not enough for a business to be built on an exciting idea. To have true impact, it needs to solve a societal problem. This is why entrepreneurship starts with a question: what is bothering me at the moment? Chances are, if it’s bothering you, it’s bothering other people, too. And, by addressing these issues, you’re not only bettering life for the current generation, but for generations to come.
While the Foundation addresses issues related to society through entrepreneurship education and development, it also attempts to be a good corporate citizen, by tending to environmental challenges by minimising water wastage and electricity consumption, while also increasing its recycling efforts. Initiatives related to governance, meanwhile, aim to create a measure which provides stakeholders confidence in our commitment to responsible entrepreneurship. This is what drives us to strive to maintain our record of clean audits and maintain an independent Board – it’s all in the name of walking our talk. This is part of the long-term orientation we believe lies at the core of sustainability.
This long-term outlook is key to our functioning, too – as it befits an organisation dedicated to a career path where overnight success is a myth that is propagated often. We have firsthand experience of this in our own operations. In 15 years, we have supported over 1900 beneficiaries’ educational and mindset development journeys through the Scholarship, Fellowship and Association programmes whilst developing an entrepreneurial mindset of over 25000 youth through the Allan Gray Entrepreneurship Challenge. To date, 168 of those are perusing entrepreneurship and 68 are full-time entrepreneurs. Two of those businesses are valued at R 1 Billion each. This is proof that our approach is achieving success: rather than aiming to create a swathe of entrepreneurs who do not, in fact, have an entrenched entrepreneurial mindset or who do not apply the principles of entrepreneurship to create sustainable, high impact businesses. Our goal is to leave a lasting impression on those we do reach. This objective is driven by our understanding that our entrepreneurs will have a higher propensity to take entrepreneurial action if we develop these individuals holistically, practically and tailored to their specific developmental areas.
Most notably, an entrepreneurial mindset doesn’t flourish instantly; rather, it is a way of viewing the world that is nurtured over time and does not always translate to immediate action. Our aim has always been to support beneficiaries while they complete their studies as education is important leverage, and then continue to support them as they enter the world of work and gain the experience, insights and social capital that would set them up for success when they were ready to start their own ventures. Indeed, age has been shown to be a major indicator of entrepreneurial success, with many studies revealing that the most successful business founders tend to be older than 35.
As we move forward, our long-term orientation becomes even more important. We’ve encapsulated this future focus in our Vision 2030. Chief among these is our objective of seeing 500 new high impact businesses created by our participants; 10 of which would be valued at R1 billion each. When you look at our outcomes from this angle, the proportionate return on investment is expected to be significant.
What’s more, these companies will have an impact that goes far beyond their balance sheets, thanks to the social return on investment. That’s because we’re doing more than simply educating a single individual. We’re also going beyond, helping them to build a specific mindset which will equip them to face a number of obstacles while inspiring them to join the next generation of entrepreneurs. We are, in fact, looking at the family behind that person who will be forever changed; in many cases, our beneficiaries are the first in their family to attend university, effectively breaking a long-standing cycle. That’s before we take into account the nature of the businesses these beneficiaries will go on to establish, many of which will have long-reaching impacts on the Sustainable Development Goals (SDGs).
All told, we’re confident that identifying and supporting the dynamic young changemakers of the future is the way to go. That said, there have been many learnings along the way; learnings which we hope will be useful to other companies seeking to entrench sustainability.
Learning from the past
Obviously, it takes a lot of planning to get things right. If we don’t think about the future, all hopes of sustainability will be dashed. That’s why the Foundation takes care to build up our internal reserves, so that we are able to cover any shortfalls that are not addressed by our donation (which amounts to 7% of Allan Gray Propriety Limited’s profits). We believe that this is a smart strategy for any NGO concerned with sustainability, because it creates resilience in an unpredictable world.
That long-term orientation mentioned earlier is also critical. For me, it comes down to keeping an eye to the future, rather than focusing solely on the present. That means ensuring that any business decisions you make takes into account that the funds you’re able to access right now might change down the line – even if it’s simply because you want or need to scale operations. In other words, you have to build ‘what if’ scenarios into your thinking – something I have found is often lacking – because when the world changes (as it will), you need to have the resources to be able to pivot along with it.
Your far-sightedness should extend to considering all areas of the business, rather than your primary focus area. Yes, it’s vital to offer a quality product or service – but whether you’re an NGO or a corporate, you still need the support of strong marketing, finance and HR teams. Your entity will rely on these teams for different reasons: when the going is good, you need the marketing function to tell everyone; when times change, you need an encouraging HR team to rally the troops and keep everyone focused on a single direction. And, whether times are good or bad, you need your finance function to make sure you have money squirrelled away for a rainy day – because, believe me, they will come.
I’d also like to highlight the importance of monitoring and evaluation – even for NGOs. For a long time, it was sufficient for Public Benefit Organisations to get by on their good intentions, but that’s no longer enough. We at the Foundation have a rigorous approach based on our very meticulous Theory of Change which acts as our North Star and incremental steps to arrive at the most favorable outcome. Similarly, annually we approach our strategies on cascading goals, and that keeps us accountable to our stakeholders.
Of course, the fact remains that no matter how much we achieve, we always want to do more. I am always reminded of the words of our Founder, Mr Gray, who told our Fellows upon graduation that although they have many reasons to celebrate, there is much work still to be done. That’s so true, and it’s something all companies would do well to remember – it’s exciting to start on a journey, but once you have started, it will take all your resilience, creativity and steadfastness to your vision, mission and values to see it through sustainably.