A Company for BAM Practitioners to Watch

One of the goals for those starting Kingdom businesses is to model God's love in the workplace. One of the key decisions to make involves what wage to pay workers. Is it a good witness to run a factory and pay the prevailing wage? Sure, you'll pay your workers for all the time worked, provide them humane working conditions and treat them with dignity. But what if the average wage paid by other factories in the area isn't enough to provide a decent standard of living? For that matter, how will you determine what constitutes and "decent standard of living"?

Once you determine a good wage, then the challenge is maintaining a competitive edge. In the US, where access to quality to workers is often constrained, companies like Starbucks and Zingerman's have found that providing above average compensation packages (compared to their competition) lowers turn-over and provides a better customer experience. This in turns helps them maintain premium pricing and maintain profitability. It's no panacea but it is an effective strategy.


The New York Times today writes about an apparel company that is seeking to determine if this will work in a third-world country like the Dominican Republic—
An Apparel Factory Defies Stereotypes, but Can It Thrive? - NYTimes.com. Will this work in a country where workers are plentiful? In China, we're starting to see a shift as demographics works against the mighty dragon as workers, now increasingly in short supply, get more selective. So factory owners are starting to look elsewhere for cheap labor (see the recent NYT article on Bangladesh moving in on China.

Is it possible that the answer is not to "look for the cheapest labor" but to build a competitive advantage through building a loyal, loving workforce?

Knights Apparel is running the experiment and I will surely be routing for them.

The economics of social progress

On McKinsey's "What Matters" blog, Iqbal Quadir, founder of the Grameen phone company writes an excellent article on the interplay between profit and social enterprise. Among other topics he discusses why charging for a service (v. giving it away) provides a better foundation for scaling the ability to help people than giving it away. He also shares some lessons learned about pricing and the need to hold firm to pricing strategies that allow a service to become profitable, even though it may limit the near-term social benefit. In the long run, the prices drop as the service scales, thus bringing economic benefit on a much broader scale than could achieved otherwise.

Business as Mission and Scale

Something I’ve noticed as I read through the literature on “Business as Mission” is that most of the efforts are focused on a relatively small scale. There is nothing wrong with starting small, but there almost seems to be a “common wisdom” that starting out small is the only way to go.

While I won’t argue the value of proof-of-concept efforts, there are times when small won’t cut it. Certain ideas need to start out at a scale that necessarily involves a great deal of risk. A good example is the Grameen Phone company started by Iqbal Quadir and discussed in his TED talk below:

Patient Capital: A Third Way to Think About Aid

For the past year I’ve been thinking about ways to use my entrepreneurial skills to help the international communities I work through the Vineyard. The ideas around “patient capital” that Jacqueline Novogratz proposes seem right on the money, so to speak.

Dead Aid

I first read about Dambisa Moyo's ideas about the dangers of foreign aid in the NYT Magazine (see The Anti-Bono). I was particularly struck by her answer to the question:

Q) If people want to help out, what do you think they should do with their money if not make donations?

A)Microfinance. Give people jobs.

Here's another post about her book:
Dead Aid | Varlden idag

I just ordered it from Amazon (as if I need another book to read :-)