Corporate strategy and COVID-19. Dalberg Advisors’ Global Managing Partner, Edwin Macharia, joins Alberto Lidji to discuss their advisory work in the global south during this pandemic
Dalberg is a strategic advisory firm serving a wide range of clients, from foundations and NGOs to private firms and governments. The firm was founded in 2001 and aims to create a world where all people everywhere are able to reach their full potential. In this episode we discuss how they're tackling COVID-19 implications and advising their clients accordingly.
Development and impact is key for Dalberg and, today, they are a group of companies with 30 offices globally and interests in a wide range of activities, including: human-centered design, data analytics, on-the-ground research, transaction advisory, media and advocacy, and increasingly implementation capacity.
Edwin started his career at McKinsey & Co in New York in 2001. He notes how 9/11 was actually his second day at work and it was a defining moment in his life that helped shape his outlook and appreciation of impact and the importance of things besides traditional shareholder value maximisation.
Dalberg works closely with national governments, the UN ecosystem and multilateral agencies. They’ve become the largest top-tier advisory firm in Africa; larger even than those that don’t focus on mission and impact to the same extent. They appreciate that many markets in the global south are the most forgotten and the least able to access professional support, and they’re keen to ‘localise’ their approach, meaning that in any given country where they operate, between 60% to 80% of staff are from that country themselves.
Thematically, they cover everything across the UN Sustainable Development Goals (SDGs) since, as Edwin notes, everything is tightly interconnected. You can’t fix malnutrition in children, for instance, by focusing on health alone. The drivers may well be agricultural issues, or trade issues, or education issues – everything is interconnected.
COVID-19 has been a major shock to every single client they serve; private, governmental, philanthropies; it has impacted everyone across the board. When advising clients on how best to brace themselves for the arrival of COVID-19, there are three core things they’re focused on:
Firstly: Understand thoroughly what the situation is today, and respond appropriately. If you’re a private venture, consider your supply chain, your workforce and your distribution networks, for instance. If you’re a government, what does this do to your fiscal space and your ability to raise taxes. If you’re a philanthropist, which places do you invest in, and are you taking a portfolio view. Even in this immediate context, what are the things you can do today that can have a long-term impact for your own organisation and business. Edwin emphasises that in the middle of a crisis nobody has perfect information, so you need to have a system to constantly assess what’s going on so you can respond accordingly. Also, recognise that the decisions you made yesterday may not be the correct ones for today, since you may now have new or better information that you didn’t have before.
Secondly: Start understanding what are the mid-term impacts that COVID-19 will likely have on your firm, government or philanthropy, and make decisions that provide for the best possible floor for your organisation so you don’t crash through it and therefore are unable to recover when this crisis concludes.
Thirdly: Proactively start to plan for what the post-pandemic world could look like. Because the decisions you make today could lock you in a negative space if you don’t think long-term enough on what recovery begins to look like – you may be tempted to get rid of capabilities or assets or partnerships that you might need to reacquire further down the line.
It is important to recognise that the first thing you’ll feel is panic; the world is falling on your head and you don’t know what to do. It’s important to acknowledge this but, also, you need to park that to one side and then move to a more deliberate approach to understand the expected impact on your organisation and then start to plan appropriately for what the response looks like.
Even at Delberg themselves, they started tracking COVID-19 in early January 2020 and once they realised that this virus wasn’t going to be contained in China, they very quickly started having business continuity conversations and ensuring the most important matters got attention from the very most senior leadership in the firm. We don’t know what the crisis will look like but we know that we can prepare today as best as possible so we can aim to respond appropriately.
Towards the end of February they stopped all international travel at Dalberg, which was very difficult to do, especially keeping in mind their on-the-ground research and human-centered design work. This was difficult but it was the right decision to protect their staff, the communities where they’re based and simply to be good citizens of the world and reduce the risk of transmitting this virus as they’re travelling through airports.
Edwin is based in Nairobi, Kenya, and he explains how there, too, they experienced initial panic followed by anxiety. This is a challenge for government leaders because on the one hand you want to protect the health of your citizens and on the other you want to protect their livelihoods – many people don’t have savings and are manual workers. It’s a very challenging reality. In some communities social distancing is simply impossible, with high-density communities, no running water, no possibility for remote working. A taxi driver or a labourer in a construction site simply cannot telecommute and, yet, these are the most vulnerable segments.
In response, Dalberg is incubating coalitions that can tackle these challenges in effective and scalable ways. ‘Safe Hands’ is one such initiative. It’s a coalition of Dalberg and new tech companies in Kenya, and manufacturers and distributers aimed at providing the hand sanitisers and face masks so desperately needed, and ensuring as much as possible of these get to informal communities. It’s large scale manufacturing at the lowest possible cost. Almost everyone in the coalition has said they’re putting aside the profit motive to ensure they’re protecting these more vulnerable communities.
Another initiative focuses on unconditional cash transfers to those who are most vulnerable. These cash transfers help people so they can continue to operate and exist as individuals. Cash has a strong economic multiplier because it ensures the local shopkeeper is still able to sell products and, therefore, the supply chain is maintained.
They’ve started these two coalitions in Kenya, but their aim is to use these as examples for others to build similar coalitions in countries across the globe. They want to share the model, the lessons they’ve learned and ensure they share this insight with others.
Edwin notes that some philanthropists in the global south have stepped up to the challenge; Aliko Dangote being one such example. The bit Edwin underscores from a global north philanthropy perspective is that everyone is being called to support the same cause. Everyone is being approached to help with COVID-19, irrespective of whether they live in San Francisco or Zimbabwe or Senegal. This is a departure from what has traditionally been the case, where philanthropists in the developed world would be approached for very different things in their local community versus the needs they might address in the developing world.
Also, because of distance and the inability to travel at present, it’s important for philanthropists to listen to insights from the frontlines. What’s happening in response to COVID-19 in California, for instance, may be interesting but not necessarily directly transferable to what’s happening in Tanzania. So, if you’re already working with partners in the front lines, be much more attentive to the things they say they need, versus looking at your local partner simply as a ‘delivery partner’.
Edwin also brings into the conversation the need to pay attention to what’s happening in the global east. The people who are furthest along in dealing with COVID-19 largely sit in the global east – China, Singapore, Hong Kong. They’re weeks if not months ahead.
Unfortunately, though, from a technical perspective, the link between the global east is weakest with the global south. So, a lot of this knowledge tends to be intermediated by a Western institution. The China context in a development perspective is much closer to an African context than New York or Italy, for instance. Edwin recommends that as philanthropists today are thinking about where they can provide support today for global south partners; rather than the traditional question of how do I go through a global north institution, which then works with a global south institution, ask yourself 'can I actually find a way to tie the connection between global east and global south'? Because this transmission of knowledge is what needs to happen in a much more accelerated way in today’s world.
Key takeaway: He wonders, how can we expand individuals’ moral universe. How can we expand empathy and people’s understanding of just how connected we all are. Therefore, looking out for each other is in our own selfish best interests. Hopefully, when we look back on this crisis, we can say 'did we build back better' because all our interventions had a person at the centre of what we were trying to achieve. And that person was not those who we currently consider to be in our moral universe but it’s actually much more global and much more expansive. Because this is the only way we will find long-term solutions to this challenge. To Edwin, COVID-19 is the first of challenges humanity is going to face. Climate change is just waiting around the corner. We can use this crisis to build back better; an ability to respond will require us to all start from a position of greater and deeper empathy, particularly for leaders across the world, and then hopefully create the systems and institutions to make that possible.
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