72936 APRIL 2012 ABOUT THE AUTHOR Against All Odds: ELVIRA VAN DAELE has been an IFC Operations Giving Businesses an Edge in Haiti Officer, Sustainable Business Advisory, Latin America and the Small and medium enterprises (SMEs) contribute to job creation in all types Caribbean for the past four years. She is in charge of Farmer of economies, but they have a particularly critical role in fragile and conflict- and SME Training in the region affected states. In Haiti, for example, smaller companies represent the and is also on the Global team. Elvira’s previous work was as an backbone of the economy, employing about 80 percent of the workforce. international consultant in private sector development for These SMEs face many challenges in managing their operations and setting five years. up sound business strategies—challenges that can lead to limited growth opportunities and difficulties in accessing credit. Following the devastating APPROVING MANAGERS earthquake of 2010, which magnified the already difficult circumstances, IFC Alan David Johnson, Product Leader, Sustainable Business Advisory, supported private sector development by providing SMEs with specific IFC Farmer and SME Training Micheline Nturu, Manager, management tools under the Business Edge (BE) program to help with the Sustainable Business Advisory, Latin America and the Caribbean recovery process (See Box 1). This SmartLesson presents lessons learned and Michel Botzung, Senior Operations insights gained from the Business Edge Haiti project. Officer, Sustainable Business Advisory Box 1: Business Edge BE training programs offer high-quality training tools from the global market—tailored to meet local needs—to help businesses improve their efficiency and profitability. In Haiti, the BE project—delivered by a local firm, at a local price, in the local language—seeks to enhance the business performance and competitiveness of Haitian MSME (micro and SME) owners, managers, entrepreneurs, and others in the Haitian workforce by 1) building the training capacity of local trainers and training providers, and 2) delivering management workshops to meet the increasing demand for management skills development in Haiti. Background Since the 2009 launch of the BE Haiti program, murder. Important success factors have IFC’s local training partner, SOFIHDES1, has included a committed partner, out-of-the- successfully trained over 2,500 people (44 box thinking, timely partnerships with other percent of them women) across the country. organizations, and persistence. Training covers marketing, finance and accounting, human resources, operations and management, and personal productivity skills. “What impressed me the most about the Results include increased revenue, production, Business Edge methodology is the large and job creation—and a satisfaction rate of variety of case studies. There were a lot of over 93 percent. practical exercises. The participant already has the opportunity to apply the newly acquired However, the road to success has not been techniques. There is a very strong interaction easy. The project had to overcome social between the trainer and the participants.� unrest, natural disasters (hurricanes and a very destructive earthquake), kidnapping, and —Tanguy Armand, Atlas Construction 1 SOFIHDES (Société Financière Haïtienne de Développement S.A.) is a Haitian development bank with expertise in supporting SMEs. SMARTLESSONS — APRIL 2012 1 Local trainers conduct top-quality Business Edge workshops Lessons Learned 1) Pick a solid partner—and be extremely supportive when times get tough. It’s important to involve the training provider from the start, support its business development when needed, and closely coordinate all market development activities. IFC signed a Localization of Business Edge training includes translation into French. cooperation agreement with SOFIHDES and, from Day One, provided extensive support to build its trainers’ skills and to help set up a training program from scratch with a local High-level follow-up with the local training provider can at management structure. This kind of support creates a strong times be more time consuming than anticipated. For sense of empowerment and makes sure that the partner stays instance, telephone and Internet connections have often engaged even when all the odds are against it. As a result, been down in Haiti, and onsite travel was not always members of the SOFIHDES team greatly believe in the BE recommended—or possible. In such circumstances, it is product—one of the key reasons the project is still running. important to find creative ways to engage with the local team—and to let them know you are there for them, no SOFIHDES incurred losses (sometimes large ones) for many matter what. For example, after the earthquake, IFC consecutive quarters in the beginning, especially after the coordinated with the World Bank and the Watch Office to 2010 earthquake. We put the project on hold for six months organize emergency relief for the local BE team (including to reevaluate the market environment and adjust the evacuation opportunities) and set up a large fundraising project strategy accordingly, in close cooperation with the campaign for Haiti regionally. On a more personal level, we local partner. SOFIHDES continued investing in the program, attended the funeral of the SOFIHDES general manager. based on a firm belief that adult training is a must to rebuild Working in a fragile and conflict-affected state means Haiti, that the BE methodology has been well received in dealing with extremely strenuous and stressful events and the market, and that the IFC team had provided providing the local team with real support—sometimes unconditional support throughout the tough times, showing including a shoulder to cry on. empathy and understanding after the earthquake. 2) Use a communications campaign to change attitudes toward training—to help people see it as “I think that it would be interesting for all those involved in the an investment, not a cost. Highlight the added management of a business to attend these training workshops. value of Business Edge training, and keep the The manager I was before is no longer the man I am today. . . . message relevant and fresh! Before the training, my company did not have any real operational structure. Everything was informal. The courses ‘Working with At project launch, IFC began a $120,000 communications Budgets’ and ‘Controlling Costs’ gave me significant added value. campaign (see Box 2) to create awareness of the added I went from being a tailor working on one piece at a time to the value of training, to build Business Edge brand recognition, owner and manager of a microenterprise, which now has a small- and to counter the misperceptions that training is a cost (not scale production line, employing about eight persons. My an investment), is not useful, and should be provided for production capacity is now four times bigger, and my personal free. Alignment of the campaign with the launch— income has increased significantly.� combined with an effective use of media—was key to creating brand awareness, and afterwards building brand —Robenson Joseph (Gonaïves) identity in Haiti and stimulating demand for the training program through testimonials. 2 SMARTLESSONS — APRIL 2012 The biggest challenge? The continually changing, difficult market environment. The need to adjust the communications “I own a small shop in Port-au-Prince and always wanted to campaign according to the project’s different stages is grow, but I didn’t . . . have the skills or knowledge to do so. compounded by the additional demands of working in a One day, I heard about the Business Edge program and paid fragile and conflict-affected state. for several management trainings. Soon I saw the investment pay off: my staff now offers stronger customer service, and I Working closely with the communications company and the have begun selling complementary products (computers and training partner, a project such as this one must constantly cell phones). In the six months since I have taken these training revise the message BE wants to convey, depending on the workshops, my revenues have increased by 25 percent, market situation, and adjust to the target group. Close allowing me to hire six additional workers and start thinking of coordination between the local communications company ways to expand my business even further.� and the partner is also critical in preparing testimonials, ads, and other materials. —Sharline DuBuisson, Godcel 3) To keep the project alive and growing, be willing to adjust the strategic focus in response to changing circumstances. • We linked with other initiatives and donor organizations to create synergy. In August 2010, IFC After the earthquake in January 2010, the training market partnered with Engineers Without Borders, INDEPCO, Kids completely collapsed. SOFIHDES kept its training building Connection Haiti, and the World Bank to provide open and rented it out as office spaces to cover the rental managerial training to target groups that could not afford cost, which gave us time to rethink our strategy. The to invest in training. Funding came through a $150,000 following two shifts in strategy kept the project going: postearthquake grant. All the partner institutions also contributed in-kind or parallel financing, paying for the infrastructure or meals or both. Box 2: Campaign Components—and What Worked The grant workshops helped maximize MSME outreach and showed other institutions, nongovernmental organizations IFC launched the campaign with a press conference, (NGOs), and other organizations that BE workshops can be billboards, and a massive distribution of radio spots (the adjusted to reach markedly different target groups. Between media most used in Haiti) and newspaper ads. The radio August 2011 and June 2012, these workshops trained 1,081 spots range from informational (creating BE brand people who would not have had access to managerial training awareness by touting the international recognition of its otherwise. This number, which covered seven cities in Haiti, is high-quality training) to motivational (characterizing 2011 a great selling point for the local training partner in any as the year of opportunities in Haiti, and playing testimonials business meeting. of people who have benefited from BE training). Content of newspaper ads ranges from training-module offerings to Note: When setting up a grant, it is important to make sure “Business Edge News,� which includes results, testimonials, the grant does not 1) cause any competition with the training and business tips. offer the local partner is selling, or 2) make the training provider dependent on IFC to generate business opportunities. SOFIHDES complemented the campaign by making Also, following through is important: after the grant effective use of direct marketing techniques (targeted workshops, some of the training participants clearly needed mailings, direct telemarketing) and social media (Facebook, follow-up sessions, for which additional funding has to be Twitter, and BlackBerry Messenger). And it participates in sought elsewhere—a task that requires a lot of networking trade fairs and supports events that have a lot of visibility, with donor funding organizations and NGOs. such as Digicel Entrepreneur of the Year. At these events, for example, SOFIHDES sometimes offers Business Edge • SOFIHDES went upstream to reach its ultimate target workshops as a prize for the winners. group. The grant gave the trainer pool the opportunity to reengage with the BE program and initially restarted business It is difficult to get hard data on which methods work better for the local training partner. But, in parallel, the partner than others. For anecdotal evidence, SOFIHDES asks people focused on engaging with larger corporations that could who inquire about BE training: “How did you learn about finance training for their staff or SME value chain. Since SMEs Business Edge?� Often, they first heard about the program were no longer in a position to pay for training, this shift in on the radio or saw it in the newspaper, but what prompted strategy allowed SOFIHDES to reach SMEs by going upward in them to make the call was the direct marketing or the their value chain. social media. Note: This change also affected the communications campaign The communications campaign also benefits our local when SOFIHDES adjusted its messages to target the larger partner: in addition to being able to cite the results of BE companies. The training also benefited from the large flood of training, SOFIHDES has found that brand recognition is NGOs and international companies that came in after the important in negotiations with potential clients. earthquake, which motivated Haitian companies to strengthen the skills and loyalty of their staff—to make sure they were not poached by the incoming competition with its higher wages. SMARTLESSONS — APRIL 2012 3 A participant reads material provided with the training. great potential to support job creation and economic development. Therefore, specialized BE management training workshops specifically designed for the tourism sector have been launched in Haiti to strengthen the growing tourism industry. International donor organizations such as the Inter- American Development Bank and USAID also focus on SME growth. Close collaboration has been established with these A newspaper ad for Business Edge in Haiti. organizations to create synergy—and to avoid reinventing the wheel. 4) See big and do big: the larger framework Conclusion provides for an increased development impact. Don’t go blind looking at numbers, but rather listen to the Training as a standalone product is often not sufficient to entrepreneurs; the opinion of the end user makes or breaks create a real-life change for people who are in need of your project. Keep your eyes on the big picture; training is access to credit. Seeing the big picture—from an more effective when linked to wider development entrepreneur’s point of view as well as from IFC’s—is key to strategies. Be persistent and try creative new ideas. Take maximizing impact. advantage of IFC’s great products, which can be adjusted to very difficult market settings and can play a crucial role in In Haiti, access to credit for SMEs is a huge challenge. That’s why a link is being established with the SME funding program that our Access to Finance colleagues set up with a “This training . . . allowed me to increase my production. From local bank. We also work together with a microfinance January to June, I produced 3,600 items (trousers, shirts, etc.). institution to train its SME clients and to get financing for From July to November, after the training courses, my smaller companies that have taken several BE trainings. production increased significantly to 11,107 items. In my workshop I now also share with my employees all the concepts To determine and prioritize the growth sectors—and to that I learned. . . . [I]f I had followed this training earlier on, I define which management training intervention is needed would have achieved much more to date.� to strengthen ongoing initiatives—you can look into the country’s strategy, the World Bank strategy, and the work of —Henri Alexis (Port-au-Prince) IFC Investment colleagues. For example, private sector investment is increasing in the tourism sector, which has 4 SMARTLESSONS — APRIL 2012 Personalized training helps change people’s lives. the SME recovery process when a country suffers a disaster. Most important, consider “These training workshops have definitely your partnership as a marriage, for better and changed the way we manage our business. for worse. These changes are even felt by our customers. Since June 2011, my orders have tripled, and I The BE program in Haiti is a great model had to rent a larger production space. . . . I because of its extraordinary results in outputs have even refused orders which I knew had an and outcomes. As a Monitoring & Evaluation insignificant profit margin, something I would Study could not be implemented due to the have never done before. . . . I’ve never been a postearthquake environment, we have rational buyer, and this has changed since the gathered testimonials from across the country training. They have taught us to better manage to get an idea of the real-life impact. A sentence our time, improve our customer service, and we hear over and over again is, “Vous avez how to better calculate our breakeven point. changé ma vie� (you have changed my life). And I can say that these courses have changed Most of the testimonials we receive indicate an the course of my life.� increase in production and revenues and in job creation. This is a proof that, through providing —Ironce Bienaimé (St-Marc) the right training tools, we can change the lives of SME entrepreneurs in fragile and conflict- affected states such as Haiti and turn them into business managers. DISCLAIMER SmartLessons is an awards pro- gram to share lessons learned in development-oriented advisory services and investment opera- tions. The findings, interpreta- tions, and conclusions expressed in this paper are those of the author(s) and do not necessarily reflect the views of IFC or its part- ner organizations, the Executive Directors of The World Bank or the governments they represent. IFC does not assume any responsibility for the completeness or accuracy of the information contained in this document. Please see the terms and conditions at www.ifc. org/smartlessons or contact the program at smartlessons@ifc.org. *All Photos by Elvira Van Daele SMARTLESSONS — APRIL 2012 5