- Emily Williams
3-Days in the Life of the OG of Impact. Day 1
In 2018 I went to Charleston to spend time with my friend, Stuart Williams, to see for myself what drives him, and what makes him do the things he does. This is my report from Day 1.
~ Lawrence Bloom
In 1993 Stuart co-created the original platform of "Making A Profit While Making A Difference". This was a full quarter of a century before Larry Fink, the vast majority of the members of the The Business Roundtable, and other global business leaders in Davos 2020 started calling for change and extolling the virtues of Leadership and Management through the lens of Profit for Purpose and Multi-Stakeholder Capitalism.
Thought of as some kind of "liberal hack" (Stuart is actually fiscally and militarily center right and socially and environmentally middle left), Stuart freely admits that 25 years ago the initial search for traction to the platform was arduous. "Everyone could not have been nicer, and I got to drink numerous cups of tea with many remarkable people, however, I got very used to being shown the door without obtaining the results I had hoped for", he says.
The company he co-founded in 1991, The Strategic Research Institute (SRI), quickly became a global powerhouse in the C-Suite, business-to-business conference industry, thereby giving him a platform to continue pushing his ideas forward. "It was not long before SRI was holding over 100 conferences each year on multiple continents and, as such, I was regularly rubbing shoulders with global heads of state, leaders of the world's largest corporations, and owners and managers of the world's largest asset pools". Stuart went on to sell the New York based company in 2006, at which stage it had held over 2,000 conferences, targeting 7 industries, on 5 different continents.
Stuart recalls a seminole moment in the late 90's where at one of his own conferences there was a great deal of joy about 5% of the world's assets being managed using social and or environmental screens. "The people on the panel felt that it was a 5% success, when I challenged them that it was actually a 95% failure we all had to admit that the message we were putting out was not resonating with people". According to him, there was a realization that the community representing TBL, ESG, SRI etc., had done a good job in selecting new acronyms for the same thing, but had not moved the needle in its approach to gaining adoption.
The dawning of a new century brought opportunities and challenges. In the circles Stuart moved in the very late 90's, Impact Entrepreneurship and Investing had become a "thing" and there was hope that this might be the catalyst that people were waiting for. However, the events of 9/11 slowed momentum as many of the evangelists for "Impact" had to focus on saving their own core businesses. "I was running a business that was 100% reliant upon people's ability and willingness to travel, and quite rightly, both of those necessities were taken away by the terrorists attacks".
Ironically, also in 1993, SRI held its first Asset-Backed Securities conference and it soon became the number one event in the world for professionals working in that sector of finance. Stuart had a "ring side seat" for the incredible growth in Asset-Backed Securities noting that "the first conference had +/- 400 attendees, but when we sold it to the American Securitization Forum (ASF) in 2004, the conference had over 4,000 participants", he mused. The sale included a management contract for 3 years and a move of the conference from its historic location in Scottsdale Arizona to Las Vegas Nevada, and an ultimate increase in the number of attendees from 4,000 to almost 8,000 people. "The conference you see in the movie The Big Short was that conference" he says. He goes on to say, "how ironic that Asset-Backed Securities played a major role in the collapse of the financial markets; that the very conference that was started the same year as the creation of "Making A Profit While Making A Difference" was in the movie; and, that the collapse of the conference and the financial markets in general would become a rallying cry for adopting the very tenets of "Making A Profit While Making A Difference".
The tenets Stuart speaks of ring true today:
1. Make as much money as you want, not at the expense of any segment of humanity and or the planet.
2. Once you have achieved step 1, now make as much money as you want but do it by driving positive Impact to segments of humanity and or the environment.
Stuart likes to say that even though those two statements sound similar, they are actually a long way apart.
Whether by luck, divine intervention, or their business smarts, Stuart and his partner sold SRI in 2006 to Bruce Wasserstein's private equity firm, Wasserco (now Eagle Tree Capital). As part of the sale, he joined a 5 person Executive Team challenged with integrating 6 of Wasserco's portfolio companies into one, then, on August 15th 2007, (one week before the financial crisis truly started) the team sold the company to Incisive Media in England.
Stuart then took off for New Orleans to decompress and to think about how best to transform capitalism using the Making A Profit While Making a Difference platform. He spent the best part of a year going back and forth to New Orleans to build houses with Habit for Humanity for victims of Katrina but, actually spent most of his time helping people with their consumer debt.
"I can remember the words as if they were yesterday", he says with a smile. "Before you kill yourself, or even worse kill someone else, do you think you could find something other than building or demolition to do", was the sage advice from the foreman at Habitat. "I had just run through a wall to knock it down quickly without realizing it was still holding up the ceiling", Stuart says. This, after a series of other blunders, resulted in the appropriate reaction from the foremen.
Because Stuart had worked alongside people who were actually going to be living in the homes being built, he became aware of the abhorrent levels of predatory lending that were prevalent in the communities effected by Katrina. So, ever the entrepreneur, he set himself up on a sidewalk with his cell phone and an old table, and called each lender on behalf of hundreds of people with credit card debt, car loans, mortgages etc., etc. where the terms were so onerous the borrowers would never be able to pay off their loans. "At first, people just hung up on me and it was almost like being back in 1993. However, when I threatened to have the local Network News affiliates film the lines of people waiting to see me, and the lenders saying no to loan modification requests, I got the traction and results I wanted". Stuart managed to get loans forgiven, interest rates reduced, payment holiday's etc., etc., etc. for many, many people, and it again strengthened his resolve to find a better way.
Upon completing his "detox" work in New Orleans, Stuart began to focus on the root cause of the socioeconomic and environmental problems we face. "The first step was to erase the chalk board as there was no way to add new plays to a play book that had been broken for so long", he mused, "also, starting from scratch allowed us to see the wood from the trees". Us to Stuart, means his 3 children from his first marriage. "We decided to see for ourselves why the base of the socio-economic pyramid does not work", he stated, which became almost a two year project.
Stuart and his family used focus groups made up of people living in disenfranchised communities to try to get to the root of the problem.
In room A, they convened a cohort of the eldest community members who were at least 75 years of age
In room B, they convened a cohort of community members who were in their early 20s
Both groups were asked the same questions relating to the "choke points" preventing empowerment and progress. However, the older community members were also asked to think back 60 years and provide appropriate answers for that time.
Once complete, all participants were invited into the same room where they were joined by their community's religious, philanthropic, government, and business (if any) leaders to see and discuss the results.
In virtually every community they were in the answers to each set of questions were almost identical. Worse, the answers from the elderly residents were almost identical to those form the younger residents, and worst of all, was that the answers from 50-60 years ago were the same as the answers today. Thus, it was clear to see that over the past 60 years, nothing had changed, and some even argued (and with good reason) that things had become worse.
Through deeper research, Stuart and his family discovered that:
Poverty is driven by economics.
The vast majority of poverty eradication initiatives focus on the effects of low economic vibrancy e.g. hunger and a lack of access to fresh, healthy food; homelessness and inadequate housing; sub-par education and healthcare; violence and inter-community crime; high rates of unemployment; and inadequate transportation, to name a few. However, this has been like trying to cure the symptoms, while paying no attention to the disease.
Most initiatives are designed to be win/lose i.e. if one community segment "wins" one or more others "lose". This creates polarization and ultimate failure.
There are clear choke points that prevent top-down capital from supporting bottom-up innovations. Many of them hide in plain sight.
Many initiatives are designed to continue Entitlement as opposed to transforming to Empowerment
Numerous initiatives are not "In Place" i.e. they try to help from afar
Poverty is an economic model, and hence it is driven by economics. To date, most initiatives have been driven by philanthropy or government programs, hence we have been fighting economics with charity. That is not going to work, hence the current results.
Armed with the root cause of the problem, Stuart and his family believed they could design a solution that:
Fixed the root cause i.e. lack of economic vibrancy and not just the effects
Empowered every community stakeholder and community segment by providing each with a seat at the economic table
Produced tangible benefits for each entity at the table but in a way where if one benefits they all benefit
Ensured Each Solution was:
Used a circular economy based upon "Making A Profit While Making A Difference"
Focused on business & economics more than charity and philanthropy
Unlocked the capital flow choke points
Placed economic, social, and environmental balance at the center
They also surmised that any program that could help the rich get richer (if they wanted to be) even if it meant that the poor got "rich", would not be received well by the capital flow choke points hiding in plain sight and they were right. To read about that you will have to wait for his book, "Pimping Poverty" to be released soon. However, here is a snippet that relates to this article as Stuart strongly states:
"For decades the .1% have been demonized as being a major problem in the goal to eradicate poverty. However, it is time to take a hard look at reality, and to stop blaming those trying to help.
Ask yourself a question. Do you know any family of ultra wealth that does not donate copious amounts of time, money, passion, and purpose to initiatives they care about? We have asked just over 500 people from all over the demographic spectrum, and to date, not a single person has said yes. Needless to say, and based upon our personal values and virtues, we can disagree with the causes each one of us supports, however, there appears to be no doubt that families of wealth truly do help with their time and capital.
Now ask yourself a second question. Why is the poverty problem getting worse, when over the past 60 years, billions of dollars have been donated, gifted, granted etc., to millions of people purposed to eradicate poverty? Maybe, it is simply time to play "follow the money", to see where the choke points are that prevent "Top-Down" capital from finding, funding, measuring, and scaling "Bottom-Up" innovations. (At In Place Impact, they call that find, fund, measure, scale, repeat).
There is no doubt that on many occasions, only small percentages of the capital released from the "Top", finds its way to the intended targets at the "Bottom". Our belief is that a large portion of it never makes its way passed the middle of the demographic pyramid, i.e. the sector that makes an incredible living, out of those who have made an incredible fortune. This sector includes the government policies that don't just keep the status quo, they make it worse!
Further down the demographic pyramid (at the community leader level), we ourselves have been told not to "come in here and rock the boat", when we have provided free help for those living within those communities. After 25 years worth of work, we no longer look at the demographic pyramid being a single shape, but rather a pyramid that in of itself is made up of a myriad of smaller pyramids inside it, each with a "Top" and a "Bottom".
It is plain to see that there is no "direct line of sight" between the "Top" and the "Bottom", and that the current conduits channeling capital from one to the other have way too many choke points within them. Without a direct line of sight, people hold on to narratives that are not based upon fact.
One narrative that has been socialized throughout the "Bottom" is that the people in the "Top" do not care and they do nothing to help. This could not be further from the truth. One narrative that has been socialized throughout the "Top", is that the people in the "Bottom" are there because they want to be, because they are lazy, and because they want handouts. This again could not be further from the truth.
In summary, we need to stop blaming the "Top" and or the "Bottom", and focus on the choke points preventing high percentages of "Top-Down" capital from fully supporting the "Bottom-Up" innovations they target. Eradicating poverty in America has proved hard enough, if we do not remove the choke points that are hiding in plain sight, we will never succeed. The "Top" and "Bottom" need a direct line of sight to each other".
Using all of the above, Stuart designed Impact Economics which is a business-driven, inclusive economy that through its natural operation starts to increase economic vibrancy within every segment of a community. It is 100% inclusive of all community stakeholders, and drives positive benefits for each one, however, if one segment benefits, they all do.
Impact Economics provides the following community stakeholders with a seat at the "circular economy table":
City, Municipal, State, and National Governments
ALL Community Residents
ALL Community segments
Impact Economics uses Inclusive Capitalism to create community-based (in place) economies where:
Economic vibrancy is increased in each and every segment of a community
People are empowered to create a better quality of life
The effects of poverty begin to be eradicated purely through the use of business and economics
Every community resident can participate in and personally benefit from the drive to create a sustainable future
Not a single entity is asked to donate anything
Capital flow chokepoints are unlocked
No segments within the community are demonized
Every community segment has a direct "line of sight" to the others so that misleading narratives can be changed
Communities can become economically, socially, and environmentally sustainable for all residents
Everything is done In-Place, and the beneficial results remain In-Place
Increases in economic vibrancy remain In-Place
Local people build their own companies to help every stakeholder within their communities
Success is politically agnostic
To prove his model worked, Stuart set in place a 5 - year pilot in Charleston, SC which ended in May of this year. "The results were beyond my expectations, Impact Economics really works and it has been embraced by the City, The Mayor, The College of Charleston and multiple business, community and not-or-profit leaders, and community residents and students. It is allowing anyone the opportunity to participate in and personally benefit from the creation of a sustainable future. By using Impact Economics, Charleston will become a community that is economically, socially, and environmentally sustainable for everyone".
When you visit with Stuart in Charleston and you see Impact Economics at work, it is hard to imagine my quote about him is wrong:
"As the world continues to talk about developing new community based economic systems and adapting capitalism, In Place Impact has done it. Furthermore, they have tested their models for almost a decade, proven that they work, and are giving 6,000 people the opportunity to deploy them in their communities"
Stuart and his team are now scaling Impact Economics in communities across the world. Impact Economics is already in Costa Rica, Honduras, Guatemala, Liberia and multiple states across the US. They invite anyone to come to Charleston to see it work and they have an amazing program to Certify people to do this in their own communities i.e. "In Place". They run it all through www.inplaceimpact.com.
Once at scale, Stuart believes that Impact Economics will be the annual catalyst for the following:
$2B of funding for Impact Studies in schools
$600m to fund locally grown Impact innovations
2.5m students and community residents taking Impact Studies classes
500,000 companies embracing the Leadership and Management principles of Profit for Purpose
60,000 jobs in the Impact genre
2,000 Impact focused for profit companies being launched
Increases in economic vibrancy in marginalized community sectors
Critical steps being taken for communities to attain the SDGs
The creation of communities that are economically, socially, and environmentally sustainable for all residents
To spend time with Stuart is like having a quadruple espresso with a Red Bull chaser. His mind is never quiet, and his red shoes are a blur as he paces back and forth in front of a multitude of Whiteboards. His phone rings constantly and requests for his time seem to fly in by the minute, but somehow, what seems to be completely manic and random ends up in a clarity of the problem and the simplicity of the solution that I have rarely seen.
I can see why people are drawn to Williams, and I can see why they believe he has indeed designed the future of sustainable communities, businesses, capitalism, and economics.
I ended my visit watching Stuart help mentor a group of undergrads at The College of Charleston where he runs the Rebecca and Stuart M.Williams Impact Scholars program, and where he also designed and helps teach the award winning ImpactX class. To end the class he tells his students this:
"What is in our heads makes us marginally dangerous to the status quo, but what is in our hearts makes us a global force to be reckoned with".
What a way to finish my first day in Charleston, knowing that through our youth we have hope for humanity.