Bob Brody profiles Harvey Koh, a managing director at mission-driven consulting firm FSG, and discovers why he is so passionate about driving businesses toward positive social change.
Go ahead, name the sectors where someone can help develop and scale new business models that benefit the impoverished and, better still, shatter the cycles of disadvantage for generations to come. Water. Health care. Housing. Energy. Education. For two decades now, Harvey Koh has developed initiatives in those sectors and others across Asia, Africa, and the Americas. It’s just what he does — shapes businesses and markets to create positive social impact.
He’s a managing director and co-leads Inclusive Markets at FSG, a consulting firm that advises corporations, foundations, nonprofits, and nongovernmental organizations about creating such impact. Based in London, he collaborates with companies, investors, donors, funders, and governments to build business models that serve marginalized communities. He also conducts and publishes research, and has lead-authored reports such as Beyond the Pioneer: Getting Inclusive Industries to Scale and From Blueprint to Scale: The Case for Philanthropy in Impact Investing.
And yet, he never planned a career in social impact. He started as a management strategy consultant counseling multinational companies. He volunteered for a pro bono project for a nonprofit organization in Ireland. There, migrant workers from Brazil and the Philippines suffered slave-like working conditions and even violence. In due course, he helped the migrants gain the right to be recognized, and treated, as equals.
That turned out to be a eureka moment. “As a business consultant,” he says, “I often sold services that seemed less than essential. I had to find something with value and utility. And I realized this was what I wanted to do with my life. Apply my skills as a strategist to improve how people live.”
Koh was born and raised in Malaysia, in a family resolutely middle class — but, he says, “only a generation away from poverty.” His mother told him how she grew up living in a tin shack without running water. He knows personally about being an outsider. “I grew up gay in an evangelical Christian, Asian family, in a socially conservative Muslim country,” he says. From Malaysia, he managed to get into Cambridge University.
Back in London, Koh set up a venture philanthropy enterprise, backed by the private equity industry, that sought to scale up highly effective nonprofits. But he was eager to go beyond philanthropy and drive businesses toward positive social impact. So, intrigued by cutting-edge initiatives in India, he relocated to Mumbai to team up with Monitor Deloitte and guide entrepreneurs making the housing sector more inclusive.
“I had a lot to learn about international development,” he says. “I ran into more challenges in India than I expected. I went believing everything could come together with a purely market-based mindset. We would replicate the microfinance approach to combat poverty. But I realized that many of the challenges were systemic. So, we became accidental advocates for market systems change.”
All of Koh’s work is now informed by this systemic perspective. He envisions the big picture and connects the dots among philanthropists, governments, nonprofits, nongovernmental organizations, entrepreneurs, investors, and public policy experts. No enterprise can achieve systemic change alone. He compiles reports and PowerPoint presentations replete with charts and graphs, but goes grassroots, too.
“Numbers on a page are needed,” he says, “but what’s important to me is making all those connections.”
Over time, he finds, the abstract is turned into the concrete, the theoretical into the practical, and ideas into action. He goes shoulder to shoulder with local entrepreneurs and market stakeholders. Low-income families are moving into decent homes for the first time. They’re drinking safe water and getting light and electricity.
“Results can take a long time,” says Koh. “But eventually you see how businesses, industries, and markets can be shaped to create greater social impact. It requires a long-term mindset. Seeing people commit to meet a need, seeing the change actually happen, that’s really powerful. It’s what energizes me.” (See Inclusive Markets section below — how the dairy farmers of Gujarat united, and prevailed.)
Eventually you see how businesses, industries, and markets can be shaped to create greater social impact. It requires a long-term mindset. Seeing people commit to meet a need, seeing the change actually happen, that’s really powerful. It’s what energizes me.
In nearly two decades navigating the social impact landscape, Koh has picked up some valuable takeaways about how social investors can shape markets:
Recognize change might be discontinuous. “Radical systems change rarely goes smoothly,” he says. “Too many people think of it as a smooth glide from A to B. But things in the real world often get worse before they get better.”
Partnerships matter, but sometimes subtly. Most scenarios “have no need for a grand formal partnership or some kind of big bang,” he says. “It might just call for unlikely partners getting together, maybe a company with a foundation, or a nonprofit and an investigative journalist. You bring together partners that never would have worked together and move a problem no one ever moved before.”
Abandon fixed preconceptions. “There is no single blueprint,” he says. “You have to evaluate and respond to the market system that’s in front of you rather than one you imagined or grew up in or want to see. That’s how efforts fail. Get out of that trap. Stop being the hammer to which everything looks like a nail.”
Respect interdependencies. A given model may address one or two problems, such as improving housing or health care. But poverty is multi-faceted and kaleidoscopic and, Koh says, you must read the patterns that emerge to arrive at a holistic solution. What are the local politics? How will the children be affected? Only if you understand how systems are organized can your support lead to inclusion.
Understand power. “It’s all about power,” says Koh. “It took me 10 years to understand that. Engaging in power dynamics is how we overcome systemic inequities. It’s a kind of jiujitsu — you need to find the right levers to pull.”
Ownership matters. “It’s no accident that any time how people earn a living undergoes radical transformation, it involves changes in ownership,” he says. “Either the growers or the employees now own the companies. We have to pay more attention to who controls what. If we want wealth more evenly distributed, we have to bring about a society based on shared ownership and shared control.”
All of us, Koh says, should be aware of the systems in place around us, and realize that we each already play a role within those systems. “Inequitable outcomes are systemic,” he says. “So, we have to change the systems — change how they behave. If our most pressing problems are ever to be solved, we have to create systems that will deliver long-term benefits to the entire planet.”
In 1945, in the Kaira district of Gujarat in western India, dairy farmers were struggling. A private dairy had a monopoly on collecting and distributing milk throughout the region, including to the coveted Bombay market, and paid farmers a pittance for their milk.
In response, the farmers appealed to leaders of the Indian independence movement, who helped establish farmer-led cooperatives. The cooperatives staged a two-week strike, dumping milk into the streets rather than surrender to the monopoly. The protests had their intended effect. They broke the monopoly.
But challenges in milk collection, processing, and distribution remained. The cooperatives cleared another hurdle in 1947 when newly independent India leased a government creamery to the cooperatives and gave them direct access to the Bombay milk market. Further breakthroughs saw them turn buffalo milk into milk powder, which smoothed seasonal variability in supply, and expand into butter, cheese, and other products.
Over time, the cooperative innovated in ways beyond the technical, adeptly responding to political priorities and market changes, such as seizing on a foreign exchange crisis in 1956 to convince the government to ban the import of butter — eliminating foreign competition.
In 1970, the government launched the world’s largest dairy development program dubbed “Operation Flood.” It encouraged private and public investments into technology, marketing, and commercial facilities, and transformed India’s fledgling dairy industry into a powerhouse.
By 2000, India had doubled the milk available per person from 1970 levels and dairy farming had become the country’s largest self-sustaining rural employer. The Gujarat cooperatives of this story now generate over US$ 4 billion a year, and most of that value goes into farmers’ pockets, a stark contrast with typical agricultural value chains.
This remarkable transformation shows how a panoply of innovations — supported by diverse actors including the government, the World Bank, UNICEF, Oxfam, and the private sector — can change both market players and market rules, and lead to a more vibrant, inclusive, and fair market outcome.