How Goldman Sachs deployed a far-reaching, data-driven strategy to further the cause of women’s entrepreneurship.
Magazine Extras (Summer 2014)
Supplement to the article “Applied ‘Womenomics.’”
In 2010, Madhu Chandrika realized that her commercial art business—Earthen Symphony, based in Bangalore, India—had reached a point of stagnation. The company, which she founded in 1995, still held potential for growth. But without proper management expertise, she didn’t know how to expand. Chandrika struggled in particular with pricing the products (murals, pottery, carved furniture) and services that she sold. Being the only woman in a company with 14 employees took a toll on her sense of confidence as well. “I had apprehension about whether I was doing right by following my dream of running my own business,” she says. Chandrika scouted the newspaper, hoping to find information on a long-distance MBA program, and came across an advertisement for something called the 10,000 Women Initiative. Through that initiative, she would be able to enroll in a program conducted by the Indian School of Business. Chandrika applied immediately.
Upon acceptance into the program, Chandrika took more than 100 hours of coursework in networking, marketing, and other relevant skills. She met with a local businessperson who served as a mentor, she garnered invitations to dozens of networking events, and she partnered with a paid consultant who acted as a business advisor. “Until then, I had been working in isolation,” says Chandrika. “I started feeling proud of myself. It was the first time that I acknowledged myself as an entrepreneur.” By 2012, just two years after she graduated from the program, Chandrika’s company had doubled its number of orders, doubled the size of its workspace, and doubled its number of employees (half of whom were now women).
The 10,000 Women Initiative began in 2008 as a five-year program sponsored by the investment bank Goldman Sachs. Funded with a $100 million commitment from the Goldman Sachs Foundation, the initiative aims to provide training and support to women entrepreneurs. Participants receive full scholarships for specially tailored short-term instruction at leading business schools. The program operates in 43 locations worldwide—from Afghanistan to Brazil to Rwanda—and by the end of 2013, it had produced 10,000 graduates. In surveys funded by Goldman Sachs, 73 percent of graduates reported that they had created new jobs, and 83 percent reported that they had seen their revenues increase, since going through the program. The women selected to participate in 10,000 Women return the favor by helping colleagues: In a survey, 90 percent of graduates reported that they mentor other businesswomen in their community.
This past March, the 10,000 Women program renewed its commitment to women’s entrepreneurship by partnering with the International Finance Corporation to launch the Women Entrepreneurs Opportunity Facility, a $600 million fund that will provide capital to as many as 100,000 women business leaders in emerging markets. The Goldman Sachs Foundation has pledged $32 million to this phase of the initiative, and the firm plans to continue operation of the 10,000 Women training program as well.
The idea for 10,000 Women grew out of research done by Kathy Matsui, a Goldman Sachs strategist based in Japan. In 1999, she began writing a series of reports based on the concept of “womenomics,” which focuses on the impact of increasing labor-force participation by women. A report that Matsui issued in 2005 caught the eye of senior executives throughout the firm, including Lloyd Blankfein, chairman and CEO. “This research showed that investing in women was truly the smartest possible investment that we could make—and the idea of 10,000 Women was born,” says Noa Meyer, global program director for the initiative.
The design of 10,000 Women charted new territory, according to Jeri Eckhart Queenan, who leads the global development practice at the Bridgespan Group and who consulted to Goldman Sachs on launching the program. “They found a new intersection in the field by combining small- and medium-sized enterprise development with women’s economic empowerment, and they got the leading business schools of the world to partner with them,” Queenan says.
Women in developing countries who aspire to build small- and medium-sized enterprises encounter a wide range of barriers. Often they don’t have formal business training, they don’t have a professional network, they don’t have mentors, and they can’t access capital. “Goldman figured out what all of the hurdles were and made a program to help women get over every one,” says Queenan. “That is why they have been able to get such extraordinary results.” Meyer agrees: “In this kind of training, the transformative effect comes from offering an entire suite of services.”
Running a program with such a large global footprint poses a real challenge for Meyer and her team. They work with 89 partner institutions worldwide, and to keep these partners in line, they put forth global guidelines on issues such as candidate selection and the level of ongoing support that they provide to each participant. (Each candidate, for example, must operate a business with at least five employees.) “We recognized that we weren’t experts, we’re a financial services firm,” says Meyer. “We identified the academic institutions and nonprofits that were best in their class.” Instructors and advisors hail from the American University of Beirut, Harvard Business School, London Business School, and other top institutions. Partner nonprofits include the Clinton Global Initiative, the World Bank, and the International Center for Research on Women (ICRW).
In 2011, Goldman Sachs hired ICRW to prepare an independent evaluation of the 10,000 Women program in India. According to the ICRW report, about half of all participants in the India program had at least doubled their revenues since graduating from the program. The ICRW report included some important caveats: The rise in business revenues came at a time when the Indian economy was growing at a rate of more than 8 percent annually. In addition, the women selected for the program were owners of businesses that already had a high potential for growth. Still, the researchers concluded, the 10,000 Women program had provided entrepreneurs in New Delhi and Hyderabad with critical tools needed to manage and grow their companies.
Goldman Sachs applied its own best assets—including its commitment to research and measurement—to the creation of 10,000 Women. “Goldman was very fact-based in their decisions,” says Queenan. “That’s in their DNA.” Leaders at the firm were rigorous in defining the goals and scope of the initiative, and in determining exactly which population they would serve, the impact that they wanted to achieve, and how they were going to measure that change.
Before launching the program, Goldman Sachs developed a performance monitoring and evaluation system with support from the Bridgespan Group. (Experts from organizations such as Acumen, the Center for Global Development, and TechnoServe also provided technical assistance.) The process involved collecting data on each participant and her business at certain milestone points—before she started the program, and then 6, 18, and 30 months later. Goldman Sachs’s IT department collated those data so that Meyer’s team and the 10,000 Women partners could gain insight on which aspects of the program were working and which aspects required adjustment. “It was a vital tool at the beginning to get the kinks out of our model,” says Meyer.
Many participants, for example, struggled to provide the kind of data on their companies (revenues, employment levels, and so forth) that the measurement system itself requires. That flaw in financial reporting indicated a flaw in the training program. “Women weren’t graduating with the depth of knowledge in certain subjects that they and we thought they should have,” says Meyer. Her team shared that finding with program partners, and together they changed the curriculum to improve the sessions that cover financials. The new lesson plan trains participants to feed more-accurate data into the measurement system. More important, it strengthens the program.
The measurement system also revealed some interesting points about participants’ access to capital. On one hand, graduates as a whole had a loan-approval rate that was much higher than the rate among a comparable population. On the other hand, many graduates still could not access capital to expand their businesses. Although the direct funding of graduates lay outside the scope of the program, Meyer and her team worked to improve that aspect of the 10,000 Women experience. The brought in bankers and venture capitalists to speak with participants, for example. This finding, meanwhile, informed the design of another Goldman Sachs project—the 10,000 Small Businesses program, launched in 2009.
Instructors at some partner institutions, including the Indian School of Business and the American University in Cairo, discovered early on that 10,000 Women participants have much less interest in business theory than in case studies of companies similar to their own. For that reason, coursework now often includes discussions about businesses owned by program graduates—or even by fellow classmates. “While you’re teaching, they’re applying lessons in their heads,” says Maha ElShinnawy, professor of leadership and ethics at the American University in Cairo and director of the 10,000 Women program at that institution. Another change to the program came in the form of language. Originally, ElShinnawy and her fellow instructors taught courses in English, but students found that the business jargon was too complex, so she and her colleagues in Cairo switched to teaching in Arabic.
One of the greatest challenges faced by leaders of the 10,000 Women initiative has involved managing the sheer volume of applications. “The hunger for business training is enormous, especially among women,” says Meyer.