By Catherine H. Tinsley
Recently, the United Nations Secretary-General António Guterres said that it is an important time for Africa and emphasized that we must “empower women so they can play a full role in sustainable development and sustainable peace.”
This mission perfectly aligns with the Kate Spade & Company on purpose business model and initiative fellow Georgetown University McDonough School of Business colleagues, Ed Soule, Pietra Rivoli and I studied over a span of nearly two years. We recently issued our findings and are sharing this important story of how business can be a force for transforming the lives of some precariously vulnerable, yet amazingly resilient individuals.
Rethinking the Global Value Chain
In a small, rural village in Masoro, Rwanda, more than 150 women make high-quality handbags that end up on the shelves of one of the biggest names in fashion: Kate Spade & Company. The artisans in Masoro are employees of Abahizi Dushyigikirane, Ltd. (ADC), the supplier of Kate Spade & Company’s on purpose label, an initiative launched in 2013 as a new and innovative value chain approach to empowering women. on purpose, a fully integrated commercial division of Kate Spade & Company, is uniquely positioned to empower women through their “social enterprise supplier model.” ADC is a Rwandan-owned for-profit social enterprise that provides high-quality products to the global fashion industry with a social commitment to empower its employees and transform its community.
Economic Opportunities Bring More than Economic Gain
We wanted to document ADC’s human impact – the extent to which the company’s employment experience is economically and psychologically empowering. The project was a collaborative effort among Georgetown University’s McDonough School of Business, the Georgetown Institute for Women, Peace and Security, and the Georgetown University Women’s Leadership Institute.
During the 23-month study titled, “A Social Enterprise Link in the Fashion Industry Value Chain Performance and Potential of a New Supplier Model,” we:
The Employment Experience Matters
Although it is unrealistic to expect one’s job to be the sole source of empowerment, the ADC employment experience has consistently provided vital resources for the artisans so that they might flourish economically, socially, and psychologically. The opportunities for women to gain full-time employment are close to non-existent in this community. Employment at ADC not only provides consistent employment for women, but also it ensures healthcare, paid vacation, maternity leave, and access to education programs.
The stability of the artisans’ earning power coupled with their dignified work experience encouraged optimism and well-being in what are difficult conditions. The artisans (98% of whom are women) reported higher levels of mental and physical health, as well as higher levels of confidence. They also perceived an increase in their social standing in the community.
Learning is a Key Component to Increased Confidence
The exciting shifts in overall well-being among the artisans over the two-year research period correlate with the learning opportunities provided by the factory work. Artisans were asked to rate their acquisition of two sets of skills – technical skills (including sewing, embroidery, beading, handbag assembly, machine maintenance, and operating cutting and embossing machines) and the interpersonal skills introduced in initial training workshops (including communications, problem solving, attention to detail, teamwork, leadership, ability to ask for help, and English proficiency).
After controlling for all artisans’ gains in material well-being, such as increased buying power and home improvements, these learning opportunities accounted for improved non-material well-being. For example, the artisans’ general anxiety seemed to be reduced by acquiring both technical and interpersonal skills, and the artisans’ confidence expanded through the acquisition of three specific interpersonal skills: communications, leadership, and teamwork.
Additional research findings include:
1. How a financially viable business model is taking shape – ADC has the elements of a sustainable business and has a realistic prospect of achieving its commercial purpose, which is to prosper as a supplier to multiple fashion brands;
2. Lessons learned: How businesses can raise the bar on corporate social responsibility and make a difference in the lives of those making their merchandise;
Over the next year and upon acquisition of a second client, ADC can become price competitive as production increases from the current level of 7,000 units per production period to approximately 15,000 units per period.
Our research provides valuable information about a business model companies around the globe should review, especially if they want to raise the bar on corporate social responsibility.
Why This Experiment Succeeded
The employment benefits extended beyond wage stability and included learning and self-actualization. Prospects for learning and skill development in the workplace create the foundation for self-actualization and lasting development. They are worth the investment and also simply the right way to do business.
Catherine H. Tinsley is a professor of management and academic director of the Executive Masters in Leadership Program at Georgetown University’s McDonough School of Business. Ed Soule is a professor at Georgetown University's McDonough School of Business. Pietra Rivoli is a professor at Georgetown University's McDonough School of Business.
Copyright Catherine H. Tinsley