It took me 30-some-odd years to become more comfortable with expressing my opinions, standing up for things I believed in and against things I felt could be challenged. In this time of uncertainty and significant change in our environment, communities, and the economy, speaking the unspoken felt to me to be more important than ever. So in the Spring of 2011, I started this blog – intentionally named Be Openionated – to have one’s opinions and be open to those of others as well. We need this sort of open expression of ideas and open dialogue if we’re going to solve the problems the global population is facing and take advantage of the opportunities in front of us. At times I am still quite apprehensive about posting my ideas and opinions. I know we won’t always agree. But I’ll do what was always intended for this blog – extend the invitation to whomever is reading this to post a comment, to ask me questions, to challenge me openly in this forum, to take the opportunity to express alternative opinions. Be direct, but be polite. Be courageous.
The following is a post that was originally published on June 23, 2011. I have updated and edited it and invite you to comment.
Here are some ideas that could change the financial services and investment sector, that could create positive social impact as a result of their implementation.
1. Healthier Risk-Taking. People in the “impact investment” sector are already in the business of taking risks on investee companies, however, sometimes I feel conservatism and a lack of understanding of risk and healthy risk-taking holds some people back from investing in innovative, potentially game-changing social enterprise ideas. (Speculation and self-serving risk-taking in the past decade has turned “risk” into a nasty four-letter word.) Perhaps there is a way we can invest more in potential, rather than just performance and do so in a way that is healthy and has benefitting other people, communities, and society as whole in mind.
2. More Intuition in Investment Decision-Making.
Some people may view this idea as the same as seed capital, but I mean something subtlely different. With seed investments there is the semblance of something on which analysis could be based, such as a prototype, a business model, or potential customer segment. I meant something based on little analysis (a case where there is little empirical data to analyse) and based more so on intuition. This might sound like reckless gambling – certainly for people whose decisions are based primarily on logical analysis. However, there is undoubtedly a role played by intuition in decision-making (more on this in a future post). Rather than more intuition, I believe an integrated investment decision-making approach – one that encompasses analysis, emotions, and intuition – is needed for effective impact investing. Sometimes feelings and even analysis (in the form of a familiar habit) can be mistaken for intuition. There is something to be said for quieting the mind and really understanding to what decision our core spirit, our intuition, leads us.
3. Activist Shareholding for Social Change. The Children’s Investment Fund does it, but for private-profit-seeking motives. Fair Pensions mobilises folks who have invested in companies through their pension funds, but this happens after money has already been invested and it is unclear exactly who has what invested where. I’m talking about intentionally aggregating investment into a publicly traded company, having an influential shareholding, and voting at AGMs to effect positive change. I’ve heard some people query why put money into a company that was creating negative social impact. However, I have been speaking with other people who also feel the need to to affect decision-making in large publicly traded companies and that by mobilising influencing shareholdings, we could effect change.
4. Greater Transparency/ Opensource Finance. This would be a major step for the financial services and investment industries – to become more transparent about pricing of loans and investment products, what kind of return they expect, and the costs of making investments available. Financial institutions may become concerned about client privacy issues and litigation, but there is a movement towards improving financial literacy and making financing less opaque. This might cause a bit of discomfort in the room, but I think many people are curious of the positive impact greater transparency may have. Opensource happens in the tech world – Wikipedia’s code is publicly available. People use it, modify it, improve it, share it. But no one else created another wikipedia. Opensource comes from a place of abundance – an assumption that there is enough to go around and that no one will copy a thing exactly, that at the end of the day there are differentiators (implying, we must differentiate on a basis other than price). In response to the discomfort, I simply invite people to imagine what the world would look like if we had full transparency about true cost and therefore pricing and that this kind of re-imagining of the world was necessary for innovation and positive change to happen.
In the past, I felt like a mad scientist. It wasn’t so much that I was concerned, but rather that I felt alone. On the one hand, I must be in the right place because the environment in which I work is reasonably conducive to change and innovation, yet I felt really alone at the time of responding to a request for Big Ideas. Looking back on this post, re-reading and re-writing it, I realise that these ideas are not-so-big and not-so-wacky. They are fathomable. They are within reach. And I am not alone in contemplating them.