Most of us know how to deal with acute illness or injury. You see a doctor(s), get a treatment plan, follow it for the prescribed amount of time and then resume your originally scheduled life. The broken bone gets put in a cast; the infection gets an antibiotic, the cancer is treated with surgery and/or chemo and/or radiation and so on.
We’re rarely prepared, however, to tackle a chronic illness; something that requires attention, management and focus every day from diagnosis until the end of your life. When you look at the numbers, it’s a bit astonishing how little we discuss managing chronic illnesses: 3 million Americans with type 1 diabetes; 1.5 million Americans with lupus; 1.3 million Americans with rheumatoid arthritis; 1.2 million Americans with HIV and so on. Forgive me if I haven’t mentioned a disease that you or a loved one struggle with – there are many!
The diagnosis of a chronic illness is sometimes referred to as a ”lifestyle altering” diagnosis because there is no cure or end game in sight. Active management of the illness and symptoms is required to avoid “worst case” outcomes and here’s where the Impact Investment silver lining comes in.
Dealing with a chronic illness forces long-term and incremental thinking. The decisions made today will perceptibly impact physical well-being tomorrow. The decisions made this week will impact how productive one will be next week. Ultimately, the decisions made now will impact longevity, later-in-life well-being and functionality. Will an extra hour at work today be worth lower productivity tomorrow? Or does the decision-making equation need further thought? Breaking complex activities up into bite size pieces may be more productive than trying to “power through” when you’re tired or in pain.
Many people have a hard time making good choices when the consequences are long-term/future oriented. Compliance failure is a major issue in chronic disease management. Short-term thinkers stop taking their meds when they feel better, or if the meds (or the delivery system, since many are injectable) are unpleasant, and then run into expensive health care problems down the line. A more pleasant today often wins out over compromising today to prevent a future outcome that may or may not occur. When you have a chronic illness, you have to make all of the right decisions every day. Skipping one or two things may save time (or seem less unpleasant), but the consequences make themselves felt, literally, in your overall health and productivity. Bottom line? This is a risk management issue and one that reveals that human beings are perhaps as focused on short-term results in general as are the stock markets we impact investors complain about.
Individuals who recognize the trade-offs between current compliance and long-term risk management are ahead of the game, whether dealing with chronic illness or impact investment. The silver lining has four elements: awareness/sensitivity; risk management; engaged productivity and patience.
Awareness: Our lives in the Western world include a range of ‘creature comforts’ like electricity, running water, 24 hour emergency care clinics etc. that it’s easy to take for granted. The types of difficult choices we have to make regularly when managing chronic illness are analogous to the kinds of choices faced by poor and low-income populations and can heighten our sensitivity. Regardless of how profound the sacrifices are, the necessity of making conscious sacrifices in our own lives makes it easier to understand some of the trade-offs faced by our target market. Buy medication for yourself, or school books for your children? Put your job at risk by taking time off for treatment or try to hang onto your income source?
Additionally, the fact that many chronic illnesses force us to slow down or just to accomplish things differently adds realism to the opportunity cost of time. Many early proponents of microfinance looked only at interest rate costs when evaluating microlending programs. A much smaller number recognized that there is a high cost when the poor must leave work, travel to the nearest bank branch, wait in line and then travel home. If you lose a day of work and income to apply for a loan, the interest rate you pay represents only a portion of the true cost. Similarly, if you lose a few days of work because you overloaded your travel schedule, the true cost of your field work is much higher than the plane and hotel expenses.
Risk Management: We all know that early stage investing, and especially multiple bottom-line early stage investing in emerging markets, involve a wide range of risks. We have a tendency to assume that because we are doing good work at the base of the pyramid, we can avoid some of the risks that affect mainstream economies – which means that we often respond to risk after a crisis rather than before. Virtually none of the microfinance debt providers had inter-creditor arrangements in place before the global financial crisis. Standard practice in most types of international lending, microfinance didn’t think about inter-creditor issues until after the impact of the crisis began to make itself felt at the level of microfinance institutions. The more aware we are of risk, and how risk management can make us better or worse off in the future, the more pro-active we can be as investors. The same skills that enable you to manage the risk-reward trade-offs of a chronic illness will serve you well as an impact investor. Let’s talk about what could go wrong today, while everything is sunshine and roses, so that if we do run into problems, we’re already prepared to take corrective action.
Engaged productivity: Learning to delegate is hard. Learning to delegate in a way that empowers and enhances your staffs’ abilities is even harder. Before I had to manage chronic illness, doing something myself – or redoing something I had delegated and wasn’t happy with – was a major temptation. Now, however, I am aware that my energy is a scarce resource. I know, on a different level, that delegating things that can or should be done by others is important. In addition, ensuring that you have the tools, resource and motivation to handle delegated work effectively and efficiently becomes a mandatory element of the equation for me. If I redo your work, something on my priority list won’t get done. So, if I’m not happy with what you’re doing, I need to help you do it better. Period, end of sentence. Managing a chronic illness creates a significant incentive to delegate wisely and avoid micro-management. Surprising how responding to a resource constraint can produce a positive outcome!
Patience: The need for “patient” early-stage capital is often mentioned as critical for the success of social enterprise and impact investment. While this is indeed true, our notions of “patient” vary significantly. For some, it means permitting a “grace period” before borrowers must begin to repay capital. For others, it means longer tenors on debt – although usually not too long! Patience, however, disappears when we touch on impact measurement. It seems that we’re willing to leave our money “at risk” as long as we feel it’s doing good. In order to feel that we’re doing good, we want indicators and numbers around the social and environmental returns we anticipate alongside the usual financial returns.
While that sounds reasonable, if we’re talking base of the pyramid, we need to recognize that poverty is a complex condition with multiple causes and numerous obstacles to achieving greater socio-economic well-being. For immigrants, it usually takes a generation of hard work to perceive improved socio-economic well-being. Why do we think that any of our activities or interventions can break the cycle of poverty in a year, or even 24 months? Don’t get me wrong, I’m not saying there’s nothing you can measure in the early stage of a social enterprise life-cycle. What I am saying is that you are unlikely to find a wide range of robust indicators that are statistically meaningful and cost-effective during that early stage. When we are forced to be patient in our own lives, every day, all the time, it changes our personal views on patience. If we can wrap our brains around the realities faced by our target market, we can use that awareness to design new financial instruments, new compensation structures, new pricing policies etc that more effectively align stakeholder interests.
Living with a chronic illness is no fun – and perhaps even less fun when the appropriate risk management strategies are added to our daily lives. By the same token, living in poverty is never fun. Too often, we latch onto initiatives that will make poor people’s lives a little less miserable, rather than aiming for ways to make their lives progressively better. When it’s your health on the table, you’re quite likely to look for ways to make your life better and you’ll probably get creative in doing so – acupuncture, yoga, homeopathy, meditation – the range of complementary or alternative strategies you pursue is limited only by your beliefs (and potentially by the size of your wallet). Capture that creativity and willingness to sequentially try new things until something works – apply that to impact investment – and voilá: the illness you struggle with on a daily basis has just become a source of inspiration, creativity and management savvy.
Work smarter, live longer: One last word on managing chronic illness. As a society, we place a premium on good health, boundless energy, pulling all-nighters in school and working round the clock in the office. We place such high value on health and energy that most people are reluctant to admit to a chronic illness, much less ask for “concessions” that might enable greater productivity or a longer life-span. We can achieve more by working around our limitations than we can by ignoring them and hoping that the consequences can be addressed “later”. Many of us worry that if we can’t work the same way and the same hours as others, we’ll be perceived as unproductive or that people will think we’re not team players. The reality is, if you play to your strengths, you’ll produce better results than if you just play along with the crowd regardless of your needs and abilities.
“Don’t ask, don’t tell” wasn’t a great strategy for the military and it’s not a great strategy for talent management either. If you have a chronic illness, do or ask for whatever it takes to maintain your health and morale. If you have a staffer managing a chronic illness, empower that individual to approach their situation in the most proactive and productive way possible. We get older every day, and sadly, our world gets more toxic too. Let’s grow our empathy and flexibility at the same pace. Today, the person whose well-being and talent you enable and support may be a staffer, colleague or parent. Tomorrow, that person might be you.
By Lauren Burnhill aka @LaurenOPV