Imagine setting up the social enterprise of your dreams, landing two big contracts totaling $40 million in annual revenue, and successfully retooling your factory and staff when you’re suddenly forced to shut down.
This was the situation Chid Liberty, Co-founder and CEO of Liberty & Justice – the first fair trade-certified apparel manufacturer in Africa – found himself in August 2014. This is when the Ebola outbreak went from a few cases in rural Liberia to a countrywide health crisis. The Liberian government declared a state of emergency quarantining much of Westpoint, Monrovia – the exact neighborhood Liberty & Justice’s factory and the majority of their workers live.
“Ebola was not in our business plan”
Chid and his team went from getting ready to ship their first half a million dollars worth of product to flying every expat worker out of the country and shuttering their doors for three months. “Ebola was not in our business plan,” Chid told us when we caught him over the phone, now two years removed. “It wasn't even among one of the possible risk factors.”
A self-described third culture kid, Chid prides himself on adaptability and his comfort with ambiguity. Born in Liberia, Chid left when he was an infant for Germany when his father was appointed Liberia’s ambassador there. When civil war broke out in his home country his family sought refuge in the U.S. He returned 28-years later after being inspired by the Liberian women’s movement that ultimately catalyzed the end of the civil war to start Liberty & Justice.
"I've been an entrepreneur since I was 16. I love ambiguity, I love uncertainty but this was a crazy uncertain time where you really couldn't find answers or make an assumption. We didn’t know whether it was going to 10,000 cases per week or five. The CDC had no idea, the Liberian government had no idea and the U.S. government had no idea. So you can bet that L&J had no idea.”
Ebola, Zika, global financial crises – these are the worst-case scenarios that don’t usually make it into our risk assessments because they’re out of our control – but realities all companies face. At Acumen we’ve found a key driver to succeeding in social enterprise is not the business plan, strategy, or marketing opportunity but the team’s entrepreneurial capacity and ability to respond to challenges. We talked to Chid about how his team, French food, and eastern philosophy helped him steer his social enterprise through the Ebola crises while staying true to his mission. (Spoiler alert: Not only did Liberty & Justice survive but they created a new brand, a new avenue for social impact and a stronger team).
Don’t Get Attached to Results
Chid, who left the country in August, watched from afar as the disease ravaged nearly 5,000 of his countrymen. He surrounded himself with good friends, French food and eastern philosophy - a topic he’s studied since he was 16.
“[In eastern philosophy] our job as human beings isn’t to be attached to success or failure but to the actual action because it’s coming from a good place. When things were looking quite certain we were going to fail, I did my best to stay unattached to the result and do what I thought was just.”
The crisis was devastating — not just for his company, for those in Liberia whom it supported. His 303 workers (the vast majority female) own a 49 percent stake in his factory. Suddenly their livelihoods and the well-being of their families were at risk. Chid’s focus became how to keep the women and their families safe.
“We have a really amazing young woman named Angel who started on the factory floor in 2010 and grew into a job in the front office. She went door-to-door to our factory member's houses making sure they were ok, delivering cash, delivering food, delivering whatever they needed.” Fortunately, they all got through the outbreak without losing anyone but his social enterprise was on the verge of collapse.
Let your Mission Feed Your Phoenix
“After the state of emergency we started marketing to customers again but we couldn't get anyone to sign on to do another order with us. A lot of these corporate buyers come to the factory, they send their compliance people and quality people to the factory. Nobody wanted to go - nobody wanted to even talk about it. What we found was in months we had a factory ready to rock and rip and no customers.”
Determined to keep the company alive and help his country stage a comeback they started to look within. “We took a step back and realized that we had all this excess material from all these orders that we hadn't fulfilled,” Chid said. After learning about the $5 million school uniform market in Liberia (and potentially $15 million if every kid went to school) they decided to start their own brand UNIFORM but the question was who would pay for it? The Ebola epidemic left many parents without any way to pay, preventing kids from returning to school. That’s when ideas for a Kickstarter campaign began to percolate.
“We had a factory ready to rock and rip and no customers”
Around the same time, Chid found a study done by the Abdul Latif Jameel Poverty Action Lab that found donating and providing children with school uniforms improved school attendance by 62 percent and increased test scores 0.25 standard deviations. Furthermore, free uniforms have also had a direct impact on young girls, decreasing their school dropout rate by a third and for every three girls who stayed in school, two delayed pregnancy.
With that information, Chid and his team felt confident they could build a brand that sold amazing clothing direct to consumers, and donated school uniforms to children in need. In a matter of weeks, they had a Kickstarter campaign up introducing a new line of ultra-soft T-shirts – selling $50,000 T-shirts in the first five hours.
Lean on your Team – All of it
Crises tend to reveal weaknesses in your systems - however not for Chid – this outbreak revealed strengths in his team he was completely missing. Managing a company with operations in multiple countries, one thing you always have in your toolbox is the ability to parachute in and deal with people, problems, or opportunities as they come up. In this instance, that was no longer an option.
“As someone who comes from Silicon Valley tech culture, I was very Americanized. I've always leaned on my American and Asian staff just because I was culturally more comfortable."
Chid realized he gave less authority to his local staff. "Of course, I'm Liberian and I don't think I come in with a colonial mentality but even with my mentality, I was still saving some tasks for expats. This crisis forced me not to do that and lean on people locally to solve their own problems and be ok with the fact that if they got something wrong for the first time that they're going to get it. They're all very smart and capable people,” Chid reflects. “If I look at how we’re running things now and how we were running things before, we’re leaning a lot more on the local team.”
Get Real with Risk
When asked what advice he’d give to other social entrepreneurs on how to prepare for unexpected hits like the Ebola outbreak, Chid advises getting really real about your tolerance for risk. “I think in social entrepreneurship we have an unrealistic relationship with risk. Sometimes as entrepreneurs we don't have as much respect for capital risk as we should. On the other side, I think investors need to come to terms with their own relationship with capital risk and what kinds of capital and what kinds of risk they're trying to take. Country risk is very real not just because of things we can see today but they're real because of the shaky infrastructure of the places that we're working.” But he emphasizes:
“You can't allow that to be the reason not to work. The risk of investing in places like Liberia is nowhere near the risk of not investing. If we don't build these systems now, we're going to continue to see the cycle of poverty to continue and fly out of control for generations.”
And work they continue to do. After raising a total of $230,000 in their Kickstarter campaign, Chid, and his team proved demand for UNIFORM and were able to put 8,000 kids back to school. When we last spoke, Chid and his team were working on delivering the first batch of T-shirts from their campaign as well as launching their Fall collection in Bloomingdale’s and online direct-to-consumer in Fall with the goal of sending hundreds of thousands of kids to school in the next five years. “We’ll never give away a uniform in a country that it wasn’t made in but given what we know about donating school uniforms we’re actually having more impact than we thought we would by just providing jobs.”