A Compassionate Model for Business

In my last post I described the context of my work in Suame Magazine, Africa’s largest industrial engineering cluster. Today I answer the burning question on everyone’s mind: what do I actually DO here? (This is a bit of a long one and more informative than my usual ‘funny story’ posts).

A bit of history first. The Suame Magazine Industrial Development Organization (SMIDO) was established in 2006 as an umbrella organization to unite the 12 existing professional associations of workers (ie. Spare Parts Dealers’ Association, Foundry Workers Association, Diesel Engine Mechanics Association, etc.) and provide the Magazine’s 200,000 workers with a strong, unified voice in advocating for change.



Today SMIDO operates four major programs:

1) Auto Diagnostics Training: vehicles today are controlled by sophisticated computer systems and integrated electrical components. SMIDO trains mechanics in the Magazine to keep pace with the rapidly changing automotive sector and service modern cars coming in daily from Europe.

2) Policy Advocacy: SMIDO actively engages the government of Ghana, World Bank, the United Nations, bilateral donors, and the private sector to bring positive change to the Magazine.

3) Information and Computer Technology (ICT) Training: subsidized training on basic computer use, MS Office, and the Internet, with a long-term goal of teaching basic AutoCAD and engineering design skills. This training allows artisans to get technical help and information online while using MS Office tools for business development functions (ie. Accounting).

4) Engineering Program: connecting small-scale artisans to business opportunities in the formal sector (more on this in a bit).

“So Florin, what do YOU actually do?!?”



The good looking chap beside me, Emmanuel (B.ASc., M.ASc. University of Birmingham), and myself (4th year B.ASc. University of British Columbia) run the Engineering Program. Think of it as a business, a general contracting firm which services the large-scale mining sector in Ghana. We market ourselves as a company providing locally made, high-quality metal products at a low cost with timely delivery.

A set of "apron plates" used on an "apron feeder" - a conveyor system that works like the rolling track on a military tank - to transport rock and ore. The plates, seen here drying after a coat of paint, were produced for a major international gold mine client.


We often embark on trips across the region to meet with procurement managers and engineering supervisors to discuss how SMIDO can service their needs and how to integrate us into their supply chain.

When a contract is signed with a company, we sub-contract all of the work to small-scale artisans in the Magazine. For now SMIDO has a workshop of seven workers who we sub-contract to, and they, in turn, sub-contract more specialized work (high-precision milling, heat treatment, or lathe work) to other artisans in the Magazine. As the work progresses, Emmanuel and I visit the workshop daily to do quality control and make sure everything is running smoothly and safely.



Sometimes we get a request for a part that we’ve never manufactured before. After skimming the Internet and my engineering textbooks for answers, we throw on coveralls and sometimes spend days in the shop working alongside our team of artisans to design and develop the methods and materials needed for manufacturing the right part.

A set of chain links that are used to drive the "apron plates" mentioned before. This project was for a major Canadian bauxite company operating in Ghana.


On a visit to the mine for an inspection a month after delivery.



Often we have to settle disputes between SMIDO’s executive and the workers, determine and provide appropriate compensation for a job well done, keep workers motivated and happy while sticking to timelines and budgets, maintain a high standard for quality, and of course, ensure safety on the work site and of the final product.

Basically, SMIDO is your typical manufacturing firm, with Emmanuel and I as the savvy Marketing Department, Sales Managers, Quality Control Inspectors, Research & Development Department, Project Managers, Human Resource Managers, Safety Personnel, and usually, we play the role of delivery boys too.



SMIDO operates under the same business principles as our competitors in Ghana, or around the world as far as Germany and China, with one major advantage: our number one driver is not profit, but creating opportunities for the urban poor. This model of “social enterprise” has received great attention in recent years with the 2006 Nobel Peace Prize being awarded to the Grameen Bank and its founder Muhammad Yunus, a pioneer of micro-finance and the concept of social business.

As a “social enterprise” SMIDO is able to engage the mining industry not only as a quality supplier, but also as a means of giving back to the local community, a shining example of Corporate Social Responsibility (CSR) for the mining sector. Not only does SMIDO stimulate the local economy, create jobs, and encourage investment in the informal sector, but it also provides a wealth of skills and technical development for those workers who are sub-contracted, something that your average contracting firm can’t boast. SMIDO operates with every bit as much rigor, passion, dedication, and hard work as your ordinary firm, but the social and economic benefits of our model far exceed traditional ones. To clarify, all of SMIDO’s profit goes into funding the Automatics, ICT, and Advocacy Programs, as well as further developing the Engineering Program to benefit the artisans.

While the benefits are great, I must admit, so are the challenges. Try explaining a Gantt Chart to someone who reads and writes at a beginner level and doesn’t speak your language. Yesterday I struggled to explain why a rusted metal plate should be grinded and cleaned before welding, taking me 15 minutes before I got a smile, a warm hand shake, and an explanation that “this was never taught to me before!” Don’t get me started on the power outages in the workshop that lasted for six days this week!

Despite this, I’m extremely confident in our model. I know that with hard work and dedication from everyone, we can compete with any local producer, and certainly out-compete the container ships arriving daily packed with Chinese goods. I’m here to make sure of it. But as hard as we work to make this a reality, I’m not here to fill an ordinary job. I came here as a dynamic, enthusiastic, and dedicated change agent. By the time I leave, I want the Engineering Program to be self-sufficient with a wide network of committed industry partners and a talented pool of artisans to do the work. I want SMIDO to have the capacity, both managerial and financial, to attract the highest caliber of Ghanaian engineers to run the company. I envision SMIDO having dedicated Marketing and Sales Departments, an ISO 9001 certified Quality Control Unit, and a Research and Development Unit made up of academic and industry champions. And most importantly, I want to ensure that the work of SMIDO is having a substantial and sustainable impact on the livelihoods of the artisans in Suame Magazine.

So, all I can say is for now, I’m working on it…

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WEEKLY CHALLENGE:

This is a new segment I want to introduce with a weekly question and challenge for you, the reader. This week I want to further explore the idea of profit and poverty reduction. I had an idea, and I want your feedback (keep in mind this is very hypothetical).

As I said, I’m confident in the model succeeding with enough critical thought and hard work. We are however a long way from achieving the final vision for the Engineering Program, and sometimes find ourselves cash strapped. I think what we need now is someone who is (somewhat) talented, and more importantly, dedicated to SMIDO’s success. Without sounding arrogant, I think I could fit that role. My problem is that if I started a career with SMIDO, I would eventually go back to Canada and find myself stuck with a student debt in the tens of thousands of dollars. But what if I graduated from UBC and came here on a special contract for two or three years, dedicated to the success of the SMIDO Engineering Program, under these terms: if no money comes in, I work for a base salary of $100/month (which is what I get now). If, as a result of my work, SMIDO engages upwards of $500,000 to $1,000,000 in annual revenue from mining jobs, my salary is upgraded to $60,000/year. This would be a highly competitive engineering salary in Canada, and maybe even here in Ghana as an ex-pat. What do you think?

NGO’s and charities are often expected to work with minimal overheads and peanuts for executive salaries, while also expected to produce high-caliber results in a very complex field. What if it wasn’t me, a white guy from Canada, but a local engineer like Emmanuel getting $60,000 a year for those results? If organizations like SMIDO competed with the United Nations, Goldman Sachs, and Exxon Mobil for talented graduates of Oxford, MIT, and Harvard, would the aid industry reach the same level of success?