Why you should care
Because there are plenty of problems in the world and not enough people working on solutions.
John Wood is famous for leaving Microsoft to save the world (as he puts it in the title of his first book). A former rising star for the tech powerhouse, Wood quit his job after a life-changing trip to Nepal and has since dedicated his life to the nonprofit he founded, Room to Read. Nearly 20 years later and with over $500 million of funds raised, it’s one of the leading global educational charities, operating across 10 countries to promote literacy.
Meanwhile, Wood has developed a reputation as a leading innovator in the nonprofit sector — his first book was a clarion call to NGOs to operate more like serious businesses; his most recent, Purpose, Incorporated, a complementary call for corporations to learn from nonprofits and adopt a mission-driven approach. Wood recently sat down with OZY in an interview that’s been condensed and edited for clarity.
What’s the most important lesson learned from Microsoft that you applied to the nonprofit world?
John Wood: If you want to go after something, you need to go after it in a really big way and not think incrementally. Microsoft had very bold ambitions — a PC on every desk and in every home. So when we started Room to Read, we set the goal of reaching at least 10 million children by 2020. It seemed a very bold goal for a small, cash-strapped NGO, yet we achieved it five years early. Bold goals attract bold people.
And on the flip side, what is something that private corporations can learn from nonprofits?
Wood: There are so many companies out there where there’s no passion; employees don’t feel connected to some higher cause. There are too many companies still telling people it’s just about one more quarter of grinding out profits. One thing that’s great about the social sector is we attract people who are very purpose-driven. So I hope that more and more companies will realize that by embracing a mission that’s more than just profit, they can actually have a better company.
So the main argument of the book is that corporations should do good, even if out of entirely selfish reasons?
Wood: I don’t like to use the word selfish, but I view it as a win-win. If it’s done right, it doesn’t have to cost the company a lot of money and actually it can make them money in the long run. Purpose is not antithetical to profitability. Purpose means doing smart things that help your company to be better, because you have more motivated employees, you have a bond with your customers, you stay on the right side of regulators, you look better on social media. Ten years ago, if you asked an executive if they had a social media strategy and they said no, you’d forgive them because it was still early days. Nowadays, you’d think they were pretty incompetent if they couldn’t answer that question. I think in the next 10 years we’re going to see something similar happen if you ask about a company’s purpose.
Were these incentives always there — or, if not, what has changed to bring them about?
Wood: I think in the aftermath of the global financial crisis, many people lost faith in business, and business leaders realized they had to pivot to be about something bigger than just profits. Second, you have a younger generation entering the workforce that wants to be part of the solution, not the problem. Third, customers really evaluate now — they’ve got access to more information more quickly and easily than ever before.
Are these shifting tides enough to encourage historically irresponsible corporations to take an active role in making the world a better place?
Wood: I don’t know if all of society will pivot in this way, but those business leaders who start to move in that direction will have an inherent advantage over those who don’t. In the past there’s been this false dichotomy that business is all about profitability, while if you wanted to solve social problems you look to government and the social sector. Now, the line between for-profit and nonprofit is blurring. Nonprofits are needing to be run more like businesses with professional, buttoned-up management, KPIs and ruthless performance metrics; meanwhile, there’s an opportunity for businesses to be a force for good.
Talking of KPIs, how do you measure success at Room to Read?
Wood: We’re very data-driven. Melinda Gates was my first boss at Microsoft, and we were fortunate that the Gates Foundation helped underwrite a very robust program of research, monitoring and evaluation early in our lifetime. We measure reading speeds; how much reading skills have improved compared to control schools where we don’t work; reading comprehension; book-checkout levels; parental involvement; graduation rates and dropout rates; and where the children end up. Books have been proven to be the intervention that works at the widest scale with the lowest cost. There have been all kinds of trials of technology in the developing world that have not worked, so there’s nothing to be ashamed about opening an old-fashioned library with old-fashioned books.
Are there things that companies can’t do? Why does the nonprofit model work for Room to Read?
Wood: We’re what a venture capitalist would call a pure play — we wake up every day thinking about one thing and one thing only. So any business that’s looking to work in the education sector can come to us. It’s the best of all worlds because business can bring capital, expertise and branding, and then the NGO can do what it does best, which is to implement high-quality programs on the ground in partnership with communities. If companies try to do this on their own, they’re not going to get very far, because it’s not easy.