‘What if we gave more to the world than we took from it?’ Acumen CEO Jacqueline Novogratz on moral leadership

Growing up, who were your best examples of leadership? How did they inspire your own journey and career?

I grew up in a big immigrant, Catholic military family: and my parents, grandparents, uncles and aunts reminded me regularly of the importance of duty, hard work, and faith. So did I learn from my parents that leadership is about showing up. My father especially would tell my six siblings and me to count our blessings and to give to others.  I still live close to my parents and siblings; and as I’ve aged, I am reminded that we can be more courageous when we know there is—somewhere–a refuge, a place where people love you for who you are, hands that will catch you when you fall down. As a six-year old, I was taken by stories of the Saints. Many years later, I understood that they were the first stories I’d read of women who both drove the narratives of their own lives and committed to a purpose far greater than themselves. I was always drawn to biographies of leaders who served: Harriet Tubman, Eleanor Roosevelt, Martin Luther King, Jr.

At Stanford Business School, John Gardner, a public servant and extraordinary leader, imprinted me most profoundly with ideas of community, of commitment, of servant leadership. He would tell me to focus on being interested, not interesting. And he’d remind me that commitment ultimately is what sets you free.

What were the biggest challenges and risks you encountered when founding Acumen in 2001?

The biggest challenge was that this was a new idea, one that confronted a status quo comfortable with the idea of focusing on profit alone in business and then giving charity away on the side. This idea didn’t make sense to me as a young person; it makes even less sense today. But 20 years ago, to some, the idea of maximising shareholder value had been raised to the rank almost of religion. More than a few men on Wall Street told me that I ‘clearly didn’t understand business’. Those conversations were hard. Those days were lonely.  

I didn’t start Acumen from a place of naivete or idealism alone. I started Acumen because I’d worked on Wall Street: I had seen the power of markets and wanted to use them–but I didn’t want people to be used by markets. I had seen too many people overlooked or exploited by markets alone. I also had seen the power of philanthropy–yet, there, too I had seen the shadow side: too often philanthropy, charity and top-down government programs create dependency. That is the opposite of dignity.

What were your biggest takeaways from that point on? 

What I learned early is that you don’t need a big number of people to support your vision. You need a small group of early adopters who are willing to take a bet on your character and your idea. I started Acumen with 20 founding partners. Some of those individuals are still with Acumen and have been foundational to building what is now part of a global movement for impact investing and social entrepreneurship. We wouldn’t be here without them, and I am deeply indebted to that group for taking a bet on what seemed like a crazy idea. Now I understand that when they call your idea crazy, it often means you are onto something.

In your opinion, what are the greatest barriers to effective leadership, especially in social entrepreneurship?

Social entrepreneurs are stepping into an important space of leadership, focusing their efforts not simply on making a profit but on solving the tough problems of poverty. These individuals must learn to hold values in tension–to balance purpose and profit, generosity and accountability, humility and audacity.  There are no roadmaps for reimagining systems and building them anew in ways that include those who have been overlooked or excluded; thus, leading in ways that are grounded with a moral compass is paramount to leading effectively for change.

There are other challenges as well. First is the fear of getting started. Our problems can feel so big as to be overwhelming. Effective leaders take a step regardless of how daunting the problems might seem. Once social entrepreneurs start, they can sometimes get stuck in thinking small.  Donors are a major part of this phenomenon. It is hard to ask for money, and many donors want to give only for a specific program, for a specific and often too-short period of time, like a single year. It is hard to think big and even harder to plan for big solutions when you spend 60 per cent or more of your time fundraising. This is not to say that leaders should dream big and wait till they have everything they need. Rather, it is to hold the boldness of their dreams while they also have the humility to start small, to learn, to fail, to try again, to partner with others, and to persist. I understand what a tall order this is, and I have come to understand why true leadership requires a deep and longer-term commitment that should not be taken lightly. 

What do you think are the top traits and characteristics shared by exceptional leaders in the social impact space?

Curiosity, audacity and humility. Humility is needed to recognise the barriers in your way. Audacity is the key to imagining a different future regardless. When we acknowledge and accept the reality with humility, we will then realise that we need one another in this lifelong work of change. But we don’t stop there. Partnering with humility, exceptional leaders dare to believe that our future can be different, and only because of that, we have a chance of making it so. 

The challenges of climate change, of rising global tensions, inequality and polarisation can make the world feel scary to some. We thus need more than ever leaders who will hold on to hard-edge hope, people who understand that cynics do not change the world: pragmatic idealists with operational and financial skills and the ability to partner across lines of difference do.

What are some traits that Acumen favours in leaders when considering which social enterprises and startups to invest in?

Over 22 years of investing in social enterprises that have impacted more than a half a billion low-income individuals, we’ve come to conclude that the single biggest factor predicting the success of a venture is to invest in character. By character, we mean moral imagination, the audacity to see the world as it could be and the humility to see what it is.  We mean the operational and financial skills to build and not simply to dream. We mean the willingness to immerse with the people you intend to serve, a growth mindset that is driven by curiosity about others without  thinking you have all the answers. We look for examples of persistence–has the person failed and learned from that failure?  Do they have the persistence to try and try again? Do they know how to partner? If we are persuaded by an entrepreneur’s vision, see a pathway to scale and, critically, believe we can and should take a bet on her character, we are most likely to invest, knowing that is for the long-term, not a transaction. 

Any final thoughts about the potential of Southeast Asian and Malaysian leaders to tackle poverty and other problems effectively? 

What excites me the most is the changing narrative–from one of scarcity when it comes to social impact leadership to one of growing abundance. Everywhere I sensed a growing collective determination to support and strengthen efforts within the region. The problems of poverty are complex, and we often say that we have more questions than answers, but we hold on to the hard-edge hope, knowing that we can do something. Leaders in Southeast Asia and Malaysia are no different; they embody the spirit of being builders and givers, always striving to create a positive impact in their communities. 

In this region, we are experiencing a new model where several essential factors for success are coming in as alliances or partners. The presence of philanthropists like our partners Kathleen Chew from YTL Foundation, Lam from Lam Nguyen-Phuong Family, and Stanley Tan from Asia Philanthropy Circle has laid the foundation for meaningful change. Infrastructure from the public sector is also steadily improving, providing a supportive ecosystem for leaders who want to bring positive change to thrive.

I believe that it is only a matter of time before innovative solutions become mainstream in businesses across Southeast Asia and Malaysia. The hunger for change and the abundance of talents are driving forces in the region's journey towards sustainable development. And everywhere a new generation is pushing companies to integrate ideas of purpose and sustainability more visibly into their operations. There has never been a time that is riper nor more in need of the new generation rising to solve the biggest problems of our time.

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