PIMCO: Building Better Leaders Through Global Pro Bono
We welcome guest authors Sarah Middleton and Sara Piccollo, two leaders at PIMCO, to share their insights on the union of CSR and leadership.
El Salvador’s coffee sector is in crisis. The coffee leaf rust (roya in Spanish) outbreak is hurting production and causing massive crop losses. Fifty percent of the country’s coffee sector jobs have disappeared since 2011.¹ Nearly three quarters of all coffee trees are infected.² Farmers in El Salvador fear ruin from roya.
As part of PIMCO’s approach to corporate citizenship, two PIMCO employees traveled to El Salvador for nine weeks in 2014, specifically to point the coffee sector to greater competitiveness in the medium term.
Chosen after a competitive global application process, John Cavalieri, executive vice president and product manager, and Scott Argyres, senior associate in the Funds Business Group, participated in PIMCO’s Emerging Enterprise Program (EEP), one of the firm’s two global pro bono programs. John’s assignment was to develop an industry strategic plan for the coffee sector in order to improve farmers’ growth potential; and Scott’s assignment was to analyze the main problems affecting coffee sector growth, alternatives for positively impacting the sector and its farmers, and a cost-benefit analysis of both.
Through EEP, motivated PIMCO employees become volunteer consultants for TechnoServe, a nonprofit that identifies business solutions to poverty in developing countries around the world, and are matched to projects in Latin America for five to nine weeks. Our PIMCO participants contribute their skills to benefit some of the enterprising people that TechnoServe works with.
Revitalizing El Salvador’s Coffee Sector
During their time in El Salvador, John and Scott had 30+ meetings with industry leaders, exporters, cooperatives, farmers and lenders. They also performed secondary research and developed several hypotheses that they then tested over the remaining weeks.
The hypotheses they analyzed included: the need to help farmers diversify in order to lower their risk; the need for scalable, low-cost technical assistance; how to unlock capital for small and large farmers; and how to make high-quality genetic material from leaf rust-tolerant varieties widely available to farmers.
At the end of their respective assignments, John and Scott delivered an industry strategic plan that TechnoServe put to use to help develop El Salvador’s coffee sector.
Increasing Diversity of Thought by Increasing Differences
EEP is also a powerful initiative for developing employees as leaders to solve global challenges. While John and Scott were lending their business skills to TechnoServe, their purposeful engagement work provided them with impressive leadership development opportunities, new skills, and increased global and cultural awareness. John and Scott also benefited from nine weeks of being immersed in differences.
Think of it this way: Monday through Friday, you go to work. A lot of what you do at work is automatic. You work with people similar to you, making similar decisions and doing similar things. It’s when you do something different – say, volunteering in Latin America on a coffee sector project – that your brain switches to a different mode. Your brain exercises itself differently; all of a sudden, your automatic pilot doesn’t apply. When you have this kind of altered stimulation, it forces you to question assumptions and as a result, you generate new ideas. This is cognitive diversity at its best.
Here, Daniel Kahneman would remind us that we think with two systems, one fast and one slow. And he would tell us that, in the above example of altered stimulation, our brains switched from Type 1 thinking (fast, automatic, 2+2=4) to Type 2 thinking (slow, conscious, 35×17/5=119). Kahneman’s research on fast and slow thinking reveals that people are prone to cognitive biases exactly because system 1 kicks in before we have time to engage system 2. System 1 thinking dominates us, but if we could leverage a more conscious thought process, we could become more disciplined thinkers. There are tremendous benefits for companies to encouraging and executing diversity of thought such as greater innovation, better problem-solving and stronger financial performance.3
EEP is a tangible way we assist our PIMCO colleagues in increasing their diversity of thought. EEP also inspired creativity for John and Scott and forced them to notice that their usual automatic way of thinking might not lead to optimal decisions.
John, describing EEP, said, “You’re paired with someone you don’t know from a different part of the company. You’re in a foreign country, talking with people who’ve never been to where you’re from. Age, education differences, multiple ethnicities in addition to different nationalities. If you consider all of the different ways in which you can think about diversity, EEP would check all the boxes.”
Scott said, “EEP made me realize what I’m good at and what I’m not good at. The program helped me realize that I don’t have to have the answer to everything. I still need to evaluate the information I receive, but I should rely on others who have different experiences and perspectives.”
“The whole experience puts you in a different environment,” continued John. “The whole time in El Salvador was a large exercise in accepting there are unknown unknowns. There are some things we don’t know that we can look up. But then there are things we don’t know that we don’t know. Instead of presuming I have all the knowledge and skills, it’s the opposite. It’s presuming I don’t. It’s trying to harness everybody’s unique strengths to create a better outcome.”
Volunteering Creates Opportunities for Innovation and Growth
When our colleagues engage in a volunteer initiative like EEP, they get to be innovative and grow. They ingest a greater diversity of skills and ideas, and then bring those skills and ideas back to PIMCO. The lenses through which our EEP participants see the world change; and the ways that the participants problem-solve change.
John shared a story about a visit to a state research institution in El Salvador. This institution, among others, is responsible for resuscitating the country’s coffee industry. John said, “During our meeting [with the institution], the program the representatives were talking about made sense. The program included visits and support to remote coffee plantations. But after the meeting, my TechnoServe colleague said, ‘No, this program doesn’t work because the institution’s employees don’t have enough gas money to visit the remote coffee plantations. There are no visits.’”
As John realized after this meeting, the support program made sense in theory. But clearly it didn’t work because it had a major blind spot – program employees didn’t have sufficient funds for gas.
When John returned to PIMCO, he related the experience to his own job. “It’s a learning lesson,” he said. “A lesson that opens your eyes to additional layers of reality that ultimately make you more effective. There’s a difference between what makes sense in theory versus recognizing the underlying assumptions at play and the practicality of how things actually get done. You have to understand what people’s actions will be once they return to their desks after a meeting.”
The Goal: A Transformative Experience
The most important outcome of EEP is transformation. John and Scott were able to create a strategy to benefit the coffee sector in El Salvador, and they also took part in a transformative experience. They gained greater resilience, agility and perspective as a result of their EEP participation. They tapped into meaning, purpose, and connectedness. They experienced leadership growth and received practical experience learning how best to leverage diversity of thought for better business solutions.
John commented, “As people come up in their career, they get rewarded for high accomplishment. It’s for this reason you might get selected for EEP. But when you get [to the EEP project], you have to figure out how to work with different people across a variety of dimensions. You have to leverage all of these differences to deliver a final product. It’s seeing value in different perspectives. It’s creating a better solution together than one you would’ve created in isolation.”
These are exactly the types of leadership lessons our EEP participants learn on the coffee plantations of El Salvador and bring back to their pods at PIMCO – to share with colleagues and apply every day.