a recent story in bloomberg businessweek, about the rebuilding of afghanistan’s economy through foreign investment, discusses the importance of our hand in hand program in helping to achieve this goal and features highlights from a trip to the country by our chief merchandising officer, sydney price and our ceo, craig leavitt. below is an excerpt from the article. the piece in its entirety appears on the businessweek website at http://www.businessweek.com/
Where most people see only deprivation and misery, Paul Brinkley sees potential. With luck, business will agree
By Jason Kelly
The skyline of the city of Herat, in the westernmost corner of Afghanistan, is dominated by the Qala Ikhtyaruddin, a 700-year-old stone citadel. On a chilly December afternoon, as the sun begins to dip, the citadel’s grounds are largely unoccupied. The general public isn’t allowed in until renovations to the time-ravaged site are finished. Paid for in part by a $725,000 grant from the U.S. government, the project is scheduled to be completed at the end of 2011.
Paul A. Brinkley isn’t the general public. As U.S. Deputy Under Secretary for Defense, he moves freely behind the barricades, ushering a handful of American visitors, including Silicon Valley executives Atul Vashistha and Mike Faith, the heads of Neo Group and Headsets.com, through dark corridors and up steep stairways to the highest reaches of the fortress. The tour comes after a morning of meetings with the provincial governor and the local university’s chancellor and students, all of them pushing, along with Brinkley, for the executives to consider a noble and dangerous proposition: opening up shop in Afghanistan. “I’ve never regretted taking a businessperson to the theater,” Brinkley says. “This is about getting their eyes on the problem.”
In Herat, Kabul, and cities large and small, Brinkley serves as tour guide, ambassador, fixer, motivational speaker, and leader of the unofficial Afghanistan chamber of commerce. With all of his titles and duties, he prefers to think of himself primarily as a matchmaker, negotiating high-stakes unions between multinational companies like IBM (IBM) and JPMorgan Chase (JPM) and Afghan officials and entrepreneurs. Building a culture of business is the only way Brinkley and General David Petraeus, commander of NATO forces in Afghanistan, believe they can counteract the legendary forces of destruction here—from decades of war and deprivation to the brutal rule of the Taliban and a reliance on opium as a chief export. “It’s an infusion of optimism in what can seem like a hopeless situation,” Brinkley says. “The Afghans say, ‘People actually want to do business with us? Maybe there is something at the end of the rainbow.’”
The Task Force for Business & Stability Operations was launched in 2006 as part of the Defense Dept.’s effort to link military strategy and economic development in Iraq. For four years the task force recruited Western companies in an attempt to modernize Iraq’s banking system and reopen factories. Early results were unsuccessful. Security concerns prevented staff from restarting most heavy manufacturing sites, and overseas companies balked at doing business in Iraq because of the very real possibility that their employees could be wounded or killed. A former chief information officer at JDS Uniphase (JDSU) in California, Brinkley joined the Defense Dept. to help with internal business operations. His work in Iraq spurred the creation of the task force. “When we started our work in May 2006,” he says, “[Iraq] was in a complete daily deterioration.”
The task force’s work in Afghanistan consists largely of an endless stream of meetings, many of which are conducted over platters of nuts and raisins and cups of green tea. Sleep is elusive. That owes in part to the brutality of time zones: Just as a Kabul workday ends, Washington and New York, nine and a half hours behind, are getting started. A second workday essentially begins after dinner, with BlackBerrys buzzing throughout the evening. There’s no delineation between weekday and weekend, especially given that the Afghan weekend falls on Friday and Saturday. Clothing retailer kate spade new york’s chief merchandising officer, Sydney Price, arrived on a Saturday, had what amounted to a working dinner with the task force, and then started Sunday morning with meetings and tours. Brinkley and his staff use their proximity to the guests for the soft sell, talking about what they saw that day, sharing stories aimed at emphasizing the country’s humanity.
Kate spade wanted to work in Afghanistan as the next step in its three-year-old partnership with the Washington-based NGO Women for Women International, a project that has taken the company to Bosnia. Brinkley’s team coordinated a visit last August for kate spade executives including CEO Craig Leavitt, who announced the company’s plans at an event held at the U.S. Embassy. “I was very skeptical,” Leavitt says in an interview from his New York office. “We knew of the logistical problems because of the instability.” Four months later, kate spade’s chief merchandising officer, Price, is reconnecting with the staff at Turquoise Mountain, a Kabul-based nonprofit that was created in 2006 through an agreement between Karzai and Britain’s Prince Charles, with the goal of reviving arts and architecture in Kabul and creating an Afghan craft industry that could thrive locally and abroad. Turquoise Mountain takes 45 new students a year (970 applied in 2010) and trains them in traditional crafts. They spend about 60 percent of their time learning a specialty, such as jewelry making, and the rest studying business, law, and technology to help them become well-rounded entrepreneurs. At a recent local exhibit the students sold $20,000 worth of goods in four hours, all to local buyers, according to Shoshana Coburn, the group’s managing director. If all goes according to plan, Afghanistan-made cashmere scarves may begin production in Kabul this year and will eventually appear in kate spade stores as part of its “hand in hand” line, alongside pom-pom scarves and other products made in Bosnia. Kate spade’s approach to the products is different from the traditional “a portion of the proceeds” model. The company buys the goods outright from the workers, typically at a multiple of local market prices. Kate spade then handles all the exporting and marketing costs involved in getting it to its stores.
The advantages for the producers—in this case, Afghan women—are clear. They get the money once they produce the wares instead of waiting for their share of the sale to make its way back to them. If the products sell well, then kate spade will make additional orders. The company aims to employ upwards of 1,500 women in Kabul by the end of 2013. “The Afghans feel that any attempts by the Americans to really change anything would be half done without leaving a viable economy behind,” Leavitt says.
During his August visit, Leavitt arrived at Women for Women’s Kabul training institute and sat on the floor among the participants and asked how he could help. A woman who had been unable to leave her home for seven years summed it up. “She just needed a market to sell,” Leavitt says.
Kate spade is perfectly suited to working in Afghanistan. “Hand in hand” is equal parts philanthropy, entrepreneurship, and branding. “This is not a cash-aid partnership,” Leavitt says. “Our goal is that this is ultimately a profit center for the women and for us. This is meant to be good solid economics for everyone.”
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