Making the Most from Field Visits to Impact Enterprises
In the past five years, I have visited more than 50 operational sites of impact enterprises, both to evaluate them as potential investments and to visit my existing portfolios. For me, field visits are the highlights of my career as an impact investor. Not only that I can learn about the enterprises and their actual challenges on the ground, but more importantly, I can understand the actual perspectives of the people from the communities that the enterprises are engaging with.
For me, doing field trips is the fastest way to understand a pipeline company. I would prefer to do it as early as possible in the investment evaluation life cycle, depending on the feasibility to arrange the trip logistic, my own calendar situation, cost of the trip, the keenness are the company management on an investor making a visit, and how attractive is the company for investment (As an equity investor, I have to manage Company management’s expectations by NOT doing a field visit if I am not too interested in making the investment). After making the field trips, my interactions with the management are usually more engaging, my questions are more specific and to the point, and I can make faster decisions on whether the Company is a good fit for my fund, or should I drop it.
Because of the remoteness of most sites, this kind of field trips are typically short, with not more a day available on the field itself. If there are more than one locations to be visited, then we have to also subtract travel time between those particular locations. With these time constraints, it is important for me to maximize time on the field. In one day or so, I have to fulfill the main objective to verify claims in reports or pitch documents as well as to become helpful to the enterprise as well, helping them identifying their blind spots. I would not be able to do all that in a day if I don’t plan in advance and just come and do sightseeing.
I am sharing the six points below, along with some DOs and DON’Ts that I think are important for impact investors when conducting field visits. Some are basic and probably obvious stuff, that I listed as a reminder to ourselves, and some that should be a bit more counter-intuitive.
1) Follow local etiquette
Field visits are not tourism trips. This should be obvious to everyone, but I have seen it happened often enough that I can’t help mentioning it as the first point and get it out of the way.
l DO dress according to climate, expected weather, terrain, and the local culture. I had a female colleague who became “very popular” among the males in the village because of the way she dressed (to her defense, it was a very hot day).
- DO eat the snacks and drinks provided. If not sure, take a small bite or sip only.
- DO record the conversations, after asking permissions.
- DO ask before taking pictures, especially picture of people from the communities. Their privacy rights are the same as ours.
- DON’T post the pictures from the trip in social media.
2) Be prepared, but keep an open mind
Preparation is important, but we also have to be flexible and come with an open mind.
- DO state our specific requirements for a trip agenda to Company management to arrange.
- DO expect the companies want to showcase only the best aspects — this is normal and to be appreciated.
- DON’T forget to ask for translation services to be made available, if needed.
- DO respect the logistical arrangements and don’t make last minute requests.
- DO familiarize ourselves about the industry and the Company beforehand.
- DO try to understand the history of the land and their family/community issues beyond their interactions with the company, from news media and other sources. But also be aware that these accounts might be biased, especially if they are written by people outside of the community.
- DO try to learn a phrase or two in local language or dialect — this will impress them and help as ice breakers.
3) Observe the enterprise’s regular business processes
Once it is apparent that we are “special guests” that come to observe, then the interactions might not be genuine anymore. It is a natural thing for anyone, not just the poor communities, to “put together a show” to impress outsiders, especially if they perceive have certain power that can benefit them.
- DO ask to follow the Company’s field officers making their daily activities. It depends on the business model, but most companies have daily customer visits (e.g., in microfinance industry) or buying trips.
- DO blend in with the field officers and stay silent while they are doing their job. Obviously, it might not be easy to do if you are foreigner with different skin colors or do not understand the language being used. After this order of business is completed, then we can start asking questions.
- DO ask for the meetings in their farms or other places of work, with 4–5 people max to ensure effective discussions.
4) Use local perspectives and terminologies
The finance and development worlds are guilty of having too many jargons, like “SDGs”, “impact”, “returns”. Best not to cognizant not to use them at all during the field trips.
- DO small talks or ice breakers even if time is limited.
- DON’T ask basic, general questions that we can ask the Company beforehand.
- DON’T ask close-end questions, unless these are verification questions that we must ask.
- DON’T ask questions that make them try too hard to recall the past or do mental calculations, e.g., even a simple question like “how much did you earn every week?”. Very few of them have steady monthly income that can be easily divided by four weeks.
5) Stay as an outsider
The people that we are meeting interact with the Company on a regular basis, and they may have some grudges against the Company or their employees. We have to make sure that we listen, but we are not the official representatives of the Company.
- DON’T ask provocative questions that can strain relationships between the Company and the communities.
- DON’T make promises on behalf of the Company, even if the Company is already an investee.
- DON’T be defensive about the company, when the farmers are critical about their practices.
- DON’T ever blame the Company on anything.
- DO frame the visit so that wecan make suggestions to the Company based on the discussions with the communities.
6) Share learnings back to the Company
Share our learnings — Companies have their blind spots in their day-to-day interactions with the communities, and our outsider perspective can help. A couple of Indonesian impact enterprises mandated their employees, even at senior management positions, to regularly conduct field officer duties so that they are not out of touch with the reality on the field.
- DO summarize the visit for the management of the Company, with suggestions based on the interactions on the field. Don’t add or subtract points. The best ones on understanding the situation are the community members. Let their voices be heard.
- DO thank the Company for the trip arrangement.
Field trips are the most memorable and insightful experiences of my career as an impact investor so far. It surely beats going to impact investing conferences, where insights are summarized at typically high-level, and it is not possible for even very seasoned impact entrepreneurs or investors to share their extensive experiences. The “A-Ha” moments have to be experienced ourselves.
I would also want to argue that we should not do too many field visits. First of all, we are no longer an outsider of the situation, able to contribute outsider’s perspectives, but we have gone native. Second reason is that there’s no point in doing multiple field visits when there are no significant modification in the business of the impact enterprises or the geo-political landscape, as behaviors change only when the system has changed.
I have been to more places in my own country in the past few years compared to all of my previous years combined. The lives of the people in remote rural areas are vastly different than the middle-class (or sometimes even jet-setting) lifestyles that most impact entrepreneurs and investors might have. If you are an impact investor, having your field trips well-planned and well-executed is a key to understanding the companies and their impact more thoroughly.