Paul Tierney (right) discusses TechnoServe’s past and future with President and CEO, William Warshauer.

Your entry into international development was through the Peace Corps. What led you to join the Peace Corps and how did it influence you going forward?

In 1964, I was in my senior year at Notre Dame and I wasn’t sure what was next. I had applied to law school, business school, and several doctoral programs, but sought advice from the university president, Father Theodore Hesburgh, who suggested the Peace Corps. I had a sense of mission, of wanting to do something for mankind and give back, so I took his advice and joined. I was sent to Chile on an economic development program to work with farmers in the agrarian reform movement. My job was to help people structure and improve cooperatives.  

During my experience in Chile I’d seen that there were a lot of bright people in development, but few of them knew business or had practical skills. So after my service I decided to go to Harvard Business School and learn how commerce actually works, then pursue a long-term career in traditional economic development. But by the time I finished my MBA program I thought that more effective work in economic development would be done in the private sector. I started a career in investment management. After about 10 years of building my own company, I felt like I could come up for air. I’d made some money, I had some experience, I saw how the real world operated, and I understood capital markets. But I still had a taste for the work I was interested in when I was in the Peace Corps.

 

How did you first get involved in TechnoServe?

Around 1990, I started looking around for ways of getting re-engaged in the kind of work that I had been doing in the Peace Corps. I surveyed a lot of different organizations, and I found TechnoServe. It was a much smaller organization back then, with a single office in Norwalk, Connecticut, an annual budget of around $5 million, and a board of directors of predominantly older people who had been friends with the founder.

I visited four of the countries TechnoServe operated in, and as I saw what was going on the field, I became more and more confident that this was an organization with a good approach that was making a real impact. I kept stepping up my level of involvement with the organization, starting as a volunteer member, then a Board member, then Chairman of the Executive Committee, and ultimately, stepping into the role of Chairman in 1992.

One of my early efforts was spearheading a succession plan for Ed, who was looking to phase out of his leadership role for health reasons, and we ultimately chose Peter Reiling, then Regional Director for Africa, to be the new CEO in 1996. When I went to Ghana to meet with Peter, I had to talk him into taking the job. I thought it was a good sign that it took me a week to convince him to do it – he was reluctant to go to Washington because he was doing such good work in the field. TechnoServe has a very good record for a nonprofit in having only four chief executive officers in 50 years.

 

Paul Tierney on a visit to Ghana.

What are some of your favorite stories from visiting the field?

One of the efforts I’m most proud of is TechnoServe’s work in Mozambique in cashew, an industry that had been practically destroyed by the country’s civil conflict. I remember spending a few satisfying days in Mozambique visiting cashew processors TechnoServe helped establish, where I met women workers, who wouldn’t have had jobs otherwise. It was very hard, grinding work, but they told me that they were happy to be able to do it in safe conditions, and grateful to be able to send their children to school with the money they were earning.

I’ve also made many visits to our coffee projects, with one joyful meeting after another with some of our coffee beneficiaries. At the end of one recent meeting in Tanzania, people broke out in song and dance, toasting TechnoServe for the work that we’ve done, which has contributed to a greater level of education in the community. [It’s gratifying to see how] this type of work allows the second or third generation to continue on a trajectory of significantly increasing their standard of living.

 

Are there any entrepreneurs that you’ve met who stand out?

Over the years, we’ve debated whether TechnoServe should set aside funds that we could invest in our clients. I’ve always said that if we found an entrepreneur who is worth backing and financeable, some of the directors and I would be willing to do it. Around the year 2000, there was a man named Miranda in the cashew business in Mozambique whom we all liked. We brought him to New York and he gave a presentation in front of our Board. Half of our Board agreed to finance an expansion of his existing business, and we made a proposal which, putting on my for-profit hat, was a soft proposal for a small amount of equity in the business. Miranda was very appreciative of our interest, but he turned us down! He turned us down because he could get cheaper money elsewhere. I had to be happy for him for taking the better deal, but it also illustrates how mixed up the capital markets are when you have NGO lenders and investors looking for somebody to back, and their very low requirements for return on capital can be undercut by someone looking for zero return.

 

We saw the potential of building a Peace Corps-like experience for volunteer consultants working for TechnoServe.

You played a big role in starting the Fellows (or Volunteer Consultant) Program. What were you looking to accomplish?

I thought it would be good to combine the Peace Corps model – sending knowledgeable volunteers into the field – with an organization that pointed them in the right direction. In the summer of 1995, my son Matthew worked for TechnoServe in Bolivia while studying International Relations at Georgetown University. Upon his return, we saw the potential of building a Peace Corps-like experience for volunteer consultants working for TechnoServe. Matthew pitched Peter Reiling on the idea and they hammered out the details for a one-year program in Peru after graduation. Matthew and his friend, Eric Sillman, worked in Peru for a year and then completed a second year working on various projects in Central America and Africa. It was a great experience for them and the organization, similar to my own experience in the Peace Corps. From there, it grew into this quite substantial Fellows Program that we have today.

 

I think the comparison with the Peace Corps is exactly right. The work and McKinsey-quality analyses that these Fellows have done over the years that have really informed and helped us design good programs. It’s been one of the big differences I’ve seen between TechnoServe and other NGOs where I’ve worked – the depth and the quality of the analysis.

Today the profile of these people is even higher. Many Fellows are management consultants who have spent about three years working at a place like McKinsey or Bain, and know a lot about a certain commodity or financial analysis. The model gives us an affordable way to supplement the work our full-time staff does with high-quality, talented people.

 

How did TechnoServe start working with corporate partners and how has that evolved?

One of the greatest challenges in my early days as chairman was our funding model. About two-thirds of our funding was coming from the public sector, specifically from USAID, and we wanted to lessen our dependence on a single donor by balancing that with private funding. We saw opportunity in supply chains of large corporations who were sourcing in emerging markets. It seemed like a very natural fit for TechnoServe – in geographic areas where we had great strengths, like East Africa, or in sectors where we had great strength, like coffee – to create partnerships with companies where there was mutual benefit for their business and the farmers we work with. Some smaller, early examples of this were in Peru, with beans and vegetables, and in Panama with tomatoes. In those days, I would often arrange meetings with the country directors of large corporates whenever I was traveling to one of our countries. Eventually we set up our Strategic Initiatives unit and today this work has evolved into larger scale partnerships, such as our work with The Coca-Cola Company in fruit or with Nespresso in coffee.

 

I am proud of the quality of the people that we have attracted to the organization, and the mission that we have enunciated and stayed true to.

What else are you particularly proud of during your tenure at TechnoServe?

I am proud of the quality of the people that we have attracted to the organization, and the mission that we have enunciated and stayed true to. Our staff in the field are head and shoulders above anybody I see in other organizations. And we have a strong Board of Directors; it’s neither an academic board nor a celebrity board – our directors are on the board because they really care about what we do.

In terms of our mission, there’s often temptation in the nonprofit world to cover overhead by taking on grants for areas that might be outside of the organization’s scope. But I’m very proud of the fact that we’ve stayed true to our mission.

 

You’ve spent the last number of years focused on investing in Africa and in other emerging markets. How do you think that work has informed your chairmanship with TechnoServe and vice-versa?

Well, the clients or the investee companies for our partnership called Development Capital Partners in Africa are very different than the clients or investee companies that we help with TechnoServe, but I think that I’ve learned a lot from the grassroots involvement in TechnoServe that informs my point of view about the macroeconomic and macro-cultural picture. And what I’ve learned through businesses in countries where I’m involved in companies as a shareholder, is very helpful in my role at TechnoServe. It gives me a truer perspective on the country, and it builds a network of people that I can leverage for TechnoServe. It was a good trifecta when I was teaching the graduate-level course at Columbia on Africa, that I had business in Africa, and we had TechnoServe operations in Africa. I think it was really a good case of education on one side helping results on the other side.

 

The power of business to solve social problems – that was a somewhat radical notion 50 years ago, but it has become more mainstream in development today. Has TechnoServe been influential in bringing that into the mainstream and where do you think the trend is headed?

I’m very pleased with the fact that so many people are speaking our language. Some of the things we’ve done, have been adopted by other organizations, for example the model of Volunteer Consultants, or what we’re now calling Fellows. Many organizations that were formally working in disaster relief or disease prevention, have also added an economic development component. And there has been a widespread understanding of the need for technical assistance to complement capital and impact investing. I’m glad that we’ve played some modest part in leading the sector in that direction.

 

You’ve had an extraordinary run as being chairman of the company for 27 years during a period of remarkable growth and maturation for TechnoServe. What led you to conclude that it was time to step away now?

I don’t think it’s a good idea for an organization to be overly dependent on one person, and by turning over the reins to other people, the organization can benefit from new energy and creativity. There are also some other things I want to do with my free time, in addition to staying involved with TechnoServe. It just felt right.

 

So look into your crystal ball and talk a little bit about some of the key areas of focus for TechnoServe, looking out five, ten years.

I think that looking out five or ten years, TechnoServe has to find a way of scaling its organizational efforts and core competency in a more efficient way. We have to use technology to convey learnings and to keep finding ways to provide training in a more cost effective way. TechnoServe should also continue to be more decentralized, relying on good people in the field. I think we ought to look for ways of entering Asia beyond India, and expanding in Latin America, and Africa.

 

You’ve had a profound and very longstanding involvement with TechnoServe, as you pause and reflect back on that, what has that meant to you and to your family?

I always think that the best thing that a parent can do for a child is to provide a role model, and the activities that I’ve been involved in with TechnoServe have been noticed by my kids and my grandkids. All three of our children have done some form of service work, two of them with TechnoServe. It’s been very satisfying, and I feel fortunate that I’ve been able to be involved.