Movers and Shakers: Laura Herman, Managing Director, FSG Social Impact Advisors

By Andrea Newell (Grand Rapids, Michigan)

At age 14, Laura Herman spent the summer on the north coast of Spain with a host family. It was her first taste of independence, immersion into another culture and glimpse of a society affected by political unrest. Once back in the quiet Boston suburb where she grew up, she determined that not only would she go back to Spain the following summer, but she would do something “international” with her life. That experience kindled a lifelong passion for other cultures and an interest in social issues. Herman not only returned to Spain for the subsequent three summers, but has visited, volunteered and worked in more than 40 countries to date.

When Laura first arrived at the University of Michigan, she thought she would major in International Studies and then join the Peace Corp, but she was ultimately drawn to the U of M Business School. “I came to this huge university from a small high school with a graduating class of 100 students. Entering the business school was a way to make the university seem smaller and I liked the cohesion of the business program.” While at U of M, Herman spent a summer as an intern working in Prague at a new foundation just after the Berlin wall came down.

Abject Poverty and Multinational Companies

After Herman earned her undergraduate international business degree, she spent five years at Deloitte Consulting. While she was learning the nuts and bolts of business consulting, she continued to travel and volunteer. During a leave from Deloitte, she spent nearly three months in southeast Asia (Vietnam, Thailand, Malaysia). As she traveled around the beautiful, yet economically desolate, countryside, she saw struggling communities alongside multinational companies. “I thought a lot about poverty, why poor people were poor, and exactly what was driving such poverty.” And she started to think about how they could work together.

During a subsequent trip to Nepal, India and Cambodia in the late 1990s, she spent a lot of time talking to the local residents, asking about the role of these companies in their communities. Herman kept track of her thoughts and ideas in an early blog for family and friends. She spent a month at Mother Teresa’s orphanage in Calcutta, where the pervasive, all-encompassing poverty literally took her breath away. “You have to ask, what kind of people are we that we allow children to live in these kinds of conditions?” She began to think of how she could get involved and took stock of her skills, education, and experience. Of course she could always volunteer, but she felt that she had some unique skills to bring to these issues and thought about how she could make the best use of them to create the biggest impact. Could these companies work with these communities to drive change? Herman felt sure that there was a strategic way to build a bridge between these two worlds so that both could benefit.

An MBA and the Social Sector

Herman decided to pursue her MBA at Stanford because of the Public Management Program’s focus on the social sector. In her application essay, Herman discussed wanting to start her own consulting firm that combined her business experience with her passion for international issues. While researching summer internship opportunities, Herman came across Foundation Strategy Group (FSG), which had just been launched by Mark Kramer and Harvard Business School’s Michael Porter. In 2001, she became a summer intern for the fledgling FSG when the organization was just three employees. She returned as a summer intern the following summer, and after completing her MBA and a Masters in International Policy in 2002, she and another colleague opened the San Francisco office. Now 70 employees strong, FSG is headquartered in Boston, with offices in San Francisco, Seattle, Geneva, and another office opening planned for Washington D.C. in late 2010.

What is so different about FSG? Herman gives her elevator speech, “FSG serves different kinds of organizations – corporations, foundations and non-profits – and we fundamentally try to bring a strategic orientation to decision making. For companies, this includes looking at CSR and corporate philanthropy to identify opportunities where they can invest in social issues that will also benefit their business. This involves understanding their corporate strategies, the range of assets they can bring to a problem and the linkages with society’s toughest problems.” In 2000, FSG was a pioneer in social sector consulting, and in our current climate of elevated corporate social responsibility, there will only be more demand for their expertise.

Herman explains, “Our work starts with understanding our clients’ business and the issues facing them. Then we concentrate on identifying the assets the client can bring to those issues. It may be money in the form of a donation, but we think corporations have a lot more to bring than just a donation. They have incredible experience in-house. For example, a pharmaceutical company knows how to register a new product unlike anyone else. Food producers have a stable of nutritionists on staff. Financial services firms understand raising capital unlike any social sector organization. Media companies understand how communication influences people. The cash these companies can bring is often significant, but by leveraging their expertise they can address problems in a way other kinds of philanthropic donors can’t. We also conduct significant research on the social issues that affect the business. We seek to understand what interventions are underway, what is working, who else is funding in an area and how the company can play a unique role. The end result is a CSR strategy built on a combination of that internal corporate view and a great deal of external research.”

This marriage of corporate expertise and social need creates a symbiotic relationship where the corporation and the community can both benefit. In turn, this creates a self-sustaining lifecycle that enriches the lives of those within it, and its effects ripple outward to the surrounding communities.

For Pfizer’s Malaria No More program, Laura led a team to help identify how Pfizer could leverage philanthropic resources and technical expertise to improve malaria treatment in Ghana, Kenya and Senegal. More than 20 million people suffer from malaria each year in these three countries and they are important markets for Pfizer’s antimalarial products. However, malaria symptoms aren’t always recognized quickly enough for patients to receive effective treatment and patients do not always understand the importance of following the full treatment regimens. FSG recognized the opportunity for Pfizer to partner with international and grassroots organizations to improve symptom recognition, treatment and referral. Combined, these interventions will help ensure that patients with malarial fevers are treated quickly and effectively, while also building capacity within the health care sector. Pfizer’s products will be better recognized for their efficacy when patients are taking these medications appropriately.

Personal Rewards

Having spent a more than a decade directing billions in assets toward the greater good and impacting the lives of millions, what accomplishment is Herman most proud of? “Growing our firm. Being a part of a team that has that role in the field and has become a respected voice in the social sector. When we come together for our annual meeting, I beam with pride when I look at our team – that we found people who are so dedicated and yet so kind to each other.” As one of the only people in her graduating class at Stanford to still be with the same company, Herman can’t believe how lucky she is to have her dream job.

So how does Herman balance saving the world with marriage and motherhood? First, by working from her NYC home on most days, with periodic visits to the Boston office. When her nanny leaves, Herman spends time with her 14-month-old son and returns to work after he’s in bed, if necessary. After a recent baby boom, a large percentage of the FSG team are parents. “We believe that retention is important, so we let people be creative, design their own arrangement, and see if it works. If not, they try something else. People are too important to lose, so we respect their needs.”

Herman’s philosophy on work/life balance? “As a fellow managing director recently commented, there is work/life balance – the split between work and home. There is work/work balance – the percentage of time you spend doing various tasks like developing new clients, mentoring, working with your team, writing, developing new ideas, and managing the firm. And there is life/life balance – spending time with your kids, your husband, your family, your friends, and having time to yourself. I think work/life balance is only one dimension of the balance you need to get right in order to be happy.”

Herman has three pieces of advice for women consulting in the social sector. Even though social sector consulting deals with some of the world’s toughest problems, Herman reminds future consultants that “you can’t care more about the issue than your client.” As with any business initiative, many factors come into play and sometimes even the most well-thought-out plan won’t make it off the paper. Second, it’s a small world. “Treat people with respect,” Herman advises. “You feel better about yourself and you never know when someone who leaves your firm might become a client.” And lastly, “Life is a marathon, not a sprint.” Social sector consulting is still a client-services business and brings with it a lot of stress, especially given the weighty content. “We need people to stay in this field. It’s incumbent upon all of us to build the right systems that enable people to last.”