Experts discuss the potential that public private collaboration can have toward achieving the goals of U.S. foreign policy, private business, and civil society.
This meeting is part of a series on "Smart Power" sponsored by Booz Allen Hamilton. For more on smart power, please see: http://www.boozallen.com/smartpower.
BENNETT FREEMAN: (In progress) -- and I'd like to welcome you to this morning's Council on Foreign Relations corporate program meeting sponsored by Booz Allen Hamilton. And first I'd just like to ask everybody to completely turn off, not just put on vibrate, your cell phones, BlackBerrys, all wireless devices, to avoid any interference with the sound system. And I'd also like to remind members that this meeting is on the record.
Let me first introduce our panelists, and I'll then make just a minute or two of opening remarks to frame our theme for discussion this morning. And then we'll start a conversation amongst us up here, and then turn to all of you.
I'm really delighted to be joined by three distinguished panelists. To my immediate right is Lieutenant General Ken Keen, who's military deputy commander of U.S. Southern Command, who's had the extraordinary task the last year of directing the U.S. military's humanitarian relief operations in Haiti.
And to General Keen's right is Stanley Litow, vice president for corporate citizenship and corporate affairs of IBM and president of the IBM International Foundation, and also the architect of the Corporate Service Corps at IBM that we'll be hearing about from Stan.
And then to my far right, geographically but maybe not ideologically, is my friend Tim Fort, the Lindner-Gambal professor of business ethics at George Washington University. He directs the university's Corporate Responsibility Program and he's a noted scholar in the area of business roles in conflict zones in relation to peace building, and is very active with the U.S. Institute for Peace, among other organizations.
So public-private cooperation in connection with U.S. foreign policy goals is not a new theme. We've had a debate for half a century or more about some of the motives behind that cooperation, from the Marshall Plan to the Iraq War. Scholars like Raymond Vernon have studied the subject in the context of U.S. sovereignty, the sovereignty of other nation-states where our companies have been active. New commentators on the scene, like Parag Khanna, think that the new way to run the world, as he titles his new book, is by forging fresh, creative networks among business, governments and NGOs.
I think there are three drivers, though, that bring this debate, this subject, into sharp and timely focus. One is just this extraordinary expansion the last two decades of U.S. direct investment overseas, and the range of not only commercial but foreign policy issues that that raises and the need to cooperate even more.
Second, the irreversible mainstreaming of the corporate social responsibility and sustainability agendas that put a premium as never before on companies' demonstrating commitment to various global issues -- disease, climate change, poverty, education, empowerment of women -- and finding partnerships to make a mark in those areas. And then third, the U.S. government itself is now recognizing that in a world of perhaps diminished U.S influence, more diffuse power, the rising importance of non-state actors, that partnerships are the way to go, more than ever.
And the State Department just launched several months ago its first Quadrennial Diplomacy and Development Review, and it explicitly recognizes this new reality in its call to embrace 21st-century statecraft. This whole-of-government approach -- as our sponsor, Booz Allen, by the way, calls its Smart Power Initiatives -- will become more and more important as we leverage both American values and interests around the world, not least also in the context of constrained budget resources.
So with that attempt at framing the timeliness of our theme here, I'd like to start with a broad question for each of our panelists to get the conversation going amongst us before turning to you. And I'd like to start, General Keen, with you.
Based on your experience the last year in Haiti, what lessons have we learned from U.S. military cooperation with private-sector partners in that massive humanitarian operation that you've been overseeing?
LIEUTENANT GENERAL P.K. "KEN" KEEN: Well, thank you -- first, thank you for having me here today. It's a real honor and pleasure to participate in this forum, because many of you in the audience -- and certainly the public-private sector was instrumental in the relief efforts in Haiti, and our military was but one part of it. And it truly was, I think, as we look back on it, a whole-of-government approach led by the U.S. government, by the United States Agency for International Development.
In the area of what lessons we have identified, USAID is leading a effort to get at that -- I think, a historical effort, from a whole-of-government approach -- in terms of working within the interagency, putting together a product to identify lessons and, more importantly, what do we learn from those lessons and how we apply it as we go forward.
One of those lessons, I think, certainly from U.S. Southern Command perspective and from my personal experience in Haiti both at the tactical and the strategic level, is how we cooperate and coordinate with the public-private sector in these -- these type of disaster response situations. Haiti, obviously, was not the norm in terms of our level of response. It was the largest U.S. military response to a natural disaster overseas, and it lasted for the longest period of time, I'm told, in terms of the -- standing the joint task force up and -- from beginning to end.
So in that regard, one of the areas that we have really been looking at is how we do information sharing and how do we coordinate our effort to achieve this whole-of-government approach and have a unity of effort. What I learned in Haiti was the real muscle of humanitarian assistance is, as to response, is in fact the NGOs and the public-private sector. We were there to enable them to get to the point that they needed to to deliver, many times logistically and -- the critical aid that was needed, whether it was saving lives from rescue efforts or delivering water and food.
So I think, as we look at this in terms of how we do it, we've got various forums that we're looking at in terms of trying to develop information-sharing systems. We've got the public sector that's working with DOD on how do we build those systems, and how we can apply them with our partners in the region. So I think the one major area is how we develop frameworks and processes immediately.
The United Nations, of course, in the particular instance in Haiti was critical, but how do we plug into those systems as quickly as possible to better coordinate and collaborate with those on the ground and those who want to provide assistance from around the world.
FREEMAN: Great. Thank you. And we may -- going to come back in a couple of minutes to the NGO role in particular, but -- fascinating.
Stan, you've been the architect of IBM's Corporate Service Corps, among many initiatives at the company, in the nearly two decades you've been there. It's sort of a private-sector Peace Corps, and I'm wondering how you position the program among what I would imagine would be two stated goals. One would be benefiting local communities in countries where the company operates, and maybe another goal, if it is one, which is trying to act in concert, if not in explicit coordination, with U.S. foreign policy objectives.
How do you get all that into alignment?
STANLEY LITOW: Well, let's start off with, you know, we're a big company. We have a lot of resources, you know -- over 400,000 employees, a $100 billion company. We've been in business for 100 years. And among technology companies, being in business for 100 years is sort of unusual because the technology comes and goes and companies come and go, so you have to reinvent yourself.
The two things that I think the company has that's particularly valuable is the technology innovation and the people. That's what the company is made up of. And how you train and prepare your people to lead in the 21st century is a real challenge.
If you train your people in the same way that you did in years past, you're going to be behind the eight ball, because classroom training doesn't work, and international assignments where people live in enclaves and they're not part of the culture doesn't work. And if you expect full global integration, you've got to give your top talent the kind of experience that's going to enrich them, enrich the company and, hopefully, make a difference in the community.
So the Corporate Service Corps is sometimes referred to as the corporate version of the Peace Corps, but there are some important differences. At IBM we take our 500 top emerging leaders every year -- and about 10,000 of our employees would apply to get into this program; it's a pretty high bar, more competitive than some of our most competitive universities to get into.
And then they're assigned in teams of six to 10 in critical geographies, about 20 of them right now -- large concentrations in Africa, Nigeria, Ghana, Kenya, Philippines, Malaysia, South Africa, Turkey -- and they work together.
And it's a global team; it's not just a U.S. team, so it consists of our employees on a worldwide basis. And they have all the requisite skills, so some people are high-end technology or software developers, some are business consultants, some are communications people, and they work on the ground solving a critical problem. So in Nigeria, it might be setting up in Cross River Province a health care social services system. In Tanzania it might be a strategy and plan for the tourist industry.
I like to describe it as a triple benefit. So benefit number one is obviously people on the ground are delivering millions of dollars' worth of consulting services that make a difference around job generation, economic growth, in the communities where they're in.
Second of all, for the individual, it is leadership development. It's figuring out how you're going to build skills in this individual employee -- teaming skills, cultural adaptability skills. And you're not going to get that on a business trip to those geographies. Working together, living together, working 24/seven and then taking advantage of the technology connection so they're doing their work, and then mentoring the next team that goes in so they maintain ongoing contact and development.
And then the benefit to the company is clear, because at the end of, like, a two-year period you have a thousand of your best emerging leaders in the company who have on-the-ground knowledge and experience of these geographies. So if you're going to think about business strategy, it's on the basis of people who've really lived there and been there and can be helpful in guiding the company's activities.
So I think it is the future, really, in terms of leadership development. I think it's the future in terms of building the kinds of skills in the private sector that's going to be relevant in global enterprise in the 21st century.
In terms of U.S. policy, your question about U.S. policy, I think the interesting thing is the global construct of the team and helping people to understand U.S. perspective in a very, very different light. And I think it is potentially really transformative, because if you think about -- for us to have 1,000 people over a two-year period, just imagine if the Fortune 500 companies, instead of having international assignment, did the exact same thing -- and you had 500,000, you know, of the best leaders in the private sector having that kind of experience on a worldwide basis in global teams, solving problems, their understanding and perspective of the public sector, the private sector and the nongovernmental sector working together, I think, would really be a transformative experience. So I really see it as an opportunity for the future.
FREEMAN: Oh, that's terrific. Come back a little bit to the U.S. government alignment. Tim, private-sector role in conflict zones and peace building is a subject that maybe's gotten a bad name over the last decade. You know, for example, one of the largest private security contractors in Iraq got into so much trouble it had to change its name. (Chuckles.)
But there's a lot more to the subject here than private military contractors, and there's a whole world that you've been living in for much of your career, and I've participated in somewhat myself, of how corporations can make positive responsible contributions to conflict prevention, resolution, peace building.
Give us a snapshot, if you would, of where we are, what we've learned maybe over the last decade since this has become a defined subject.
TIMOTHY L. FORT: Sure. Sure. First, thanks all of you for coming today and for the invitation to be here. This is one of those moments where growing up in a farm in western Illinois, I'm trying to figure out how the heck did this happen that I get to speak to this group? (Laughter.) We were so small, it's not even one of those one-stoplight-in-a-town; there's one stoplight in the entire county, and that's new. So it's a real joy and pleasure and a little bit intimidating to be up here, but we'll give it our best shot.
The idea of business or trade and economics and peace goes back centuries. Montesquieu and Kant and others have talked about trade and peace for a long time. Republican and Democratic administrations alike tout the benefits of free trade, economic development, things like that.
What's new is in the last 10 to 12 years people have started to focus on the actual actors that are delivering the trade, the actual economic actors, the business institutions themselves. Because it's not just any kind of economic activity that's going to necessarily create harmony and understanding. One can imagine colonialism or sweatshop labor or any number of kind of things that would actually sow the seeds for resentment, as opposed to peace and harmony. And so it's a certain kind of behavior that we think actually could promote peace and harmony -- the way the businesses are conducted.
Now, keep in mind, as Bennett said when he was introducing me, that I'm a business ethicist. And so the way that I came upon this was about 12 years ago and I was finishing a book for Oxford University Press on my conception of how corporations should organize their affairs to develop a culture of ethics.
And I was reading in the peace studies literature, simply because I like to read that kind of a literature, some studies of anthropologists, a relatively -- attributes of relatively nonviolent societies. And what I noticed was that they were pretty much the same things I was arguing about of how businesses should behave ethically. They mapped really well onto them, and that was the "Aha!" experience of, I wonder if there's a way that businesses could conduct themselves that would contribute to this notion of peace and harmony.
Give you a snapshot of that, three key ways that we have talked about. One is economic development itself, providing jobs, alleviating poverty. Second one is rule-of-law kinds of things, and particularly avoidance of corruption -- clear correlations between countries that are highly corrupt and those countries that resolve dispute by violence. And so to the extent that a company can have a strong anti-bribery policy, they do something to move the needle away from violence and toward peace.
And then the third is a little bit more amorphous, but it's my favorite, and that is the sense of corporations in community, and that has two dimensions. One is the external dimension, which is corporate citizenship, corporate social responsibility. And I think that we pretty well understand that, and Stan's going to be able to tell you much more definitively about that than I'm going to be able to. I'm going to be listening when he talks a lot more, because he's going to be teaching me a lot of things.
The other dimension, though, that I think is fascinating to think about is the internal structuring of the business organization. I mean, how is it structured to protect human rights within the organization for gender equity within the organization? I'll give you a quick example.
Voice is almost always attributed to be an attribute of relatively nonviolent societies. There is a leading management theory, usually under the quality-management umbrella, that says that if you want to be economically productive, if you want to produce high-quality goods and services, you have to empower and require people up and down the corporate ladder to speak up if they see a product defect. Otherwise, it's inefficient and it's too late.
Well, that's a dimension of voice. I'm not talking about corporate democracy here; I'm just talking about giving people a chance to have a say over what they do at work.
So if you put those together, there are ways -- I mean, those are attributes of nonviolent societies too. And we don't have enough time to go through all of those, but those are attributes of those too. So certain ways that business conduct themselves, I think, can make a positive contribution.
Okay, so if trade and economics are the 35,000-foot level, I just gave you the 15,000-foot level. There's a lot more drilling down that we have to do. And one of the things that I'm really pleased about -- two things -- is that we have an academic community now of about 100, 150 scholars. When I got started, there was about three, but there's about 150 scholars who are really trying to flesh this out.
All we've done at this point is to give a plausible case. We don't have anything definitive. We don't have anything beyond a reasonable doubt. But we have a plausible case of how these things might be put together, and we've got a lot of academics that are working this with empirical studies.
The other thing that I'm really pleased with -- and in fact the second meeting happened yesterday -- is that there's now a task force that my institute is leading, co-leading, with the U.S. Institute of Peace that is comprised of retired generals, retired CEOs, NGO leaders, business leaders, academic -- that are trying to pin this down, get much more definitive.
So we have to look at things like what kind of business are we talking about. Multi-national company? Are we talking about social entrepreneurship? National/local company? So there's lots of fine grain that we have to do, but I do think that there is a "there" there to the idea of the way in which businesses can foster peace.
FREEMAN: So let's come back in a few minutes, Tim, to the "there" with maybe a couple of examples of what U.S. corporations are actually doing on the ground. The extractive sector who's been particularly active, for obvious reasons, operating in a lot of conflict zones, but there are others as well. Come back to you in the next round.
General, you -- we mentioned NGOs a few minutes ago, and you've been in the middle of an extraordinary operation working together with USAID, private-sector companies and NGOs of all sizes and shapes and national origins, U.S., European and otherwise. There've been some problems, some tensions along the way. There's been over the last decade conflicts at times between the military and civilian roles.
Tell us about some of the issues that you've had to deal with in Haiti in the last year, particularly involving NGOs.
KEEN: Well, I think, first as we confronted Haiti, you know, a disaster of epic proportions in terms of those who were already working on the ground, NGOs included -- and Haiti had more than its share of NGOs that had been there for years, really keeping the society and the government afloat, if you will. And when the disaster struck, it affected those NGOs as well as the United Nations, which had been there for years establishing the security and stability of the region.
So as we entered following the earthquake -- I happened to be with Ambassador Ken Merten at his residence when the earthquake struck. So it was immediately apparent to us as, within minutes, that what we were confronting in Haiti was going to require the entire international community, certainly the U.S. military. And the government immediately came to us within hours, asking us to essentially take over the airfield.
So everyone immediately -- you know, the following days that were on the ground, they were essentially responding to save lives and to account for their own people. And the United Nations was doing the best it could, and it lost its -- both its civilian heads and over 100 peacekeepers that were on the ground, and was impacted heavily. So the first days and weeks following the earthquake, it was really trying to figure out who was there and what we were all doing and trying to flood as much assistance in to help save lives.
I think the major challenge that we all confronted is how you -- how you coordinate and organize the effort around, and everyone plugs into it. And that is still, I think, one of the major challenges, the coordination with the NGOs in particular. And what I found necessary -- and I happened to have a 26-year relationship with the Brazilian general who was commanding the U.N. forces. So we had known each other, so that facilitated us working together, but we both had not worked with the NGO community that were doing work on the ground.
So establishing that, working with OCHA and the U.N. to try to bring them together and to try to work beside each other as we went forward. And there was a lot of friction, obviously, natural friction. So as we went forward, I think we got more effective at doing that. But meeting the needs of the people in the government, I think, is something that we confronted, and then how you do that and establish mechanisms.
So we tried to establish coordination centers that brought them together and tried to meet the needs -- in many cases, trying to balance what the NGO community or a particular NGO was trying to do, whether it was establishing a displaced persons camp or distributing food. And how that balanced with the bigger priorities of the country at the time is something that had to be resolved on a day-to-day basis. But we tried to work through that, I think. And how we bring those together, I think, is the biggest challenge that they still face in Haiti today, with the public-private sector as well as the NGO community.
How do you meet the priorities of the country, how do you determine which airplanes get to land or which ones do not get to land was a point of discussion I had nearly every day with the U.N. and the government, and the World Food Program and other NGOs who were trying to get things in.
FREEMAN: Maybe if we have time in this round or in the -- from the audience we can hear a little bit more about specific activities of companies with operations on the ground in Haiti, whether it's Gap or Fruit of the Loom, with textile factories, or Coca-Cola, for example, with its distribution network and how you used them.
But I want to go back to Stan. So you run this Corporate Executive Corps in 20 or 30 countries around the world. How do you set the objectives around particular initiatives or projects that your IBM folks get involved with? Do you do so in close alignment and consultation with the U.S. Embassy, with the AID mission in particular, with some reference, for example, to the Millennium Development Goals that might be most relevant in that country? And how do you then figure out how to deploy your tactical and managerial capabilities?
LITOW: Well, we collaborate very, very strongly and closely with NGOs who have a lot of on-the-ground experience in those geographies. CDS here in the U.S., which does a lot of work with USAID, is a very close partner of ours. Digital Opportunities Trust in Canada, Australian Business Volunteers -- these are people who are on the ground. They have alliances with local NGOs in those countries. Maybe their experience hasn't been exactly in mounting large-scale business consulting engagements, but we rely on them. We rely on our, you know, businesspeople, our country general managers, in framing the specifics of the projects.
And also they're fairly complex because it's not just going in and doing one assignment; it's -- sometimes we'll send four different teams in sequence into a geography. So you're managing it as if it was a private-sector business consulting engagement, and you're marrying the consulting goals and the technology innovation, which is critically important here. And we always have somebody on the team who has a finance background, communications background, marketing background, so you have all the requisite skills on an individual team, but to make the projects work in partnership with NGOs and also in partnership with local government, or it could be national government.
The project that we're engaged in in Kenya is setting up a network of digital villages, and we have to work with the government on that because that was a goal of the -- of the national government. They were limping along and they weren't doing very well by it. They needed top-level management talent on the ground to figure out sort of how that would work.
I think the other thing that's important is not just the 1,000 people that've been involved in this effort, but the way it links back to the full resources of the company. You know, we have, as I said, about 400,000 employees, but about 160,000 of them worldwide do regular community service.
And every time somebody does 40 hours of service each year, it triggers a grant to the NGO or to government, based upon their services. So over a, you know, five- or six-year period, that's 11 million hours' worth of community service. So those people on the ground can hook into the others who may not be on the ground with them, but can be reached via the Internet to be able to get other added additional services.
And one of the things that they use a lot on the ground is a special site that we and the World Bank IFC constructed called the SME Toolkit. It's a small-business toolkit. It has about 5 million users, and it's in about 17 different languages, so they can access those tools on the ground when they talk about linking to job development and working with local entrepreneurs on the ground.
So it's not just these, sort of, leaders; it's connecting to all the resources that the company has and all the connections that the company has to clients, business partners, other NGOs, et cetera.
FREEMAN: Let's go back to Tim before we go to the audience. I'm going to want to come back, though -- somehow through the audience, though, to you, Stan on again how you define some of these objectives.
Tim, give us a couple examples if you would, on the ground, of companies that are working in conflict zones or in maybe post-conflict zones, that are making concrete contributions or at least trying to. And what kind of problems are they running into and what kind of contributions are they actually making?
FORT: Okay. I'll give you two quick examples and a third sort of conceptual idea from a real company.
One is -- and remember in my last set of remarks I mentioned the different kinds of companies -- frequently the distinction between an NGO and a social entrepreneur is very thin. And there was an example of that, actually, at George Mason University where they have a business in order to fund some of their work that they do in their Center for Religion, Diplomacy and Conflict Resolution, where they run tours in Palestine.
The difference between the way they do it and what a lot of other people do it is that they make sure that they have two tour guides, one from Palestine and one from Israel, that give both sides of the story. And so you've got people coming in, they go visit places in both areas and then they have to listen, and they have credibility with both areas because there's someone from their side in the area. And that is a way to build understanding between two parties in a way that is very difficult to achieve otherwise. Now, that's small, that's incremental, but it's still moving the needle a little bit. That's one.
Second -- and I'll preliminarily say that I think that democracy, voice and free flow of information are good things, and they tend to be correlated with peace. I think it's fascinating what happened this week with Twitter and Google over in Egypt to find a way to allow for free flow of information.
Now it wasn't, I don't think, a great political statement necessarily by the two of them, but it was core to their identity. I mean, those institutions are known for free flow of information. And that happens to align very well, but still I want to give credit to something that I think is really extraordinarily valuable of what they do.
And then the third, more conceptual, thing is -- and truth in full disclosure, this is about Ford Motor Company and we are doing a project with Ford, so I tend to be biased to liking Ford right now. They're giving me a lot of money right now and so -- (laughter) -- keep that in mind when I'm waxing eloquent about how wonderful Ford is.
But they have this model that they're talking about. It's called the Trusted Partner Model. And the idea that they have is that if you are engaged and are a good citizen wherever you're doing your work, it is a competitive advantage for innovation. Because if you are trusted and want to make innovation, there's always the pushback -- why change? -- when there's always a resistance to change. But the more you are trusted as a corporation, the easier it is to make changes in your workforce and also in the places where you're doing work. And that dimension of trust gets carried out by respect, you know, and by those kinds of peaceful attributes that I talked about earlier.
FREEMAN: Just -- I'll just note before turning to the audience that in the extractive sectors -- oil, gas and mining -- there are a couple of examples of public-private cooperation that have -- that really contribute to better governance and to human rights.
One is the Extractive Industry Transparency Initiative, whereby a number of oil and gas and mining companies commit to disclose their revenue payments to companies around the world where they operate. And in turn those companies try to disclose those payments in return on a reciprocal basis to enhance transparency and diminish corruption over time.
Another example, which really gets to conflict in a much more tangible, operational way, is the Voluntary Principles on Security and Human Rights, originally a State Department initiative with some involvement by the U.S. military in countries like Colombia, whereby oil and mining companies commit to live by certain human rights standards in their arrangements with public and private security forces.
So those are a couple of examples that -- both are compiling track records that are beginning to make a real difference.
With that --
FORT: If I may say, though --
FORT: -- our moderator had a key role in developing those. He's too modest to point that out, but Bennett had a key role in developing those.
FREEMAN: Well, thanks. But with both of those, it's a cast of hundreds around the world, even thousands.
But so with that, I think the time has come to turn to all of you -- there's just tremendous expertise in the room -- to pose questions to our panelists. And when I call on those of you -- and there are microphones around the room -- please, as always at the Council, state your name and affiliation. Limit yourself to one question and keep it concise to allow as many members as possible to participate.
So with that, questions from the audience.
QUESTIONER: Anne Richard, International Rescue Committee. Hey, Bennett.
FREEMAN: Hi, Anne.
QUESTIONER: I'd like to ask the general, based on your Haiti experience, do you feel that the various pieces of the U.S. government that showed up had the right training and the right backgrounds, first, to do what they needed to do, and second, to work with each other?
KEEN: No, I don't think we were certainly as prepared as we could be or should be to confront the challenges of Haiti. I think there were sectors and elements of tremendous success. And I'll illustrate one, and that is the -- often, USAID's relationship with a number of urban rescue teams from around the world -- six in the United States in particular that responded, but over 30 that responded within hours into Haiti -- that did urban rescue, essentially they saved the largest number of live rescues -- I think over 130 -- from under the rubble.
Those relationships had been developed and protocols for their response had been developed over years, and they responded rapidly and were tremendously successful. But if you look in health sector, you look in many other sectors, while the response was robust it was not as coordinated and synchronized as we would dearly like for it to be. But again, I think the magnitude of the disaster and the overwhelming response presented unprecedented challenges in that respect.
But I think this is one of the areas that we -- that is being looked at in terms of what lessons can be drawn from that. Can you establish a sort of international framework for response in some of these sectors beforehand, so it can be gauged in what the requirements are and it could be done in a little bit more coordinated fashion? So I think we have a lot to learn in that regard and in making it more effective. But I think there were areas that performed exceptionally well.
FREEMAN: Yes, sir.
QUESTIONER: Phil Carter, McKenna Long & Aldridge. I work a lot with government contractors who have a statutory and regulatory responsibility for social responsibility. And this is for Stan.
We're in a down economy. If you're pitching this to a business leader that is not in that sector and doesn't have that responsibility, how do you make the business case for CSR? We sort of presume that it's there, but I'm skeptical that there's actually a short-term ROI in a lot of these things that businesses will hook into and buy.
LITOW: Well, we've been able to document a fairly consistent short-term and a very significant long-term economic benefit, and I do that in my annual presentation with our CFO to our IBM board.
Number one, a lot of the things that we do involve technology innovation. We created World Community Grid, which uses grid technology to contribute supercomputing power for humanitarian research. We set that up so you can donate the unused cycle time on your individual PC, combine it with others and create a supercomputer. It's fueled AIDS research, cancer research, but it's also created intellectual -- significant intellectual property for the company that has a significant economic value.
The Corporate Service Corps that I described has built a knowledge base in the company around growth markets that we've capitalized on from a business standpoint, not on a quid pro quo basis, but we've wound up with a significant amount of economic return.
The actual value of the leadership development and training we've decreased our -- increased our retention rates. We've used it to attract significant talent. We've motivated investment from socially responsible investment funds. I usually document a three-to-one return on the CSR investment that the company has made on a global -- on a global basis. And you know, having our CFO next to me explaining that that's, you know, true, fast and clear and it has a significant amount of economic return. Now, from a company standpoint, we like to think that we can get a better than three-to-one return in a lot of other areas. In research, definitely.
But it's a fairly compelling argument that this is not about -- it's not separate from the business; it's connected to the IBM business strategy. If you look at the two or three most significant investments that we're making, business analytics, we lead in the area of social investments around business analytics. Cloud computing, we've developed a disaster-relief-in-a-box solution called -- with Sahana -- that we've put on a cloud, making it easier to deploy -- which makes the case for cloud computing, because for a lot of people that's a little bit strange and Star Warsy.
So I think that the connection to business strategy, economic return, is absolutely clear. If you don't deliver it in the way that you deliver your business, you're not going to get any results.
FREEMAN: Great. Nina?
QUESTIONER: Yeah. Nina Gardner -- (off mic). Nina Gardner. I consult on CSR and teach at AU on business and human rights.
But I had the opportunity of going to Tunisia and Egypt to set up for Vital Voices some public-private partnerships with women entrepreneurs. And one of the things I saw is that it's probably the best value for money in terms of setting it up so that it's not -- it was a (MATB ?)-funded project. But of course we had private sector involved and it was good, because the women, as consumers, and to your point, are the ones who make those business decisions.
One of the things I was wondering for you all to comment on is I think this is absolutely the way forward for U.S. foreign policy, but I didn't see that there was much coordination. And I'm wondering if there's coordination between our government and other governments in some of these parts of the world where perhaps, for example, the French government would be more present -- for example, in Tunisia -- and how you would feel about coordinating a public-private partnership with competitors and companies that are not necessarily American on site.
LITOW: We work very closely with other companies. Virtually we -- everybody is both a customer and a competitor these days, so I don't think you can be so careful about drawing the lines between who you'll work with and who you won't work with.
And, you know, we do business in 170 different countries, and usually our country general managers and our local teams are local, and they have very strong relationships with local governments. So in every single instance that we -- that I talked about with regard to the -- (audio break) -- we worked very closely with local government.
In some of the deployments about -- you know, World Community Grid, our partners are in China, in Brazil, in South Africa. If you work with a local university on the ground, very often they have a strong relationship with the government and NGOs. The NGOs are their partners; government are their funders.
So I think -- you know, we've gotten beyond the point where a U.S. company can say you're working with the U.S. government and U.S. NGOs completely. Things have really, really changed. And if you look at our corporate social responsibility investments, 60 percent of it is outside the U.S.; 25 percent of it is growth markets. And if you went back into the 1990s -- I mean, even today the average among Fortune 500 companies' contributions alone outside the U.S. is a single digit.
So I think it's going to change. It has to change, because the world has changed.
FREEMAN: (Inaudible.) There's two gentlemen here side-by-side -- if we go to first you and then the gentleman behind you.
QUESTIONER: Rich Jaskot, Booz Allen Hamilton.
All of you talked about information-sharing requirements and how important that is, whether it's sharing communities of interest or what you're doing there. And obviously, General, you saw that in Haiti. But when we get back to foreign policy goals for the U.S., it's usually all about resources. And although it seems like a lot, the minute you start getting down to activities, those resources dissipate quickly.
Can either of you, or any of you, talk about either areas where you have been able to share information across the public-private lines to assist the U.S. government in planning and conserving resources and better focusing them because you're already operating in the area? Or General Keen, maybe ways that SOUTHCOM or other areas, you know that you're looking out there at what private community's doing to better focus your resources?
FREEMAN: Great question. General?
KEEN: Well, (I'll hit upon -- Rick ?). I mean, we're working -- one of the entities in platforms that we're working with -- and Booz Allen Hamilton has been a big part of this in terms of rolling it out for us, and we used it in Haiti, is the --what we call the All-Partnership Access Network, APAN. And it is a platform to be available on the Internet to coordinate and then collaborate with the public-private sector on what we're doing on a day-to-day basis within the region, and where they might be able to partner with us.
For example, if we're building a school in El Salvador, we need people to put the desks, chairs, books, et cetera, into that school, working with USAID and find out which folks are on the ground that want to partner with us.
I think we're in -- trying to figure out how to network platforms like that with things that already exist so we can get better understanding and situational awareness of everything that's happening on the ground. And I think it's an area that we need to figure out how to expand. And we're just trying to bring the people together that can help us do that from our own interests in Southern Command, but (principally ?) we're dealing with humanitarian assistance and disaster relief, but not exclusively.
FREEMAN: Stan, do you want to add to --
LITOW: I mean, I think that you have great opportunities for creating platforms that can reduce cost and share the benefit. We developed something, a high-quality automatic language translation, English to Arabic. We provided the technology for this Maydon (ph) project. I mean, obviously that has a huge opportunity for government, for NGOs, for other private-sector players -- you know, automatic language, open-source technology, the variety of different platforms being developed in research right now --
I mean, it sounds a little frivolous, but in a couple of days on television you're going to watch an IBM computer play "Jeopardy" against a couple of champions. And that sounds a little frivolous, but the technology behind it, the deep Q&A, natural language technology, could be a huge, huge breakthrough in health care. It could be, you know, the formation behind your 911/311 systems, so governments at a variety of different levels and others will be the beneficiaries of that kind of an advance. So that's another example.
FREEMAN: Go ahead. Sir.
QUESTIONER: Mark Brzezinski, McGuire Woods.
Professor, I want to follow up on your points about anti-corruption. Because if there is one place in terms of the way the government is interacting with the private sector that is very dynamic, it's in anti-corruption. The increase in prosecutions and enforcement actions against U.S. businesses for bribery and corruption abroad has increased over the last couple of years by an order of magnitude.
And there's lots of different approaches being taken now -- sting operations, the emphasis on internal compliance programs -- with enforcement actions being taken against companies for not having good compliance programs, liability being created for senior executives at home by third-party agents and salespeople abroad, and stuff like that.
To what degree is this having a -- the kind of change effect to advance the U.S. foreign policy goal of anti-corruption that is desired? And this administration in particular has been trying to multilateralize this. At the G20 meeting in Korea, anti-corruption and the Foreign Corrupt Practices Act was one of the tables at the G20, for the first time ever.
So to what degree is it multilateralizing, and what would be the U.S. reaction if in fact China does start prosecuting U.S. companies, for example, for corruption in Russia?
Thanks very much.
FORT: Well, there's about seven questions in there that's going to take us a while to sort through. (Laughter.) But Mark, it's a -- it's a great question. It's a great point, and actually I was almost going to hook onto the last question with a statement about corruption, and that is that there are going to be certain kinds of issues, corruption being a key example of it, where if it is not multilateralized, I'm not sure if it can really go anywhere.
And you can prosecute all you want, and you may have some impact here and there, and I'm glad it has impact here and there. I don't necessarily object to that. But if you don't have some sort of an agreement of across-the-board, or somewhat across-the-board among, say, G20 itself, of what corruption is and what -- how we are going to prosecute it, how we are going to provide information so we know what corruption is, I think that it's really going to be very much drops in the bucket. I think it's very difficult to do unless you have it multilateralized.
And you bring up China. Both with respect to China -- with respect to China and corruption and with some of these other ideas of, you know, human rights and voice and democracy, I mean, one of the things that came out of our meeting yesterday with the task force was the extent to which, A, U.S. corporations might be disadvantaged if they can't bribe in order to get contracts; and second, that there are different rules that are being played by companies of different countries that seem to also put you at a disadvantage.
And a story that I love to tell was that I gave a speech over in Oslo a couple years ago by an organization called the Business for Peace Foundation. And there was myself, there were two guys from Europe and then there was a guy from China.
And the guy from China -- we were talking about human rights and business and stuff like that -- and the guy from China said, you know what? A good principle for life is to identify what you're good at and to pursue it and do it well. You Americans, you Europeans, you're great at coming up with these ideas of anti-corruption and human rights and democracy. We in China, we're good at bulldozing, and so we're going to bulldoze. You come up with more ideas. (Laughter.) And, you know, there's a reality there of exactly on what page all the parties are and how they're going to compete with each other.
I think your point is well taken of, you know, that you need to have some sort of a multilateralization of issues like this, unless -- or else you're just going to put people at a competitive disadvantage. Or frequently that can happen anyway.
FREEMAN: I would just add that I hope that the OECD convention against bribery and corruption adopted, I think, in 1994, has made some difference, along with business principles that transparency International launched in '03 against bribery and corruption, plus the work that I referred to earlier on the extractive sector with the EITI. There is some progress being made in multilateral contexts.
Let me go to General Christman.
MS. : Bennett?
MS. : (Off mic) -- 97 countries.
FREEMAN: Ninety-seven countries. Gosh. Thanks, Jill.
QUESTIONER: Thanks, Bennett.
A question really, I guess, to Ken or to Tim. The title of the panel here is "Beyond Whole-of-Government," and I want to ask a question about the whole of the private sector here.
My assertion is that we've done a great job in the last 10 years of bringing the whole of government, both doctrinally and attitudinally together. FM307 on stability ops for the Marines and the Army, the QDDR, are really good about emphasizing the importance of whole of government. But both those crucial documents are virtually silent on the private sector.
And so my question is how do we engage the whole of the private sector beyond the ad hockery that now passes for trying to get the private sector onto the battlefield, onto the zones of persistent conflict? You know, we've got Paul Brinkley, for example, in Afghanistan ad hoc.
Ken, you talked about systems and processes that are under way from the DOD perspective. Are any of those now designed to bring the whole of the private sector in a systematic way into these zones, beyond the ad hoc nature that we've seen the private sector engage in to this point?
KEEN: Sir, no I haven't seen, to the extent that we are there yet. I think we have some challenges within certainly the military in terms of defining what our authorities, both legal and policywise, are to work with the private sector in particular areas. And those things are being addressed.
And by that I mean if a private-sector company wants to move bottled water from their warehouse in the United States to a location in whatever country in Latin America, how we can enable that. There are major limitations on getting them the mechanisms to do that. There are avenues to do that, but they don't necessarily address today's world in terms of the immediate need versus taking six months or so to coordinate it and set it up through something like the Denton Program, if you will.
So I think we need to be much more innovative and look at, okay, how can we facilitate enabling the public-private sector to work with what we're doing in a particular country, obviously led -- in most cases, what I'm talking about are led through a Department of State/USAID in the engagements we have in a particular country, whether it be trying to build partner capacity or just do engagements with them, notwithstanding the ability to respond to a disaster.
When a disaster occurs and we have a disaster declaration, then we generally have all of the authorities in place we need to do something. It is leading into that and enabling us to work with them on a routine basis, and that's what I found is we need to train together and we need to work with the public-private sector and NGOs on a more routine basis so when crisis does occur, either like Haiti or in a conflict zone, we're not exchanging business cards on the tarmac.
FREEMAN: Right. Exactly.
In the far back --
QUESTIONER: Thank you. My name is Yoneyama (ph), from Mitsu (ph) & Company, a Japanese multinational.
I am pretty much impressed with Mr. Litow's story. Well, the question is about countries' needs depend on the phase of development. And some countries require water, food or education, technology, depending on their progress.
How your company decide the nations to be launched with your team, and how you pick up the specific support -- from bottom-up approach, or from top-down approach? And whether with a combination with government, private or not?
Thank you for your information.
LITOW: Okay. I'll try to answer quickly. From the standpoint of the targets, the 20 countries that we select, they're -- from a business standpoint, pre-emerging markets. They're not the places where the company has developed significant business opportunity. They're places where it's a pre-emerging geography. Maybe you don't have a significant amount of presence; maybe there are significant problems on the ground. That would certainly be the case in Nigeria or Tanzania, where you went in with the idea that you would generate something that would create real value and real image.
From the standpoint of what you would bring to the table, we marry the technology that the company has -- specifically business analytics, cloud, grid, voice technology, automatic language -- with a set of critical, local, on-the-ground problems that exist in those geographies. Literacy, clear example. So we developed a way to teach non-literate children and adults to read using voice recognition technology.
So in each instance, the geography is set based upon one set of criteria, but what we have to offer, the talent and technology, is what we're developing for the future. And then when we put it together, it's addressed at what is the critical national agenda. So if it's jobs and economic growth, it could be a small-business toolkit. If it's literacy, it could be an online reading tutor.
So it's just the way you would develop your business strategy, the same way.
FREEMAN: We have time just for one more question. In the front here.
QUESTIONER: Thank you. Sherri Goodman, CNA, Center for Naval Analysis.
Ken, working in the 1990s with your predecessor, who was one of the leaders of the task force in Haiti in the early '90s, he used to say, George Close, I was trained to go into battle with the 82nd Airborne on my right and the 101st on my left, but I went to Haiti in the '90s with USAID on my right and NGOs on my left.
You tell a similar story about that operation now, from your recent experience, and clearly a lot of progress has been made in engaging the private sector. And yet we still heard today about the gaps in combined joint training and education that would really marshal the whole of government, civilian and military, private sector and NGOs.
I invite any of the panelists to share with us any ideas about how we could, recognizing current constraints in funding, advance those critical skills of pre-crisis training and education for public-private sector civilian and military.
KEEN: Well, one of the things that we've -- Haiti showed once again is that we need to develop within our exercise, military exercise program, we need to bring in this aspect of our training. We have not done it in the past.
We do very well with the interagency. I mean, we're getting ready to run an exercise next week, one of our major exercises where we have virtually every interagency organization. But we have virtually no representation from the public-private sector, NGO community. And it's a disaster response venue.
We are looking to change that dynamic. Obviously, part of the challenge is getting the public-private sector NGOs to participate in those exercises because of their capacity to devote two weeks. I mean, we like to plan the exercises; we like to have seminars, we like -- and the exercise generally lasts five to seven days. Sometimes we -- but we are reaching out to say, hey, we need to train with you. We need to exercise with you, but from our military perspective.
Now, within the institutions of sharing the need to do that, I think I see that being discussed, happening much more. But I think this is an area that we have identified in our lessons from Haiti. How do we train, exercise with this community in a much more robust manner.
FREEMAN: Anne, I see your hand urgently, and then we'll wrap up.
QUESTIONER: (Off mic.)
QUESTIONER: Because I agree with you, General, that this is exactly what we should be doing. And especially -- (aside) thank you -- especially on natural disasters. There are tensions between the civil and military side, I think everybody knows if you've been following Council meetings.
But on the natural disaster side, we ought to work more together. We ought to train more together. The tricky part is NGOs are not staffed and are not supported by the American public to train the U.S. military. And there's a lot of U.S. military, and there's not that many NGO personnel. And on both communities and in diplomats there's tons of turnover.
So the trick, I think, is how do to it in a way that it's lasting, through doctrine, through video. And I'd love to talk to you more about that.
FREEMAN: That's terrific. On that note, thanks to the -- all the audience for a terrific discussion, and most of all to our panelists. Thank you very much.
MR. : Thank you.
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