Husk Power Systems: Darden MBAs Bring Power to Rural India
Manoj Sinha grew up in Bihar–“the most backward state in India,” he asserts. But the 35-year-old Darden MBA (’09) has spent his professional life in America. So when he partnered with Darden classmate Chip Ransler to build a business in his childhood home, he felt a little unprepared for the onslaught of challenges. “I was in a business ethics class where you say no to bribes, you say no to this and that,” Sinha says. “When you are operating in rural areas that have five levels of government officials, how do you deal with it, practically speaking?”
Sinha did something simple. He called up his former ethics professor, R. Edward Freeman, for a bit of private tutoring. Freeman’s advice proved sound. “We have never paid even a penny [in bribes] in our four to five years of existence,” Sinha says.
Socially Minded MBAs
Bribery is just one of many challenges Husk Power Systems continues to face. The company designs and installs power plants that generate electricity from rice husks in and around Bihar, where 70% of the population lacks access to power. It then equips villagers with the skills to operate them.
Since the business started in 2008, the number of plants has grown to 90, but progress hasn’t been an upward trajectory. “For every three steps we take forward, a lot of times, we take two steps backward,” Sinha says. He gives one especially colorful example: “You get people who you train for three to six months, and after that they fight with each other,” he says. “Like, literally fight. Fight as in they actually punch each other. I never learned techniques to address this in my business school.”
Still, when you’re one of the few startups of your kind, the unexpected is almost a given. Husk Power Systems is a social enterprise, seeking to simultaneously help and profit. “We started thinking–we can do it once or maybe twice with our friends and families’ money, but if we really want to expand it at a massive scale, it has to be a business,” Sinha says. “Social enterprise was not really defined as a sector at the time, so it’s kind of funny that I had to explain what we did because a lot of questions that would come to us were like, ‘Are you a nonprofit? Are you a for-profit? What the heck are you guys?’”
But times are changing. According to Sinha, the number of social enterprises–and the number of investment funds that cater to them–has grown substantially in the last five years. “In 2008, the financial crisis happened, and the majority of Americans lost a lot of money,” Sinha says. “So I think that might have been an impetus to the shift.” Watching corrupt investment bankers getting caught probably didn’t hurt either. “There’s something about the financial services market that might have prompted people to, you know, find meaning in their lives,” he speculates.
For all its headaches, social entrepreneurship comes with a few notable perks. You’re much more likely to get attention from major newspapers–and from the White House. Sinha explains that his “very tiny company” was honored earlier this year in a White House press release on the President’s Power Africa initiative. Husk Power Systems has pledged to install 200 power plants in Tanzania. “That’s my general, anecdotal sort of evidence,” Sinha muses. “If you go this route, the likelihood that you will be able to meet President Obama is actually pretty high.”