More than a dozen Kelley Evening MBA students are in South Africa to provide unpaid consulting services to small business owners in Johannesburg and the nearby Diepsloot Township.

“This will be a different business model and business environment for many of our students," explained Marjorie Lyles, professor of international strategic management and instructor for the week-long study abroad course. "Some of the people in these townships don’t have electricity; others don’t have water. Most of their customers are what we call the working poor, making about $3 to $10 a day or sometimes in a week. My students will have to think about how you serve this particular kind of market. It is often called 'the base of the pyramid.'”

The program is part of an existing collaboration between the Kelley School of Business and the Gordon Institute of Business Science (GIBS). Kelley Evening MBA students, who work full time while pursuing an MBA part time, spend about 10 days with GIBS and the small businesses identified by the institute. The main purpose is to provide an experiential learning opportunity for students, while providing free advice to the businesses.

The Evening MBA students are documenting their experiences as the week goes on. Read on to see the latest from South Africa.

Sunday March 12, 2017

Blog By: Olusola Afolabi, Trevor Bruner, Vipin Iyer, David Smith

We had quite an exciting start to this South Africa trip. We spent our day visiting The Cradle of Humankind and Sterkfontein caves just outside Johannesburg. This visit was followed by a visit to the Apartheid museum in Johannesburg. The Cradle of Humankind is the site of several fossil discoveries that have helped piece together the mystery of human evolution from human-like apes.

The key takeaway for me during this visit was the idea that concept, color and race are in our minds, and in reality there is no distinction between homo sapiens, because 99% of human DNA is identical.

At the Cradle of Humankind, we also saw a replica of the Taung Child’s skull, which was discovered in 1924. This discovery was heralded as one of the greatest archeological discoveries of the 20th century and represented the first of several fossils found in Africa that created a link between apes and human beings. For anyone traveling to South Africa, I would highly recommend visiting this location.

In the afternoon, we visited the Apartheid Museum, which is a relic of the apartheid era. The museum documents the movement, the struggle against it and the events leading to its downfall, followed by the transition into a democratically-elected government.

As part of the course, we read several books and articles and watched documentaries on the impact apartheid had on the lives of native South Africans, but it was extremely interesting to experience apartheid from the eyes of a South African.

Our knowledge about the era and what we saw in the museum were virtually identical, and it was nice to see this validation in an official museum in South Africa.

At the entry to the museum we were arbitrarily classified as "whites" and "non-whites" and were shown different exhibits from the apartheid era depending on where we were classified. This gave us a sense of what it might have been like to be a South African before 1993.

Another interesting fact of the post-apartheid government was the creation of a Truth and Reconciliation Commission to address violations of human rights abuses during apartheid.

Victims were interviewed and invited to recall their experiences, sometimes on live television, as sufferers of abuse. Perpetrators of this abuse were also afforded the opportunity to provide testimony and participate in a restorative process that could get them amnesty from prosecution. I thought this was a very innovative idea to begin the process of healing and forgiveness.

At the end of the day, our tour provider arranged a welcome dinner for the group at a marvelous Sandton restaurant called Marble.

Our group’s first official day was extremely informative and a lot of fun. We look forward to meeting our GIBS counterparts tomorrow.

March 14, 2017: Meeting the local businesses

By: Shanshan Zhang, Iris Wang Huixian, Holger Bayer, and Milan Patel

Our group of Kelley MBA students started today by driving through the township where each team’s consulting project microbusiness was located. Driving through the different parts of Johannesburg is always an interesting experience as Sandton (the area we were staying at) had luxurious hotels, shopping malls, large buildings and a vibrant culture whereas the townships were the exact opposite with poor infrastructure, minimal housing, high crime and low incomes. The amazing thing was how only a couple kilometers separated the nicest areas of Johannesburg from the poorest areas.

Diepsloot is a township in Johannesburg established in 1995, making it the only township established after the end of apartheid. It was originally established as a transit camp to account for overflow from existing townships like Alexandra. Unofficial statistics estimate that one million people share an area of one million square meters which implies a density of one person per square meter.

To say living conditions are tough would be a drastic understatement. Electrical supply outages are common and frustrating, and depending on the area within the township, up to 20 families share one port-a-potty.

The population of Diepsloot shares two government-run hospitals where one needs to be at the hospital as early as 4 AM to secure a spot in the line. While the conditions of Diepsloot are rough, there is, nevertheless, a big informal economy where microbusinesses seem to flourish.

Our Kelley MBA groups had the opportunity to work with a hair salon owner, a spaza (grocery) shop owner, laundry cleaner and a tuck (food) shop for each of our consulting projects.

Today, all the groups met with their respective entrepreneur to observe their local business and get to know the owner as well as understand their respective business models.

Our group was assigned TSK Hair Salon owned by a woman named Ficious. She is incredibly bright and passionate about her business and what she can accomplish. Today, it seemed there were peaceful protests in the area of her business forcing our group to meet with Ficious at a local restaurant.

As we asked her questions about her salon, we discovered her main burden seems to be her limited access to electricity.

She relies on a battery which she uses to warm water to wash customers’ hair, keep the light running in the evening hours, and powering hair blowers. However, using the battery requires her to recharge it every month which takes three days and the power is minimal, forcing Ficious to use her hair instruments sparingly.

Simply speaking with Ficious, seeing Diepsloot and understanding the living conditions was definitely an eye-opening experience for our group and class – and today was only the kick-off of our collaboration with her!

Prior to leaving Diepsloot, we had lunch with Ficious and the rest of our class. This was our first true experience with native South African food. We ate different meats and quasi-curries all of which had a rich taste and spice in them.

After lunch, we headed back to GIBS (Gordon Institute of Business) where we had a couple of class sessions with local faculty.

The first session was with Dr. Tashmia Ismail where we used a lego-building exercise to articulate what we experienced on our visit to Diepsloot. The session, at first, seemed slightly unconventional, but quickly led to a thoughtful discussion on the causes of the stark inequality of South Africa and the living conditions of the individuals in Diepsloot.

Our group, using legos, built two different models representing both the old and new townships. The model of the old township was filled with animals, spiders, armed police and chaotic buildings with no electricity. In contrast, the model of the new township was filled with trees, working men constructing new buildings powered by solar energy and colorful flowers all around the township. The construction of the models actually led our group to explore the topic much further than we would have otherwise.

The following session was with Dr. Adrian Saville who discussed the macroeconomic causes of the low growth of South Africa. His talk identified how important it was for emerging economies like South Africa to invest in their long-term growth.

The two sessions helped our class understand at a superficial level how South Africa’s economy has stagnated, leading to the inequality seen in the townships. By the end of the day, our group and class was exhausted. It had been a long day with an experience few of us will forget and a large amount of information thrown our way. We all turned in early to get ready for our first full-day with our microbusinesses!

Thursday, March 16, 2017

By: Praveen Srinivasan, Manuja Wimalasena, Sujit Telang, Uduak Offiong

The next day was our last day to meet our business owner and finalize our proposals to them. Prior to meeting our business owner Sophy Serake, a tuck shop owner (or small store selling food) in Diepsloot West Secondary School, our group had a lecture by Professor Tashmia Ishmail on ‘Business Models for the next Billion.'

We learned about innovative business models across many countries. Some of the innovative companies we were introduced to included: JuMo (South Africa), Selco Solar (India) and M-Kopa (Kenya).

We left for our final day at Diepsloot with Sophy to discuss improvement opportunities.

We decided to use Legos to discuss store layout improvements with Sophy.

One of our suggestions to her was to help her handle cash more efficiently during the busy lunch hour. 

After our visit to Diepsloot, we returned to Gordon Institute of Business Science (GIBS), only after being snarled in rush hour Jo’burg traffic.

We reconvened with our teams on either side of dinner well into the night, preparing for our final presentation on Friday.

This brought team dynamics to the forefront as we were all racing toward a deadline.