The Birth of a Transformation

Friday, August 17, 2018

I’ve always been interested in the turn of events that leads people to take on a transformative path. For some, it’s a goal that they have always wanted to pursue – perhaps a pilgrimage across ancient routes to open mind and soul.

For others, the thought of transformation is only considered when things are at their worst. At the point where there is no going back and staying in ‘this place’ is unbearable, transforming pain into a path towards healing becomes necessary to move forward.

Sometimes, it takes just a moment of serendipity for preconceived limitations and barriers to drop away, allowing a glimpse into an alternative state or future which suddenly appears possible. From this open space may come unrest, inner turmoil and disruption, until the path to transformation is accepted, or rejected.

Another avenue to transformation which has intrigued me from an entrepreneurial point of view, is when asking a simple question becomes the catalyst for extensive change.

The Beginning of It All

I’ve been reading the book, Banker to the Poor: Micro-lending and the battle against world poverty (2007) by Muhammad Yunus. Yunus, a Bangladeshi economics Professor, formed the world’s first micro-credit bank which encourages people living in deepest poverty, in particular Bangladeshi women, to take out a loan for an enterprise which will help them earn enough to live another day.

For many women in Bangladesh, their life of semi-starvation, beatings and homelessness is an endless cycle of misery. When Yunus realised that for only 22 cents, he could provide a woman with a means to buy materials to weave stools and earn an income, he asked his local bank why they wouldn’t loan money to people in poverty.

The bank manager responded that it was against the rules if a person had no collateral. Even with collateral, women were unable to access banking loans unless their husbands agreed, which was usually out of the question. Gradually Yunus realised that the banking system as it was, would never provide the “banking untouchables” with the loans they required to escape poverty.

He writes, “That was the beginning of it all. I never intended to become a moneylender. I had no intention of lending money to anyone. All I really wanted was to solve an immediate problem. Out of sheer frustration, I had questioned the most basic banking premise of collateral. I did not know if I was right. I had no idea what I was getting myself into. I was walking blind and learning as I went along. My work become a struggle to show that the financial untouchables are actually touchable, even huggable.” (2007, p.57).

Today, the Grameen Bank has over 8.93 million borrowers, 97% of whom are women. It has 2,568 branches with services in 81,400 villages, covering more than 97 percent of the total villages in Bangladesh ( Credit is provided based on mutual trust, accountability to a group, participation in economic activity and creativity. The transformation which Professor Yunus envisaged could be achieved through micro-credit, was that “these millions of small people with their millions of small pursuits can add up to create the biggest development wonder.”

It’s NOT The Size That Matters

While the point of any transformation is to radically change something, it doesn’t rely on having only large-scale enterprises in mind; in fact, quite the opposite. By noticing a need and deciding to act on it in even the smallest way, you begin to explore and practice any number of different ways of thinking. These different ways of thinking lead to trying out different behaviours. These different behaviours ultimately lead you to experiences which shape the way a transformation might unfold.

The transformation of the micro-credit system in Bangladesh started when Yunus asked one question of the banks: ‘Why won’t you loan money to people without collateral?’ Rather than assume that a loan would be paid back without collateral, the banks had decided the poor could not be trusted unless collateral was part of their banking loan agreement.

Asking the question however, is not enough. Yunus could have shrugged his shoulders at the answer and left the problem sitting there. Instead, he felt annoyance, anger and frustration that something as little as having no collateral was preventing the poorest people in his country from achieving economic survival.

The Discomfort of Dissonance

Why didn’t Yunus just leave the problem as it was? Because his brain wouldn’t allow it. The brain prefers a state of harmony with the information it receives. When two facts match up to your belief system, such as, ‘People in poverty need loans’ and ‘banks loan money’, then you experience cognitive consonance. When you say, ‘this feels right’ you are describing a state where your brain has recognised that these facts go together and there is no conflict involved. Yunus was an economics professor – he knew that the purpose of a bank was to loan money.

But when you hold beliefs or facts that are not consistent with each other, or are opposites, such as ‘People in poverty need loans but banks don’t loan it to the poor’ then you experience cognitive dissonance. Cognitive dissonance is uncomfortable because harbouring two conflicting thoughts triggers a threat in your brain.

Error Signals

The part of your brain that detects errors is the anterior cingulate cortex (ACC).  On this diagram, it would be situated in the violet coloured area, in front of the area marked cingulate gyrus. 

When two ideas are contrary to the way you expect, an error signal results. The ACC is like having a tiny alarm in your head that lights up to warn you when something isn’t right. When the ACC fires too frequently, it brings about a state of anxiety and stress until you find a reason to explain away the dissonance.

There are various ways to overcome cognitive dissonance in any situation. You might:
  • change the way you think about the situation, for example, ‘People in poverty need loans so I’ll loan money to them.’
  • You might decide that people in poverty are in the right and the bank is in the wrong.
  • You might put more weight on one fact over another, such as ‘People in poverty get plenty of help through relief donations, they don’t need access to loans.’
  • You might create new beliefs that replace the old, such as ‘People in poverty don’t need loans, they need to live in an area with more employment.’
  • Or you might acquire knowledge pointing to the positive effects of poverty, ‘People in poverty are said to be happier.’

Changing Your Thinking

Mohammed Yunus chose the first option. He changed the way he thought about the problem. Rather than find a rationale as the bank had done, for why people in poverty needed to stay out of the banking system, he found the dissonance so disturbing that he took one small step towards changing the way the banking system operated in Bangladesh. He took out a loan and acted as guarantor so that the “…'banking untouchables’ never had to suffer the indignity and demeaning harassment of actually going to a bank” (2007, p.57).

This one step put him on the trajectory for transforming access to micro-credit for people in poverty. He could have stopped at any time but each change in the way he thought about the problem led to a new behaviour and a new experience. This is the way we transform ourselves and our situations; not through blazing lights and fanfare but through one small decision which leads to another and another.

If a transformation process is on your horizon but you don’t know where to start, begin with a decision. Just one small decision to act in one small way will light your way to the next point. Consider it a quest that starts with the first roll of the dice. You don’t yet know which square you will land on, but you will be moving in the direction you are meant to go.