Jessica Droste Yagan MPA 2007 is removing the tension between social and financial return.
By Mari Megias
February 20, 2015
The company that educates prison inmates (Jail Education Solutions). The firm that streamlines community input on new architecture (Civic ArtWorks). The business that provides cloud-based management of medication supply chains in developing countries (Reliefwatch).
These are all startups financed in part by Impact Engine, a Chicago-based fund that invests in and supports for-profit entrepreneurs, with a focus on using business principles to effect social change. The CEO of Impact Engine, Jessica Droste Yagan MPA 2007, says the goal of the fund, now starting its fourth year, is to “remove the tension between social and financial return. We specifically want to scale solutions using the profit mechanism.
“Impact Engine focuses on making our companies seed stage investor-ready by testing the product, defining the market, and addressing gaps in a team. By the time companies are raising money from impact and other investors, they have a really strong platform.”
Growing up in southern Illinois, Droste Yagan felt sure she wanted to do something to help others. This desire to give back to her community was instilled in her by her parents, who were often assisting others in need. But after receiving her undergraduate degree in public policy from Haverford College and interning with Senator Paul Simon, Colorado Department of Health Care Policy and Financing, and the US Department of Health and Human Services, she became frustrated with a pervasive focus on politics over policy. She learned about a startup based on leveraging the competitive market advantages of the inner city to drive economic development and ended up working at the Boston-based Initiative for a Competitive Inner City(ICIC), founded by Michael Porter, a Harvard Business School professor.
During her time at ICIC, Droste Yagan served as a consultant on projects in various locations, including St. Louis and Louisville, where she defined inner-city areas, measured and compared inner-city and regional economies, quantified workforce capabilities, and produced dozens of best-practice case studies.
“This experience led me to concentrate on overlap between business and the public good,” she says. “I learned a ton about how businesses, governments, and nonprofits work together—or don’t work together. As consultants, we’d come up with different recommendations, but when the recommendations failed, it was often more due to the fact that people had a hard time working across sectors. Individuals from community organizations, the corporate sector, and the government didn’t speak the same language and there wasn’t a lot of trust. I wanted to be one of the people who could cross these boundaries and translate ideas.”
After a couple of other work experiences in community and economic development, she decided to head to graduate school, gaining admittance as a joint candidate for her MPA at the Kennedy School and her MBA at Stanford University. “My time at the Kennedy School was tremendously valuable,” she says, “particularly the way the MPA program is set up—we had a lot more freedom to design the components of our program than we had in business school.”
After completing her two graduate degrees, Droste Yagan joined a company that, on first blush, may sound surprising: she became the director of sustainable supply at McDonald’s. “The summer before I finished my graduate work,” she says, “I interned at the corporate social responsibility department at McDonald’s, and while I was there, I identified the supply chain as a huge opportunity and a huge challenge.”
She was at the company for seven years, during which she experienced many supply chain successes such as the use of certified sustainable fish and the support of coffee farmers. “But the thing I’m most proud of,” she says, “is the fact that sustainability became embedded in how supply chain decisions were made.” She says the biggest success was having everyone understand why sustainability is important to long-term business success. “Once you put that lens on decisions, around what impact a specific decision will have in 10 or 20 years, sustainability becomes important to those who are making purchasing decisions.”
Last year, Droste Yagan left McDonald’s for a new challenge. “I’ve been involved with Impact Engine since it started, as a supporter, investor, and mentor, and was very excited by what they were doing.” Her goals for Impact Engine involve supporting the community of potential investors. “We want to give people an opportunity to take the next step and become an impact investor, to offer them not only social support but also more access to what’s happening in the investment field,” she says. With a growing list of investors and a diverse set of startups, she is well on her way to achieving that goal.