Interview with Yann Risz (EDHEC Master 1988), 2021 EDHEC of the Year

Yann Risz (EDHEC Master 1988) is Franco-Austrian and more recently also American, grew up in the Congo and has lived in around 20 different countries since. From his early career with Volkswagen, moving between Germany, China and Mexico, to working for McKinsey in San Francisco and the United Nations in New York, up to the creation of Aligned Incentives in 2015 in the San Francisco Bay Area, he has redefined business as a set of opportunities to improve the way we live together. For Yann, understanding others is key. He now advises businesses and institutions on the range of societal risks they face in both financial and societal terms. Geopolitics and the major challenges of our times are never far away, which gives our daily life an incredible wealth of discoveries, peppered with fascinating collaborations.

Yann received the EDHEC Person of the Year award at the 2021 EDHEC Rendez-Vous. Here he tells us in detail about his philosophy and career.

How did you manage to build international mobility in your first big positions?

Mostly luck and an openness to seize opportunities as they present themselves. I was hired in the Export Division of Volkswagen. My first boss wanted to send me to China to develop software for car dealerships. I pointed out that I had never been to China, had zero software development experience or for that matter had at that stage never entered a car dealership. His response was “well then it’s about time”. It ended up being an extraordinary experience at a time when China was still just emerging from the Mao years. The project went quite well as it forced me to start with first principles and understand Chinese retailers from the ground up, which was exactly what was needed. This opened up other opportunities in Mexico, the US, and other countries. Later, back at headquarters, I came across people in their late 20s that had regular meetings with my CEO. I was fifteen levels down from the C-level and asked who these guys were. That is the first time I heard about McKinsey and their expertise in solving complex problems. The idea of developing expertise not on a subject but on solving problems in general intrigued me. The head of Human Resources suggested that I do an MBA. I went for it, and ended up working for McKinsey in San Francisco, Finland, Singapore, Malaysia, and Australia. This tendency of jumping into new things has been a constant. I do not want to make it sound easy. I often felt at the brink of incompetency. Throwing yourself in cold water comes at a cost. 

You already studied environmental issues when doing your MBA at Harvard Business School; did you already sense, back then, the potential of the sector or were you just interested in it? How did you get interested in this field?

I did not sense the business potential at Harvard but was always interested in societal issues. Rather than a linear progression, I think of my life in concentric circles that build on each other: an idealistic core circle, a business circle, and a societal circle. 

The first circle is the idealistic circle, my societal awareness. I was born and grew up in Africa at a time of decolonization. My parents wanted to explore the world and they ended up living in Congo for 12 years. As a family, we would spend months in remote villages making documentaries on social upheavals. The times were adventurous and so full of hope, but also tough. Many of our family friends were involved in the guerrilla, some ended up in jail. Dinner conversations were intense, political, and heated; while as a kid I understood only part of these discussions, they marked me. After leaving home I continued my own explorations. 

The second circle is business. I learnt useful tools and ways of thinking. Two key things emerged: first, understanding the incentives of the people you deal with and building strategies based on their incentives; second, finding the right blend between creative thinking and data driven decision making. Eventually I did want to go back to my societal interests though; business just for the sake of business started to feel a bit empty. 

My third circle is the integration of the first two circles, tackling societal issues with analytic business tools. Building on the first two circles my focus was to develop solutions that took into considerations the incentives of the various actors, from the ground up, that were creative but also data driven. I have been in this third circle for 17 years now, the first year at the UN, then mostly as an entrepreneur. 

Among your numerous collaborations, you worked with famous business guru CK Prahalad …

I was fortunate to meet CK Prahalad while on the staff of the Commission on the Private Sector and Development at the United Nations in New York. The Commission brought together fifteen high-level people – businesspeople like the CEO of HP and the Head of McKinsey, heads of States like the Prime Minister of Canada and the President of Mexico and academics like CK. For a year, we worked together and thought about how business could solve or help with societal issues or economic development. We had a “carte blanche” to go around the world and speak with anybody we wanted – intellectuals, civil society leaders, entrepreneurs – to write a report at the end. CK authored The Fortune at the Bottom of the Pyramid, which solidified CK’s ranking in the world’s top 10 management thinkers. He showed companies how to view the 4 billion people living in poverty as an attractive market that’s worth investing in. After the Commission we started The Next Practice, a consulting firm that worked with companies to create new business models that catered to base of pyramid markets. I learnt a lot from CK. Sadly he passed away much too early. 

Do you think the diversity of profiles, i.e. not only operational businessmen, can transform business?

Look at how the Medici family brought together people or artists from very different backgrounds and what came out of it: the Renaissance. Not to compare ourselves with the Medici, but the societal challenges we address at my current company, Aligned Incentives, require a mixture of scientists, economists, data scientists, finance experts and software developers. As a small company we have learnt to build networks of talent around the world. Our core team is very small for the size of our business. Our model at Aligned Incentives is quite unusual, but I believe that broad loose networks of knowledge and talent are inherently better suited at creativity and delivering high value to our customers. When working with CK Prahalad we addressed social inequities. An integral part of coming up with creative solutions was working with people of different cultural, racial and wealth backgrounds. For example, one of the most effective distribution channels was working with informal networks of women in rural India. These networks comprise millions of women and reach far into rural areas. Why not involve them when develop next practice solutions?

Can you explain your current activity?

Aligned Incentives is a data analytics software as a service (SaaS) company that quantifies the societal impacts and related financial risks across 2,000 dimensions. Let us say you are a leading fast-food company; what are your impacts from cattle ranching in your supply chain all the way to waste created in your restaurants, in terms of greenhouse gases, waste, water depletion etc? If the world continues to heat up, what will be the impacts on the future of cattle ranching? What are the risks for investors in that fast food company? What tools does your lettuce supply chain manager need to understand the financial risks of increased water depletion? 

Our clients include organizations as different as the US Department of Defense, McDonald’s or HP Enterprise. On most large company websites, one of the first mentions you see is that what is good for society is good for business. When you scratch the surface, there is very little behind it, it is mostly an empty statement. What we do at Aligned Incentives is provide the analytics that enable the organizations to truly integrate societal issues such as climate change, water, toxic emissions, social impacts into their strategies, and develop competitive advantages by doing so. 

How do you make your analysis relevant to companies? 

We provide all analyses in terms of physical and financial impacts, costs, and risks. No company could imagine managing itself without a financial account system. Every year, companies disclose their income statement, balance sheet … We provide the societal accounting system for our clients and their investors. We are doing so with granular bottom-up data and aim to provide insights to people in sales, finance, and supply chain management. For example, if you are a beef purchasing manager, our SaaS platform and analytics enable you to understand the environmental and financial risks in 10 years in the scenario where climate change continues at the current pace versus one where we manage to avoid a climate catastrophe. How do climate change and water scarcity affect cattle ranching? Should we consider meat alternatives? The uniqueness of our project is the financial angle based on robust science, speaking the language of people who may not care about sustainability but want to understand financial risks. 

In today’s world, what do you believe in?

First is gratefulness. Our planet is just this tiny little miracle in a very vast dark and cold universe. It’s easy to forget how incredibly lucky we are, just to be alive. May sound corny, but I derive a lot of my happiness from just looking at the nature around me. Another level of gratefulness is towards all the selfless help we receive along the way, from family to friends and co-workers. As I get older, I feel how much I owe them and how little I have done to recognize them. 

Another is resilience, jumping back on your horse when you get knocked down. A colleague once told me: “Whenever you feel you’re great, you’re typically not that great, and whenever you feel you’re bad, you’re typically not that bad”. So true, on both ends. Do not get too self-important but also, accept failure and move on, which is more easily said than done. 

A third is the benefit of being around people who are different from me. Not only traveling but also in terms of choices of who you live and work with.

What are your links to EDHEC today?

They keep growing, at different levels. First, EDHEC is doing an extraordinary job in international partnerships, including here in my backyard in Berkeley. I love re-engaging with EDHEC faculty and leadership when they come to the Bay Area. Our US country manager and local ambassadors are also terrific in bringing us together.

Second, back to the topic of gratefulness, I believe in supporting EDHEC students with limited financial needs. I benefited from the generosity of others when I was a student; one donor once told me not to forget to pay it forward. And it turns out I am now a donor. I was recently very touched by a thank you card a student sent me.

Third, I am increasingly reconnecting with old classmates I had not seen for a long time. As we grow and experience both successes and failures, we increasingly realize the humanity that connects us all.

How do you think the EDHEC 2020–2025 strategic plan embodies the future of business?

EDHEC is poised to become one of the top global schools for students and companies interested in tackling societal issues, the same way EDHEC has been ranked 4^th Grande École in France  with its Master’s in Finance. I love the entrepreneurial way the school approaches the opportunity, including with EDHECinfra, following the successful sale of Scientific Beta for $200M.

Most surveys show that new generations increasingly care about sustainability and the school’s strategy will help it attract the best talent out there. Particularly since tackling societal issues is not a financial sacrifice: it is one of the largest business opportunities out there. Ask Elon Musk.

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