We first met the Cambodian managers of Jars of Clay Cafe, Pov (Vicheka) and Jenda in 2007, while we were living in Phnom Penh, Cambodia. We were really impressed to say the least by their integrity, honesty and hard work ethic. Having delivered a number of training and development programs for small business and not-for-profit (NFP) leaders since arriving in Cambodia in 2006 (via our business, Future Now Enterprises Co. Ltd), we had already noticed that a majority of small business and social enterprise leaders in Cambodia were limited by human resource capacity limitations, poor management systems, and an overriding poverty mindset. One thing was sure, we felt there was something different and unique about Pov and Jenda. We felt they were the type of aspirational and strong business managers we could work with and sensed something significant was at play with our connection. Little did we know at that point in time that we would embark on a working relationship that would extend almost a decade now and would see our efforts adding value to their team – helping with a number of transitions over the years.
Over almost 10 years, we have gone the journey with Pov and Jenda as the business expanded to more than double its staff employed and then recently to almost double their staff numbers again via starting a second cafe in Phnom Penh. This is their amazing story.. Jars of Clay Cafe was founded by Barbara Neale, a passionate and steely UK missionary in 1998 from very humble beginnings yet with a compelling vision to provide sustainable employment for young disadvantaged women including many who had been rescued from the sex trafficking trade. The business offered a selection of homestyle (predominantly western) foods, cakes and beverages and offered its customers both khmer and foreigner/expat a safe, welcoming and relaxed environment from which to escape the intensity of Phnom Penh city life. Many people likened the cafe to an oasis in the desert and from these humble beginnings under Barbara’s leadership the business, its staff and leaders grew a sustainable mission-focused business that employed between 5-8 young women by the mid 2000s.
In 2007 Barbara made the decision to return to the UK and to hand over the business fully to the Cambodian staff and management team. Prior to her departure, we (my wife, Jo & I) were asked to consider a role in supporting the business during the transition from expat leadership to Khmer leadership, together with another UK expat business owner (Michael King) who had established a mentoring relationship as well with Pov and Jenda. Although we were still very much on a steep learning curve ourselves at that point in time regarding the nuances of Khmer cultural mindsets, the complexity of building sustainable social enterprises in a mostly corrupt country, and in working within what can only be described as one big cross-cultural melting pot – it was an easy decision! As we felt a connection from the outset with Pov and Jenda, we jumped at the opportunity to walk alongside the young Khmer management and leadership team to add in our efforts towards seeing the business flourish under Khmer leadership. Although we fulfilled a transition role by supporting the Cambodian management team adapt to life without Barbara, we also started to focus on building up the capacity of the team and in forming an advisory board that could support achievement of Jars of Clay Cafe longer term vision.
From those earliest days of transition, the Khmer management & leadership team held strongly to the vision of creating a franchise type business model with the goal of starting 1-2 new cafes over the next five year period. It was exciting and challenging to be part of such a motivated and committed leadership group – and to see their own growth in mindsets, knowledge/ skills and teamwork. These factors remain the foundation of our work individually and collectively in seeing the broader dream of Jars of Clay Cafe become a reality.
Why is Jars of Clay Cafe worth raving about? Here’s five good reasons:
- Cambodian Ownership / Shareholding: Jars of Clay was established on the principles of equal ownership – all the original girls were joint shareholders together with Barbara in the founding years of the business. As new girls were brought into the business, subject to them showing good character and a longer term commitment to the business they would be offered a shareholding in addition to a fixed salary. Businesses thrive when ownership is distributed equally – resulting in everyone doing their bit to ensure the business is a success. Although salaries differed depending on the job role and responsibilities – each staff received equal profit share which promoted an ownership mindset among the whole team.
- Cambodian Managed and Led: Typically, most western styled businesses were led at that time predominantly by expats / foreign managers (in fact, the majority of SME businesses in PP still remain this way). Jars Of Clay Cafe is very unique in this way – they not only have sustained a profitable business without direct expat oversight / management for many years but they have also been able to drive a forward-looking growth agenda. By taking a step of faith, the business expanded initially by enlarging the first cafe footprint (effectively doubling floor space / capacity) which resulted in increased sales and a doubling of staff numbers!. More recently, the business took another significant step of faith by opening a second cafe in an emerging part of Phnom Penh city. This new (2nd) Cafe is now turning a profit consistently and was cashflow positive within the first 6 months of operation!. The ability to sustain an established business while navigating a growth agenda for a second business is a difficult job for any management team – let alone a small team of Cambodian women who lacked any formal education or previous experience!.
- Profitable & Sustainable: A key driver of any business growth is the ability to sustain revenue growth over a sufficiently long enough period of time to enable building up of capital reserves which can be invested in the business. In 2011, the Jars of Clay Cafe management team and the advisory board set about creating a capital fund to be used to grow the business in the future. These funds were sourced from existing Cafe profits and would mean each shareholder sacrificing their yearly profit share for the benefit of funding future business growth. We knew this sacrifice would not be easy for many of the existing shareholders. Many were from poor families and desperately needed those additional funds. To their credit – Pov, Jenda and all the shareholders agreed to stay the course and build up savings from their retained earnings. We journeyed with the Jars team for 3+ hard years of sacrifice which enabled the business to save in excess of $US40,000. These funds were then used to open the second Jars Of Clay Cafe in Phnom Penh Thmey in late 2015. What an amazing achievement for a small Cambodian business! What also makes this particularly meaningful is the fact that over those years of putting aside their profits, the Cambodian managers were approached by several expats /foreigners seeking opportunity to invest in their business. The management team could have opted for outside capital – but instead felt it was not in their best interests and kept pursuing their vision of self-funded growth. This is a role model for sustainable, indigenous, profit-led business growth.
- Replicable: Any small business seeking new growth will likely need to consider how to scale or grow revenues through their existing business model. The leadership team at Jars of Clay Cafe have taken a measured approach to growth – enlarging their revenues through a sustainable and replicable business model. Our role in providing business mentoring and advice has sought to add value at key points along the journey. We are incredibly grateful to be able to advise the team when facing key decision points and to simply be there to provide a sounding board or to give them confidence to dream big and take bold steps of growth when required. The ability to replicate any business model however requires visionary and bold leadership that is committed to growth over the longer term. The Jars Of Clay Cafe journey is remarkable in many respects – not the least due to the fact that they have built and retained such a strong local management and leadership team over almost 10 year period which has supported and enabled the business growth to date.
- Invest in building capabilities: As is typical in most small businesses and social enterprises – there just aren’t enough good people to get the job done! Most growth oriented businesses will face the human resource challenge at some stage of the growth journey. For the Jars Of Clay team, there is the added pressure in staying true to their social agenda – of employing young women / girls from vulnerable backgrounds. As most of the young women employed in the business often lack any formal education, and most don’t come with the required skills and knowledge – there is a significant amount of upfront investment in training of the new girls. In spite of these challenges, the Jars of Clay management team have consistently aimed for stepped improvements – both in terms of their product offering (range and quality of food and drinks sold), but also in regards to their customer service and marketing. From their humble beginnings the team has done incredibly well to increase their customer base and grow loyalty from their existing customers over many years. Investments in the leadership and management have been made to also ensure the leaders are growing in their skills as the business grows. As part of our commitment to support the business, we initiated two internships for both Pov and Jenda to travel to Australia to see first hand how professional cafes operate and to gain valuable learning opportunities through partner cafes (including short volunteer placements at reputable cafes while in Australia). Other investments in capabilities include recent work we are undertaking for the business (services delivered through Emergent Consulting Australasia Pty Ltd) – which include a complete refresh of the business branding, marketing, website and social media development. Although these investments require money, the Jars Of Clay management team have seen these as worthwhile investments to ensure the business capabilities are matched to the growth aspirations for the business.
Our role over almost 10 years as expat business advisors and mentors has moved well beyond the typical transactional type of working relationship. We consider the staff and management of Jars of Clay Cafe to be our friends. We have benefited greatly from their friendship and have learnt so much about Cambodian culture and values over these years. We are grateful for the opportunity to walk alongside such a great group of people that we can be mutually encouraged, learn from one another, laugh, cry and share dreams /visions of the future. As the business grows and continues to make a difference in the lives of many Cambodian young women, we remain committed to build capabilities and confidence into the team so that they can continue to achieve their dreams. We look forward to a bright future ahead for the Jars Of Clay Cafe team. Look out for the new Jars Of Clay Cafe brand, website and social media (..all coming online very soon!) and make sure you stop by at one of the Phnom Penh Cafes for a meal, coffee or cake next time you visit Cambodia!
Jars Of Clay Timeline:
1998 – Barbara Neale (founder) starts Jars Of Clay Coffee Shop, 5-8 staff employed (equal shareholding), humble but promising beginnings.
2007/8 – Transition to Khmer Management Team. Advisory Board established and focused on growing the business (Advisory Board Members: Mark Dennert, Jo Dennert, Michael King), 10-12 staff employed.
2009 – Expansion of Cafe 1 (doubling of capacity), funded 100% from the business retained earnings, Total of 18 Staff employed
2015/16 – Launch of new Cafe 2 in Phnom Penh Thmey. Total of 30 Staff employed through Cafe 1 & Cafe 2 businesses.