toms

"Privately, Mycoskie claims, he has been seeking out constructive criticism for several years. "I've asked people, 'What could Toms do better?'" he says. "I've learned that the keys to poverty alleviation are education and jobs. And we now have the resources to put investment behind this. Maybe five years from now, we'll be able to say it's really good for business. But the motivator now is, How can we have more impact? At the end of the day, if we can create jobs and do one-for-one, that's the holy grail."

Toward that end, the company has sought to improve the effectiveness of its work throughout the supply chain. All of Toms's consumer shoes today are made in China, as are the vast majority of its giveaway shoes (a small number of which are distributed there). "Toms would not be what it is today without China," says Toms president Laurent Potdevin. "We wouldn't have the resources we have now. It has been the easiest, most cost-effective place to make shoes."

Three years ago, Toms began to make giveaway shoes in Ethiopia, which has a small but burgeoning shoemaking sector. Within the next couple of years, it expects to add shoemaking in India, Kenya, and Haiti, where an artist collective is already customizing Chinese-made Toms for a limited-edition line. Potdevin emphasizes the challenges of such ventures: "Getting a factory up and running, retention, training, finding local management--every aspect is more difficult in a place like Haiti." But separately, Jung, the supply chain chief, notes that it's not all altruism and sacrifice. "Let's not lie to each other," he says. "If you're creating product for the local market, you're spending less to distribute it. No sea freight. No duties." Staying local is especially important in Africa; Ethiopia and Kenya both belong to a free-trade zone that includes nearly every African country where Toms shoes are given away.

Head of giving Sebastian Fries adds that Toms is upgrading the quality of its manufacturing jobs. He rattles off a list of improvements: higher wages; tutoring for workers' children; company-provided take-home meals for working moms; financial education; an on-site preschool at a Kenyan factory where Toms hopes to begin production later this year. "The jobs we help create," he says, "should be in line with what Toms stands for."

At the other end of the business, Toms has lately decided that it ought to learn whether its giveaways work. In August, researchers from the University of San Francisco are expected to release results of a two-year study, funded by a $225,000 Toms grant, of giveaways in El Salvador. Fries, who in 2011 was hired away from Pfizer, where he had been devising products for consumers in low-income markets, says that more such research is planned."

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