The following is a conversation between Rafael Alvarez, Founder and CEO of Genesys Works, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.
Denver: Have you ever found yourself in an environment or setting well beyond what you would ever have imagined for yourself, one that was meant for other people, but certainly not you? But once there, something strange happened. Through the value you provide and your interactions with others, you come to realize that, in fact, you do belong here, or at another place just like it. That is very much what happens to the students who are part of the Genesys Works Program. And here to tell us about it, and the difference it has made in so many young lives is the Founder and CEO of Genesys Works, Rafael Alvarez.
Good evening, Rafael and welcome to The Business of Giving.
Rafael: Thank you very much, Denver.
Denver: Let me start by asking you, Rafael: What is the central problem that Genesys Works addresses?
Rafael: The very center… there are two realities. One is that companies need people. Right? They need people to carry on their business, and they’re having a hard time finding that stream of people. On the other hand, there’s a whole segment of the population that are great young men and women that are growing up in underprivileged communities, not knowing what their true potential is and following the path that their families have always taken. And yet, if they only had that opportunity to experience that they can succeed in this new setting to realize that it’s not that hard, it’s not this big ugly world… that changes their mindset; that changes their framework. And when those two come together, now you equip young people to provide those services that companies want, and that’s how you accomplish change.
Denver: Fantastic. So, you were working on corporate strategy for Compaq Computer. We all remember Compaq Computer. How did the idea for what was to become Genesys Works take root?
Rafael: So, I was a corporate strategist working for this big company, served on the boards of nonprofits like many successful professionals do, and I went to a graduation ceremony one evening. Saw these students in this charter school that I was on the board for graduate and be very happy about graduating. Most were first in their family to graduate from high school. So, this was an accomplishment, and we were very happy.
So, I went down to the floor to congratulate them, shake their hands, and as I did that, I asked them, “So what are you going to do with your life now?” And then one said, “I just want to continue my job.” And, “Okay, what do you do?” And what I found out was that they were pursuing just minimum wage, dead-end occupations which are good honest jobs for when you are in high school but don’t provide that path to the income that you need in order to live in the economic nation and to truly realize your potential, right? And so as I thought about it and found out that it’s because they never saw themselves in the corporate world.
And that’s when the idea occurred to me. I thought, ”Yeah, if”… You know I worked in Compaq. I knew that there were things that we were doing for our corporate clients that were not that hard to do, and I knew how much money we were charging for that. And I thought, if I could train these students to provide those services, in essence we could become the disruptive technology in the services business and the IT segment, and get these students to experience success in that corporate world during their senior year in high school. And through that experience: A: Provide a valuable service to a company, but also help the student realize that there is a different path.
And I thought, Well, if that was to happen, how would that experience change the mindset of the students and the actions, the decisions that they make, as a result of that? How can this be that fork in the road, this catalyst that changes the trajectory of life for the students themselves?
And so the interesting thing about this is that I had that thought the summer of 2001, and what happened September 11 of that year, of course, we all know what happened. And I sat there and I thought, “Okay, that could be me in the Twin Towers, right? It could’ve been me that died. And if I died tomorrow, which I could, what have I accomplished with my life? What impact have I had?” And if I was honest with myself, the answer was not pretty, right? I had created a lot of PowerPoint presentations and perhaps made some money for the company, but I had never changed the lives of people. And so, at 33 years old, I decided, “Hey!” A week after September 11, I decided to quit my corporate job and start Genesys Works.
Denver: Unbelievable. It is interesting how a confluence of things like that come along and really change the trajectory of your life as well. Well, tell us a little bit about the program of Genesys Works. How long does it go? And what does it entail?
Rafael: So, we start recruiting junior/ senior high school, and our sweet spot is what we call the quiet middle…. that middle of the pack kid in large, urban schools serving an underprivileged population. But we’re not going after the super performer young man or woman or the trouble maker either. It’s that middle of the pack kid who normally is pretty quiet, has it in them to succeed; they just don’t have the opportunity. And so, we give them the opportunity. They come in for training over eight weeks in the summer prior to their senior year in high school, but 80% of them make it through the training, and those are the students that we assign to an internship.
So, the students are our employees; they work for other W2 employees of ours. We assign them to our clients, and that’s where the students work for their entire senior year in high school. They go to school in the morning in their regular schools, and then they work about four hours a day, five days a week during their senior year. And then through the year, they get to discover, not only that they can succeed as technical professionals or accounting professionals, but they also get to explore different avenues and careers and universities with which they can continue their career.
Denver: Yeah. You provide that college and career counselling for them, don’t you?
Rafael: Absolutely. So, our students are coming from schools that the ratio of counselor to student is maybe 500 to 1. And honestly, counselors don’t even know their names. But we have a ratio of 20 to 1 where the students come in, and this program coordinator that we call… their only job is to make sure that these 20 students get to the finish line and have the right realization of their true capabilities and opportunities to pursue their career.
Denver: Yeah, it is interesting. It certainly doesn’t mirror it, but there are certain elements of this program that are like your own experience that you had in Mexico City. Correct?
Rafael: Yeah. Yeah. A little bit. So, when I was 16 years old, I was delivering computers for a little computer company. Now, this is before Compaq even…I guess Compaq was in the early stages, but it was early, early stage in the PC revolution. And so my job was to deliver computers, and through the process I learned how to program. The language was Basic, remember? It’s very basic.
Denver: Ohh, I certainly do. I took it. Yeah.
Rafael: And so…
Denver: I can’t remember a thing, but I took it.
Rafael: And so I learned a few things in Basic, and then I looked at the teacher’s teaching Basic, and I thought, “Man, I could be teaching Basic instead of driving around this crazy city of Mexico City.” And my boss, Rodolfo, gave me a chance. He gave me a chance. A little senior in high school to teach programing instead of driving around, and that was the beginning of my career because I leveraged that into my first internship in college which was in my freshman year in college… and then my sophomore year… and then junior. By the time I finished college, I graduated in the middle of a recession, but it didn’t matter. My experience was so strong that I didn’t have a problem.
Denver: Yeah. And these were big companies too. Procter & Gamble, Chrysler, places like that. Give us a picture of your student profile.
Rafael: So, our student profile is what we call the quiet middle. These are good young men and women. They want to work hard. They want to follow direction. They’re hungry for knowledge and opportunity, and that is what they don’t have much of– opportunity. And so, they come into a program; they recognize the opportunity that we’re making available for them. And once they start their internship in the company, they work so hard and so well, and they are the kind of young person that corporate professionals just want to have under their wing.
Denver: What happens to them when they go to that company, I’d be interested, in terms of the transition or the transformation that occurs? I mean, here they are still in high school. They are working in one of those companies that is in the skyline, in many cases, that they’ve only looked at from a distance. They’re having expectations placed upon them. They’re meeting those expectations … exceeding those expectations, and they’re providing some real value to the company. How does that change the individual?
Rafael: Well, let me ask you, Denver, because I’m sure it happened to you as well. I’m sure along your trajectory, somebody gave you opportunities to do things that you didn’t quite think were possible. Right? You mentioned that in your introduction.
Denver: Yeah. I would have to say, you know what what happened to me was that I used to work at…The United Way was my first job. And I was exposed to a lot of CEOs because back in that day, CEOs were very heavily involved in the United Way, and I would go out on calls with them, and I’d recognize they were just regular people. I always had this picture of them as being these supermen or superwomen, mostly supermen. And it turned out, they really weren’t, and as you said, “You know? They’re not that much different than I am.”
Rafael: Yeah. That reminds me I was touring one of our locations in the Bay area… in the San Francisco Bay area, and one of the students asked me, “What’s it like to be a CEO?” And my answer was pretty immediate and I said, “I am always scared.” And that caught him by surprise, and I explained. I said, “You know, as a CEO of a national non-profit organization, my job is to constantly push the envelope. Constantly push to the next level. And as individuals, we have to be doing whatever it is that we’re doing, right? And so when we go to that next step, we’re scared. It always feels scary.” We were talking earlier before the show started about how I love to snow ski. Well, what I tell myself is that if I am not wiping out every now and then in snow skiing, I am not skiing at the edge of my ability. If I am not doing that, I am not getting better. And if I am not getting better, what’s the point? And so it is the same thing in your career. It’s always pushing yourself.
And so, when this happens along in your career, you start to recognize being afraid. You start to recognize that feeling that at the end, it’s going to be okay. At the end, you are going to learn that you could succeed, and what once felt scary no longer is. The problem is, with our students in the underprivileged population… there are actually students everywhere, we’re not giving them that opportunity to stretch, to develop that muscle of fear. And I think that, that is probably the most important thing that we do at Genesys Works, is we allow students to experience something that: A. They would not get without us; but second, that exercises that fear.
Denver: Oh, sure. Absolutely. If you don’t feel that discomfort, you’re not going to grow, and I know the kind of fear you’re talking about. It’s the healthy fear. It’s not the paralyzing fear, but it’s the fear that gets that adrenaline really going.
Rafael: Exactly. Exactly.
Denver: Well, in terms of breaking through, one of the things you have is a “breaking through ceremony” that occurs in the Fall. Tells us what happens at that.
Rafael: Yeah. It’s a wonderful ceremony where students dress up, and they come with their parents; and our corporate clients are there, and our philanthropic partners are there, and we do it in the Fall when they are beginning their internship. Not at the end, like a graduation ceremony. It’s at the beginning. Why? We want to expose the student. We want to place them in front of their families, and have their families start to view their young son and daughter as a professional. And so when they’re dressed up in their suits, for many, this is the first time they’ve ever worn a suit. And we do it on a big stage, and we recognize the companies, the places where they are working. I think it really changes the mindsets of students and families. And we call it “breaking through” because that’s where we celebrate students breaking through their barriers… because we all have barriers… breaking through their barriers, their fear, into a professional career.
Denver: And one of the coolest things you do is you give them a box of business cards. Right?
Rafael: You know, it’s funny. I was having lunch at one point with a lobbyist, an education lobbyist, who was claiming, “Just give us more money, and we can fix education.” And I’m not going to say his name but I said, “Not necessarily. Do you know what we do with $10?” And he said, “You can’t do anything with $10.” And I pulled out my business card, and I said, “We give a box of business cards to our students, to each one of our students, and they have their name and their information and everything.” And I said, “This is a hundred opportunities for the student to feel like a professional.” And I think that’s what’s missing in our education. We’re not allowing our young men and women to feel successful and to allow a potential that they really, really have. And so, it’s about thinking differently about how we treat our young men and women and the opportunities that we put in front of them.
Denver: Yeah. We all know the magic of a business card. You just feel like a different person.
You’re a data driven organization, and you measure everything, including the social return on investment. Share with us, Rafael, some of those numbers.
Rafael: So, a couple of years ago, a study by Columbia University was conducted on the social return on investment. And what they did was looked at how much more likely each one of our students was of finishing a college education. And as a result of that, what was their expected increase in earnings and income over their lifetime. And they concluded that it was like 13 & ½ times. So, they were very happy about that. People were happy about that, but then when I dug into the study, I thought, “Okay, but you’re not even taking into account the students who go to college and don’t succeed all the way through college, but as a result of their work, their resume that they now have associated with their experience, they were able to get a job that actually paid a lot more.” And we actually confirmed this over our comprehensive alumni survey studies that even those students that don’t finish a college education are much better off in life because they now have that opportunity to start in these IT careers as a technical professional, right?
And so, that study, 13 & ½ times the return! But I believe that the reality is actually better than that.
Rafael Alvarez and Denver Frederick inside the studio
Denver: Yeah. That’s low-balling it. What are some of those other numbers? I mean, how many of your students go on to college? How many complete it, and what do they make? How much… what’s their medium pay, let’s say five years out?
Rafael: So, 95% of our students, when they finish their program, they go on to college.
Denver: 95%?
Rafael: 95%. Because through their year, we’re actually working with them to explore what colleges are right for them. What careers are right for them? So, 95% go on to college. All those that pursue a four-year education, 65% of them actually succeed in getting their education. It takes them longer, six, seven years because what we found out is that 92% actually work during college. They have to.
Denver: But even that number, I think, is better than the national average.
Rafael: It is. 65% is good. I still worry about the other 35%. And the question is then: How can we even improve on this work experience… that through work, whether you graduate from college or not, you can actually achieve a level of financial sustainability for your family, right?
So, for the students who are finishing college, no question they’re going to do much, much better. I mean, the literature is clear on that. But we want every one of our graduates to join the economic mainstream because that’s who we’re about.
Denver: You started this program, as I mentioned, back in 2002 with 10 students. It wasn’t easy. Then 20. Now, you scaled up to about 4,000 or so in different places across the country. Well, we know one of the most difficult challenges for either a profit or non-profit is to scale up an organization. What can you share about successfully scaling one up?
Rafael: You know, scaling in the non-profit sector is really hard, and the reason is access to capital. Once we have a site up and running, about 80% of our total budget comes from earned income. This is the money that we charge companies for the services our students provide, and companies are happy to pay that because they’re getting value from the students, right?
Denver: Yeah. I think about 95% of them re-up, right?
Rafael: They do. They do. Year over year. This is no longer about charity. This is about solving their business needs with a solution that actually also changes the trajectory of life of young people. But we still need to raise growth capital money. Every time we want to grow, growth is expensive. And when we start a new city, it’s almost all philanthropic money. Or even when a city is established, 20% of a few million dollars is still a good chunk of change. And access to philanthropy is not as much as the capital markets. When you have a great for- profit intervention that proves its model, and it becomes profitable, then access to capital is almost unlimited. In the non-profit sector, it’s not quite so. And so, that’s why it’s much, much harder to scale in the nonprofit sector.
Denver: Well, speaking of scaling, you made some significant news recently with your announcement that Genesys Works is expanding this program right here to New York City. Give us some of the details of that.
Rafael: We’re so excited about Genesys Works coming to New York City. There is so much opportunity here. There’s so much opportunity to connect young people with corporations. I mean, there’s so much of everything here in New York City that we are so excited to start an office here and start serving young people and corporations here in the city.
Denver: Yeah. And one of your big partners, and this is going to be AT&T here in New York, but tell us a little bit more about your corporate partners….who some of them are… and what the relationship you have with them… how those numbers all work.
Rafael: You know, I think, long gone are the days where corporations have to choose between doing what’s good for the company– for the bottom line– or doing what’s good for the community. More and more companies are realizing that you can actually do both. And AT&T is a great example of that. We’ve had a multi-year relationship with AT&T where our students have proven to be valuable in their business. And AT&T has been a major, major supporter of our work as we scaled and grew into the Bay area… and now New York City and other markets. AT&T’s philanthropic funding has been behind a lot of that growth.
We also have other great clients like Salesforce.com and JP Morgan Chase and Accenture that have all realized the value of this double win-win, if you will, and are embracing that.
This millennial generation that is here now, there’s a lot of great things about it. One of them is young people want to have a purpose. They want a career, for sure, but they also want a purpose. We are very, very lucky to have young men and women coming into Genesys Works working hard, working really, really hard… Putting all their heart into it and creating change for the young men and women that we serve.
Denver: Some real blue chippers, that’s for sure. I know, Rafael, that you are exceptionally proud of your corporate culture. What are some of the elements that make it special? And what are some of the things that you intentionally do to guide it and shape it?
Rafael: You know, this millennial generation that is here now, there’s a lot of great things about it. One of them is young people want to have a purpose. They want a career, for sure, but they also want a purpose. We are very, very lucky to have young men and women coming into Genesys Works working hard, working really, really hard… Putting all their heart into it and creating change for the young men and women that we serve.
Working at Genesys Works is not easy, I’ve got to tell you that. People frequently ask me, “What do you do on a full-time basis?” they ask me. You don’t understand that we’re a company of a thousand employees with all the complexity that you expect that to have, and it’s not easy. Changing lives is not easy. But we have a culture where people come in and just hit hard. We’re aligning what we want to achieve and succeed together.
A person that is much more qualified can engage in partnerships at a much higher level than I was able to do. And I’m excited to bring that person in.
Denver: You announced recently that you’ll be stepping aside as the CEO of the organization that you founded. I think that’s going to happen in the first quarter of next year. What were some of the things that went into making that decision?
Rafael: Very, very, very few people are able to translate the skills that they needed in order to start an organization, be an entrepreneur, to those skills that are needed to scale an organization. I believe in the future and the potential of Genesys Works to truly scale to the magnitude of the problem. But I recognize that I’m an entrepreneur. My skill set is that of being an entrepreneur and creating things from nothing.
Now, we’re at a point where we need to bring in the person. Frankly, Denver, I wish I’d been my boss all these years. A person that is much more qualified can engage in partnerships at a much higher level than I was able to do. And I’m excited to bring that person in. We are in the middle of a search right now. We want to find the right person, but I feel proud of the team that we put together and what the team has accomplished right now. Now it’s time for me to go start on another thing and bring in the person who’s going to take Genesys Works to the next level.
Denver: Because that’s where your core competency is, starting something. Let me ask you this and maybe you haven’t thought about it, maybe you have. Often it can be difficult for the person who comes in and follows in the footsteps of a founder. What can a founder to do help make that transition easy?
Rafael: People ask me sometimes, Denver, why am I so bent on growth. The way I respond is,” If you believe that what we do changes lives, it’s my job to grow the organization as far as I can up to the point where we are no longer needed.” And we’re far away from that. It’s the same thing when it comes to CEO succession. My role is to support the new person in whatever way I can and get out of the way. They’re going to bring new ideas. We hire them because they have that greater mindset and greater level of skills, and I need to immediately get on to the background, have the spotlight be on that person. I will always be the founder. I will always be there to support him or her, but I need to get out of the way and let them lead. I think that’s my role.
Creating that holistic partnership between every student in America… for them to be able to truly experience a career that they never thought they could aspire to, and connect every single professional to the youth in our country; then think about what that would mean for our future.
Denver: Let me close with this Rafael. You have been all around the educational system for the last 15 years or more, and despite the enormous success and growth that Genesys Works has had, the problem is so much bigger than that. Rafael, if you were King for a Day and could do anything you wanted to improve the educational system of this country, what would that be?
Rafael: We’ve proven through our model that when you connect a student to an opportunity in the workplace, it’s good for both. It’s good for the student. It’s good for the supervisors at the corporate place that are giving them this opportunity. Our problem is not the value that we’re providing. The problem is awareness. So, if I was King for a Day, I would make sure that every professional in this country is aware that there is a way for them to provide opportunity to a young person, and that in doing so, they can benefit as well. Creating that holistic partnership between every student in America… for them to be able to truly experience a career that they never thought they could aspire to, and connect every single professional to the youth in our country; then think about what that would mean for our future.
Denver: It’d be huge.
Rafael Alvarez, the founder and CEO of Genesys Works, I want to thank you so much for being here this evening. Tell us a little bit about your website, the information on it, how people can help support the organization if they’re so inclined.
Rafael: Sure. The website is genesysworks.org. There’s multiple ways to support us. If you are a corporate client, particularly in the cities that we are in now or we’re going to, you can go to our corporate section on our website, and there will be a contact information page there. That’s how you can become a corporate partner of ours. Or, if you want to provide philanthropic support so that we can continue to serve even more students in the future, there is a button in multiple places on our website where people can actually donate.
Denver: That’s good to hear. Thanks Rafael. It was a real pleasure to have you on the show.
Rafael: Thank you, Denver.
Denver: I’ll be back with more of The Business of Giving right after this.
Rafael Alvarez and Denver Frederick
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/business of giving.