Weekly Roundup – Walking Across the Bridge as You Build It
The business books on strategy always zig when the field zags. Titles like “Screw Business as Usual” come to mind.
This is more than just a publishing industry ploy to sell books. The majority of the world’s economic growth will not emerge from established markets, but from emerging ones. The role of business is changing in a way that must connect to the needs of the low-income and yes, poor, customer – or risk stagnation. Millions of people, the lion’s share in China, have moved from poverty into the middle class with a bridge of commerce reaching to meet them with newly affordable products. But many of the bridges reaching into other developing economies remain rickety, or there is no bridge at all.
For companies that seek not only global expansion but sincerely hope to create inclusive businesses that serve lower-income people, much of the low-hanging (profitable) fruit has been taken. The next step for those businesses and their managers might be into some unfamiliar territory, especially given those managers’ educational experiences, argues Bhaskar Chakrovorti, Senior Associate Dean for International Business and Finance at The Fletcher School, Tufts University.
“To pull off ‘inclusive innovation’ requires a fundamental shift in mindset and operating tactics on the ground,” Chakrovorti writes in “To Be an Inclusive Business, Forget Business School Lessons on Strategy,” published this week on Skoll World Forum. “Executives may have to put aside some of the core business principles handed down by courses on strategy designed for an earlier century.”
For Chakrovorti, traditional business school lessons of choosing the most profitable market segments and narrowly focusing on the company’s core competencies to extract profits, are as relevant as slide rules.
“… An inclusive approach to business will require that the manager considers engaging in parts of the value chain that may be outside the organization’s core competencies. This is because the company may have to step in to fill voids, both upstream and downstream, to ensure that its business operations can run and grow sustainably.
“The company may have to develop creative solutions to fill in the gaps in its supply chain and distribution networks or provide technology transfers and capital to enable local entrepreneurs and NGOs.”
He cites some examples that we have written about here on NextBillion, such as Coca-Cola’s partnership with the Gates Foundation and TechnoServe to ensure ample supplies of fruits such as managos for juice drinks.
“It is time to take another look at how we are preparing managers to do business in emerging markets. Business strategy needs to be re-thought and re-learned. If you remain trapped by axioms developed for twentieth century industrialized markets, you will suffer trapped value in the emerging opportunities of the twenty-first century,” Chakrovorti writes.
It’s a viewpoint I believe business school academics should heed and begin adjusting for, if they haven’t already. The global business student and future manager needs to be schooled in, or at least comfortable with, partnering with the likes of NGOs and universities. Those organizations often are often standing in for established value chains and market infrastructure in developed markets.
Chakrovorti’s essay is particularly apropos for the week, given NB’s coverage of two new publications that chronicle how supply chains are being created or buttressed with the assistance of nonprofit organizations and nontraditional partnerships between business and nonprofits. Kevin McKague and Muhamad Siddiquee wrote about CARE’s seven-year effort to build out a value chain for smallholder dairy farmers in Bangladesh. And yesterday NextBillion Health Care published an e-book compiling many of the key articles in its Market Dynamics series, which demonstrates some of the principles and promise of shaping markets to deliver health care services and products.
Social Good Guides
Shana Dressler isn’t shy about her failures. In an article published in Good, Dressler details how creating the Global Giving Circle in 2009 ran afoul of trademark laws (the name was just a touch too close to GlobalGiving.org). She admits that she cut corners by not speaking with a lawyer when crafting the name and it cost her the nonprofit she had hoped to get off the ground.
Two years later she formed the Social Innovators Collective and continues to manage forums and workshops addressing common challenges. (NextBillion wrote about her efforts here).
Clearly, Dressler didn’t give up. She also spoke up, and she got several social entrepreneurs and other been-there/done-that experts to do the same. They’ve come together to create The Social Good Guides. It’s a project three years in the making. The topics are varied, but they address two key questions: 1) What does a startup changemaker need to know to be successful? and 2) When do they need to focus on a particular topic?
“Startup social entrepreneurs have immense passion for solving social problems, but often lack small-business skills. They don’t realize that these skills are essential to being successful,” Dressler said. “I certainly didn’t know I needed small-business skills when I first entered this space, and most of the social entrepreneurs I have met along the way didn’t know they needed them until they hit a roadblock or their first venture failed.”
The first 17 are online, with three more to come. Here are the first 17 titles: Idea To Launch; How To Start a Nonprofit or Social Enterprise; Funding Your Startup Social Enterprise; Nonprofit Funding for Long-Term Sustainability; Business Plans and Planning for Social Enterprises and Nonprofits; What’s Strategy Got to Do With It?; Operations: An Overview; A Legal Primer for Changemakers; Accounting and Taxes for Social Enterprises; Evaluation + Impact Assessment; Marketing: Lean In and Control the Lane; Branding + Identity; Building Your First Website; Why Great Design Matters; Publicity and PR: Getting the Word Out; What You Don’t Know About Social Media; and How to Find a Job in the Social Impact Space.