Journeying from First-Gen to Second-Gen BoP Strategy: And singing along to a different tune
Taking stock of the past and charting the way forward was a central theme at the BoP Summit. One key challenge, however, as discussed in a recent NextBillion post, is transforming the way we collectively think about the realities of living in subsistence contexts and “frame the base of the pyramid.”
In my opinion, two compelling points that were made in the summit’s opening session set the stage for what makes this transformation so hard – but also how to journey forward from here.
First, Stuart Hart referenced the beauty of an “unfinished symphony.” Specifically, too many BoP ventures have approached the market with a finished “symphony” of a well-crafted business model largely built upon top-of-the-pyramid assumptions and styles of listening. In such cases, the BoP enterprise playbooks leave little white space for creative departures that express the voices of those living in the BoP. Good intentions aside, first-generation BoP strategies are shaped by what Hart calls the tyranny of the unmet needs and BoP product mind-sets.[i] Shifting to a second-gen BoP strategy means that these lessons must be un-learned and supplanted by mental models that re-envision people in the BoP as co-creators. Co-creating value in the BoP then, must emerge from authentic dialogue and recognize that value for individuals, groups, and communities is not a unidirectional activity that flows from ToP organization products and services to BoP consumer-producer. Rather, value is always co-created in a multi-directional fashion and socially constructed through interactions, experiences, and resource networks.[ii]
Second, Ted London spoke about the late C.K. Prahalad’s exceptional ability to ask the right questions. Among other proposed paradigm shifts, one of the most striking questions that Ted asked the community of BoP practitioners and scholars at the summit was … “do we have enough humility?” This is where transformation can run into some formidable obstacles. Beyond taking up new perspectives, in many ways, stepping into second-gen BoP strategy requires surrendering the iron-clad confidence, certainties, and scripts that define first-gen BoP strategies. This movement also goes against the grain of what many consider to be the type “A” go-getter template of an entrepreneur. Thus, humility for understanding and engaging the BoP requires a “new set of eyes” and giving up control at times to let other co-creators navigate the trajectory of the enterprise.
Beyond these ideas that have stuck with me, during the summit, I had the opportunity to participate in the “Understanding the BoP” working group led by Madhu Viswanathan – who is a thought leader in use of bottom-up perspectives to create insights for subsistence marketplaces. Our group coalesced around the ideas that BoP ventures need to seek deeper, more holistic understandings of the local context and the lived experiences of impoverished consumption. Practically, this translates into slowing down, being patient to develop trust and insight across generous time horizons, and focusing on mutual understanding that creates value for all involved. Our roadmap also highlighted the need go beyond the current standard of identifying unmet needs/wants in the marketplace and make greater use of human-centric perspectives that explore the psychology, sociology, and anthropology of topics like felt deprivation, risk, power, survival, and flourishing in BoP contexts.[iii]
Despite the hurdles of journeying to a second-gen BoP strategy, the good news is that it is no longer difficult to find social enterprises operating under this paradigm. For example, at the summit, Radha Basu shared how iMerit has relied upon extensive ethnographic research to develop an IT outsourcing model that employs rural Indian youth. Furthermore, her description of employees made it clear that iMerit views them as co-creators, and she shared one vignette about a young girl working for them who dreams of becoming a pilot someday. In many ways, the acid test for the next generation BoP strategies will be “to what extent does this enterprise story truly reflect the desires and aspirations of our BoP co-creators?”
Christopher P. Blocker is an Assistant Professor in the College of Business at Colorado State University in Fort Collins, Colorado. His research focuses on understanding what people value and desire in life and within marketplace relationships.
[i] For more discussion on the shifting paradigms in Base of the Pyramid strategies:
– Hart, Stuart L, and Ted London. (2011) Next Generation Business Strategies for the Base of the Pyramid: New Approaches for Building Mutual Value. Upper Saddle River, NJ: FT Press.
[ii] For emerging ideas about value co-creation:
– Peñaloza, Lisa, and Jenny Mish (2011) “The Nature and Processes of Market Co-creation in Triple Bottom Line Firms: Leveraging Insights from Consumer Culture Theory and Service Dominant Logic.” Marketing Theory 11 (1) (March 1): 9–34. doi:10.1177/1470593110393710.
– Vargo, Stephen L., and Robert F. Lusch (2008) “Service-dominant Logic: Continuing the Evolution,” Journal of the Academy of Marketing Science, 36, (1), 1–10.
[iii] For research that addresses consumption in contexts of poverty:
– Blocker, Christopher P. and Andrés Barrios (2013) “Trajectories of Consumption Desire in Poverty,” Consumer Culture Theory Conference: Building Communities Across Borders, Tucson, Arizona.
– Blocker, Christopher P., Julie A. Ruth, Srinivas Sridharan, Colin Beckwith, Ahmet Ekici, Martina Goudie-Hutton, José Antonio Rosa, Bige Saatcioglu, Debabrata Talukdar, Carlos Trujillo, Rohit Varman (2013) “Understanding Poverty and Promoting Poverty Alleviation through Transformative Consumer Research,” Journal of Business Research, Volume 66, Issue 8, August, Pages 1195–1202, http://dx.doi.org/10.1016/j.jbusres.2012.08.012.
– Chakravarti, Dipankar (2006) “Voices Unheard: The Psychology of Consumption in Poverty and Development,” Journal of Consumer Psychology, Volume 16, Issue 4, Pages 363–376 http://dx.doi.org/10.1207/s15327663jcp1604_8
– Martin, Kelly D. and Ronald Paul Hill, (2012) “Life Satisfaction, Self-Determination, and Consumption Adequacy at the Bottom of the Pyramid,” Journal of Consumer Research, Vol. 38, No. 6 (April), pp. 1155-1168, http://www.jstor.org/stable/10.1086/661528.