Friday
March 18
2011

Josh Cleveland

Leading the Next Wave of Corporate BoP Engagement

If your Google Alerts are set up like mine, you might start to think that everyone is hopping on the market-based, base of the pyramid (BoP) development train. You’d certainly have reason to believe that it’s becoming a good way to make money while pursuing social good. This might in turn lead you to think that large companies would be taking this approach seriously as a double-bottom-line effort.

And some are. But most are not even close.

This sentiment was echoed during my brief survey of leaders at prominent strategy consulting organizations. The clear message was that most multinational corporations (MNCs) just don’t find the social business at the BoP niche attractive yet – or at least not enough to hire a large consultancy to come figure out how to make it work for them. (Look for articles profiling companies that are actively entering this segment soon.)

As Paul Callan, partner at Dalberg Global Development Advisors, recently told me, “For some companies – in sectors such as agribusiness & food, natural resources and utilities – engaging the BOP as consumers and/or producers is core to making the business successful. However, for many other companies, BoP business opportunities are not unavoidable and not low-hanging fruit with high internal rates of return. In those companies, very often the returns on BoP business ideas aren’t able to justify the time and effort required to learn new markets and to develop new pricing, new distribution, new cultural capacity, and new competencies – the returns simply aren’t worth it for most managers.”

Of course, that’s not to say that it isn’t happening.

Companies are people too

There is something that we often miss in discussions about “corporations”: companies are made up of people. The vast majority of these people care about doing good in the world and they also care about doing well in their jobs. Some of them are actively taking it upon themselves to address development issues while creating value for the companies they call home. Those who are successful in developing financially viable solutions to social issues while within a large organization are known as social intrapreneurs.

Why are social intrapreneurs important to corporate engagement at the BoP? Social intrapreneurs built a large number of prominent BoP social business success stories. CEMEX’s Patrimonio Hoy, the social business sector at Novartis, Vodafone’s MPESA, and Morgan Stanley’s microfinance unit are all attributable in large part to social intrapreneurs.

Social intrapreneurship is not an easy business. The fame and glory reserved for startup founders is generally not showered upon these corporate changemakers. They work within existing corporate structures – slogging through bureaucratic jungles while challenging deeply rooted beliefs – to uncover profitable solutions to societal needs. Sometimes they are embraced, yet often they are shunned. Their ideas, like some of those on NextBillion, are a bit ahead of their time, which makes them appear threatening to those profiting from their company’s status quo. They do it because they like it – they’re social impact-driven creatures. And while a CEO may decide that orienting large-scale corporate strategy to grab an elusive piece of the BoP pie might not make sense, social intrapreneurs are more than happy to seek out those returns.

There is no doubt that combining the passion of a social entrepreneur with the resources and corporate savvy of a proficient manager produces a powerful breed of changemaker. These individuals can lead a company to the BoP water – but only if their businesses let them.

Roadblocks

If you’re wondering why more companies don’t house significant numbers of active social intrapreneurs, consider these two most often-mentioned roadblocks I’ve found in my work (and others have repeatedly highlighted here and here):

  • Entrenched management mindsets. Unsurprisingly, not everyone is well-versed in the gospel of Prahalad and Hart. “There’s a fortune to be made where?” And often times, these mid- and senior-level leaders find difficulty understanding why an out-of-the-box idea like social enterprise might benefit them, especially if it comes from several levels lower on the corporate hierarchy.
  • Unsupportive internal climate. Large companies have killed more big ideas than any of us can possibly imagine. Let’s just say that despite all the amazing advances coming from big companies today, many businesses are not exactly skilled at harvesting and supporting innovation. Sure, some provide “20 percent time” in order to provide the lifeblood of inspiration that keeps the company ahead. But to most that idea is pretty “out there.”

To be sure, other substantial obstacles remain for social intrapreneurs. There may not be a suitable BoP engagement opportunity for a particular industry. Lack of knowledge about how to implement their idea, lack of project funding, lack of ideas for social impact, lack of project management expertise, etc. likewise all stand in the way of the next Patrimonio Hoy or M-PESA. Successful social intrapreneurs just happen to be more adept than most at overcoming those issues.

Overall these roadblocks pose no exceptional challenges. Employees face the same issues when bringing forth any new ideas. This suggests in turn that these roadblocks are indeed surmountable. Change some mindsets and provide some level of internal support and you’re well on your way.

Supporting the movement

If you’re a corporate leader serious about engaging your company in the next wave of social impact and business opportunity, read the suggestions below for a place to start. If you’re a current or aspiring social intrapreneur looking to change your company’s direction, don’t be discouraged by the size of the task. There is an emerging field of practice out there to support you. And don’t forget, it’s because of enterprising people like you that we’re having this conversation in the first place.

  • Get senior leaders engaged. Don’t just send a memo. Don’t stop with PowerPoint slides. Think about what real engagement looks like. How can you ensure that senior leaders “get it”? On-the-ground problem-solving combined with cultural immersion can get you some of the biggest bang for your buck. IBM’s Corporate Service Corps, Accenture’s Development Partners, PwC’s Ulysses Program, and others all attest to the effectiveness of creating understanding through experience. These programs send corporate leaders to markets where the company hopes to do more business. Once there, leaders participate in real-life problem-solving experiences while immersed within the local culture. Designing these programs takes time but produces results that no board meeting, slide deck, or workshop in the home office can provide. If you’re a social intrapreneur, you probably won’t be able to invite the whole leadership team on a field trip but you just might be able to bring the field trip to your office by inviting leaders to attend a brown-bag lunch workshop on social enterprise.
  • Create the culture. Company culture is not something that changes overnight. However, a meaningful analysis and some smart prioritization can get you on the right course faster than you’d think. To start, conduct a “cultural audit.” This can be a company-wide exercise or it could be in your team of twenty. Examine your company’s communications. Can employees provide feedback? Do they? Analyze incentive programs, meeting structures, and product/process development. How does it all fit together? Where would someone find a ray of light in which to show off a new idea? And most importantly, what do your employees think about this? What are the forums where ideas do shine through?
  • Build the innovation infrastructure. As presented in Andrew Hargadon’s “network theory of innovation,” innovation is enabled by “technology brokers” – individuals who are able to “bridge distant worlds” and combine existing people, ideas and objects in new and novel arrangements. These technology brokers are well-positioned to become social intrapreneurs. Bottom-up innovation requires places where they can connect with resources and one another. Physical manifestations of this infrastructure include social impact task forces and annual ’meetings of the minds.’ Online infrastructure comes in the form of social media outlets and idea competitions. The investment infrastructure encompasses time -like Google’s 20 percent projects – and money – like Vodafone’s Social Innovation Fund. Again, if you’re starting from the ground up, don’t try to overhaul your corporate system overnight. Start small. Create some spaces for discussion to take place and build from there.

Are we there yet?

Those on the cutting edge of creating engaging climates for social intrapreneurs will be the first to tell you that it’s a never-ending process. Nonetheless, many are certainly well on their way. If they play their cards right, corporate leaders may not need to dream up the next big BoP engagement strategy. As they progress and break down the barriers to activating social intrapreneurs, we can hope to see more innovations coming from the changemakers housed deep within multinational behemoths. And at this point in the debate about getting corporations engaged with BoP populations on a deeper level, its time we focused on creating more Patrimonio Hoy’s by cultivating more social intrapreneurs.

Categories
Entrepreneurship
Tags
Base of the Pyramid, corporate engagement, social entrepreneur