Monday, October 24, 2005
I have often said that change in India is of the morphing, creeping kind, not of the mega-trend, discontinuity kind. One such creeping change is the increasing private sector partnerships with development sector organisations, to create win-win solutions to help alleviate the problems of the poor, in an affordable yet profitable way. However, the coming together of people from two worlds which are wired so differently has been fraught with problems, and that?s what this article is about ? what are the challenges involved in creating the much-needed common framework of understanding that enables the creation of robust partnerships?
But before that, an invocation to the guru! There is a saying in my mother tongue that unless you pour water through a conch shell, it does not become holy water. And unless you have a leading management guru talking about it, it does not carry legitimacy in the business world. It?s thank you C K Prahalad, for giving profit motive driven businesses the compelling logic of the ?why? and ?how? of engaging with people at the Bottom of the Pyramid (BOP).
His book Fortune at the Bottom of the Pyramid has made it mandatory for companies around the world that consider themselves progressive, to at least examine the idea, and devote some time and resources to real life market experimentation to test this idea. One of the key ideas of the book is that the last, but most important ?get to, and get the consumer? mile can only happen if private sector works in partnership with the development sector organisations.
The latter have access, influence, trust and knowledge, about people at the bottom of the pyramid, as well as the cost-right grass-roots organisation infrastructure; and hence are the best market development and channel partners for any company wanting to find the fortune at the bottom of the pyramid. That?s where the theory ends. In practice, wherever I have been a part of such initiatives, even sustaining a constructive dialogue has been tough. What we have is parallel monologues, with different mental models and different processes of ?getting the job done?.
I think both sides need to first train each other in how they think, plan and speak, before having aspirations of working together and believing that this is one more ?learn as you go? situation. Here?s an example of some significant differences. The development sector processes are all about forums, networking, sharing knowledge; about creating intellectual and experiential resource pools which act as enablers and catalysts and hence generate action. The private sector is all about organisation structures, work plans, working backwards from the results (rather than going forward with the evangelism).
I once went to an all star cast meeting to discuss how to get small producers together to give them market access with reasonable supplier power. The private sector answer was to create a marketing organisation that acted as a bridge between the two worlds and did vendor development in line with market demands.
The development sector answer was to create a networked movement which included a whole slew of experience sharing conferences, training sessions for supplier organisations on business processes, and marketing. The private sector was looking at shorter time horizons than the development sector. Clearly one lot comprised ?human doings?, while the other comprised ?human beings?.
Another area where arguments happen is the notion of what it takes to replicate successful initiatives, and hence build scale in the whole endeavour, whatever it might be. I once saw a huge fight between a consulting firm and their development organisation counterparts, very interestingly both sides were alumni from the same business school. One said that ramping up the low-cost education model that had proven successful was to hire 400 managers and get them to replicate the model in 400 locations, armed with best practice manuals.
The development sector folk said that replication should happen wherever there was a supportive local government, a development sector person and local community expressed desire for the initiative ? no matter what the pace of ramp up be. Both sides made sense, but there never was a resolution, because one thought the other was an interloper into hallowed turf, and the other thought that this was a bunch of impractical, hide bound old women.
But the real good news is that there is more similarity today than there ever was. There is emergence of a whole bunch of new-age development sector organisations, set up and run by people who have had classical engineering, MBA type educational backgrounds that you would find in the private sector, and that makes for easier communication, negotiation, and for easier finding of solution spaces. Second, much of the progressive, younger development sector thinking is about creating financial sustainability in services that they offer to their beneficiaries.
I was once invited to a big NGO conference where they wanted to hear about low-cost business models that businesses were beginning to create, and learn from them. As an aside, I must say that I had to delete large parts of my presentation which exhorted everyone to do product and process innovation ? the sort of stuff we would say at a business forum.
Because money and people shortage coupled with passion to get the job well done is the sort of necessity that is the mother of all innovation, and the development sector has it in plenty. Add to it the number of tech savvy folks now in the sector, and you have much that the business side can learn. The jhola has been replaced with the lap top, and the hand out with the concept of financial self-sufficiency, and earning surpluses to reinvest in the initiative. So the environment for partnerships has indeed come of age.