The G20 Challenge Applying Proven Business Models to the BoP
Last week, the doors swung wide for full applications to the G20 Challenge on Inclusive Business Innovation. The Challenge doesn’t offer prize money to winners; rather its value is in opening the doors of opportunity for BoP-focused enterprises with proven models.
For more details on the Challenge, I recently chatted with Andria Thomas, a project manager in Dalberg’s Washington, D.C. office and a member of the Strategy & Performance practice. She advises numerous foundations, NGOs, corporations, multilateral organizations and government agencies in areas of strategy, innovation, effectiveness, business planning, and organizational change, and is helping to coordinate the Challenge.
NextBillion: As you know, there are many business plan and business model competitions in the social strata; how does the G20 Challenge on Inclusive Business Innovation distinguish itself from the pack?
Thomas: What sets the G20 Challenge on Inclusive Business Innovation apart is that it’s focused on proven models that have put their ideas into practice for years and already created development results. Most of the competitions we reviewed have been looking for new ideas. The G20 Challenge on Inclusive Business Innovation is different in two ways: 1) in targeting inclusive businesses rather than non-profits or businesses unrelated to development, and 2) by looking for businesses that have proven models rather than those in the startup or early stages.
NextBillion: What types of companies are most likely to be successful in this competition?
Thomas (pictured left): Successful companies will need to show that they are financially sustainable and on top of their environmental and social risks. But what will really set the winners apart will be three things: how their model is integrating the BOP in their value chain, the development results they’re achieving, and the big one: their model’s potential for scale and replication. The winners’ models will have the potential to be successful in other markets or other sectors – the goal is to grow inclusive business around the world.
Also, it’s not just the winners who can be successful in this Challenge. All applicants will have access to an applicants-only section of the Challenge website, G20Challenge.com, where they’ll be able to make connections that might not be geographically possible offline. I can imagine some of the resulting collaboration being very successful even for companies that don’t win G20 recognition. The companies that get the most out of that access will be ones that are the most eager to engage their peers and truly develop the inclusive business community.
NextBillion: The site mentions winners will be selected based on criteria such as innovation, development results, financial sustainability, potential for growth/replication, etc. I’m curious if any outside impact assessment data showing effectiveness of a particular company’s models is required or encouraged?
Thomas: Outside impact assessment data is certainly encouraged, but we understand this may not be possible for all the businesses applying so it is not required. Businesses that do have outside impact assessment data can use and cite that data when answering questions in the application about BOP reach and impact. Others can provide their own metrics; the Challenge does require that businesses provide some evidence of tracking their development results over time, whether the data is generated internally or by third parties.
NextBillion: There really are two key aspects to the challenge: The process of submitting an application and awards of course; but then the winners will be assembled in a series of regional workshops. How will these work and what is their goal?
Thomas: The first in the series of workshops will be held in Frankfurt after the June 2012 G20 Summit at which the Challenge winners will be announced. The goal of the workshop series is for winners to come together to discuss the challenges of expanding their businesses and replicating them in new markets. Investors will be one of several groups invited to the workshops, so they can be part of the networking and problem solving. With so many leaders in the room addressing the same issues, the workshops will be an effective forum for building inclusive business relationships and collaborating on common problems encountered by businesses when integrating BOP in their value chain. IFC, which is managing the G20 Challenge, has had similar success with its annual Inclusive Business Leaders Forum in Washington, D.C. where B2B linkages were created.
NextBillion: Who are the judges for this competition, what are their backgrounds?
Thomas: The judging panel will include representatives from the private sector, academia, international organizations, and the G20. Final selections for the judging panel are still being made through the end of this month, but they have backgrounds in the intersection of business and development
NextBillion: What rewards will the winners receive?
Thomas: This Challenge award isn’t monetary – it’s access to new partnerships and entry to global business communities. Winners will receive something that money can’t buy: recognition from the Group of 20, the premier forum for international economic development; a spotlight at the next G20 Summit in Mexico in June; and access to a network of fellow winners in workshops organized and supported by the G20.
NextBillion: How, if at all, does the G20 Challenge on Inclusive Business Innovation differ from the G20 SME Finance competition?
Thomas: The G20 Challenge on Inclusive Business Innovation is the first of its kind, a separate competition from the G20 SME Finance Challenge that took place last year. One key difference is in the sector of the applicants: entrants to last year’s SME Finance Challenge were mainly private financial institutions, socially responsible investors, foundations, and civil society organizations. For the G20 Challenge on Inclusive Business Innovation the focus is on businesses in the ’real sector’ that work with people at the BOP as suppliers, distributors, retailers, or consumers. For example, this could include agribusinesses, educational companies, healthcare providers, and more. Regardless of sector, all applicants will have proven business models that are both financially sustainable and already creating development results through their involvement with people at the BOP. The second key difference is that the winners of the G20 Challenge on Inclusive Business Innovation will receive global recognition and access to a network of fellow winners in G20 workshops that follow the June 2012 Summit in Mexico. Unlike the SME Finance Challenge, the focus is not on receiving monetary awards.
NextBillion: The full application window opened December 1. Can you provide an overview of the competition process from here on out?
Thomas: The first step to applying, no matter when you start, is to submit a pre-application form to share some preliminary information and verify that your business is eligible. If eligibility is confirmed, you will receive access to the full application, which can be submitted anytime before 11:59 PM EST Feb. 29, 2012.
Applications will be evaluated over March, April and May, so that the winners can be announced in June 2012 at the G20 Leaders Summit in Mexico. The Summit will represent an opportunity for each winner’s business model to be recognized before a global audience.