This article is a follow-up to the webinar “Resilience for Inclusive Businesses – Early Insights from Practitioners” that took place on April 9, 2020. For the video recording, please click here. To be updated on future webinar installments, please check out the Hystra website or the Global Distributors Collective’s dedicated COVID resources page.
As the COVID-19 pandemic reached their country and government took extraordinary lockdown measures, many Inclusive Businesses suddenly had trouble importing, producing, distributing, and selling their beneficial goods and services. Some of them were able to quickly respond and sometimes even pivot their business models to continue serving their low-income consumers with essential products and services. Some of these pioneers shared early lessons with us via an online webinar.
Using a Crisis Response Framework to prepare and think all options through
Mike Sherry, Director of Mwezi, a last-mile distributor in Kenya, shared that they were able to quickly respond to the crisis thanks to an existing Business Continuity Plan that was built initially for social unrest-type situations in Kenya but could be adapted for a pandemic. He used a 4R framework (React, Reimagine, Reshape, Rebound) that helps understand the different layers and time horizons of a crisis response plan, from immediate damage control to longer-term reinvention. Other frameworks exist, such as the McKinsey R5, perhaps skewed toward anticipating longer-term sakes, or the BCG checklist or People Priorities, more geared toward thinking through all the immediate steps that need to be taken.
Ensuring a safe journey for staff and consumers
Operating more than 600 water ATMs across 20 states for hundreds of thousands of low-income consumers, Sarvajal was facing an immediate challenge to their model. Being an agile organization with a tech department used to coming up with frugal innovation in a matter of days, and well-proven logistics capabilities, they were able to quickly roll out contactless dispensing technology to those ATMs that were using push buttons and risked contaminating customers. Combined with disease prevention measures and community awareness-raising, this quick response has ensured that Sarvajal could continue to provide safe drinking water to their customers during this crisis.
Keeping in touch with consumers to base decisions on data and insights
To understand the impact of the crisis on their consumers, Moon, an off-grid solar company operating in Senegal, launched a survey via its independent Local Evaluation Centre. What they found was surprising: consumers were willing to anticipate their repayments to avoid any possible difficulties with mobile money networks in the future. Moreover, consumers valued more than they could have imagined additional online information and education services Moon provided. Based on this valuable information, Moon was quickly able to revise their pessimist business forecasts.
Similarly, looking into their customer database when the crisis hit, Mwezi realised many of their urban and peri-urban customers had moved back to their village just before the lockdown of the Nairobi area and were now looking for ways to keep in touch with the rest of the world, i.e. looking for solutions to purchase off-grid TVs and radios, and forming a new customer segment for Mwezi which could help mitigate the sharp decrease in new customer acquisition.
Reshaping operations to serve customers where they are
As Guatemala entered into a lockdown in March, Ecofiltro, a social business selling water filters, was surprised by the initial spike in water filter sales. Customers were actually gearing up to whether the crisis at home. When retail stores closed down, however, sales suddenly plummeted close to zero. Based on these two sharp variations in sales, the Ecofiltro team understood that only the sales points had disappeared, not their customers’ demand or willingness to pay for their product. Water filters were in high demand during the crisis, but customers were unable to get them. Ecofiltro was able to set up an online ordering platform and a same-day home delivery system in just a few days, thanks to the team’s ingenuity and commitment to their goal as a social enterprise. The recruitment of 20 good agents was made possible because they had been laid off over the past weeks. Now selling hundreds of filters online, and thanks to the initial boom in sales, Ecofiltro was able to reach its best month ever in terms of sales, almost doubling their previous record.
Reimagining the business model to make it more local
As all Paygo companies, Moon is now faced with a challenge in acquiring new customers, which is traditionally done by sending out mobile agents to villages, organizing group demonstrations and entering people’s homes for installation and training. In the new COVID context, this becomes a health risk for both agents and villagers, which pushed Moon and other Paygo companies to reimagine their business models with less travel and for focus on village penetration.
Building resilient business models
These lessons from practitioners highlight the importance of preparing your business for uncertain events by building options (or opportunities to pivot) and developing modular (or flexible) operations to be able to quickly respond, i.e. key dimensions of what makes a resilient business model.
