Innovation, Scale, Returns, Failure... If BIF Is A Pilot, What Are We Learning From It?
So what have we learnt about inclusive business in the last three years, running the Business Innovation Facility? Quite a lot, as it turns out.
As Country Managers and theme leaders met in London last week, we worked through some of the 'big questions' together. Where in our portfolio do we see the greatest innovation - not just incremental change in engaging the poor, but discontinuity with the past and innovation that integrates poor people? What will determine which businesses go to scale; which ones have a model that has to scale - or fail?
These are the questions that Soji (Nigeria) and Karen (Malawi) were leading. First thoughts are in their new blogs (which you can read by clicking the links above), with more to come in detail. They won't be smothering us in blah, saying all projects are both innovative and scalable, but picking out what's different about the most innovative and most scalable.
Inclusive business by definition generates both commercial and social return. Easily said but so rarely defined in practice. What commercial returns are companies expecting, what returns do they actually get back from their inclusive business? Nisha (India) is scrutinising company reports on drivers and returns, all amalgamated in Excel. And for people at the Base of the Pyramid, who is it that benefits and how? We've argued hard that you can't just measure benefits in terms of new jobs, so how exactly do they benefit from access to affordable services, or new market opportunities? Georgina (Malawi) and Carolin (M&E team) are assessing the projects.
There are many ways to categorise the BIF portfolio - by country, by size of company, by stage of maturity. But the most obvious one to me is to distinguish businesses that engage the poor as producers and suppliers of materials and those that engage the poor as consumers of goods and services. So we need to assess both types.
Most of the producer projects are in agribusiness, focusing on supplies from smallholders. So it makes perfect sense that Georgina, our agri expert in Malawi, is building on her recent Insider to see how well the agribusiness portfolio is performing (who gains) and who does what in the new value chain models. Most of our projects on the consumer side need to create demand for a relatively new or unfamiliar product within the Base of the Pyramid, as Parveen (Bangladesh) is exploring.
Whether producer or consumer-focused, companies have to move out of their comfort zone to make a succcess of inclusive business, and that is one of the reasons Tom (Operations) has found so many richpartnerships in the portfolio. His Insider looking at why large companies so need partnerships is coming out next week, and a great insight.
What is the most interesting question but toughest to answer, at least in public? Andrew (Zambia) got that: why do some inclusive businesses not thrive? We expect some to stall, but what shapes that? Is it just a case of insufficient profit? Or the champion leaving? Actually it seems to be more than that.
Any decent project team should have plenty of lessons to draw after three years of hard work. But usually we think about them on the way out the door, and note them in the next bid. Luckily in BIF - a pilot - we have a drive and mandate to distil the lessons and share them. Many of our team blogs from last week are setting out questions not answers, but we have set ourselves an ambitious agenda to address in the final six months of BIF 1. So watch this space for more.
This blog is part of an Inclusive Business Insights Series, brought to you in partnership with the Business Innovation Facility and Innovations Against Poverty.
Working closely with companies at the ‘coal-face’ of inclusive business, the Business Innovation Facility and Innovations Against Poverty aim to share lessons learned and insights gained from over 100 projects across the developing world. Each month, this blog series will feature selected articles written by members of the team working on the ground, to highlight the challenges and opportunities of implementing inclusive business and to spark fresh thinking and innovative approaches to leveraging business for development.