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iii THINKERS

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IN THIS ISSUE

A Drill Down on Base of the Pyramid

ASSESSMENT—INCLUSION—ENTREPRENEURSHIP—SUSTAINABILITY—BUSINESS MODELS

Vol 1, Issue 3. July-September 2015

A Drill Down on Base of the Pyramid

THINKERS Magazine is now available in the following versions: Print: Get access to the print copy which will be delivered to your place. (Available only in India) Digital: Available on Magzter.

Editor-in-Chief AMIT KAPOOR

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Consulting Editor MALVIKA CHANDAN

Publisher Institute for Competitiveness Editorial Board In alphabetical order ANURAG BATRA Chairman Business World JOAN BIGHAM Managing Director Global Solution Networks Executive Vice President Tapscott Group MANOJ KUMAR Managing Partner Hammurabi & Solomon NEERA VOHRA Program Coordinator Institute for Competitiveness

THINKERS, is a presentation of Thinkers50 India, which is about discussing new ideas, new thoughts, addressing challenging issues, forging new paths, and in the process creating an ever widening circle of thought leadership. Further, we seek to create synergies in the thought leadership space by integrating the online and offline experiences.

Thinkers50 India is a joint initiative of Institute for Competitiveness, India and Thinkers50.

Institute for Competitiveness, India is an international initiative centred in India, dedicated to enlarging and purposeful disseminating of the body of research and knowledge on competition and strategy. Institute for Competitiveness, India conducts and supports indigenous research, offers academic and executive courses, and provides advisory services to the Corporate and the Governments. The institute studies competition and its implications for company strategy; the competitiveness of nations, regions & cities and thus generates guidelines for businesses and those in governance; and suggests and provides solutions for socioeconomic problems.

Created in 2001 by Stuart Crainer and Des Dearlove, the Thinkers50 was the first-ever global ranking of management thinkers. In the intervening decade, the scope of Thinkers50 has broadened to include a range of activities that support its mission of identifying, ranking and sharing the best management thinking in the world. Today, Thinkers50 is widely recognized as the world’s definitive ranking of the top 50 business thinkers, and the T50 Distinguished Achievement Awards are widely regarded as the “Oscars of management thinking.”

3 In Conversation with MARK KRAMER In an interaction with Mark Kramer, co-founder and managing director of FSG, a nonprofit consulting firm, he shares an in-depth view on the Shared Value construct, its many advantages and opportunities, and how it can be successfully applied.

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EVALUATING THE STATE OF ASSESSMENT

By Heather Esper and Yaquta Kanchwala Fatehi

An enlightening piece by the authors on the evolution of impact assessment since its genesis in the 1950s and 60s, where it stands today, and the mind-set needed to move from debating to extracting the most value from it.

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YOGA 3.0

By Raja Choudhury An insightful article in which the author talks about how India invented yoga, lost it, regained it and now wants to give it away again.

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A FRAMEWORK FOR SHARED-CHANNEL DISTRIBUTION MODELS FOR BOP ACCESS Markus Dietrich

An excerpt from the book Base of the Pyramid 3.0 edited by Stuart L. Hart and Fernando Casado Caneque. The author of this chapter explores challenges companies face in distributing products to the base of the pyramid which are often located in difficult to serve locations. He further suggests a framework to evaluate opportunities of partnerships with organizations already active in those locations.

INCLUSIVE CHANNELS: HIGH TOUCH-LOW COST

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The author makes an impactful case for inclusive channels across sectors when targeting the over 4 billion base of pyramid market. The article cites successful examples of its deployment across geographies, from Bangladesh to India to Indonesia to Kenya.

In an interaction with Riz Khan, international journalist, television host, and author who has formerly been with BBC World, CNN International, and Al Jazeera English, he shares his view on what constitutes good journalism and also lessons for journalists everywhere on steps they can take to live up to the high ideals of the profession.

By Nicolas Chevrollier

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In Conversation with ROBERT JOHANSON In an interaction with Robert Johanson, chairman and independent director, The Bendigo and Adelaide Bank Group, he talks about the challenges within the current capitalistic system, and of the community based banking model and how it could work in both developed and developing countries.

In Conversation with RIZ KHAN

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SUSTAINABLE ENTREPRENEURSHIP AT THE BASE OF THE PYRAMID

By Urs Jäger and Vijay Sathe

In Chapter 1 of the book Base of the Pyramid 3.0 the authors explain the importance of a company’s purpose, vision, ambition, and capability to its business development at the base of the pyramid

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4 (BoP). In this article they elaborate on how the wisdom of Peter Drucker allows a company to build on these fundamentals to promote sustainable entrepreneurship at the BoP.

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CO-CREATING INCLUSIVE DEVELOPMENT AT IMPOVERISHED RURAL TERRITORIES

By Maria Alejandra Pineda-Escobar

The author writes about the inspiring work done in ‘inclusive territorial development´ in the Montes de Maria region in Colombia which is conceived as a business initiative that seeks to bring sustainability to the region through the implementation of inclusive business models.

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RECREATING SUSTAINABLE BUSINESS, FROM THE BOTTOM UP

By John Gardner

The author describes how the shift to the circular economy is picking up speed and will transform how the aluminium rolled products and recycling industry does business in the future. Novelis has chosen to view this change as an opportunity, rather than a threat, and are moving fast to respond.

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BETTER STRATEGIC MANAGEMENT FRAMEWORKS FOR ALL

By Paul Barnett

This article is a look at initiatives to improve the quality of business reporting, making it more useful to investors.

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In Conversation with GURCHARAN DAS In an interaction with Gurcharan Das, author, commentator and former CEO of Procter & Gamble India, he shares his view on topics ranging from the state of the Indian economy, to the performance

of the current government to qualities he saw in himself that lead to him becoming a successful and best selling author.

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VISION FOR LONG-TERM GOOD AND PROSPERITY FOR ALL

By Sunil Kumar

In this insightful piece the author talks about creating ‘systems’ which can produce ‘good’ people as our leaders and policy makers, who will strive for subjective or inner growth towards ‘perfection’ and also for quality and perfection in work, done with an evenness of mind, for the good of society.

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THE MISSING LINK - PARTNERING FOR INNOVATION

By Jacob Ravn

The author provides his perspective on the missing link between the obvious needs of developing countries and existing technologies and how they can be met by providing a platform for strategic partnerships between the private sector, NGOs, universities and public authorities.

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In Conversation with NAVI RADJOU AND JAIDEEP PRABHU Authors Navi Radjou and Jaideep Prabhu speak about their new book Frugal Innovation: How to do more with less, and also about how the concept has been embraced in unique ways.

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THE ECOSYSTEM OF POVERTY: LESSONS LEARNED FROM THE $300 HOUSE PROJECT

By Christian Sarkar and Abhijit De

The authors have illustrated an “ecosystem of poverty” showing how poverty is caused by a range of issues that create a vicious cycle of failure and how these problems are all interrelated. They have

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PERSPECTIVE - WHERE’S THE DIGNITY?

By Vibhav Kapoor

THE FUTURE OF X

These photographs of the ‘Bottom of the Pyramid’ give a peek into the struggles and hardships of life here, and how everything is not hunky dory.

Certainly, they indicate that economic and social development in India still has a long way to go.

The author believes change of various quanta and directionalities has occurred in almost all spaces man had delved in. Herein, he projects what future awaits the constructs/ practices of the joke; and of the celebrity status.

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By Sandeep Mann

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TARGETING THE BASE OF THE PYRAMID AT SCALE: EASIER SAID THAN DONE!

By Filippo Veglio

THE PRISMatic APPROACH TO COMPETENCE

In this article, the author examines the scalability of ventures targeting the base of the pyramid (BOP), by expanding access to goods, services, and livelihoods in commercially viable ways and thereby evolving into inclusive business.

In this article, the author describes the significance of Zen wisdom in refining one’s sensory perceptions and aligning the flow of one’s physical energy with one’s thoughts, words and deeds both as a subject and as a team player/social being.

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By Stuart L. Hart and Chiropriya Dasgupta

By Rizio Yohannan Raj

USING REFRAMING, DESIGN & BUSINESS MODEL THINKING TO LIFT THE BOTTOM OF THE PYRAMID

By Maarten Koomans

New business models can change everything, but are you prepared to leave your assumptions at the door? The author argues that by using the process of reframing, design thinking and the application business model canvas, we can flip our reality and create new realities. Fast.

CREATING AN INNOVATION ECOSYSTEM FOR INCLUSIVE AND SUSTAINABLE BUSINESS The authors contributed to a chapter in the book – Base of the Pyramid 3.0: Sustainable Development through Innovation and Entrepreneurship. The book covers the state of the domain and acts as a sounding board for expert voices from the field.

This excerpt from the authors’ chapter, articulates the systemic need for an innovation ecosystem.

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also offered an integrated development approach to fight poverty at scale while tackling all of the root causes of poverty simultaneously.

NOTE FROM EDITOR-IN-CHIEF This issue of Thinkers has a special emphasis on Base of the Pyramid. This is a collaborative effort between Enterprise for Sustainable World, University of Vermont and Thinkers. This special issue gets released at the BoP Global Network Summit being organised at University of Vermont on July 16 & 17, 2015.

BoP is a pressing and huge reality in many parts of the world and there are organisations, institutions, NGOs, tech firms that are genuinely trying through their individual and collective expertise to up the standard and cater to this market and include them in the mainstream. We hope this issue will give insight on initiatives being taken towards uplifting the BoP that may be anywhere from the exploration stage to the execution stage but all have a common goal of seeing the light of day.

To lift the Base of Pyramid population around the world to a level where they live with dignity and equality is a mammoth goal and if achieved even slowly, would make the world a much happier place to live in. Steps in the right direction have been taken, as many of these articles show. Some are hopeful some are more confident, and experience tells us that success comes if we stay the course.

Regards, Amit Kapoor

EDITOR’S NOTE “The Base of the Pyramid (BoP) is a socio-economic designation for the more than 4 billion people living on less than $8 a day. It is also a business strategy that focuses on products, services and enterprises to serve this demographic in a way that is culturally sensitive, environmentally sustainable and economically profitable.�

The sheer magnitude of this population is overwhelming and serving them is challenging on many counts, but the socially responsible thing to do in a world where this poor audience gets blatantly ignored and the top of the pyramid by default attracts all the attention.

In this issue of Thinkers we have contributions on aspects ranging from the ecosystem of poverty to impact assessment of BoP initiatives. This issue also carries thought leadership pieces on tapping inclusive channels across the world to reach this target audience and applying best management practices to build sustainable and innovative enterprises for the BoP. Included are interviews with intellectuals such as Mark Kramer, Riz Khan and Gurcharan Das who give a macro perspective respectively on the Indian economy and shared value initiatives and journalism.

Finally, we have contributions from eminent personalities on topics ranging from yoga to Indian philosophy and more insights from management gurus such as Navi Radjou and Jaideep Prabhu on the potential in the world for frugal innovation.

Regards, Malvika Chandan

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IN CONVERSATION WITH MARK KRAMER

By Amit Kapoor In an interaction with Mark Kramer, co-founder and Managing Director of FSG, a nonprofit consulting firm, he shares an in-depth view on the Shared Value construct, its many advantages and opportunities, and how it can be successfully applied in the developed and developing world.

9 regulation or constraint is likely to result in a very fair or just society. There need to be some ground rules. What shared value enables us to do is to begin to first of all encourage companies to document the positive social benefits of their operations and encourage them to find new avenues and new products and new opportunities to do more things that create positive social benefits.

Companies focused on shared value initiatives have undeniably created great social and environmental value and have been able to do it on a scale that non-profits are unable to match.

Historically, we thought of companies as purely economic creatures that did not need to take into account the social and environmental impacts or indeed the competitive impacts around them. What we are finding is that these things that we thought were externalities in fact have tremendous internal cost.

We’re also finding that there are tremendous missed opportunities when companies are focused on only serving the well to do through traditional distribution channels at traditional pricing models. They miss most of the world’s population and there are immense opportunities to bring much-needed goods and services to people who today do not have access to them and this could be done profitably.

The biggest criticism of the shared value concept has been that this is just another word for base of the pyramid (BOP) or this is just another name for frugal innovation. How do you counter this?

The shared value concept is very much an umbrella concept and it absolutely overlaps with bottom of the pyramid, it absolutely overlaps with sustainability in many ways. Not every product that’s sold in bottom of the pyramid though is necessarily done so in a way that

We are seeing that shared value is redefining capitalism in two ways. One is thinking about the cost of operations and the value chain where we’re realizing you can improve these things by addressing the social, environmental issues that impact your business.

Secondly in terms of new opportunities, creating new products and services that reach new markets or that help address the emergent societal needs.

According to one school of thought, the world seems to be divided in two sets of thinking, wherein one set believes that capitalism is good and the other that it is evil. How do you think this gap can be bridged?

I think it helps to bridge the gap by example. Capitalism I would agree with Michael Porter is a tremendously powerful force for innovation and for efficiency and for scale and these are things that government and NGOs cannot do as well. It is very hard for NGOs to scale, it is hard for governments to be innovative and efficient but this is where capitalism has pushed tremendous advances in the world over the last century.

But, capitalism can do evil and I don’t think that unbridled capitalism without any government

“Shared values says that you have got to be improving your customers well being because of the product you sell and the way you sell it.” is good for people. Shared values says that you have got to be improving your customers well being because of the product you sell and the way you sell it.

We see many examples in upper income markets and in developed countries of shared value. When Dow creates a cooking solution for fast food restaurants in the U.S., it reduces trans-fat and is heart healthy and that’s not a bottom of the pyramid product. Even when it overlaps with bottom of the pyramid and certainly bringing goods and services to people who don’t have access today is an important social benefit that doesn’t begin to describe the entire scope of it. I think the same thing is true of sustainability. Not everything that reduces an environmental footprint saves money. Those that do are legitimately shared value. Those that don’t may still be necessary, may still be important but they are not shared value.

I think shared value is above all about competitive strategy and the competitive positioning of the company relative to others in its industry. I think these other

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How do you think shared value is really working in redefining the capitalist way?

I think shared value is redefining the way capitalism is operating and being conceptualized. We have always thought of companies as being pure economic players and the social and environmental impacts that they create did not have any impact on the company’s performance. As the world becomes much more complex, much more interdependent what we are finding is that these things that we thought were externalities really have tremendous internal cost.

10 concepts such as bottom of the pyramid are often seen as an ancillary piece to a company that is already thriving and focused on top of the pyramid and sustainability is often seen as a cost setter and something off to the side that has to be managed. Neither of these is typically seen as a dimension of the value proposition and the core competitive strategy of the company.

Don’t you believe that competitive advantage has to be sustainable; otherwise, enterprises will lose out over a period of time. How does your construct overcome the whole ideological thing that’s happening right now?

Certainly companies need to adapt to changing circumstances and what is absolutely true is that what was the competitive advantage may need to be modified or changed to be sustained in the face of innovation and other changes in the economy. Of course, it’s difficult for very large companies to change. We see in the start-up companies that they are the ones that have conquered the internet more than established ones because it’s so hard to change a large company that’s already at scale.

There are lots of reasons why companies that have what appears to be a sustainable competitive advantage weren’t in fact able to sustain it. The basic idea that you’re serving a set of customer needs uniquely well because you have a laser like focus on just meeting their needs and you therefore understand them better than anybody else and can serve them better than anybody else and over time you’re able to refine your operations more and more to directly target and benefit and officially serve that clientele. If that’s true then other companies really cannot compete with you. I think shared value adds a new dimension, a social dimension to competitive positioning and so it is one more way in which a company can differentiate, can define the market it is serving and the benefits it’s providing to those customers. Shared value initiatives can develop a distribution model and a pricing model that meets the needs of customers at an affordable price.

You’re saying that market based solutions will really solve the problems of the world and those solutions will have to imbibe the social aspect or the social construct in which they are operating. I believe the real value of your construct is actually going to come from the developing world or the world that is facing huge levels of disparity, from sanitation to health to education and so forth.

I agree with you. I think the greatest human benefit of shared value will come in the developing world, where

so many basic needs, so much basic infrastructure is missing. There is so much suffering and disease and poverty that could be eliminated. Although I agree that shared values greatest human impact will be in the developing world, I don’t believe that shared value is the answer to every problem in every way. There is a role for government and government policy that can never be taken over by private enterprise and there is also role for philanthropy and NGOs, because not every need can be met with market-based solutions. I believe that there is and always will be a need for cross sector solutions, for solutions that engage government and NGOs as well as companies.

In a country like India where majority of the people are not covered by insurance, even the ones who are covered with insurance do not have adequate coverage. There are people who just do not have the kind of disposable income needed to go for insurance. That means it requires different actuarial thinking, it requires different sets of models. How do you think insurance companies should look at these constructs to create effective models?

Insurance is a great example where we’re used to actuary models that are based on well-to-do populations and very expansive healthcare provisions. The key factor is how do you get the right risk profiles spread over a large enough population to make insurance viable. We’ve seen examples of a major mobile phone company in Africa that is providing health insurance because in doing so they’re reaching a huge and largely healthy population that enables them to actually bear the cost of the health insurance for those who are sick.

In China, we’re seeing another partnership between an NGO and an insurance company that is working with factories. By getting into one of the large factories with 250,000 people they can get a broad enough base. These are very different ways of selling insurance, of devising the actuarial tables than what we are used to in the U.S. or in the developed world. There are viable business models there but you have to really understand the market. You have to find new ways of selling insurance and you have to build up enough experience to be able to develop the actuarial data that we don’t otherwise have. I think there will always be a role for government and healthcare. I don’t think that there is anyway around that but that doesn’t mean that there isn’t a supplementary role for insurance companies even for very low-income populations.

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How do you foresee the shared value initiative having an impact on the system in India?

If shared value helps provide a platform for discussion, for conversation, for innovation, for strategy, that it self is helpful. There are so many examples of wonderful shared value initiatives that are already underway in India. I think there is a very unique situation with the 2% CSR requirement and as the legislation is drafted, even though it does not directly apply to shared value investments by companies, I think it does enable partnerships between companies and NGOs that create shared value initiatives. There is no other country in the world that has a 2% law like that and I think the amount of money that could potentially channel in to shared value initiatives is tremendous.

Anything else you would like to tell enterprises within India regarding shared value? That it is not about 2%, but about that 98%, about the major part of your business.

One of the challenges of bringing shared value to India is that it has been such a rapidly growing economy.

“I think the greatest human benefit of shared value will come in the developing world, where so much is missing in terms of basic needs and infrastructure.”

The leaders of business face a tremendous number of opportunities all of which are very attractive and the hard work of developing a new business model to reach a population that hasn’t been reached or to create new products that are more beneficial to customers sometimes doesn’t seem to be as necessary when there are so many other low-hanging fruit available. On the other hand I see that the leading families of India that own so many of these businesses are also very charitable. They see a patriotic duty in helping ensure that growth is inclusive and carries the entire population.

Their businesses are in fact a powerful vehicle to help create social progress throughout India, than mere philanthropy.

What do you think are the shortcomings with this construct that you would like to overcome in the future?

I think we need to do a better job of explaining how shared value is tied to strategy and making it clearer to people that this is not just another term for corporate social responsibility. I think we need to be very clear by industry, what are the shared value opportunities in pharma, in banking and so on because the issues are often industry specific. I think we need to do some work around the role of government policy. In theory, business can actually solve some of these social problems that cost the government so much money. There is a strong argument for government subsidy but how do you put them in place in a way that really creates the right incentives and not the wrong ones. I think that there is a need for new financing mechanisms here. Healthcare is a great example where the cost of prevention is so much less than the cost of treatment or cure and yet we haven’t found a way to capture that savings in a way that can create a market. If we can capture those savings then there is tremendous money to be made. We really need some financing instruments that bridge some of these gaps in order to give companies the incentives and the profits to really go after some of the social problems that are costing our society so much money.

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Coming back to my earlier question of bridging the gap between have’s and the have not’s. What if the construct is not going to get to its full potential?

Unfortunately we’ve seen that countries and regions that fall into a trap of poverty particularly when it’s combined with bad government can stay in that for a very long time. You get into this vicious cycle where there is no incentive for private investment and therefore there is very little innovation, there is very little new opportunity. Unless we can bring a shared value lens to situations like these, companies are not going to go in there and we’re not going to see economic growth and improvements in standard of living. The second thing I’ll say is that I don’t think it has to be about shared value. There is a much broader movement that redefines the role of corporations in society. We talk about it in terms of shared value and we think shared value helps you understand how to tie it to corporate strategy and operations but there are many others out there using different terms like conscious capitalism but are saying very similar things. Whether shared value as a concept prevails or not, I think the more enlightened understanding of what business brings to society and what business needs and depends on society for, that interdependence I think is becoming much more clear in many different ways. So whether shared value as a term is being taught in business schools or something else is taught, I think that the trend is irreversible.

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EVALUATING THE STATE OF ASSESSMENT

By Heather Esper and Yaquta Kanchwala Fatehi

An enlightening piece by the authors on the evolution of impact assessment since its genesis in the 1950s and 60s, where it stands today, and the mind-set needed to move from debating to extracting the most value from it.

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Context: Evolution of the assessment debate This is not the first time we have heard this debate; this is just the latest entry in a global conversation on why and how to assess impact.

Approaches to impact assessment have been implemented in the international development community since the 1950s with logframes being popular. The logframe links an organization’s inputs and activities to resulting outputs, outcomes and impacts.

In the 1980s, leading development theorists such as Robert Chambers advocated for the inclusion of program stakeholders in the design, analysis and reporting of impact evaluations . In the 1990s, assessment continued to gain a wider following due to the increased need for accountability by nongovernmental organizations (NGOs).

Alnoor Ebrahim, Associate Professor of Business Administration at Harvard University viewed assessments as a tool to track accountability.

He found assessments were increasingly used for upward accountability (to donors and governments), but identified significant potential to use them for downward accountability (to patrons and communities) and as a learning tool for innovation.

“Socially-minded organizations must find transparent ways for assessment - especially to access investment and engage in nontraditional partnerships.”

Meanwhile, Greg Dees, one of the pioneers of the social entrepreneurship field, defined accountability as part of the field’s definition, thus social entrepreneurs must assess “their progress in terms of social, financial, and managerial outcomes, not simply in terms of their size, outputs, or processes” .

Dees with his co-author, Beth Battle Anderson who was also at Duke at the time (2003), recognized that while it is difficult to measure and attribute impact, social entrepreneurs should conduct internal measurement and external evaluations. They even recommended the use of indirect or leading indicators in order to break down impact goals into “specific, measurable process and outcome objectives.” At a similar time, a big push to measure results came from the Millennium Development Goals (MDGs).

Moving deeper into the debate, the conversation evolved from the need for assessment into the different metrics available and their different purposes. Sheila Bonini and Jed Emerson who at the time they wrote their piece were at the Hewlett Foundation pushed all organizations to concentrate on what data to track, how to track it cost-effectively and how to integrate it into decision making. Similarly, other groups also focused on measurement integration and standardization of metrics, for example the Rockefeller Impact Investing Collaborative (RIIC) , which found the “lack of clear, consistent and credible impact” as a barrier to reaching scale. An example of standardization of metrics is the Impact Reporting and Investment Standards (IRIS). Managed by the Global Impact Investing Network (GIIN) as a catalogue of output metrics, IRIS aims to increase capital flow and allow investors to compare social, environmental and financial performance of their investees. From there, the conversation moved into the relationship between business and poverty reduction and assessment’s role to improve the

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Recent debate has focused on whether businesses should assess impact. Erik Simanis, Head of Frontier Markets Initiative at Cornell University, argues that impact assessments are good for non-profits but bad for businesses that want to profitably serve the poor due to management perception, implementation costs and burdens on consumers. We, the authors, believe Simanis is concentrating on a type of assessment — an evaluation — since it appears he is focusing on causality. We use the following definitions in this article: assessment means using qualitative or quantitative data to better understand an issue such as an organization’s performance or their consumers’ well-being; while evaluation is to establish causality to judge an issue and measurement implies numerical data . Shortly thereafter, Irit Tamir and Mara Bolis of Oxfam America responded by stating Simanis’s stance would encourage business negligence. They see assessing impact as a means towards managing risk and identifying new opportunities through customer feedback.

14 work of grantors (foundations and agencies), social enterprises, NGOs, impact investors, through mutual value creation.

So how then did the debate begin to yo-yo between “to assess or not to assess”? We and others like Howard White of 3ie believe some of the confusion in the larger debate, stems from interpreting assessment terms in different ways.

Some use a narrower definition and require a counterfactual for evaluation . Another important reason for the debate is the push for randomized control trials (RCTs) which requires many resources and rigid design requirements. The Evaluation Gap Working Group led by the Center for Global Development’s 2006 article is widely credited with the adoption of RCTs in the development sector. A widely cited example is that of d.light, a company that sells solar home systems in emerging markets.

“If the goal of an ambulance service is to provide timely and quality transport for patients to a hospital, then they should assess indicators related to their services rather than an outcome such as improved health years later.”

Their bilateral grantor pushed to conduct a RCT of customer’s health and educational outcomes for further funding. d.light argued that the RCT design would require they offer the products for free or with heavy subsidies, partner with unfamiliar distribution partners and target poorer household than they usually do – which wouldn’t be a sustainable model for scaling. d.light’s proposed solution would allow selling products at market prices with planned distributors at scale in the areas they operate.

Where we are now A framework, called Metrics 3.0 released in 2014 calls for integrating impact metrics with operational metrics as well as carrying out evaluations that contribute to collective learning agendas for the broader ‘ecosystem’ in order to create the most value from impact assessment. Going back to the d.light

example, it is clear that the question ‘do d.light solar units improve the welfare of selected households’ would fit in the collective learning agenda as other organizations providing and investing in solar units would benefit from this knowledge.

However, the question ‘does d.light’s business model improve customer’s welfare’ would provide specific information to help d.light’s operations and decision-making. This example also illustrates how the assessment’s goals help influence the indicators and methodology used. , In the past, partly due to the confusion created by this debate, organizations collected too much or too little data resulting in much unused data.

Many organizations simply gathered data at donors request or feared that if they didn’t, investors would question their investment; but they struggled to make ordered sense of it. At the same time organizations feared they’d overestimate their impact or base their estimates on false assumptions.

Today, many groups including ourselves develop thoughtful organization-wide data design processes with a clear rationale that minimizes wastage of resources while maximizing value of data collection.

Many professionals now accept all assessment types (impact, process, performance) and methods (qualitative and quantitative) and use a range of these to incorporate multiple perspectives and types of indicators . , . One such example --the CART principles-- provides helpful guidance in deciding what to assess and how to create the right-sized data collection system. CART dictates indicators to be credible, actionable, responsible on resources, and transportable to other contexts.

There is also a movement toward tools that allow for quicker and less resource-intensive assessment such as rapid feedback loops, lean data, social performance, and impact proxies. Other ideas include: Unitus Seed Fund, a seed-stage venture firm operating in ten Indian cities, suggest selecting indicators based on key questions associated with the organization’s stage of growth . A second idea presented by Ebrahim, suggests organizations focus what they assess within a logframe on the complexity of their theory of change and operational strategy . For instance, if the goal of an ambulance service is to provide timely and quality transport for patients to a hospital, then they should assess indicators related to their services rather than an outcome such as improved health years later.

Assessment for value creation Socially-minded organizations must find transparent ways for assessment - especially to access investment and engage in non-traditional partnerships. Assessment creates value for businesses and non-profits alike for reasons such as learning at the organization and community level, benchmarking, identifying causality, and coursecorrecting. Deciding what (indicators) and how (methods and tools) to assess depends on the most important question/s an organization wants to answer.

So let’s agree to end the assessment debate and advance to a conversation of how to extract the most value. As Emerson states “In the end, I hate the whole metrics debate…It is repetitive, mind numbing and distracting from the critical task of fighting the forces presently destroying our societies and planet.” To accelerate this learning, businesses should contribute to ecosystem-level learning agendas and all organizations should strengthen their capabilities to develop strategic data collection systems. Advancement in technology has led to data collection via mobile phones and

geo-spatial visualizations. However in our push to collect data especially from low-income areas, we must not inundate people with too many questions resulting in survey fatigue. Many questions different organizations ask are likely to overlap and thus we call for data sharing. We must also share results back and provide information in exchange for survey responses. We look forward to continuing on this conversation with you.

1. Simanis, E. Dec 3 2014. Why Impact Assessments Are Good for Nonprofits but Bad for Business, Guardian Sustainable Business the Role of Business in Development, The Guardian, Accessed 2 June 2015.

2. Huitt, W. (2007) Assessment, measurement, and evaluation: Overview.

Educational Psychology Interactive. Valdosta, GA: Valdosta State University 3. Tamir, I., Bolis, M. Jan 19 2015. Next Thought Monday – Five Reasons Why BoP Impact Assessments Are Good for Business: Companies Overlook Risks and Miss Opportunities When They Don’t Assess Human Rights Impacts, Capturing Impact, NextBillion- Development through Enterprise, Accessed 2 June 2015.

4. Staff Writer (2014) Why and How Social Enterprises Should Measure their Social Impact?, social platform, Accessed 15 May 2015.

5. Roche, C. (1999) Impact Assessment for Development Agencies: Learning to Value Change. Oxford: Oxfam GB. 6. Ebrahim, A.,Rangan, V. (2010) The Limits of Non-Profit Impact: A Contingency Framework for Measuring Social Performance, Harvard Business School.

7. Sette, C. Participatory Evaluation, Better Evaluation, Accessed 15 June 2015.

8. Dees, G. (1998) The Meaning of Social Entrepreneurship, Stanford University: Graduate School of Business.

9. Dees, G., Anderson, B. (2003) For-Profit Social Ventures, Social Entrepreneurship, Senate Hall Academic Publishing.

10. Bonini, S., Emerson, J. (2005) Maximizing Blended Value–Building Beyond the Blended Value Map to Sustainable Investing, Philanthropy and Organizations.

11. Olsen, S.,Galimidi, B.(2008) Catalog of Approaches to Impact Measurement: Assessing social impact in private ventures, Social Venture Technology Group with the support of The Rockefeller Foundation.

12. Kramer, M., Graves, R., Hirschhorn, J., Fiske, L. (2007) From Insight to Action: New Directions in Foundation Evaluation: FSG Social Impact Advisors.

13. London, T. (2009) Making better investments at the base of the

pyramid, Harvard Business Review, 87, pp. 106-113.

14. White, H. (2010) A contribution to current debates in impact evaluation, Evaluation, 16, pp. 153-164.

15. Maas, K., Liket, K. (2011) Social impact measurement: Classification of methods, In R. Burritt (Ed.), Environmental Management Accounting and Supply Chain Management,27, pp. 171–202.

16. Heider, C. (Nov 13 2013). Embrace All Evaluation Methods – Can We End the Debate?, Independent Evaluation Group, World Bank Group, Accessed 2 June 2015.

17. Shah, N. (April 16 2015). Evaluation with Impacts : Decision-focused Impact Evaluation as a Practical Policymaking Tool [PowerPoint slides],, Presented at 3ie Evidence Week: Washington, DC. 18. McCreless, M., Fonzi, CJ., Edens, G., Lall, S. (Jun 4 2014). Metrics 3.0: A New Vision for Shared Metrics. Stanford Social Innovation Review, Accessed 2 June 2015.

19. IDinsight. (April 21 2015). IDinsight Presents at 3ie Evidence Week on ‘The Future of Impact Evaluation’, Accessed 2 June 2015.

20. Shah, N. (April 16 2015). Evaluation with Impacts : Decision-focused Impact Evaluation as a Practical Policymaking Tool[PowerPoint slides], Presented at 3ie Evidence Week: Washington, DC. 21. Heider, C. (Nov 13 2013). Embrace All Evaluation Methods – Can We End the Debate?, Independent Evaluation Group, World Bank Group, Accessed 2 June 2015.

22. Stanford Social Innovation Review, Accessed 2 June 2015.

23. Gugerty, MK., Karlan, D. (Apr 2 2014). Measuring Impact Isn’t for Everyone, Stanford Social Innovation Review, Accessed 2 June 2015.

24. Sekar, U. (Jan 28. 2015). Finding Realistic Impact Measures for Investors, Entrepreneurs: Presenting Unitus Seed Fund’s new guide for measuring impact. NextBillion, Accessed 2 June 2015.

25. Ebrahim, A.,Rangan, V. (2010) The Limits of Non-Profit Impact: A Contingency Framework for Measuring Social Performance, Harvard Business School.

26. Emerson, J. (Mar 12 2015). The Metrics Myth, Markets for Good, Accessed 2 June 2015.

Acknowledgements: We would like to thank the following persons for their time and helpful comments to strengthen our article: Scott Anderson (Managing Editor, NextBillion at William Davidson Institute), Chiropriya Dasgupta (Director, Strategic Initiatives at Enterprise for a Sustainable World), CJ Fonzi (Senior Project Manager, Dalberg Global Development Advisors), Daniele Giovannucci (President, Committee on Sustainability Assessment (COSA)), and Thane Kreiner (Executive Director, Miller Center for Social Entrepreneurship and Howard and Alida Charney University Professor at Santa Clara University).

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INCLUSIVE CHANNELS: HIGH TOUCHLOW COST

By Nicolas Chevrollier The author makes an impactful case for inclusive channels across sectors when targeting the over 4 billion Base of Pyramid market. The article cites successful examples of its deployment across geographies, from Bangladesh to India to Indonesia to Kenya.

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However, in what is commonly known as the “last mile distribution challenge”, entrepreneurs are providing innovative solutions to make the last mile a first opportunity. With passion, perseverance and patience, they invent ingenious ways of reaching these underserved communities engaging them into their sales and distribution systems creating “inclusive channels”.

Distribution trends Low-income groups or the Base of the Pyramid (BoP) refers to the more than four billion people who earn less than US$ 8 per day. Given the sheer size of the group the market potential for the BoP is enormous. The World Bank estimates BoP markets globally at $20 billion for water-related projects, $433 billion for energy, and $2,895 billion for household food needs for a combined market value of over US$ 5 trillion.

“The World Bank estimates BoP markets globally at $20 billion for water-related projects, $433 billion for energy, and $2,895 billion for household food needs for a combined market value of over US$ 5 trillion.” wholesalers do not abide to brand requirements.

For wholesalers it is all about price, and about how fast the product moves. This is a big barrier for using existing routes, especially if a new brand or product is introduced that does not have the same demand guarantee as existing products. Companies like Unilever are looking for ways to secure their brand presence and connect directly with retail, even some of the smallest shops. For instance, Unilever launched the ‘Perfect Store’ program which transforms simple trading stalls into small businesses. Unilever provides marketing support to key retailers and stays in close contact with them and in return increase sales and distribution costs and ensure that stores get improved margins and sales volume.

Three inclusive channel strategies While looking at companies successfully distributing products in low-income markets, three main distribution strategies surface:

In these markets, distribution networks of BoP products take place mostly in the informal economy. Most sales still go through informal and fragmented channels such as small shops, market stalls, and street vendors. However supermarket are gaining shares. For example, in consumer goods retailing, more than 70 percent of sales in Nigeria still go through these informal and fragmented channels but modern retailers are making inroads, and sales through modern-format stores are growing by 28 percent per year.

Leveraging existing retail channels. By making use of limited existing channels and infrastructure for distribution, enterprises can create new routes to markets. For example, Hapinoy Stores in the Philippines improves a network of small neighborhood convenience stores (Hapinoy sari-sari stores) by introducing new business opportunities to sell products like medicines, solar solutions, or financial services through mobile platforms. Storeowners—often women—are trained on business management and personal development to increase profitability of the store and, if needed, gain access to finance to grow and build a bigger store.

Furthermore, wholesalers do not necessarily care about brands. Manufacturers often complain that

Creating hybrid partnerships. Non-profit organizations or microfinance institutions that

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You can buy a Coca-Cola anywhere in the world, but affordable products that provide essential value like water treatment or lighting often do not reach billions of poor populations around the globe. In fact, a majority of the population in India or Africa lives in rural areas often accessible only by poor quality road infrastructure. In addition, geographical isolation or limited access to relevant information disconnects populations in many developing countries from any business value chain.

The consequence—which can affect both urban and rural populations—is that products providing essential value either do not reach the intended customers or are more expensive or lower quality than the standard products that are accessible by other populations.

18 are well established in the local scene can provide a direct network of targeted communities. The rise of Grameenphone in Bangladesh—the result of a partnership between Grameen Bank and the Norwegian mobile operator Telenor—is an example of such a win-win situation. As part of the crosssector partnership, existing women borrowers of Grameen Bank are equipped with a mobile phone and become mobile public call offices commonly known as village phone. It allows the for-profit Grameenphone to reach rural areas often neglected by mobile operators.

“While the ‘last mile’ probably represents the greatest challenge for global economic development, it also represents a significant opportunity for innovators to come together across sectors and across borders to develop inclusive channels.”

Tapping into village entrepreneur forces.

Empowering leaders and entrepreneurs in the community to play the role of sales agents is another path for creating reliable distribution networks in underserved communities. Microentrepreneurs are usually paid a commission for sales, sometimes combined with a fixed salary. A great example of micro-franchising in distribution is JITA in Bangladesh. JITA is a sales distribution network of low-income women (aparajitas) selling consumer goods to rural households in Bangladesh.

JITA has taken an innovative approach to building a commercially successful business by developing a multi-company basket of goods and leveraging local trust in NGOs to introduce the aparajitas as new market channels. Goods are transported to independently owned hubs, from there; service agents employed by JITA transport the goods to the homes of aparajitas. They sell the goods in (mobile) stalls or door-to-door.

To determine which model is best for which company or product line depends greatly on the

type of business one company is engaging in, its strength and the context it operates in. Two important trade-offs include: Investment versus control: Tapping into village entrepreneur forces tends to require a larger initial investment than partnering or leveraging existing channels. In return, more control throughout the channels is ensured via micro-entrepreneurs. This is a major trade off when brand awareness is key for launching a new product.

Speed versus competitiveness: A micro-franchising model may take a long time to develop due to the selection and training needed for the workforce.

However, once a micro-franchising model is established, it is not easy for competitors to replicate it, hence a significant competitive advantage.

Three key success factors for micro-franchising models include: Engagement When developing inclusive channels, the selection of agents and the implementation of the right incentives to motivate them to sell products are critical. Furthermore, often new expertise and skills need to be developed for these sales agent to act efficiently. In low-income markets, trust is key and sales agents are often recruited as prominent members of the community where your sales need to happen.

Incentive can come in various forms. For instance, Nazava, in Indonesia, has a sales force of more than 60 resellers selling innovative water filters.

Incentives include discounted prices based on volume of sales or rewards such as TV. In West Africa, Fan Milk (http://www.fanmilk.com/) offers unique frozen dairy products, juice and juice drinks to a total population of more than 200 million people. The biggest enabler of Fan Milk’s growth was their distribution system. They are also a pioneer in the development of sales and distribution systems. Bicycle vendors were introduced in the early days in Ghana and today consumers can still see thousands of Fan Milk vendors on their bicycles all over West Africa. Fan Milk has more than 30000 sales agents and was recently acquired by Danone. FanMilk requires vendors to save 10% of their earnings, which is kept

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A number of companies use also the concept of “Business in a Box” that provides all the necessary materials to the sales force which can include training session, brochures and catalogues, advertisements through radio and newspapers or micro-loans to acquire stock.

Selection, incentive, training are the three activities in terms of engagement to keep in mind to ensure long-lasting loyal sales forces.

Finance When distributing products to low-income groups, local retailers and village entrepreneurs have little cash at hand to buy the products they want to distribute. Access to the right finance is crucial to stock up and operate these distributors. Access to finance can be provided by the company itself or via a partnership with a financial organization.

Nazava provides KIVA (http://www.kiva.org/) loans to resellers for them to buy the necessary amount of products to sale. KIVA lets individuals lend as little as $25 to help create opportunity around the world.

Hapinoy makes capital available to women storeowners (called Nanays) to ensure that they can start up new enterprises or expand existing ones.

After 5-6 months, Nanays that would like to expand their business can access more capital via Hapinoy’s microfinance partners like CARD Bank.

Reducing the need for financing in the distribution chain is also a way to solve the finance issue. For instance, Copia (http://www.copiaglobal.com/) is selling devices through catalogue system for nonperishable goods with easy mobile order system.

Less permanent stock means less fixed cost for the sales agents.

Technology Using Information and Communication Technology, like mobile phones, can make inclusive channels more efficient and effective by: Using innovative point of sale material like video’s through mobiles and beamers etc. Sales ladies of JITA, http://www.jitabangladesh.com/, use small beamers to project the benefits of the products they

sell to prospective customers.

Enabling access to (real time) easy-to-use stock information. Hindustan Unilever Ltd in India distributes goods via the Shakti network (http:// www.unilever.com/sustainable-living-2014/ enhancing-livelihoods/opportunities-for-women/ developing-employment-opportunities/). It uses a low cost mobile IT solution called Shakti Mobile.

Shakti Mobile is a mini-enterprise resource planning (ERP) package run on an entry-level smart phone. By the end of 2012, it was already being used by more than 40,000 Shakti ammas across the country.

Using online/mobile platforms to aggregate demand and provide choice. KOPERNIK (http:// kopernik.info/), by connecting simple technology with last mile communities, is doing just this in Indonesia.

Using technology to facilitate payment. M-PESA (http://en.wikipedia.org/wiki/M-Pesa) in Kenya is a mobile-phone based money transfer and microfinancing service launched by Safaricom that can facilitate payments in sales channels.

So whether for presenting more efficiently, for accessing stock information, aggregating of demand or facilitating payment, using ICT improve the efficiency of inclusive channels and ultimately allow a swifter deployment of these forces in the most remote places. While the “last mile” probably represents the greatest challenge for global economic development, it also represents a significant opportunity for innovators to come together across sectors and across borders to develop inclusive channels.

If executed correctly, the impact could be unprecedented. The balancing act is to create “high touch” – “low cost” channels. “High touch” because low-income groups are risk adverse customers that need a relation with trusted distribution agents.

This trust is enabled via frequent interaction or touch point between sale forces and consumers.

“Low-cost” because affordability in these markets is key. Some companies in India and over the world have started to pave the way, let’s walk with them to create the next generation of inclusive channels that deliver value to billions.

THINKERS

on a company bank account and paid out to vendors when they leave the company. Vendors stay at company approximately 8 years!

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IN CONVERSATION WITH ROBERT JOHANSON

By Amit Kapoor In an interaction with Robert Johanson, chairman and independent director, The Bendigo and Adelaide Bank Group, he talks about the challenges within the current capitalistic system, and of the community based banking model and how it could work in both developed and developing countries.

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Capitalism will continue to be the best way to allocate resources to meet the needs of people but the role of government as a moderator and regulator of all the processes, will only continue to grow.

Modern capitalism is about digital economies— where once you know the impact of a complaint by a citizen, it can be marshaled that much quicker.

So all things that people complained about point to the government, which will need to manage those processes. People also need to take a longer view because most allocations of capital are made to solve the big problems and are long-term investments.

The demands democratic systems make on companies will be translated through governments; and this will only get greater.

What you’re saying is the role of government is going to be enhanced over a period of time.

There are going to be challenges in terms of information that is going to increase.

Everywhere people are saying governments have to reduce spending, governments are getting to be too intrusive but nowhere are governments able to change that. Demands are going to continue to grow as people feel that they’re more vulnerable to the

“Everywhere people are saying governments have to reduce spending, governments are getting to be too intrusive but nowhere are governments able to change that.” swings. We know the system of capitalism, which is really capital allocation according to the needs of consumers. In the end to scale back at that is the democracy of it all and that’s why we would be the most efficient while doing it.

People are saying that capitalism is fairly exploitative. Across the world we’re seeing a lot of conflict which could be based on this whole issue between haves and the have not’s.

We have seen this issue over the last 100 years, where societies have tried to reduce the differences by giving more to those who have docked. This happens where State control systems are prevalent.

In an open market system, people are given a voice and then that voice effectively works for the marketplace and capital is allocated accordingly.

In economies where you have a lot of poor on the fringes, it’s how you bring them into the system, to give them a voice to ensure their voices are heard in the capital allocation equation. That’s how we’re going to give them things or how they are going to get things. Like in India, it relates to the disenfranchised anonymous rural poor—its by giving them bank accounts, its by getting them or letting them have access, by letting them participate in financial systems making sure that money gets to them without too much cost on the way through, it’s those things that will bring them into the system which will give them a chance of getting something.

So you are convinced that market based solutions are going to solve the problem?

Absolutely. Market based solutions because it is what democracies do best and that’s what democracy is, a market place. It’s a market for ideas, its market for goods.

In the Indian context, where the whole social progress aspect has been missing even though we’ve been a democracy for the last 60 plus years, and into the market based system for 25

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How is capitalism going to change over the next 10 to 20 years? And what do you believe are some of the challenges within the existing system?

Simple question first. Capitalism is everywhere.

Capitalism as it is practiced today is a regulated structure of aspects of market forces. So the question is about the various players we’re seeing, particularly in banking, an industry I am involved with. The State has and will continue to probably have an increasing role in this industry, to ensure that citizens get from it what they need. I am still convinced that business, the free market system will be the best way that capital and assets get allocated. It is a democratic system where in a sense, assets and capital get allocated according to the demands of people which is what capitalism is, but expectations and demands on the State to control that, to moderate outcomes, to protect the State itself from consequences, will continue. So like in the global financial crisis, where we saw in the banking system certain stakeholders use the system for their own advantage and then ended up being paid for by tax payers, you’ve got to expect the governments will continue to intervene to moderate that possibility.

22 years, but the disparity has risen. How do you look at this situation?

There have been a whole lot of people left in the same condition they were 25 years ago but there have been a whole lot of other people whose conditions have changed a lot. It’s a system in change, but a lot of it has happened. Now, it hasn’t happened for everybody and the size of the problems in India, you know. Nonetheless, if you were trying to pick a starting point you’d rather start today than 25 years ago wouldn’t you?

were just imagined. What we’re trying to do is to do the central things well—technology, big risk management, management of capital but we partner with local communities to run the distribution. What we have now is over 350 different communities each of which own their own local branch, each of which employs their own local bank offices, and they act as our agents but as a franchisee. They ride the business, they take deposits, or they make loans and we share with them the revenue from that roughly 50-50 they get half, we get half.

“In India at the moment the big problem is how to give banking to the local community, to franchise into the financial system people who are currently disenfranchised.”

Our half goes to pay the central costs, their half goes to pay the local costs. We share the consequences if the loan goes wrong, so they are responsible for the loans they make to some degree, and they’ve got stick-to policies that we agree on. Local people know who are the good credits, the reliable people so our history has been of very low debts because we’re dealing with people we know or at least our people know. If you can have relationships between the center and the distribution point, the distribution points can be made to work but it relies completely on openness, trust, a lot of goodwill, it’s hard work.

Could you explain the community based banking model you have created and your experience through the journey?

Our model is trying to do two things. One, provide the benefits of strong center. In a regulated banking world, you need a strong center to deal with the issues of capital, technology, and risk management systems. These are things that you need to scale because they are expensive to setup so consolidation and scale work here. For distribution what we try to do is capture the benefits of dispersion where the distribution is dealt with at the local level. Part of the problem for the last 50 years of banking that caused the global financial crisis was that too many decisions were made at head office. People made decisions about risk or credit at head office according to various models, completely ignoring what was going on at local levels so they took all the power away from local managers and centralized them. So you ended up with these models telling people to buy stuff that really was junk and that disconnect was one of the big causes of the global crises.

You had people buying manufactured parcels of mortgages on the basis of various centrally done models that predicted outcomes that

There is a lot of relationship building, a lot of relationship maintenance that has to go on. In India at the moment the big problem is how to give banking to the local community, to franchise into the financial system people who are currently disenfranchised. If they are able to involve themselves in the financial system, the benefits are enormous instead of keeping their money in form of gold or cash under the bed. In the financial system it can then be used for all sorts of things, other investments, for infrastructure.

It is useless if it’s just sitting in a gold bar under someone’s bed. If the wealth in a village could be brought together and then deployed for the benefit of the village then the whole village would do better financially by participating in the financial system.

Do you think it can actually work for tangible products as well?

Well, McDonald’s worked on a franchise system.

McDonald’s wasn’t the first to come up with a franchise model, but it’s the one everyone think

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You also wear another hat of the AustraliaIndia institute. Where do you see India from a research point of view?

The number of people who are getting educated is broadening India. The proportion of Indians who are under 25 is greater compared to anywhere else.

It’s either going to be a disaster or its going to be a bonanza. I think there is too much at stake for us all not to ensure that it is a bonanza. I think in what is a very constrained and funky market system, it is the democracy that works extremely well.

I think a place like Australia has got lots of reasons to engage with India in ways we never have in the past. So at the moment there are attempts to negotiate a free trade agreement between Australia

and India. It’s absolutely in Australia’s interest that we trade a lot more with India, that we engage a lot more with India because we have so much at stake in ensuring that it’s not a disaster. It’s now very much self-interest that we find ways to create value together and to share that because the alternatives are too awful to counter much.

In your view, which part of the world will the newer models that redefine the capitalistic system come from?

Capitalism in any place is a consequence of a whole lot of important local influences. So for instance if you ignore the diversity within India when you’re trying to come up with models, it is not going to work. If someone tries to impose a structure on India just because it worked in Australia, it may not be the solution or work the same way in India.

Each country is going to have to find its own unique model.

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so. I mean it uses local managers to run businesses according to standards and principles. That’s truly what we’re doing.

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YOGA

3.0

By Raja Choudhury

An insightful article in which the author talks about how India invented yoga, lost it, regained it and now wants to give it away again.

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At first I was very cynical, thinking of all those poor secretaries and under secretaries and civil servants being forced to do yoga by the government. But then I realized that yoga had become India’s once again.

Just 9 months earlier Modi stood up at his first appearance at the UN General Assembly as Prime Minister and called upon the world to embrace an International Day of Yoga and the a few weeks later on 11th December, 177 countries led by Norway co-sponsored the Bill and it was passed making it the largest vote in UN history. A very Indian coup indeed!

Millions of people practice yoga every day around the world from the parks, schools and ashrams of India to the gyms and salons across the US, Europe, China and most countries of the world.

It is estimated to be a $64 billion dollar industry including schools, equipment, accessories and media.

But to really understand how significant a coup this was for Modi we have to take a closer look at history.

Like so many great things of India, yoga had to first leave home, achieve fame in the west and then return home to a hero’s welcome. The Indian way!

The evolution of yoga occurred in 3 phases. First was Yoga 1.0; the invention and development of Yoga in the Indian subcontinent over 5,000 years. Then came Yoga 2.0 or how the West discovered Yoga and transformed it into big business. And then finally we are now entering what can be termed Yoga 3.0 - the return of the prodigal son and the establishing of India as the custodian of wisdom and harmony once again.

“Yoga was seen as a process to train the mind to see reality as it really is and not a projection of our frenetic collective minds or our senses alone.”

Yoga 1.0: A product of the Indian mind The origins of yoga lie somewhere in South Asia’s very ancient past and the art most likely developed with shamanic mystics in the Himalayan region across today’s India, Pakistan, Tibet, Nepal and Afghanistan. Seals depicting yoga like poses were discovered across the cities of the Indus Saraswati Valley Civilization showing advanced knowledge of yoga as early as 2,500 BCE. During the Vedic period around 1,000 BCE, the practice became known as yoga as Sanskrit became the language of the subcontinent and was described in detail in the Upanishads or the end of the Vedas. It wasn’t until the 2nnd Century BCE that yoga was codified and documented through the Yoga Sutras of a sage called Patanjali. In its early form and as embraced by most South Asian religions of that period, yoga was a technique or tool for stilling the body in order to still the chaos of the mind therefore altering one’s state of consciousness. It became a prerequisite to most spiritual and religious practices and even the Buddha and Mahavir of the Jains were considered to be advanced yogis.

Yoga was seen as a process to train the mind to see reality as it really is and not a projection of our frenetic collective minds or our senses alone. By following the rules, breathing, doing the postures, learning concentration and how to meditate, the yogi would eventually rise above all their chaotic selves and find harmony in a higher state of consciousness. The by-products would be good health, a calm mind, laser like focus and awareness, a kinder disposition towards all life and the planet and a higher state of consciousness and bliss. This was the promise and it is has remained compelling for over 5,000 years.

In India yoga became an integral part of everyday life by the 9th century with the teachings of Adi Shankara and Gorakshanath but soon after was forced underground following Islamic invasions and colonization. By the time the British came, yoga was

THINKERS

At 6:45 am on 21st June 2015, India’s Prime Minister Narendra Modi sat on the dais at New Delhi’s Rajpat and brought about a cultural revolution.

Singlehandedly, he was able to achieve a global diplomatic coup that would become the envy of China and Pakistan. 35,000 people at Rajpath and millions around the country joined him for 45 minutes of yoga poses. This was followed by millions of yogis around the world doing the same in an act of collective consciousness rarely seen before. India managed to flex its soft power muscles and became the official elder keeper of yoga and the exporter of harmony, wisdom and inner peace. It is estimated that 20 million people took part in the UN’s International Day of Yoga across 192 countries. Shear yogic will power!

26 practiced exclusively by secret schools and yogis and was seen as exotic and occult in nature. In the early part of the 20th century, yoga started becoming fashionable again amongst maharajas and their British guests and regular demonstrations were held to show the magical abilities of yogis. The Maharaja of Mysore was a great yoga patron and his teacher Shri Krishnamacharya revived the ancient Nath art of hatha yoga, which most people think of as yoga today. He had 3 students who would take Yoga to the World – BKS Iyengar, K Pattabhi Jois and his son Desikachar.

“WHO declared that yoga is India’s traditional medicine and could be shared around the world on that basis.”

Yoga 2.0: How the West fell in love with Yoga How did yoga first enter the global conversation?

In the 19th century Hindu and yogic ideas had entered American and European drawing rooms and parlours with the translation of the Upanishads and the Bhagwad Geeta by indologists like Max Mueller and also through the work of the theosophists, the New England transcendentalists and demonstrations by maharajas in London. When Swami Vivekananda arrived in America in 1893 at the first World’s Parliament of Religions the word yoga really caught on with the publications of his book Raja Yoga, but what he had in mind was very different from the physical asanas we are obsessed with today and more the yoga of the mind. Swami Yogananda took that further in the 1920’s and introduced the world to the esoteric and mysterious practices of kundalini and kriya yoga. Many Indian teachers made their way to America in the years following but it was the arrival of BKS Iyengar in 1956 that changed everything.

Iyengar was a student of the Krishnamacharya and had been befriended by the Israeli classical violinist Yehudi Menuhin who became his first international student and took him on a grand yoga tour of Zurich, Paris, London and New York where he performed demonstrations at Carnegie Hall. Audiences were amazed with his asanas and he became an overnight celebrity. In America he held workshops and classes

and eventually set up his first school in Chicago, the very city that had hosted Vivekananda 60 years earlier. His old childhood friend Pattabhi Jois also followed suit and Iyengar Yoga and Jois’ Ashthanga Vinyasa Yoga schools started to redefine yoga in the West. Today most yoga teachers in America can trace their entry into yoga to one of these schools. In 1966, Iyengar published his seminal book Light on Yoga, which went on to become a global bestseller in 17 languages. Yoga had gone global and it was said that every Madison Avenue ad man had a copy of the book hidden in his office drawers. In the years following this tipping point, millions of American and Europeans took to yoga and brands like Vikram Yoga, Rodney Yee, Power Yoga and GAIAM took yoga to a new level as a real health and wellness industry worth over $64 billion worldwide today.

In India, most people felt a sense of resentment at the business of yoga in the West and an effort was made in the 2000’s to take back some of the magic.

Many Indian teachers like Baba Ramdev and Shri Shri Ravi Shankar made yoga popular again with the middle classes and the government set up a division of the Ministry of Health called AYUSH (Ayurveda, Yoga, Unani, Siddha and Homeopathy) to protect and disseminate classical yoga. Then in 2014, Narendra Modi and the BJP came to power in India and yoga would find a new champion in the home of where it began.

Yoga 3.0 “Yoga does not discriminate; to varying degrees, all people can practice, regardless of their relative strength, age or ability…I appreciated the simple sense of satisfaction that Yoga can bring,” ~ UN Secretary General Ban Ki-moon on International Yoga Day. Every morning at 5 am, Narendra Modi sits in the garden of his home at Racecourse Road and does at least 30 minutes of yoga. His daily ritual includes asanas, pranayama, dharana, pratyahara and dhyana – 5 major parts of the ashthanga or the eight-limbed yoga system codified by Patanjali back in the 2nd century BCE. This is classical yoga and India wants the world share this wisdom.

In a series of strategic moves after coming to office, the PM first converted AYUSH into a full Ministry, endorsed and funded two major Yoga

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Modi’s argument is that yoga is for everyone. He believes it brings you into harmony and balance with yourself, other human beings, and nature and helps you discover higher states of consciousness.

He firmly believes that yoga can bring the world

harmony and can affect climate change through responsible citizenship. He said yoga transcended all religions and belonged to all of humanity. This argument was obviously persuasive as a record 40 Muslim countries also signed up for Yoga Day. In India, AYUSH and the government shifted the focus from yoga’s Hindu philosophical alignments to its health, wellness and mental benefits instead. So much so that the WHO declared that yoga is India’s traditional medicine and could be shared around the world on that basis. As Prime Minister Modi said on the dais at Rajpath on Yoga Day “It is not just the beginning of a day but the beginning of a new age through which we will achieve greater heights of peace, goodwill and train the human spirit.”

THINKERS

Institutes The Morarji Desai Institute for Yoga and S-VYASA, spoke about yoga regularly in the Indian and International media and then finally proposed the International Day of Yoga at the UN General Assembly on his visit to the US. The momentum was unstoppable and in a record vote, most countries of the World adapted the resolution. On Sunday 21st June over 20 million people around the world and millions more through TV experienced a collective burst of yoga energy around the world.

28

A FRAMEWORK FOR

SHAREDCHANNEL DISTRIBUTION MODELS FOR BOP ACCESS

By Markus Dietrich

An excerpt from the book Base of the Pyramid 3.0 edited by Stuart L. Hart and Fernando Casado Caneque. The author of this chapter explores challenges companies face in distributing products to the base of the pyramid which are often located in difficult to serve locations. He further suggests a framework to evaluate opportunities of partnerships with organizations already active in those locations.

29 Distribution challenges in the Philippines Owing to the Philippines’ geographical features, distribution channels for the BoP market experience challenges of delivery of goods to far-flung areas such as mountain or island barangays (villages).

Notably are the lack of physical infrastructure as only 14% of roads are paved and regular water transport services are either not available, or expensive and weather-dependent as well as power supply, water supply and internet services as well as warehouses, offices, banks or cash dispensers.

All the distribution challenges contribute to the “BoP penalty”. According to the World Resources Institute, the BoP often pays higher prices for basic goods and services than wealthier consumers, either in financial or transaction costs, and often receives lower quality.

The BoP penalty is expressed in multiple forms: • Lack of access to essential goods and services • Higher prices for goods and services • Poor quality of goods and services An illustration of the BoP penalty is the municipality of Culion in Palawan province. The municipality is composed of 37 islands and most of the basic commodities in Culion are shipped by a sole company from Manila by boat thrice per week.

Travel time for this route is two days. The BoP penalty in the pricing of basic commodities for Culion can be as high as 67%. Additionally, Culion has very limited access to basic commodities that require cold-chain logistics and refrigeration.

The Shared Channel Assessment Framework (SCAF) To overcome these challenges four distribution models are employed in the Philippines. First, formal distribution channels such as supermarkets and convenience stores, secondly direct sales forces, thirdly, multilevel marketing and fourthly, the shared-channel distribution model. In such a model, companies partner with commercial partners, MFIs, NGOs and cooperatives—organizations that have a strong presence in the rural areas—in engaging the

“Organizations have different skills and values embodied in their DNA.” BoP market. In the Philippines, especially, there are about 22,000 cooperatives1, 330,000 NGOs, and about 15,000 MFIs2.

The widespread presence of these organizations and their established network with the BoP offers big potential for companies to gain access to the BoP market. Companies can piggyback on the networks of these organizations to deliver their products and services to the BoP market while reducing distribution costs, increasing consumer awareness, improving after-sales services and so on.

Based on ASEI’s consulting work and interviews with key stakeholders, the Shared Channel Assessment Framework (SCAF) was developed as a tool for companies in evaluating shared-channel partnerships. The framework is based on three main categories: alignment between the partners, value add by the channel partner and market development status, each evaluated on three dimensions.

It is proposed that the level of alignment along three dimensions—product/service, organizational skills and values and supply-chain management—between the shared-channel partners is an important indicator for the partnership’s success and highlights areas to which time and resources have to be allocated to achieve better alignment.

See Figure 8.1 The Shared Channel Assessment Framework (next page) Alignment dimensions Product and service dimension Evaluating the alignment of products and services is the most important alignment dimension. It has been shown that the closer the new product or service is aligned with the existing offering of the proposed shared-channel partner, the easier the integration will be, increasing the likelihood of a successful partnership.

1 Cooperative Development Authority Masterlist of Cooperatives as of November 2012.

2 Microfinance Sector Data by Microfinance Council of the Philippines as of June 2010; data includes NGOs, banks, and cooperatives with microfinance services.

THINKERS

Asian Social Enterprise Incubator, The Philippines

30 Alignment Dimensions Product/service Organizational s kills, values Supply Chain Management Financing s upport Business l ocation Market a ccess Market r eadiness Customer a wareness Geography

Scale 3 5 3 4 2 4 3 3 5

Alignment

Product/service

Geography

Market Development Customer awareness

Market readiness Market access

Organizational skills, values Supply Chain Management

Financing support Business location

Value Add

Figure 8.1 The Shared Channel Assessment Framework Organizational skills and values dimension Organizations have different skills and values embodied in their DNA. As an example, a city-based, multinational company can be very fast-paced and aggressive, while a rural-based NGO may opt for a relaxed stance in doing business. In addition, a company cannot penetrate a BoP market without considering how the BoP and the partner transact.

Otherwise, there will be a wide misalignment between the two that will affect the entire engagement.

Supply-chain management dimension Managing the supply chain is a complex task wherein both the company and shared channel partner have to work hand in hand. This is the part where the partnership itself operates, from acquiring the products to delivering them to the BoP market and providing after-sales services.

Value-add dimensions Financing support The ability of a shared-channel partner to provide access to financial products for the BoP as its added value is important to make products accessible and affordable and thereby the partnership successful.

This is especially the case when the cost of the product is above the BoP’s financial capacity for outright cash purchases. In this situation it is beneficial when a company partners with an MFI since these organizations can develop specialized financial products for the new products and services or can integrate them into their standard portfolio.

Business location

Companies have to evaluate a shared-channel partner in terms of the location and geographic areas of activities of the partner. The physical presence of a shared-channel partner in the specific BoP market is often assumed; however, its constituency might not have the need that the company can fill, for example, an MFI operating in a poor but electrified area is not a good choice to distribute solar lanterns.

Market access The ability to access the market as a trusted partner of the BoP is an important dimension for the choice of a distribution partner. MFIs, NGOs, cooperatives and social enterprises, the premier organizations to serve as shared-channel partners, have staff or employees working directly, often on a long-term basis, with the BoP market. This helps the partnership to introduce new products to the BoP because of the leverage brought by the shared-channel partner’s identity, which has been established already in the BoP. Market development dimensions Market readiness The framework also considers the conditions of the BoP market itself. The BoP’s readiness for new products is an important success factor for the products and services to be distributed by the partnership. The need of the market does not establish automatically the fact that there is a demand.

Customer awareness The awareness of BoP consumers of the product or service has to be considered in evaluating a sharedchannel partnership. The remoteness of location of

rural BoP markets and the lack of information often contributes to a lack of awareness of the benefits of products and services a company wants to deliver to the BoP. Geography Evaluating the geography of the BoP market and aligning it with the coverage of the distribution partner is essential for a successful partnership.

This evaluation helps the partnership to determine how to plan and execute the distribution plans as, for example, an extremely far-flung BoP market will require a great deal of resources from the partnership for the products to reach it.

The degree of the alignment, value add and market development dimensions contributes to the success of the shared-channel partnership. The SCAF can be used to identify the best partner and to evaluate an existing partnership in case of misalignments or shortcomings in the dimensions that are inevitable in a shared-channel model. Misalignments, low levels of value add or low state of market development do not necessarily indicate that a partnership is not feasible.

Rather, they highlight the areas where actions need to be designed and implemented in order to enhance the partnership.

Rating the dimensions to fill in the SCAF has to be done objectively and in partnership, with consideration to the parameters that apply to each shared-channel partnership. These parameters may vary according to the partners, products and services.

Example of shared-channel distribution According to the Philippine government’s latest statistics, 25% of Filipinos lack access to electricity.3 Most of these people without electricity are located in isolated villages in coastal or mountainous areas.

Seeing the need for a safer and more economical source of light, HSSi took this opportunity to market its solar lantern products. The SunTransfer is a durable, high-capacity solar lamp designed for off-grid use. It enables users to safely light their houses without any risk of fire, save money spent on kerosene and batteries, and generate income through enhanced productivity.4 But since the target markets are in the off-grid rural areas, HSSi recognized the challenge of making the products available and

“25% of Filipinos lack access to electricity. Most of these people without electricity are located in isolated villages in coastal or mountainous areas.” affordable for the BoP in a profitable way.

HSSi partnered with Negros Women for Tomorrow Foundation (NWTF), a large microfinance institutions, to distribute its solar lanterns. Although there was a need for NWTF to equip its staff with knowledge about solar products, selling non-financial products for NWTF was already established business practice. The cooperation between the organizations went smoothly as well since both are experienced in dealing with the BoP.

In order to make the products accessible and affordable for the BoP, NWTF sells the solar lanterns by instalment, particularly to its members. NWTF sends its loan officers to the BoP communities to support the selling of solar lanterns. This strengthens the presence of the partnership in the BoP market through remote front-line employees who implement programmes conducted by both NWTF and HSSi. This is a very strategic move for the partnership because the product is new to the market.

As HSSi’s way of establishing and nurturing partnerships that involves its shared-channel partner and the BoP market, the ACCESS programme was conceived. ACCESS stands for Advancing Citizen and Community Empowerment through Sustained Solutions.

Through the ACCESS programme, HSSi was able to solve the distribution challenges in bringing solar lanterns to the rural un-electrified BoP market.

HSSi ensures that the buyers understand what they are about to buy, how they will be assisted at the point of purchase and about after-sales support. The programme is the partnership’s solution to raising market readiness and awareness for the solar lanterns and the entire concept of solar energy.

3 Partner’s Briefer for the ACCESS Program by Hybrid Social Solutions, Inc. 4 http://www.hybridsolutions.moonfruit.com/#/suntransfer/4553662505

32 Alignment

Product/service Geography

Market Development Customer awareness

Organizational skills, values

can provide leverage for sharedchannel partners to fully widen their portfolios and strengthen their presence in the BoP market.

Supply Chain Management

Conclusions The BoP market in the Philippines is still greatly untapped, but there Market readiness Financing support are a number of organizations that have taken up the challenge Market access Business location and obtained positive results. As stated by the Asian Development Value Add Bank (Dietrich 2013), the inclusive business sector in the Philippines Figure 8.2 Shared Channels Alignment is still in the nascent stage.

Framework for the HSSi–NWTF partnership

Given the poor infrastructure conditions in the rural areas, Assessment of shared-channel partnerships engaging the BoP is posing a considerable It is important for companies planning to engage the distribution challenge. Based on the experience and BoP market through shared channels to carefully the case studies presented, it can be concluded that review and determine the best partner to engage the shared-channel distribution model is a viable and with. Every shared-channel partner (corporates, scalable option for organizations engaging the BoP NGOs, MFIs and social enterprises) has its own market. pros and cons. And every company seeking to share

channel with an organization has its own set of The Shared Channels Assessment Framework strengths and weaknesses. Since there is no perfect is suggested to serve as a decision-making tool shared-channel partnership, the Shared Channel for companies and shared-channel partners. The Assessment Framework is proposed to give guidance framework provides an instrument for these on what to expect and consider when discussing organizations to evaluate an existing or a future different possible shared-channel partners. The partnership. Possible pitfalls can be identified so that framework enables companies and shared-channel remedies can be prepared beforehand or the pitfall partners to establish a well-rounded partnership with itself be avoided. The aim of the framework is to lead a multi-dimensional approach evaluating all aspects decision-makers towards cost-efficient solutions in of delivering products to the BoP. Considerations their engagement with the BoP market and ultimately should not be limited to whether a shared channel in a reduction in the BoP penalty, making products partner can be a good distribution partner and can and services more accessible and affordable for the go along with the “corporate” attitude of urban BoP. As SCAF is still in its infancy more research is area-based companies and whether the company required to test and improve the framework.

Bibliography • Bhan, N. (2009) “The 5Ds of BoP Marketing: Touchpoints for a Holistic, Human-Centered Strategy”, http://www.core77.com/blog/ featured_items/the_5ds_of_bop_marketing_touchpoints_for_a_holistic_ humancentered_strategy_12233.asp, accessed on 30 November 2014.

• ADB. (2013) “Inclusive Business Study for the Philippines. Prepared by ASEI, Inc. for the Asian Development Bank”, ADB Poverty, http://www. scribd.com/doc/142734216/ASEI-23-Apr-2013-IB-in-PHI-Final-Reportwith-Disclamer, accessed 30 November 2014.

• Donnges, C., M. Espano and N. Palarca (2006) Philippines Infrastructure for Rural Productivity Enhancement (Rural Access Technical Papers [RATP] No. 14; Geneva: International Labour Organization).

• Hart, S.L. (2007) Capitalism at the Crossroads: Aligning Business, Earth, and Humanity (Upper Saddle River, NJ: Prentice Hall, 2nd edn).

• Karamchandani, A., and M. Kubzansky and P. Frandano (2009) Emerging Markets, Emerging Models (Cambridge, MA: Monitor Group) • Prahalad, C.K. (2005) The Fortune at the Bottom of the Pyramid (Upper Saddle River, NJ: Prentice Hall/Wharton School Publishing).

• Vachani S., and N.C. Smith (2007) Socially Responsible Distribution: Distribution Strategies for Reaching the Bottom of the Pyramid (Working Papers Series; Fontainebleau, France: INSEAD).

• Allen Hammond, William J Kramer, Julia Tran, Rob Katz, Courtland Walker (March 2007). The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid

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34

IN CONVERSATION WITH RIZ KHAN

By Amit Kapoor

In an interaction with Riz Khan, international journalist, television host, and author who has formerly been with BBC World, CNN International, and Al Jazeera English, he shares his view on what constitutes good journalism and also lessons for journalists everywhere on steps they can take to live up to the high ideals of the profession.

35

As far as the media was concerned in Britain, the newspapers had the chance to editorialize, and most of the journalism was supposed to be fairly straightforward. The radio and TV journalists were meant to be completely free of using any adjectives and I never heard any of my colleagues ever saying, “I think or in my opinion”, this is why, till this day I still wimp when I see this happening in mainstream TV journalism news. In the 70s in Britain we had Sir Robin Day, whose views about media were very direct and forthright. In contrast, Jere D. Witter was a journalist who went around the world and told stories. I was more inspired

by Jere Witter type of journalism, which had conversations and if the questions were phrased correctly, with a lot of research and information behind it, then it became easy to get a good story out of someone.

Combative journalism, as it has become now, is more arguing and thus serves no real purpose. It shows who is the better person arguing or who is the stronger or a louder voice but neither does it really say much in terms of knowledge, nor does it provide a better view to get more information.

Asking the same question 10 times proves that someone doesn’t want to answer and it doesn’t lead you any further in the story. Researching and making questions valid, is something I did a lot in my ‘One on One’ series on Al Jazeera English. The trick is in getting good and well phrased questions, by taking the person into their own space and discussing them in a different way from the generalized questions.

“Having an argument with someone is not necessarily journalism but today we have a huge market for such argumentative journalism.”

I love to do such interviews, where I can discover something about someone, by doing a lot of research and learning more about the person. Now, there are many people brandishing themselves to argumentative journalism. Having an argument with someone is not necessarily journalism but today we have a huge market for such argumentative journalism. A journalist’s job is to get facts, figures and information, instead of positioning themselves and trying to challenge a person in a combative manner. Surprisingly I have heard interviewers posing questions with a lot of their own opinion.

Sometimes questions remain as long as the interviewee’s answer. A very interesting experience from an interview on one of the channels in which I worked; someone timed the interviewer and the interviewee, and it was found that in the 23-24 minute slot, the interviewer had 13-14 minutes and the interviewee had just 10-12 minutes. This shows that there is something wrong with today’s media and so I am not a big fan of tabloid journalists on TV. What is your opinion about journalists who are pre-occupied with their own views even before interviewing a person?

It is not only that you are coming in with a predetermined position and expecting the other person to validate it, but it is like coming in an interview with people like George W. Bush, and expecting him to consent with your words “well you had an evil war, a right wing extremist government.”

It is like coming with a predetermined position. If I had to interview George W. Bush, I would rather like to challenge him with questions. I am not there to tell him what I think he is, instead I am there to find out how he answers my questions and this is how the attribution comes. People are taking shortcuts and not attributing the matter. They are not doing enough research to validate their position. It is just for the sake of creating a sound bite and a sound bite, taken out of context, is wrong. The number of interruptions you see in TV journalism are not healthy and the trouble is that you’re not giving

THINKERS

What do you have to say about the Indian media turning so opinionated?

In my view, now, the term media has changed.

Media 25-30 years ago meant something different with outlets such as newspapers, radio and TV, and without any social media or citizen journalism. It is very important that journalists covering stories and news should have no opinion. My training at the BBC was intense and extended. As a trainee at the BBC, I was on a two-year news trainee scheme, where we never had a salvation in mainstream news. Detrition was still very strong at the BBC, where people were taught not to form any opinion or use adjectives. The BBC beat journalism into me and then CNN taught me how to deal with shells, that’s a big difference.

36 them a chance to speak, this is not journalism to me.

This is stupidity but even smart people do this a lot and people want to watch such combats on TV. If I were an interviewee in that position, I would say, “Are you going to let me speak?” My position as an interviewee is how you’re going to let me speak. If you give me the chance to speak, let me finish what I have to say, get everything in context and then you can ask me another question. I don’t desire to have stupid arguments with someone who doesn’t understand what I am speaking.

Could you brief us with the problems associated with the channels you have worked?

Yes. The BBC is a large ship. The only flaw with the BBC is that it is such a big organization, and it was a lumbering bureaucracy all the time. Also, they ended up getting split as they had a limited pool of funds.

CNN on the other hand is fully commercial. It is all about making more and more money out of it. And then, Al Jazeera throws money at things like they’re going into a battle. It had lots of potential but it couldn’t achieve even 10% of its potential.

Do you think media nowadays has become a battle of TRPs? Yes I think social media and the new world of citizen journalists have changed the system greatly. Today someone can get a billion hits on YouTube by singing a song in Korean and dancing like they are riding a horse. The fact of the matter is now it is awesome to get rated by the public’s opinion, with millions of hits and the optimization on the websites. It has become a business and people make big hustle of the rating system. The internet is far more influential than anything that comes on paper.

What do you have to say about a lot of push back on journalists like Arnab Goswami?

In my opinion Arnab feels that he has a role to play.

He was very respectful of my style of journalism but he believed that he had to put the politicians feet in the fire. Personally, I wink at those kinds of interviews because one has to be very opinionated and take a strong stance in order to do such kind of journalism. Whereas my training at the BBC teaches me to tell a story correctly, and let people form their opinion based on the full story. If you give only half a story, then certainly they are going to make judgments that are flawed. They won’t accept it from someone who is shouting and screaming.

Jeremy Paxman, who did the news on the BBC, was a very talented journalist, incredibly smart and very elite. He went to Cambridge University, and was privately educated. I have a huge respect for him and I worked with him when he was in local TV. His position is again as what Arnab does, to some degree, to hold politicians feet for fire. He did a famous interview with Michael Howard, who was head of the conservative party. He asked the same question many times to him to show that Howard was being evasive. It becomes funny when you repeat the same question and the interviewee fails to answer but people today feel that there is a place for such combative kind of journalism. My journalism maybe flawed or outdated, but I hope not, because I think there are people who still want to respect such kind of journalism. Robert Fisk, an incredibly talented journalist whom I respect very much believes a journalist should let people know the matter. It is a very different kind of journalism. He writes regular reports and is known to have a very strong position on the Israeli Palestinian situation. He has been in Palestinian camps when there were massacres. He described the situation but without using adjectives, which have an opinion. So that is the true journalism people should adopt. I think someone like Arnab Goswami, sincerely thinks he is going to make a difference with his arguing edition, it is just his nature, and certainly not mine.

Could you suggest a few measures as to check such kind of opinionated journalism?

One major step can be through challenging the person taking the interview. Hence, every interviewer should be in a position to face this challenge if they don’t prepare themselves and just read few articles before interviewing the person. It happens quite often that a breaking story happens and we have to cover it. Even I have covered many breaking stories where I had no clue of what was going on after reaching the place. Once, in CNN, I was asked to do an interview with Isabell, daughter of a man in Chile, who was one of the first men basically executed by some, and she wrote a book. I had no clue about the real details of the story though I had read the book. But in such situations I will never try to sound all knowing about something, when I am not. The whole idea behind having a conversation is to draw out some of the things that the person knows but the problem with journalists is that they just make a list of questions and they don’t

37

This world needs a major reset, in every sense.

There is corruption everywhere but with different labels. I think the trouble will remain unless there is a reset in how we define the kind of world we want to live. Today what happens in media is that people want to brand themselves and they want to place themselves in that celebrity culture. In order to get the status or attention of others, people should not buy something which is beyond their reach. There is a tendency for people to think that they are superior and it holds true whether it is a position in politics or in other fields. A reality check is necessary for everyone. I don’t need to try and prove myself to be better than anyone else, because it is not going to work and it doesn’t suit me. I enjoy being part of the real world and being connected with it. I iron my own shirt and I am happy to do it because it gives me time to think. I will be more happy in going to the movies instead of doing something that might be generating income, because for me generating income matters the least unless you get the experience of life. I have more pleasure going with my young daughter to the movies and watching animated cartoons with her, than to sit among Prime Ministers and Presidents at a dinner. Although I do that enough for my job I have more pleasure watching her laugh and giggle at something stupid because I also enjoy it. I will never agree with the idea of accumulating wealth. I know many people who have fat bank balances but very empty hearts, and I don’t want to be in that position, so it is my reality check.

Could you tell us how media should actually work and how it will evolve over a period of time?

Basically there are two sides to the story. One is that it needs to be a far better training ground for journalists. I think journalists should be taught how to research better without being influenced by a very limited number of sources, giving a very limited viewpoint. People tend to be lazy which is a

bad thing. The other thing, which may even be more crucial, is that young people should be taught how to filter what they read, especially online, and learn to discern the sources of information comprehensively.

I remember hearing a lecture from a journalist called Julian Shear, about how important it is to research for your article are and how people are so easily prone to believe everything they read in one article. He gave some great examples by going online and reading about Martin Luther King. As he read he got more and more negative and finally he reached the stage where our view for the King changed and got very negative because he was reading from a website. This shows that people never stop to think about the source of the information. So here comes our part, to educate the young generation about how to interpret the information they get from the media.

“I know many people who have fat bank balances but very empty hearts, and I don’t want to be in that position, so it is my reality check.”

What do you have to say about people getting so influenced by the media?

Today the news can actually set the agenda and that is the problem. If people don’t question whom they are watching, then they cannot filter and discern from the news they are getting. We are all lazy and gullible and this is why YouTube and all such networks work so well. Though it is entertaining but in this way we are not educating ourselves. I used to read a lot of comics and I learnt a lot from them as well. By only watching and not reading, we cannot know about other culture and traditions.

How can we make people aware about this?

I think it has to start in schools from an early age.

There are so many things that will change our lives, but only on the mercy of those who filter for us.

And it leads to the whole thing of how do we get information, how do we filter it, and then how do we judge it. So this kind of education is necessary for journalists too, so as they get older as a journalist they will already be well trained to think about what they are doing with information. If it starts young it can be a great achievement.

THINKERS

listen to the interviewee. People don’t think about the kind of work they do or the kind of questions they ask and ultimately they mess-up the whole process. I don’t favor this culture of shouting and interrupting, people standing in the streets trying to sound dramatic on a story just because they think by being aggressive and shouting they seem to be more intelligent.

38

SUSTAINABLE ENTREPRENEURSHIP AT THE BASE OF THE

PYRAMID In Chapter 1 of the book Base of the Pyramid 3.0 the authors explain the importance of a company’s purpose, vision, ambition and capability to its business development at the base of the pyramid (BoP). In this article they elaborate on how the wisdom of Peter Drucker allows a company to build on these fundamentals to promote sustainable entrepreneurship at the BoP.

By Urs Jäger and Vijay Sathe

39

Consider an example from Brazil, where the cosmetics giant Natura expanded into many neighboring markets in Latin America. Serafeim, Eccles and Ribot (2013, p. 10) have argued that: “As a result of shortcomings in the Brazilian state… (e. g., high levels of poverty and corruption and low levels of education and provision of health care), Natura found itself in the situation many large and prominent companies do that are operating in emerging markets: providing services that would be provided by the government in more developed countries.” Natura’s efforts to improve education in Brazil, which is one of its six sustainability priorities, is seen as a CSR activity because it benefits Brazilian society but at a cost to its shareholders. Can Natura explain to its shareholders that investments in other developing countries should also be seen as a CSR activity? Or does it need a different approach? A review of Peter Drucker’s writings can help answer this question.

Peter Drucker’s wisdom on sustainable competitiveness Much of today’s understanding of management is, in some way or other, related to the work of

“Sustainability is not something that is to be done in addition to strategy. It is a part of strategy and can lead to improved competitiveness.”

Peter F. Drucker (1954, 1973/74 and 2003). This can also be asserted in the field of sustainability.

His famous proposition that every social problem is a business opportunity in disguise shows how strongly he saw the relation between social/ environmental issues and competitiveness. He can thus be seen as the mastermind of the idea we today call “shared value”. Based on Drucker’s wisdom, we offer three guidelines that companies operating at the BoP should follow to promote sustainable entrepreneurship: a) Sustainability for strategy; not strategy for sustainability: Successful companies do not focus on sustainability per se (following Drucker’s advice that companies should focus on profit and not on CSR), but on strategy and how solutions to sustainability challenges can be incorporated into a company’s business strategy for increased competitiveness. In a nutshell, sustainability is not something that is to be done in addition to strategy.

It is a part of strategy and can lead to improved competitiveness. b) Practical, not theoretical task: Drucker advises managers not to forecast, because this assumes continuity between the past and the future.

With forecasts managers argue theoretically and ignore reality. He proposes to analyze future effects today and to exploit those opportunities.

Successful companies thus do not view the task of integrating the three bottom lines as a theoretical task – like forecasting – or as an ideal based on the normative paradigm of sustainability from the enlightenment literature (“thou shall do good”).

Rather, for companies it is about how to analyze and exploit opportunities in the present to improve all three bottom lines by developing and implementing business strategies to get to the best possible solutions for the foreseeable future (see also the argument of Amartya Sen (2010) in his work on justice).

THINKERS

The Challenges of Viability, Legitimacy and Competitiveness One reason why companies fail at the BoP is their incomplete understanding of what competitiveness requires, especially in emerging markets. A company’s competitiveness is its ability to provide products and services that create as much or more value for customers than do competitors, thus leading to above-industry-average financial performance. This is true for companies in the industrialized countries. It is also true for companies operating in the less developed countries such as those in India, but they must also deal with two other challenges before they can compete.

First, they must be able to function despite informal markets, weak institutions and poor infrastructure such as bridges, roads, and security systems. Thus their first challenge is viability. Their second challenge is legitimacy within the local communities and societies in which the company operates. In less developed countries like India, where a large percentage of the country’s population lives in poverty, a company’s growth and financial success need to be legitimized in order to secure the social license to operate.

40 “Turn your BoP challenges into business opportunities by analyzing the BoP space from the perspective of viability, legitimacy and competitiveness.” c) Viability, Legitimacy and Competitiveness: Drucker reminded managers that successful companies need a functioning society based on status (position in one’s group) and order (rules of the game). If status and order are missing, business needs to substitute for them. Following Drucker, sustainable entrepreneurship that leads to competitiveness includes status/order (viability and legitimacy) and function (competitiveness). To be sustainable, entrepreneurship must ensure the company’s viability (“we need to do it to be able to function”), legitimacy (“the company needs to help the environment and society to secure a license to operate”), and competitiveness (“we can meet or beat the competition”). In the less developed world characterized by market failure and institutional weakness (due to less developed capital and financial markets, less educated consumers and lower purchasing power, weaker enforcing institutions and NGOs, etc.) the “sustainability market” may not know or may not care about the improvements in sustainability performance. But even if this is the case, investments to improve social and environmental performance may nonetheless be necessary to ensure the firm’s viability and legitimacy, as the following examples show.

Contrasting cases of sustainable competitiveness Chiquita Chiquita Brands International is known for its banana sales. It is a multinational corporation with a long history, having begun in 1871 as United Fruit Company (the name was changed to Chiquita in 1990). As of 2007, the company’s annual sales totaled US$4.5 billion and it was operating in 70 countries. Despite its success, however, Chiquita entered the twenty-first century with involvement in scandals regarding payoffs to paramilitary groups in Colombia.

a) Sustainability for strategy; not strategy for sustainability: In 2004, the British Broadcasting Corporation (BBC) informed the public that Chiquita Brands International had made payoffs to paramilitary groups in Colombia in order to secure the safety of its employees. Such payoffs, while common in many Latin American countries, were illegal in Colombia, as well as in the USA. A few years later, Chiquita was faced with a US Department of Justice inquiry, and was fined close to US$25 million. The challenge that resulted was: What does sustainability mean for a company that does business in countries where corruption is part of daily business? b) Practical, not theoretical task: The Chiquita payoffs were motivated by the need to secure the safety of the company’s employees and their 387 family members. Over three years, Chiquita paid a total of US$1.7 million to the ‘Autodefensas Unidas de Colombia’, despite the knowledge that it was recognized as a ‘terrorist’ organization by the US Department of Justice. The paramilitaries allegedly used the money for international arms trafficking.

Chiquita understood that payoffs to paramilitary groups were considered illegal in Colombia.

Apparently, Chiquita did not search and exploit opportunities to protect their employees, earn money and not violate the laws in Colombia and the USA. c) Viability, Legitimacy and Competitiveness: It is difficult to judge Chiquita’s action in Colombia, as it was essentially investing in the security of its employees within a highly dangerous region (challenge to viability). Nevertheless, the violation of USA and Colombian laws and the expected negative long-term impact of the paramilitary’s action in arms trafficking both add up to highly negative impacts in social and economic terms (challenge to legitimacy). Chiquita thus hurt its social and economic value.

Magazine Luiza Magazine Luiza is Brazil’s third-largest nonfood retailer. It has experienced exceptional sales growth and strong customer loyalty via its focus on serving low-income clients with innovative technology. Its customer-oriented approach and a personnel-centered culture are noteworthy and difficult to copy.

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b) Practical, not theoretical task: Magazine Luiza aims to target low-income communities accordingly in terms of product development and marketing.

First, it treats low-income customers in a very personal manner. In validating credit financing, a customer’s income stability is considered more important than his/her income level, and both formal and informal sources of income are considered. Finally, the company recognizes that the employee–customer relationship is the most important connection. In addition, they also put significant effort into catering to their employees.

In 2003, Magazine Luiza was recognized as Brazil’s best employer. c) Viability, Legitimacy and Competitiveness: Magazina Luiza redefines poverty by perceiving the poor as customers with their own needs and life conditions and not as “poor humans in need”.

In that way, it creates a new market to make the company function (viability). It focuses on the relation between the firm’s employees and the customers to legitimize the company’s services (legitimacy). And it creates effective and efficient sales processes to increase its competitive advantage (competitiveness).

Magazina Luiza is a success story as it shows how to perceive and pursue business opportunities in low-income markets by redefining the poor as customers. The firm treats low-income customers in a personal manner by focusing on the employee– customer relationship. Chiquita provides a contrast that is important for learning about sustainability and competitiveness because it highlights what References • Drucker, P. F. (1954). The Practice of Management. New York: Harper & Row. • Drucker, P. F. (1973). Management: Tasks, Responsibilities, Practices. New York: HarberBusiness.

companies that operate at the BoP commonly encounter—the need to deal with criminal groups and act according national and international laws at the same time. Chiquita decided to focus on the challenge of dealing with paramilitary groups only and ignored the national and international laws.

They focused on viability and ignored legitimacy.

These examples show that sustainability is part of strategy and can lead to improved competitiveness.

The term “competitiveness” assumes that the company is viable (can function) and legitimate (has society’s license to operate). These cannot be taken for granted in the industrialized world and, as the cases show, even less so in the developing world. They are the necessary but not the sufficient conditions to be competitive in terms of as good or better value of products and services, and economic performance, than rivals. It is generally more challenging to secure viability and legitimacy in the less developed countries than it is in the industrialized countries.

The examples also show that sustainability is not about the creation of company guidelines or glamorous folders. Using sustainability to improve competitiveness is an ongoing task that needs to be repeated again and again. Sustained entrepreneurship at the BoP requires companies to replace their business glasses with Peter Drucker’s lenses for perceiving, developing and implementing strategies that address the need for viability and legitimacy (status/order) and competitiveness (function).

To end with our opening question, how can Natura explain to its shareholders that investments in society make sense also from a profit perspective?

We would say, to paraphrase Peter Drucker’s famous line that “every social problem is a business opportunity in disguise”: Turn your BoP challenges into business opportunities by analyzing the BoP space from the perspective of viability, legitimacy and competitiveness. As long as society does not function – and is not supported by effective and efficient institutions – the company has to invest in society, to secure its viability and legitimacy in order to be competitive.

• Drucker, P. F. (2003). The New Realities. Brunswick, London: Transaction.

• Georgios Serafeim, Eccles, R. G., & Ribot, S. (2013). Teaching Note— Natura Cosmeticos, S.A. In H. B. School (Ed.).

• Sen, A. (2010). The Idea of Justice. London: Penguin Books.

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a) Sustainability for strategy; not strategy for sustainability: Magazine Luiza recognizes the difference between high-, middle- and low-income customers. Low-income customers may be illiterate, having had little formal schooling, and tend to be conservative, sticking to familiar procedures. They may be technologically savvy, but are intimidated by computerized or sophisticated sales approaches.

The challenge for Magazine Luiza is to meet the needs of the poor and serve them appropriately (sustainability) in order to be profitable (competitiveness).

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CO-CREATING INCLUSIVE DEVELOPMENT AT IMPOVERISHED RURAL TERRITORIES

By Maria Alejandra Pineda-Escobar

The author writes about the inspiring work done in ‘Inclusive Territorial Development´ in the Montes de Maria region in Colombia which is conceived as a business initiative that seeks to bring sustainability to the region through the implementation of inclusive business models.

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However, despite this seemingly glowing picture, Colombia continues to have high rates of poverty and inequality. According to estimates by the National Bureau of Statistics (DANE by its acronym in Spanish), by mid-2013 more than 15 million Colombians were in poverty, that is, more than 32% of the total population. For the same period, DANE estimated that about 10%, or four and a half million people, were living in extreme poverty and survived on less than $1.25 a day. These figures confirm that with 0.539, Colombia remains a country with one of the highest Gini coefficients, not only in Latin America but also in the world. This inequality is aggravated by the unemployment rates, which in spite of been said to have decreased permanently since early 2000s, still remain one of the highest in Latin America. And, even more worrying, are the informality rates which DANE confirms to be close to 50% of total occupations in the country.

Coincident with the general trend in Latin America (which corresponds to the most urbanized region in the world), today the country is considered mainly urban, with 75% of its population living in cities and only 25% in the fields. However, rural areas

“CIVETS is an acronym to refer to Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa as the six emerging economies that would present greater dynamism during the decade from 2010 to 2020.” in Colombia have traditionally been the scene of major social problems, concentrating the highest rates of poverty in the country. Currently, the total rural population in Colombia is close to 12 million people, of which at least 65% are living in poverty.

In addition, particularly disconcerting for Colombia are the figures of internally displaced people due to the decades-long internal violent conflict. With nearly 5.4 million internally displaced persons by the end of 2013, Colombia continues to be one of the countries facing the largest internal displacement problem in the world, second only to the Syrian Arab Republic.

On the other hand, it should be mentioned that corruption is a structural problem affecting the country. In this respect, the NGO Transparency for Colombia considers that distrust in the authorities and in their ability to combat this phenomenon is generalized in the country. And the World

Map: location of Montes de Maria.

Source: Google Maps.

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Colombia is a country in South America with 48 million inhabitants, a per capita income above USD$7,800, a strategic location with coasts on both the Pacific and the Caribbean, and an abundance of natural resources. With an average age of 29 years, its population is young and has a slight female majority. Exhibiting, in spite of the international economic crisis, an average economic growth around 4% during the last decade, and with flourishing international investment, Colombia is now regarded as one of the most solid and dynamic economies in Latin America. Thus, the country is now considered by the World Bank Group as a medium–high income economy and is ranked among the countries with high human development according to the Human Development Report for 2014. Such figures led analysts to give Colombia a place within the group of the so-called ´CIVETS´, a term coined in late 2009 by the Economist Intelligence Unit, and reinforced in April 2010 by the chairman of HSBC Group, Michael Geoghegan.

It is an acronym to refer to Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa as the six emerging economies that would present greater dynamism during the decade from 2010 to 2020.

44 Economic Forum (WEF) believes that corruption and inefficiency of government bureaucracy are still among the most important obstacles for business operation in Colombia.

The region of Montes de Maria at a glance In Colombia, one of the regions mostly affected by the internal conflict has been “Montes de Maria”.

Geographically, Montes de Maria is located between the departments of Sucre and Bolivar, with 8 municipalities in the first and 7 in the second, for a total of 15 municipalities. Major neighboring cities are Cartagena and Monteria (see map).

During the worst years of violence in the country (particularly in the nineties), the region was hit by violent incursions by illegal armed groups, leading to high rates of homicides and making Montes de Maria one of the regions with more cases of forced displacement in Colombia.

Due to this history, the region of Montes de Maria has been constantly on the radar of the activities of reconstruction of the social fabric in Colombia, and is in fact one of the major recipients of development aid from both, international donors and national private philanthropic foundations.

Since early 2000s the region has been experiencing a process of rebirth and reconstruction, given a sense of improvement in the security and public order. Thus, people have started to return to their original territories and large companies and investors have come to the region to set up their businesses.

Inclusive Territorial Development at Montes de Maria Since mid-2011, the Colombian Business Council for Sustainable Development (CECODES) – The Colombian branch of the World Business Council for Sustainable Development (WBCSD) – has been carrying out in Montes de Maria, together with other actors, a novel strategy that they have labelled ‘Inclusive Territorial Development´ (ITD). ITD was conceived as a business initiative that seeks to bring sustainability to the region through the implementation of inclusive business models, with the dual purpose of improving the living conditions of the vulnerable population, while generating business profitability.

CECODES understands ITD as a development alternative in rural areas that can address a

45 THINKERS

Participants of the Inclusive Territorial Development at Montes de Maria. Source: CECODES, 2014 territory in harmony with the communities and their environment. It is based upon the inclusion of organized farmers into more dynamic and value added markets, by developing activities that are economically viable, and socially and environmentally responsible. Under this scheme, building social capital, co-creating networks and interacting with different stakeholders becomes essential.

The ITD strategy was conceived around the cultivation and marketing of teak, because of the relevance that this wood has for the business operations of one of the major corporate partners involved in the strategy, which in fact has important teak plantations in the region. Taking into consideration the long-term span for teak growth, ITD aims to give financial viability for small producers, and is based on the combination of teak planting with short and medium term productive crops, working directly and in coordination with nearly 200 farming families belonging to different communities in the region.

One of the most distinct features of the ITD strategy is that since the beginning it was designed as a 4 to 5 years work-plan. A time frame that is rare in

development-oriented efforts which tend to be of much shorter time spans. Multiple experiences of productive projects aimed at working with people in the BoP have shown that one of the factors of failure is that the support provided is sporadic or too short, which hinders the empowerment of the population and the transfer of project management from the operator to the communities involved. On the contrary, with ITD this longer conception has actually allowed for the project to evolve in a more solid and consolidated way.

The initial stage was purposely dedicated to determining the feasibility of the project. Feasibility studies are a stage that sometimes is overlooked due to implementation pressures, but which has proven to be key for project success. Feasibility studies were used to map and analyze the different stakeholders in the area, and to identify products that were more suited for sustainable commercial exploitation with local people. The characterization of the population also permitted the identification of unmet basic needs of low-income communities in the territory.

As a result, the feasibility study made visible the need to combine short and medium term activities, to complement teak harvesting as a long-term

46 “Colombia continues to be one of the countries facing the largest internal displacement problem in the world, second only to the Syrian Arab Republic.” plantation. This is due to the poor socio-economic situation of local communities, which makes implausible their participation in long term crops without parallel activities that can guarantee an income flow in the short term. After analyzing the agricultural potential in the region and the commercial viability of the products, the ITD strategy was formulated proposing the following combination of activities: Short term: tobacco and sesame crops and beekeeping Medium term: mango crops, and livestock breeding Long-term: cultivation of teak wood The scheme was designed so that the participating small farmers can freely choose the component(s) in which they want to join, on the assumption that every producer must have a minimum area of half hectare planted with teak.

Another distinctive feature of the ITD strategy is that it combines the participation of several companies to enhance its market viability. Thus, besides the central participation of the leader or “anchor” company for the business of teak wood, other major private companies were invited to join the strategy, as a link for each one of the products, so that the market salience for mangoes, tobacco, sesame and honey is also feasible. It is also important to note that the participation of these anchor companies goes beyond their role as buyers of the products obtained by farmers. Their involvement goes in line with the ideals behind an inclusive business model, including also the provision of technical and entrepreneurial assistance to improve the plating techniques of farmers and guarantee the necessary quality standards.

In addition, to improve cohesion between farmers on the one hand, and facilitate their interaction with the companies on the other, small producers were advised to become a single association. In this way, they are now organized in a formal Growers

Association, with an established structure, a Board of Directors and a unified trading scheme.

While the focus of the project is to generate income through the various production components, psychosocial support is also needed to facilitate the consolidation of the process, given the sociocultural characteristics of the local communities. In this regard, in addition to providing technical and business advisory services, the ITD strategy has included a component of psychosocial support for producers and their families.

For the continuation and consolidation of inclusive territorial development in Montes de Maria, CECODES and its partner companies contemplate forward a period of about one to two years, during which management will gradually be transferred into the hands of producers led by their Growers Association. In this way the project will move from co-management, as it has been until today, towards sustainable self-management of their inclusive business models.

In this respect, a word of advice shall be raised concerning project escalation. So far, the number of participating families has been growing, increasing fourfold from the initial group of about 50 families, to the current number that surpasses 200. Aspects such as the capacity of the Growers Association, the existence of market demand, and the creation of social bonding, among others, should be given careful consideration before continuing raising the number of participants. Otherwise, the sustainability of the ITD strategy may be at risk.

Looking ahead, one of the major challenges faced will continue to be climatic events, and the need for mitigation and adaptation to climate change. Due to the severe droughts experienced by the region of Montes de Maria for the past two years, the lack of rain has become a critical factor for the survival of crops, affecting productivity and hampering the implementation of the project.

In a similar vein, the current process that is taking place in Colombia for land tenure restitution to formerly displaced population, lays at the core of the future continuity of this project. Future operation will be greatly dependent upon the clarity, uprightness and efficiency with which land restitution effectively takes place.

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48

RECREATING SUSTAINABLE BUSINESS, FROM THE BOTTOM UP

By John Gardner

The author describes how the shift to the circular economy is picking up speed and will transform how the aluminium rolled products and recycling industry does business in the future. Novelis has chosen to view this change as an opportunity, rather than a threat, and are moving fast to respond.

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When Novelis spun off from the nearly centuryold aluminium company Alcan in 2005, we had a long history of buying and producing primary aluminium to make our flat rolled products.

Knowing that aluminium is infinitely recyclable and that recycling aluminium uses only 5 percent of the energy and avoids 95 percent of the greenhouse gas (GHG) emissions associated with primary aluminium production, we soon decided to make a transformational change in our business model and never look back.

In 2011, Novelis set an aggressive agenda to achieve 80 percent recycled content in our products and put recycling at the heart of our business strategy.

This required transforming our business from a linear to a circular business model and shifting our supply base from primary metal producers to scrap suppliers. It was a radical shift. Disruptive. But we knew it had to be done, for the sake of our business, our customers and the resource constrained world that we live in.

At the time, our global business had 32 percent of our production inputs made up of recycled content.

Today, we have achieved 53 percent recycled content, and that number continues to climb, as we work toward our long term goal of 80 percent.

Achieving this level of high-recycled content will cut the absolute embedded carbon in our products in half and take out 10 million tonnes of carbon a year from our customers’ supply chains. In addition to the environmental benefits, this new circular model ensures us more supply chain security and provides value-added products to our customers.

With our new circular business model coming into place, we are continuing to evolve as a business to reach higher and higher amounts of recycled content. To do so, we have established a number of key work streams across our global organization, from product design and recycling technology, to expanding our recycling capacity, to re-engineering our supply chain and collaborating on end of life recycling rates.

Here is a look at what we’ve accomplished so far.

Organization Acting on this new global strategy required significant changes to our organizational structure, including the appointment of a Vice President of Global Recycling and the establishment of a global coordinated recycling team. This also involved aligning R&D, Procurement, Commercial, Supply Chain and Manufacturing and other functions to focus on the big shift to the closed loop system.

We also made the difficult decision to withdraw from products where end of life recycling was limited and the use of recycled content was restricted, such as certain laminated foil products.

Product design and recycling technology To move towards a more circular economy, it is critical think about product design. This has been a key focus for our technologists, often in collaboration with our customers, particularly in the automotive industry, where evolving design specifications are critical to developing products with lighter weight, greater recycled inputs and easier recyclability.

Original equipment manufacturers (OEMs) in the automotive industry are under pressure from both government and consumers to improve

“We also made the difficult decision to withdraw from products where end of life recycling was limited and the use of recycled content was restricted, such as certain laminated foil products.”

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In today’s evolving global economy, carbon comes at a cost and both manufacturers and their customers are starting to be held accountable. Carbon taxation, both direct and indirect, is already a reality in many jurisdictions around the world, including much of the European Union, New Zealand, South Africa, South Korea, Quebec and numerous regions in China. Many experts project carbon cost between $40 to $50 USD per carbon tonne. The result is not just higher carbon costs for manufacturers who don’t change their carbon consumption. As the cost of carbon emissions increases, the value of recycle based low carbon products grows for everyone in the supply chain.

50 fuel economy and reduce carbon emissions. By combining the lightweight characteristics of aluminium with high-recycled content, automotive OEMs can leverage the light weighting potential of aluminium even further. Closed-loop recycling systems with customers such as Ford and Jaguar Land Rover will drive the recycled content of our automotive aluminium sheet to 40-50 percent within the next one to two years. Long term, Novelis is committed to delivering 70 percent recycled content in our automotive sheet products.

That’s why, in 2012, we opened our Novelis Global Research & Technology Center (NGRTC), to focus on recycling technology and new product design. As a result, in the automotive market, we have developed more recycle-friendly alloys with higher recycled content (RC), such as our RC 5754 alloy used by Jaguar Land Rover. In 2014, Novelis launched our certified high-recycled

“Original equipment manufacturers (OEMs) in the automotive industry are under pressure from both government and consumers to improve fuel economy and reduce carbon emissions.” content evercan™ for aluminium beverage cans, and in early 2015, we launched our certified highrecycled content evercycle™ portfolio for specialty applications, such as food trays and catering containers. Our R&D team is also working on new technologies to separate and process different scrap inputs to support our recycling operations around the world.

Capital investment Building the infrastructure to move from 32 to 53 percent recycled content globally is no small undertaking, especially as demand for our products is expected to grow by more than 30 percent over the next five years. As a result, Novelis has invested more than $500 million USD in expanding our global recycling footprint, opening new facilities and expanding existing operations in South Korea, Germany, Brazil and the United States. These new

assets have nearly doubled our aluminium recycling capacity to 2.1 million tonnes per year, while also broadening the range of scrap that we process.

With the addition of our new facilities, Novelis has built an unparalleled global recycling network. Our footprint allows us to better serve our customers by offering them certified, high recycled content products wherever they operate.

We also believe that export of scrap between regions around the world is costly, inefficient and generates unnecessary transport emissions. Our global asset base allows us to recycle material where it is generated and put it immediately back into productive use.

Re-engineering the supply chain Having a recycling based sourcing strategy diversifies inputs and broadens our supply base. In just five years, Novelis has moved from a handful of primary aluminium suppliers to tens of thousands of local scrap collectors around the world. This makes our inputs less susceptible to sudden shocks to the market – political or financial - and makes our supply to customers more robust. Furthermore, as we reduce our dependence on the upstream supply chain of mining, refining and smelting, we will cut our absolute greenhouse gas emissions in half - even as our business grows.

We have also learned that the best way to preserve the value of recycled aluminium is to convert it back into the same product, over and over. This avoids the value destruction often associated with downcycling, or recycling material into lower-grade products. This is an area where aluminium truly shines versus our competition.

In order to avoid downcycling, it’s important to sort and separate alloys prior to recycling. The closed loop recycling systems that Novelis has established with our packaging and automotive customers allow us to efficiently separate alloys on a large industrial scale. Because our customers help us maintain the maximum value of the material, we are able to offer the highest value to them for their separated scrap.

Collaboration to build post-consumer recycling Novelis is already recycling 60 billion beverage cans around the world annually, but expanding post-consumer collection infrastructure and

51 As a result of our strong commitment to sustainability, Novelis was recognized for our efforts during the World Economic Forum in Davos this year and we have become the first metals company ever admitted to the World Wildlife Fund’s Climate Savers Program.

Transparency Throughout this transformation, transparency has been imperative. To ensure trust and transparency with all stakeholders, our high-recycled content products are certified by reputable third parties, such as SCS Global Services. We have also established a sustainability advisory board made up of leading, external experts to guide us and monitor our results since 2011.

The infinite recyclability of aluminium, with high post-consumer recycling rates and high-recycled content, is one of its greatest advantages over competing materials such as PET and carbon fibre. In a world of very real limits to our natural resources, recycling of aluminium is a powerful tool to drive growth in our markets while simultaneously reducing our industry’s environmental impact.

Looking back Looking back, the year 2011 was truly a defining moment for Novelis. We realized that in our industry, the circular economy was not only possible, but clearly achievable. Not only does recycling make good business sense for the industry, it is essential to our long-term growth and competitiveness.

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supporting recycling education is a necessary pillar to our success in the long term for both cans and other products, including auto and building construction. In addition to buying from thousands of scrap dealers around the world, we also operate our own network of consumer-facing recycling collection centers in the United Kingdom, Brazil and Vietnam. In Brazil, we also have relationships with five can collectors’ cooperatives, each with 200+ members. In the U.S., Novelis sits on the board of the Recycling Partnership, guiding investments in local recycling infrastructure and awareness. And we’re increasingly collaborating with customers, regulators and other stakeholders to support policies that enable more efficient recycling.

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BETTER STRATEGIC MANAGEMENT FRAMEWORKS FOR ALL

This article is a look at initiatives to improve the quality of business reporting, making it more useful to investors.

By Paul Barnett

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There really are no large and widely recognised professional bodies associated with strategic management, in the way that there is in the accounting profession. That is because management, relative to finance and accounting, is a very young discipline and strategic management is younger still.

Strategic management evolved, out of long-range planning, in the late 1950’s and early 1960s.

Advancing the professional practice of strategic management is a professional goal I work towards.

I do believe that improving the quality of business reporting in that regard offers a great opportunity to achieve our purpose as it provides management frameworks rather than reporting frameworks.

Of the business plan, it is often said that the greatest value is not derived from the document, but from the thinking that goes into it. I believe the same is true of reporting initiatives. If the reports are to be holistic and integrated narratives on the future prospects and current performance of the business, it will necessitate the kind of integrated thinking that rarely happens in large corporations. It will lead to the breaking down of functional silos, ideally, or at least entail a better dialogue and understanding between.

For me the initiatives have a misguided focus on a product, the annual report. They focus on the ‘end’, rather than the ‘means to an end’. I see the report as not the only product, and perhaps the least important product. It is certainly not the product that will deliver the greatest value. Being directed to serve the interests of investors may produce benefits in the longer-term, but more important will be the immediate and short-term benefits that can

be gained from better, more integrated, strategic management thinking. The impact will be better performance and more robust business models. This is likely to lead to greater, and faster, adoption than an initiative focused on annual reporting which will be viewed as additional cost and a greater burden.

Being focused on annual reports published by larger listed companies is also a lost opportunity in many respects. My view is that the greatest beneficiaries of an integrated management framework, (which is a better way of looking at it than an integrated reporting framework), would be small and mediumsized businesses who are less likely to have good management frameworks and systems in place. The reports generated should focus on their internal use as management reports to facilitate better strategic decision-making and improved performance.

“Strategic management evolved, out of long-range planning, in the late 1950’s and early 1960s.”

All of this is not to say that external reporting is unimportant. It is very important. But there again the businesses that would benefit most are not the large listed companies who have little trouble finding capital. The bigger winners will be the SMEs that struggle to find money, may have to give a share of ownership away for it, or pay higher rates of interest. Within this category are the mediumsized businesses (MSBs) that face the need to raise capital whilst still private, prior to listing. Their requirements often require that they give away a share of ownership, put assets at risk, or pay large interest rates because of the higher perceived risk.

Alternatively they choose not to grow or they fail.

I believe that a period of integrated management reports based on a recognised framework would mitigate some of these limitations and open up more financing options. In fact I went to a director of a bank and asked if they would be more likely to lend and if the loan would be at a lower cost. The answer in both cases was yes. We are now discussing a test case.

The two reporting initiatives that I am most familiar with are the work by the International Integrated Reporting Council (IIRC), and the Financial

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Business reporting is instigated by governments and other institutions, and driven primarily by professional bodies in finance and accounting, with some influence from the environmental, social and governance (ESG) lobby. Business reporting also includes requirements related to the reporting on business models and strategies. Surprisingly, the strategy community has neither been engaged in the process of developing or introducing such reports nor has it shown much interest in being engaged essentially because there is a lack of awareness of these developments.

54 “Every investor would understand the value in a unique business model that is hard to copy and offers competitive advantage.”

Reporting Council (FRC). The IIRC has a global focus and the FRC is a UK institution responsible for promoting high quality corporate governance and reporting to foster investment. It sets the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. It also monitors and takes action to promote the quality of corporate reporting and auditing. Both have created reporting frameworks and offer guidelines to support them, and the principles behind both are, in their opinion, aligned.

In the case of the FRC the organisation was requested to provide non-mandatory guidance in support of new Government regulations introduced in August 2013 that required certain entities, mostly larger listed companies, to prepare a strategic report as part of their annual report. The aim of the report being, to “provide shareholders with a holistic and meaningful picture of an entity’s business model, strategy, development performance, position and future prospects” including potential risks. The latest version of the Guidance on the Strategic Report was published in June 2014.

Both frameworks aim to be holistic and offer a report that provides an integrated picture. I think that is great. But, in both cases the new framework focuses on the “usefulness to investors”.

I would much prefer to view them as integrated management frameworks that focus on “usefulness to management”. If management finds them useful they will also be useful to investors. Just as importantly, there will be a better relationship between internal and external reporting.

To get to the real point, I think that to focus on reporting is to “put the cart before the horse” as we say. Reporting is a product, and a bi-product at that, in my mind. The focus should be integrated thinking that helps design a framework for integrated strategic management. But, there is one caveat.

The framework should provide a guide. The story

it helps people to tell must be unique, but within this lies something of a perceived paradox. One of the aims of most annual reports is the idea of “comparability” to make the investors life easier. At the same time every investor would understand the value in a unique business model that is hard to copy and offers competitive advantage.

Some might argue that a standard reporting framework won’t work. That is nonsense of course.

The business plan template is a pretty standard document, but it allows plenty of scope for a business to tell its story. The integrated reporting framework offers similar scope.

Unlike a business plan, or most annual reports to date, it allows a company to report on the nonfinancial drivers of the business, the source of upward of eighty per cent of the value of many businesses in the knowledge economy, where tangible asset values are negligible, and are certainly no indication of future value potential.

The values in an integrated report are measured in financial and non-financial terms, under the headings of six capital categories in the case of the IIRC framework. They are Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capitals.

As the IIR explains, “the capitals are stocks of value that are affected or transformed by the activities and outputs of an organization” and, “An organization’s business model draws on various capital inputs and shows how its activities transform them into outputs”.

Making use of these capitals within the framework, “The primary purpose of the Framework itself is to provide guidance on the practicalities of producing an integrated report and to explain the concepts behind <IR>, namely strategic focus and future orientation, stakeholder and materiality focus, conciseness, connectivity and reliability of information, and consistency and comparability”.

And “any communication claiming to be an integrated report should apply these principles” argues the IIRC. Interestingly, they are also mindful of the need to ensure there is flexibility rather than just conformity

55

To conclude, I would argue that the IIRC Framework and the FRC Report Guidance are very useful strategic management tools, with a use that goes far beyond reporting. The benefits of using them may also be felt far beyond just better reporting if rightly seen for what they are, which is better management frameworks.

They are “a tool for the better articulation of strategy” according to Mervyn King, Chairman of the IIRC. I would argue that they are also a tool for better thinking and decision-making about strategy too, and that these uses of it must come first anyway.

To focus on one output is, in my view, to miss a big opportunity. To focus only on the use for listed companies is also a missed opportunity.

I think these frameworks could have a transformative impact on the performance of many companies of all sizes, but particularly those that could benefit from better management frameworks.

THINKERS

in the reports. To that end they do reflect what is unique to a business and its business model.

They say, “It identifies the type of information to include and how to present it, but strikes a balance between flexibility and prescription as necessitated by the wide variation in circumstances of different organizations”.

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IN CONVERSATION WITH GURCHARAN DAS

By Malvika Chandan

In an interaction with Gurcharan Das, author, commentator and former CEO of Procter & Gamble India, he shares his view on topics ranging from the state of the Indian economy, to the performance of the current government to qualities he saw in himself that lead to him becoming a successful and best selling author.

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What more can the current government do in this regard?

Well to start with the Prime Minister could personally speak to BJP Chief Ministers and push them to cut out the red tape and become more competitive. Also focus on the ease of doing business. They are doing a survey in this regard that will be much deeper than the World Bank study.

And they are going to then have a conference of all the chief ministers and Prime Minister Modi is going to then declare the winner regarding which state has the best ease of doing business.

Do you think this initiative by the government will be successful?

Well it depends in to how much of the messy detail of day-to-day implementation the leader gets into and Prime Minister Modi can because he knows how to break boundaries. What will take others in his team two to three months to do, he can do it with one phone call. A good leader is not just one who proclaims strategy. I personally think that these campaigns Swachch Bharat, Make in India, are all related. Besides we elected Modi for three reasons.

We elected him to stop inflation, second to stop

“Why should it take 15 years to get justice in the courts? Why is it so difficult to file an FIR to the police?” corruption, and third to bring jobs. Now he has achieved 2/3, the first two, I mean there has been no corruption scandal in the 12 months and inflation has come under control. Third is a much tougher thing, so he has to really pay more attention to this.

How would you rank Prime Minister Modi on things that are essential to India like education?

Yes those are concern areas and I personally think that they need to have more balance in the government but clearly the economy has turned around, it is in the process of recovery. At the same time education and health and agriculture are being neglected. The job in education is clearly quality.

The achievement of the last 20 years is that we now have children in school. So the quantity issue is gone. The Right to Education act should have been called the Right to Quality Education. The problem with that law was precisely that there was no talk about outcomes. It is all about inputs without even willing to measure outcomes. Anyway it is not an easy area because the delivery is by the States.

What about agriculture?

It has been a bad year for agriculture. State level reforms are needed here too, just open up distribution, allow farmers to sell across the state borders, create a market. The first priority should be a system of delivery of benefits. All indications now are that we are going to move to an Aadhar link, a Jan-Dhan Yojana bank account link, and mobile phone link for efficiency and a whole safety net. JanDhan Yojana is one of the most impressive feats of implementation and how fast Aadhar is moving and I think we are very close now at a billion phones.

So a billion Aadhar numbers, billion cell phones, and a billion Jan-Dhan Yojana or at least family accounts because there won’t be a billion people means all families will be covered. This can really revolutionize all the food corporation corruption.

The procurement, the eating of the food that is stored by rats, all that will be left behind. Only a very small buffer slot for emergencies will be kept. A mountain of food and drinks will not need to be kept

THINKERS

You sound optimistic about the manufacturing sector in India although its contribution is only about 16% of GDP. I think because we are so low we have greater potential to catch up. No country, no major country has a manufacturing share as low as ours, even our competitor nations, emerging markets, are around 30% or 30% plus and India is 16%. I think about the fact that we still have a demand for labor-intensive small shops. They are manufacturing because they are kind of workshops. There was a survey which shows that actually manufacturing jobs grew at 5.6% between 2002 to 2012. The proper word is organized sector jobs. Now they may have been informal jobs, informal meaning people on contracts – that’s how India Inc. gets around labor laws. The fact is that organized sector jobs grew at 5.1% but the labor market grew at 1.6% per year. So there was a manufacturing push. The ideal kind of jobs we should get, are the ones that are leaving China.

There is potential in defense and railways and e-commerce and these things will come but the key thing is to cut the red tape and Prime Minister Modi has given that job to Amitabh Kant whose group is trying to very hard to but they are getting push back.

58 which has been such a wasteful exercise. Nobody calculates the inventory carrying cost of 60 million tons of grains plus all the corruption so to speak.

What’s your view on the structural problems that still persist in India?

The Indian economy at the moment is in a positive position; demographics are favoring India; high savings rate, all these things are in our favor. The real challenges are institutional. Why should it take 15 years to get justice in the courts for example?

Why is it so difficult to file an FIR to the police?

Why is medical care such a mess and why is the government not investing in it? Why are government institutions so slothful? The fact that one out of four schoolteachers don’t show up in classrooms to teach shows that the problem is partly an institutional problem. If you ensure assessments, if you ensure that they are punished, then you will find an improvement.

“We overvalue intelligence but leadership is much more about determination.”

On a slightly different vein, what’s your view on leadership?

We overvalue intelligence but leadership is much more about determination. If we see a candidate from IIM, IIT, Harvard Business School we decide s/he must be recruited but what we don’t look at is attitude. We should always hire for attitude and train a person for skill—it is much easier.

Attitudes are set in the first three years of life. You can’t change your attitudes. As business people when we hire people in our organizations we get impressed with their credentials and we don’t look into qualities like determination that’s what makes leaders.

Yes but does it have to be an either or scenario?

Well ideally you would want somebody who has got all those credentials and determination. But in the real world you don’t get such people because people are not perfect so if I had to choose I would any day take a person with determination. We have a bias for thought and not a bias for action. That

was part of the problem in the last government, too much thought. Growth is the best tonic for poverty elimination and we did a damn good job as a country in the last decade of poverty elimination because of high growth, not because of NREGA and the food security and all that. Jobs came because of growth.

How do you think consumerism in India has evolved since liberalization? We definitely had very few choices in the 80s up to the 90s. There was no quality, no competition.

I must say philosophically I am not a consumerist.

I don’t frankly buy very much, books maybe. I just replaced my car you know my car was 18 years old, can you believe it. Consumer choice does not have to mean consumerism and I philosophically believe in choices in all areas. Liberal people are by nature consumerist. I agree with the view that the sin of capitalism is greed but the sin of socialism is envy and that to me is a worse trait than greed. During the days of socialism, deep down, people loved money but they were hypocritical, they couldn’t admit it and now young people have no problem with saying I want to get rich. So all that hypocrisy is gone which is good. I grew up through the License Raj and the whole period from independence. I think we got our political independence in 1947 but we started getting our economic independence only in 1991. We are very young country for markets. We didn’t let the market function until after 1991 and even there we are still not fully reformed. But to me what is amazing about the India story is that as a democracy we have gone from a closed economy to the second fastest growing economy in the world, and now we are about to become the fastest growing economy in the world.

Do you think it is right to compare India with China?

India will overtake China in growth rate and so we can keep doing that for another two decades. I think that we will be just doubling per capita income every 8 to 10 years.

So before we realize it the 2 trillion economy will be 4 trillion, 4 trillion will be 8 trillion and 8 trillion will be 16. The mistake we make when we compare India and China we talk about who is going to get rich first, that’s not the race, both countries are going to turn into middle income countries. Both will have per capital income but both China and India think that they’re going to manifest when

59

A last question for you—you have come full circle as you started as a philosopher then you went into corporate sector now you’re back as public intellectual and a writer. Can you tell us about your journey?

Well you know the fact is that in one lifetime you can reinvent. I quit the corporate world at 50. I still could look forward. It was not retirement. I looked forward to another career.

I always had that passion. I did a degree in philosophy. I went into business by accident. It wasn’t planned at all. I was going to do a PhD at Oxford and at the last minute that summer before I went for my postgraduate work I suddenly asked myself do I want to spend the rest of my life in that stratosphere of abstract thought and so I got scared, I got cold feet. So while I was trying to figure out what I was going to do in life I was back home and it was very embarrassing for my parents to have an unemployed son at home who had been to Harvard.

I think just to save that embarrassment, I answered an advertisement from Vicks Company who were looking for a trainee in sales and marketing and I got the job and stayed on but still spent my weekends reading. I never got into that whole corporate world of golf over the weekends and then when I was reading at some point I said you know you can’t, reading is all taking in and I said you got to give back, you got to take something out and so I started writing a play. So I think it takes both love and skill.

And passion. I mean I sometimes ask myself and my wife also asks that question that look you achieved all this then why must you wake up every morning at 6 o’clock, go to your desk and then I work flat out till about 1, from 6 to 1. I think that there has to be the kind of passion that it doesn’t feel like work.

I think one of the jobs of a teacher or a parent is that while the child is growing up, to help the child discover their passion.

THINKERS

they reach $40,000 why 40 because that’s the US per capita income. But that’s not going to happen unless India fixes its governance and China fixes its politics. The race is who will fix the government first. China has to give freedom towards people and India has to improve the day-to-day governance.

In India, the executive has become very weak and that’s where you need reform. For example, why should a civil servant who works one hour a day and a civil servant works 14-hours a day get equally rewarded. They earn the same salary. They get promoted on the same day. Now, can you imagine an organization that functions like that? The prime minister also said in the beginning of his term that we should put people who have been elected to parliament and state assemblies with a criminal record on fast track so that within a year they are out of the system and the honest ones are cleared and dishonest ones are removed. These are the kind of reforms that are crucial for the country.

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VISION FOR LONG-TERM GOOD AND PROSPERITY FOR ALL

By Sunil Kumar

In this insightful piece the author talks about creating ‘systems’ which can produce ‘good’ people as our leaders and policy makers, who will strive for subjective or inner growth towards ‘Perfection’ and also for quality and perfection in work, done with an evenness of mind, for the good of society.

61 •

•

• Evolving a Shared Vision for Future: As citizens and as a nation what is our common, shared vision? ‘Bharat’ literally implies that nation whose citizens are continuously striving for the highest ‘illumination’ - Perfection; Freedom; perpetual sukh, shanti, ananda; prosperity for all.

The way forward has also been encapsulated in the principle of ‘Sanatana-Dharma’, i.e. striving to imbibe and inculcate those universal values and eternal principles, practicing which we remain on the critical path to our common, universal goal of Perfection.

Our status in society, money we earn, living standard, type of work, lowest or highest, etc. are not important; the question is: Are you on the growth path to Perfection? If so, you are in ‘Sur’ (harmonious growth), you are a ‘Srestha’ whether you are an unskilled laborer or the highest leader and professional; if not you are ‘Asur’.

Points for Reflection: How do we judge the fruit of our modern civilization with its politics of democracy, excessive focus on economic growth and IQ based education?

We must ask some fundamental questions: • As Aristotle puts it: It is better to be governed by a good man than by good laws. Are our policy makers and administrators ‘good’ people? Are we producing the Srestha, the ‘good’ in all walks of life?

• Have our systems been able to produce leaders, policy makers and administrators who have care and concern for the environment and society as a whole, not just for parts?

• Have these leaders created systems where our ‘Result Producers’, i.e. the business leaders, industrialists, professionals, and the workforce, strive towards work excellence for good of society, externally, while striving towards

•

•

‘Perfection’, internally?

Can divisive and destructive politics of democracy, inefficient, non-caring, self-serving governance and mere 3R’s education, ever produce the Srestha, the men of wisdom who love the ‘whole’, not just ‘parts’?

How do we select, train, evaluate, and promote people based on their ability to solve issues fairly and justly?

How do we educate, and develop people to be committed to duties? How do we determine who is good for which role? Are our systems designed to find and punish the wrongdoers?

People tend to do what they are evaluated upon: So, how do we develop and evaluate enlightened citizenship? What syllabus and action plan are we following to build it?

In our modern concepts of governance, education, democracy, bureaucracy, who is responsible and accountable for nurturing enlightened citizenship?

Time tested Wisdom: Wisdom from across the world, say the same thing: • St. Stephens College: Ad Dei Gloriam, ‘every action of ours should add to the glory of God’ • Plato (Republic): Ruler must be a philosopher • Raja+Rishi= kingly without; sagely within.

A ‘Raja-Rishi’ alone can deliver ‘Ram-rajya’ – pictures of an enlightened ruler and a well governed state.

• Life of Pi: Nil magnum nisi bonum – There is no greatness without goodness • Bible: Kingdom of God is within you. Seek you first the Kingdom of God and his righteousness and everything else will be added unto you. Be your Perfect • Quran: An-al-haqq, I am the Truth; anyone who performs good deeds will enter paradise • Ramakrishna Mission: ‘Atmano Moksartham

“Have our systems been able to produce leaders, policy makers and administrators who have care and concern for the environment and society as a whole, not just for parts?”

THINKERS

Problems of modern society: Modern society is in a state of ‘perpetual purposelessness’. Modern systems have failed to inspire us to be committed to kartavya-palan; to Fundamental Duties (Art. 51A); to quality in work; to have love, care, concern for ‘others’; to work for good of ‘samaaja’; to develop self-control to strive towards our common, universal goal of ‘Perfection’, in and through our daily work and interactions.

62 Jagad hitaye cha’: Manifest the divinity within by working for the good of the whole creation; Shiva Jaane Jiva seva; Seeing the God within, serve the Living-beings. This is based on the principle that ‘Each soul is potentially divine.

The goal is to manifest the divinity within by controlling nature, external and internal’.

The uniqueness and backbone of Indian culture, because of which we still survive as a nation, in spite of centuries of attacks on our societal systems, values and ideals, is our worldview that each soul is potentially divine, ‘Perfect’; i.e. we are not separate entities, but are interconnected. Thus our every action must help manifest more and more of our potential Perfection and Ananda or bliss, and expand us to feel ‘one’ with more and more.

We remain on the path to ‘Perfection’ through commitment to kartavya-palan and, excellence in work when done in a spirit of worship, for the good of society, which calms the mind and is the passport to wisdom.

“Happiness is the common human desire, the universal ‘North’ towards which we all willy-nilly strive, knowingly or unknowingly.”

Defining our Shared Vision for Effectiveness: Individual: ‘As one who continuously strives to make right choices, and develops strength, fearlessness, and ability to walk the talk towards Perfection’. For this we must be educated towards the lofty Vision of ‘Perfection’; learn to make ‘Right’ Choices; and strive to harmonize daily thoughtswords-actions towards the Vision of ‘Perfection’.

Managerial: ‘As one who initiates and Implements Changes and Continuous Improvements in Services, Products and Systems’. For this we must strive to identify and improve inefficient systems which give rise to unethical behavior and suggest ways for Continuous Improved Individual and Organizational Effectiveness, focusing on our ‘Area of Influence’ while striving to expand it.

Wisdom from Chanakya-niti: Happiness is the common human desire, the universal ‘North’ towards which we all willynilly strive, knowingly or unknowingly. Based on this human instinct Chanakya Niti puts the role of different aspects of governance and work-life, succinctly: •

•

• • • •

The root cause of Happiness is practice of ‘Dharma’ (Righteous conduct, quality work, Professional Values & Business Ethics, work in spirit of seva & worship) The root cause of Dharma is Artha, i.e. only if there is economic prosperity will people desist from adharma!

The root cause of Artha is Good Governance The root cause of Good Governance is Victory over Sense-organs, i.e. striving for Self-control.

The root cause of Self-control is Vinayam, humility.

The root cause of humility is ‘Vriddh seva’, respect for seniority, serving the elders.

Indian ethos divides all human efforts and strivings into four ‘Purusarthas’: Through Dharma earn and fulfill desires, to remain on the critical path to ‘Perfection’. It is only when desires are thwarted that people fail to follow business ethics and human values while engaged in economic activities and fail to get Ananda, Peace. So, the very first step is to get educated and trained to acquire Dharma i.e. doing that which leads to consistent success, peace and perpetual bliss, which in the field of Economics implies sustainability, environmental concerns, and is now being addressed through courses on Business Ethics, Professional and Human Values, Corporate Social Responsibility, codes of ethics, etc.

While ‘Perfection’ may seem to be just an impossible ideal, far removed from our present problems, this ideal gives us a lofty vision, a higher direction, a common ‘North’, so that we can continuously reflect on our thoughts-goal-actions, and try to harmonize them towards this ultimate vision. If we are made to continuously reflect and explore the ideal of ‘Perfection’ as a desirable state of consistent success happiness, peace, Ananda; as the ultimate goal, aim and purpose of life; a state of total freedom from all dualities, then gradually the ideal will become more and more relevant.

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We seem to have forgotten that throughout history, India was the land of plenty; our elders had set up systems, environment and work culture which could produce selfless teachers, rulers and administrators who had made India great by empowering the Indian workers and managers to produce worldclass goods which attracted people from all over the world to India to partake in its glory and grandeur and to loot and plunder. With all modern education, technology and systems, India is no longer a leader

and our people are labeled as corrupt, inefficient, unskilled, and lazy!

Even today it is mostly the common uneducated Indians (80%) who are not in the organized sector who ensure that wheat grown in north reaches a village shop in south. When Mahatma Gandhi had gone to attend the Round Table Conference in 1931 in London, he stated to the Press that when the British came to India, instead of supporting the existing systems, they uprooted the â&#x20AC;&#x2DC;Beautiful Treeâ&#x20AC;&#x2122; of Indian systems and allowed it to decay and die. He gave the example of Vidya, Indian education system, and Vaidya, our health system, both of which were imparted by people who had a spirit of tyaga and seva, and which are now totally commercialized and materialistic. Of course he was soundly castigated by the British press then, but succeeded in making the emphatic point that subjective or inner growth is what ultimately produces quality work that is done with evenness of mind for the good of society.

THINKERS

Economic growth and development must be subservient to human growth: The problem of modern society, politics, education, etc. is that, pursuit of money has become the ultimate goal and objective of all activities, and we have failed to create educational, social, and institutional systems and work culture, which could have regulated and controlled this greed for consumerism and undue focus on wealth creation, arising from the modern cultures.

64

THE MISSING LINK -

PARTNERING FOR INNOVATION

By Jacob Ravn

The author provides his perspective on the missing link between the obvious needs of developing countries and existing technologies and how they can be met by providing a platform for strategic partnerships between the private sector, NGOs, universities and public authorities.

65

A demand that could be addressed by existing solutions, but a number of uncertainties and barriers such as the following seem to arise for the private sector in meeting the market demands: • Getting insight into specific market needs; • Developing technologies for an unknown market setting; • Developing the needed human resources in the organisation to innovate and implement business strategies and products to an often new and unknown market with an unfamiliar (in) formal framework; • Accessing the needed venture capital or donor funding to test solutions and commercialise the needed solutions; • Establishing network to and / or partnering with local organisations to access local competencies, knowledge and network.

The overall challenge is that despite the fact that the private sector has the technologies at hand, companies lack competencies, resources and networks to tackle the constraints in entering unknown market settings.

However, the experience from the access2innovation network is, that this apparent missing link between the obvious needs and existing technologies can be met by providing a platform for strategic partnerships between the private sector, NGOs, universities and public authorities. An approach has kick-started a range of new solutions within humanitarian relief, sustainable energy, agri-business and sanitation targeting needs in developing countries. A mind set that so far has led to collaborations between more than 350 companies, seven NGOs and four universities; provided the platform for launching 20 partnerships, established seven start-up companies with 50 new jobs and mobilising USD 11.7 million in private and public capital.

“Cross-sector collaboration is characterised by a range of challenges and barriers.”

Up until 2015 this approach has proven the ability to provide access to end-users and testing grounds for companies in close partnerships with NGOs, researchers, local communities and the private sector. Stakeholders holding valuable expertise and knowledge at local and national levels that would otherwise be out of reach of the individual company. This through a facilitated process where the “innovation platform” has provided the anchor point in enabling the test and implementation of a number of initiatives such as the One Stop Shop sanitary initiative, mini-grids providing electricity to rural areas, development of second generation bio-fuel and small drones - just to mention a few (for more information, please visit www. access2innovation.com).

Despite the positive results, the experience gained from access2innovation is however that crosssector collaboration is characterised by a range of challenges and barriers.

First of all, the key is to understand that the risks associated with entering the emerging BoP markets for the private sector are very significant, and the required knowledge and resources are often found beyond the existing organisation. The technologies very often exist, but the challenge is to fully comprehend the end-user needs and market opportunities and constraints, to identify potential and to develop and test the business models in a new and relatively unknown market setting for the private sector. This requires skill and resources beyond most individual companies’ organisational capacity to which participation in cross sector innovation platforms can be the key.

When entering onto an innovation platform the partners are often challenged by adapting to a fluent set-up where roles, responsibilities and invested resources change as the concepts mature.

A network can provide the platform and facilitation of the initial stages in building up the partnership, but the partners need to build up the necessary

THINKERS

Developing countries in Africa and Asia, are experiencing yearly GDP growth rates of 7-9 per cent, but lack access to knowledge, products and resources to ensure a sustainable growth. Therefore, there is a growing demand for sustainable solutions and systems for renewable energy, agro-business, green technologies, resource efficiency, waste management, water and sanitation.

66 “If we are to meet the growing demands and apparent challenges arising through-out developing countries, partnership-driven innovation can be an integrative approach.” competencies to identify, test and scale the business case. In this setting, NGOs can play an integrated role in identifying and testing the business case.

Researchers are most informative in the first phases, but often left behind once they have provided their state-of-the-art knowledge. This calls for an understanding of the fact that partnerships are not a static organisational form, but a constantly changing approach that will need to be adaptive to the process of identifying, developing and scaling the needed business cases.

Furthermore, the experience from the access2innovation platform is that private sector, NGOs and researchers find it difficult to establish and run the partnerships. In that sense, the access2innovation network has been a “partnership incubator”. By facilitating the process, the network and partnerships have provided the “glue” for initiating, developing and maturing the concepts; a role that has proven crucial for ensuring ownership, access to information and funding that the partners otherwise would not have been able to obtain.

Participation in this joint facilitated innovation process has had a clear effect on the developed business models that have matured in an on-going process of product development, market potential,

customer relations, production, business partners etc. The developed business models have integrated the capabilities and resources from the NGOs and the researchers, essentially meeting the previous mentioned barriers and challenges providing the private sector: • •

•

•

•

Access to the potential customers/markets when defining features and pricing Testing and developing in collaboration with end-users both in Denmark and through on-site development with local communities Building legitimacy in the market by working closely with the Red Cross, DanChurchAid, CARE etc.

Researching knowledge and gaining access to university students when building up the companies’ core competencies Networking with international NGOs and UN organisations through the access2innovation network

To sum it up, if we are to meet the growing demands and apparent challenges arising throughout developing countries, partnership-driven innovation can be an integrative approach. It can be done by applying a network-driven approach that is essentially facilitating the coupling of otherwise dispersed technologies, resources and network that collectively can provide the basis for creating innovative sustainable solutions that target the demands in developing countries. But it requires awareness, willingness and adaptability if we are to fully realise the potential that lies ahead in developing commercial partnerships between NGOs, researchers and companies as an effective and sustainable, market-driven path towards poverty reduction.

67 THINKERS

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68

IN CONVERSATION WITH NAVI RADJOU & JAIDEEP PRABHU

By Malvika Chandan

Authors Navi Radjou and Jaideep Prabhu speak about their new book Frugal Innovation: How To Do More With Less, and also about how the concept has been embraced in unique ways.

69

Jaideep Prabhu: Yes. So the Jugaad book was published in 2012 and that was mainly almost entirely about Frugal Innovation in emerging economies like India and what western companies or large corporations generally operating in emerging markets could learn from the emerging market. But after the book came out, there was a lot of interest in the west about frugal innovation in the west for the west and this has many reasons.

I think some are you could say negative reasons particularly post-financial crisis. There have been pressures on household budgets, government budgets, and consumers have become more value conscious in Europe, North America and one may say even places like Japan. So, you started to see some of that resource constraint on the demand side that you see in emerging economies but then there are also positive drivers. In the west increasingly people are also what we say values conscious, they are conscious about sustainability, preserving the environment, and gas resources. They are conscious about business having to contribute in a positive way to society and not just to shareholders. The final thing which is perhaps the most powerful aspect is that increasingly ordinary people even

“Small teams can do with limited resources what only large companies could do in the 20th century. With very limited budgets, they can come up with an idea, they can blow up a prototype, they can outsource the manufacturing, and then actually sell it.” consumers who were previously passive are now taking more active role in the economy. We call them ‘prosumers’. They are not just consuming, they are also involved in the economic process and there are two trends that we identify as being part of this. One is the sharing economy so that people, consumers who have spare assets like a spare room or spare parking place or spare seat in their car when they’re traveling are sharing or trading these assets with others. Also a lot of these ordinary people are now empowered to not just passively consume but also make things and increasingly not just physical objects but electronic devises like cheap computers. They can invent stuff they can even commercialize it. Small teams can do with limited resources what only large companies could do in the 20th century. With very limited budgets, they can come up with an idea, they can blow up a prototype, they can outsource the manufacturing, and then actually sell it.

Are there a lot of startups doing that or are larger companies also getting into that model?

Jaideep Prabhu: It’s first documenting this frugal economy that we’re seeing rising in the west. Driven by prosumers, driven by entrepreneurs and then we ask the question what does this mean for the large western corporations, what are they doing in response to this? Very much like the Jugaad book where we said okay this is what’s happening in emerging, what does this mean for large companies?

In this book, we’re saying this is what’s happening in the west what does this frugal economy mean for large western companies. And we’ve identified a fair number of firms that are leading in their respective sectors in this space and we talk about them and we draw lessons from them. Renault-

THINKERS

Can you tell us what lead to you writing this book?

Navi Radjou: We have been looking at innovation in emerging markets and how in very resourceconstrained environments people are able to use limited means to try to create more economic value for the communities. Of course, we began to look at India because we are both from India and through our research center setup at Cambridge Judge Business School. We actually documented in the book what is happening at three levels. At the very grass-root level in villages, the second level was with Indian companies whether IT companies like Infosys or it may be Tata Group with the Nano.

Our domestic companies are able to come up with indigenous frugal solutions. And then the third dimension was how multinationals like GE are using emerging markets like India to come up with the frugal solutions. So that was the real genesis.

I will have Jaideep describe how we evolved in our thinking and instead of sitting in the west and looking at what’s happening in emerging markets we just turned around and realized that in Europe and in the US, there is a context emerging now for this kind of frugal innovation.

70 “Simplicity is essentially the consumer asking what the brand can do to simplify my life, and I am willing to pay for it by the way.”

Nissan from automotive is doing this. Marks & Spencer is doing it in retail, Novartis is doing it in pharmaceuticals.

Have the drivers for Frugal Innovation in the west been very different from developing countries?

Jaideep Prabhu: Yes, that’s correct. I think in the west a couple of drivers we have identified include one in the consumers who are looking for value for money because of the economic recession.

Today the top 20% of Americans account for 60% of consumer spending that means that the income gap is growing between the richest and the middle class and today most Americans think that their children will be worse of financially than their own generation. So there is lot of economic angst right now, which means that consumers in the west are looking for more value for money. They also believe now in being environmentally responsible and socially caring so in turn they request brands to actually demonstrate not just as a CSR or some eyewash but actually embody those environmental and social values. Particularly the young people, about 67% say that they want to go work for companies that are socially and environmentally responsive. So it’s a combination of consumer needs, if you want to attract and retain future employees, future customers you have to do this, that’s the first driver. Beyond that, the other drivers include government requesting companies to become more socially and environmentally responsible, for instance regulations in Europe around recycling and then finally the competition is also a key driver.

Right, and in India on the other hand a big motivator for frugal innovation is just low cost.

Jaideep Prabhu: So we actually think of frugal innovation in the Indian context as evolved beyond low cost. Now people talk about affordable quality, which is essentially combining affordability and quality. We actually think that there are four attributes that have become together for a product to be called frugal. And that’s why in this book we raised the bar. In the first book, we talked about affordability and quality in terms of the value derived by the customer, not just in terms of features. In this book we raise the bar higher and we added two other variables, one is sustainability. We can make good quality products cheap but if you are going to be polluting environment it’s not very good and the fourth attribute is simplicity. Young people especially want to simplify their lives, consumers don’t want to have complicated devices that’s why this iPhone became successful. Simplicity is essentially the consumer asking what the brand can do to simplify my life, and I am willing to pay for it by the way.

How do companies ensure customer satisfaction does not get compromised?

Navi Radjou: By starting with understanding what the real needs of customers are. Customers will say one thing in focus groups and when you actually go into people’s house they are doing something else right. The biggest message for entrepreneurs here is that this is the golden age, which we call frugal entrepreneurship. Before access to money was the problem now it’s not a problem with crowd funding, more importantly most startups used to be in the softer world. Now what’s happening is that you can start entering the physical world, you can start changing farming industry, you can start changing medical device industry because the cost of tooling equipment and electronic components is plummeting. So the cost of innovating is going down. Even in the most sophisticated industries like drug, medical devices kind of thing.

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THE

ECOSYSTEM OF POVERTY

LESSONS LEARNT FROM THE $300 HOUSE PROJECT

By Christian Sarkar and Abhijeet De The authors have illustrated an “ecosystem of poverty” showing how poverty is caused by a range of issues that create a vicious cycle of failure and how these problems are all interrelated. They have also offered an integrated development approach to fight poverty at scale while tackling all of the root causes of poverty simultaneously.

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There are many lessons to be learned from studying the history of poverty – to try to discover what has really worked and what has not. It’s critical we see what is actually happening on the frontlines – to learn what businesses, NGOs, and governments, and intergovernmental institutions are doing to combat this ancient disease.

Let’s ask: • What is the definition of poverty? Why should it matter?

• Where do the poor live?

• What are the root-causes of poverty? Does aid work?

• What is being done to fight the problem? What are the different approaches?

• What can we do to address the illness of poverty?

By attempting to answer these questions, we may begin to see poverty for what it is – a socio-political construct that perpetuates itself over generations, with the complicity of ruling powers – governments, businesses, and institutions. What matters now is what we do about it.

Definition of poverty This may sound technical, but it’s worth understanding in order to see what the current institutional thinking is. From UNESCO, we learn that in pure economic terms, income poverty is when a family’s income fails to meet a federally established threshold that differs across countries.

The international standard of extreme poverty is set to the income of less than 1$ a day (in 1996 US

dollars). In 2008, the World Bank raised this bar to $1.25 to recognize higher price levels in several developing countries than previously estimated.

Thus by definition, someone earning $2 a day is not subject to extreme poverty. This sort of definition is just short of ridiculous, but for argument’s sake, it gives us a benchmark. It matters when we are trying to compare standards of absolute poverty across nations. According to the UN, roughly 1.2 billion people across the globe remain in extreme poverty based on this simple measure.

The poverty paradox Studies show that most of the world’s extreme poor no longer live in the world’s poorest countries.

In fact, half of the world’s poor live in India and China, a quarter of the world’s poor live in other middle-income countries such as Pakistan, Nigeria

“Poverty is a socio-political construct that perpetuates itself over generations, with the complicity of ruling powers – governments, businesses, and institutions.” and Indonesia, and the remaining quarter of the world’s poor live in 35 low income countries.

UN HABITAT reports that in some cities, up to 80 per cent of the population lives in slums. Fifty-five million new slum dwellers have been added to the global population since 2000. That said, we can say this - as goes India, so goes the world. If India cannot solve the challenge of poverty in a sustainable way, then the world is in serious trouble.

Add to this the problem of refugees – people displaced by conflict. There are more refugees in the world today than ever previously recorded — and more than half are children. Nearly 60 million people were counted as forcibly displaced in 2014, according to the Office of the U.N. High

THINKERS

At the end of this year, we will learn that, as a global community, we will have failed to attain of the Millennium Development Goals (MDGs). Our cities keep growing. UN HABITAT tells us that each day a further 120,000 people are added to the populations of Asian cities, requiring the construction of at least 20,000 new dwellings and supporting infrastructure. In Latin America and the Caribbean current housing needs are estimated at between 42 million and 52 million dwellings, respectively.

Estimates concerning total housing needs in Africa have been set at around 4 million units per year with over 60 per cent of the demand required to accommodate urban residents.

74 Commissioner for Refugees (UNHCR). According to the UNHCR, UN agencies, NGOs, the Red Cross, no longer have the capacities and the resources to respond to such a dramatic increase in humanitarian needs.

Poverty is a wicked problem It is not caused by one factor or even a few. Rather, poverty is caused by a range of issues that create a vicious cycle of failure. We’ve tried to illustrate this with a caricature of the problem – “the ecosystem of poverty” – to try to demonstrate how these problems are interrelated. There are other forces at play as well that we didn’t capture in the chart such as cultural and social biases, racism, prejudice, and other forms of discrimination, along with the mindset and attitudes of individuals.

“If India cannot solve the challenge of poverty in a sustainable way, then the world is in serious trouble.”

Aid – at least the kind that the West has given to Africa – doesn’t work. William Easterly, a leading expert in development, goes so far as to state that over $568 billion has been spent on aid to Africa,

and yet the typical African country is no richer today than 40 years ago. The evidence suggests that aid results in less democratic and honest government, not more.

Approaches in the War on Poverty Paul Polak, author and entrepreneur, tells us that one of the main causes of poverty is the lack of money. His goal is to find ways to allow the poor to earn enough new net income to move out of poverty — permanently. The key to success in his efforts is to harness the energy of thousands of small villagebased enterprises to act in their own self-interest by manufacturing, marketing, and installing radically affordable, income-generating tools. Polak also teaches us that “you can’t donate your way out of poverty.” There simply isn’t enough money to go around.

Another panacea that has been touted, especially in the last decade, is microfinance – that giving tiny loans to poor people to help them build businesses is a way to reduce poverty. Unfortunately that may not be the case. David Roodman, author of the new book Due Diligence and a senior fellow at the Center for Global Development in Washington, tells us: “the best estimate of the average impact of microcredit on the poverty of clients is zero.”

Others, like Esther Duflo and Abhijit Bannerjee cofounders of the Abdul Latif Jameel Poverty Action Lab at MIT, have a different notion. They recognize that the poor are not poor solely because they lack income. According to Duflo and Bannerjee, one effective approach is offering participants a “productive asset” (an asset that generates income, such as livestock or supplies to sell in a small store), training on how to use it, healthcare to keep them healthy enough to work, a small amount of food or money to support themselves while they learned to make a living (so they didn’t have to sell the asset immediately, merely to eat), access to a savings account to build up a buffer for future emergencies, and weekly coaching in areas like overcoming unexpected obstacles and meeting their savings goals. This approach is far more challenging to deliver, and yet has seen dramatic results – for example, for every dollar invested in India, participants spend and eat $4.33 more.

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For rural villages it means building a new sort of eco-village with renewable energy at its center – driving the energy needs of the community. This is not a far-fetched dream. The Solar Electric Light Fund (SELF) has been building these “solar development village” projects in Sub-Saharan Africa. In Benin, the organization is transforming 44 villages in a remote district: For urban slums, it means renovation and upgrading.

There are concrete success stories of this approach in Latin America. In general, these urban slum upgrade projects follow a participatory process that should demonstrate, according to UN HABITAT guidelines, the following characteristics: • But does this approach scale? Hardly.

What Must Be Done Of all the methods available, to fight poverty at scale requires an integrated development approach – tackling all of the root causes of poverty simultaneously.

•

A willingness to harness the positive forces of sustainable urbanization through the implementation of inclusive and rights-based urban policies.

Adopting a citywide, participatory approach to slum upgrading, aligned with city development plans, activity engaging relevant stakeholders in the process of implementing

Water

Food

Health

Education

Enterprise

Description

Solar energy powers purification pumps and filters delivering clean water to communities

Solar energy powers water pumps which enable drip irrigation for critical crops

Solar energy powers health clinics allowing use of key equipment, lighting, & vaccine refrigeration.

Solar energy powers schools to enable computers and Internet access

Solar energy powers local entrepreneurial and community activities

Process

SELF provides assessment, training, installation and follow-up

SELF provides assessment, training, installation and follow-up

SELF partners with a local health organization (e.g. Partners in Health)

SELF provides assessment, training, installation and follow-up

SELF provides assessment, training, installation, follow-up and micro-lending

THINKERS

What if the key to fighting poverty was to use housing as a delivery mechanism – to deliver not simply shelter, but all the essential services and utilities required for a better life?

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•

•

•

•

•

•

•

phases aimed at addressing one or more of the five slum deprivations: lack of safe water, access to sanitation, durability of housing, overcrowding, and security of tenure.

Ensuring no unlawful, forced evictions of slum dwellers will occur in the target neighborhoods.

Devising tangible and direct strategies to empower disadvantaged communities living in slums by allocating 10 per cent funding to community-led development interventions.

Implementing programs based on the good urban governance principles of transparency, accountability, participation and decentralization.

Mobilizing local, national and international resources sufficient for slum upgrading activities whilst understanding that domestic resource mobilization is the key to scaling up slum upgrading.

Demonstrating commitment towards slum upgrading through national budget allocations and co-financing of pilot projects.

Pursuing participatory slum upgrading strategies taking into consideration the rights and needs of slum dwellers, including their right to the city, adequate housing, accessibility of urban basic services and participation in decision-making processes. The rights-based strategies will target diverse community groups, including particularly women and youth.

Adopting a results based-management approach for the design, implementation and monitoring of national goals identified in all its phases.

One such example is the Un Solo San Pedro project in Mexico – a slum renovation project led by the mayor of San Pedro Garza García, who is attempting to narrow social differences between the poor and the wealthy in this suburb of Monterrey.

The work ranges from the redevelopment of public spaces, opening of a new library, wiring and fixtures in the colonies, paving various streets to support

concrete roofing and painting homes. Houses were redone, to provide proper roofing and strong roofs. A church was built as part of the community.

Special care was given to create common areas of beauty and rest to enable residents to take pride in their neighborhood. The work benefited 80 families in the community. The transformation has significantly reduced crime, created a stronger community, and given the residents pride in the homes – creating a valuable asset for their future.

New Business Models An important approach that is seeing greater adoption is the hybrid business model, where NGOs, businesses, city planners, and governmental agencies collaborate with community leaders and participants to achieve the goals of the project.

Projects may have a different funding model, based on the phase of the project. Land tenure may be a governance issue, solved by municipal authorities that make space for affordable housing. Businesses involved in the design and construction should involve locals in the building process, as well as utilize as much local materials as is feasible.

What can we learn from these projects?

Finally, here are some takeaways from our research with the $300 House Project. Development should be integrated – solutions for sanitation, water, education and healthcare must be built into the plan of the community. Employment is crucial.

How do we create meaningful, salaried jobs within the community? Improvements cannot be based solely on charity, but must include contributions from the residents. Businesses have a crucial role to play by providing expertise and treating the poor as customers, not charity cases. Sustainability and affordability go hand-in-hand. If it isn’t affordable, it isn’t sustainable. A project management approach makes all parties accountable, as long as there is open communications and budget and schedule transparency. Hybrid business models are increasingly delivering real value.

77 THINKERS

X

THE FUTURE OF

78

By Sandeep Mann

The author believes change of various quanta and directionalities has occurred in almost all spaces man had delved in. Herein, he projects what future awaits the constructs/ practices of the joke; and of the celebrity status.

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The Future of The Joke That part of the day, when you laugh – a well timed narration is thrown at you, with a twist at the end, and you smile (British humour) or go rapturous (uncouth local brawny humour). Jokes have regaled man since ages. It has been an evolutionary thing, or socially learnt? The infant makes some gurgling sounds, and breathes rapidly in bursts, which adults are quick to label as laughter.

Everyone has had different sensibilities, and thus no joke makes all laugh, yet every joke does make someone go happy. Then there are individuals who guffaw at every joke. Then there have been people and groups of people who would take offence at this or that joke. Assassinations and murders have consequence from inception of seemingly innocuous jokes.

The genesis could be traced to the collective tyranny of a society or a dominant class against a minor community hated or disliked for whatever reasons. It could be a patently visible oddity that forms the basis of a joke, or a manufactured interpretation around a subtle eccentricity or weirdness. This could be any class’s way of snubbing a dominant or subservient community. The famed movie The Name of the Rose comes to mind where the detective monk Sean Connery eventually traces surprise murders occurring in a forlorn monastery to attempts by senior clergy to keep a book joking God and religion hidden from public (the book is not destroyed, showing the clergy’s proclivity to occasionally dip in it for fun, yet is locked in an attic, with the book papyrus pages laced with cyanide so that the reader, in reading the book, licks his lips to turn the pages and thus gets poisoned). The royalty’s way in China of keeping people enthralled (and thus not too worried by serious matters of state and economy) has had creation of Comprachicos, kids who’ve been forced to wear a metal contraption/ vessel on their body or part of it, so that when they grow up, they have a grotesquely small or large head/ belly/ neck et al. Thus people could laugh at expense of these humans, and even pelt them with stones, sating their sadistic instincts.

Almost every culture we see, thus has jokes an integral part of its lore. Media is populated about fun made on expense of Poles, Irish, blondes, Texan, Baniyas, Jews, Jaats, Sardars, Pathans, and who not.

Interestingly, in this who not list, appear celebrities, mostly politicians, and even neighbouring country’s citizens. How else does a hapless mediocrity laden public get even with its tormentors or perceived enemies. The genre of husband-wife, boss-employee pair jokes too are in plethora. The for men only sex jokes are uncountably large. In fact, as an innovation, they coined the term BOAJ ( = Butt of All Jokes; …That a Boaj was going, and such and so happened…) – you may conveniently plug in any replacement for the boaj.

“Assassinations and murders have consequence from inception of seemingly innocuous jokes.”

However, we are achanging, and our society is under stress. Transparency via media is fired up, being an individual with a unique identity is getting celebrated. Then there are legal recourses available that purport to set abuse cases diminished.

Media gives equal power to varied stances – so no more is collective voice of any particular opinion group domineering. Upmanship rooted in crass snobbery is no longer defensible. Media flares up any social event or misdemeanour into a juggernaut with unstoppable inertia – and people are highly opinionated; there is no way to reach out to people and clarify a different perspective whenst any specific point of view has gained anchor. There is pride in being unique – even if this is contra to whatever norms society prescribed in the past – the greater the divergence, more the merrier.

Then intolerance. Religion. Propriety based.

Shoot-outs resulting from these. One can sense the palpable tension in stirring a hornet’s nest via a joke or lampoon. This is akin to road rage – it is too dangerous to get out of your vehicle to accost the wronging driver – for all you know, he might simply pull out a firearm and bang! Bananas is where we are going, not Bahamas.

THINKERS

Only newly created things/ construct may not have a past – they sure might have analogues or inspiring rudiments, but everything once created does have a future, resplendent or bleak.

80 Temperance has been foisted on us. You may call it sophistry or casuistry, but creative lingo groups or genuinely human interest groups, have already altered age old usages. Oh, don’t call somebody handicapped, employ a softer dignified word – so physically challenged looks fine. A jail is a horrible term, rechristen it into a Reform house or a Correction Facility. Humans are images of God, how can they be criminals – anyway, nobody is born a criminal – so let them be beckoned by a term like the Morally Challenged. No way appropriate to call anybody low IQ or imbecile or dolt, let them be intellectually challenged. Without going into the right/ wrong of this trend, and in no way questioning emergence of such flowery lingo/ euphemisms; the point being driven home is “stay off” – mind the limits people can be pushed to.

“There is an increasingly heightened sense of individualism.

A ramification is people are no more clubable in a few generic groups – a multifarious thousand times niche and hyperfine grouping bases have come up.”

One can see, not an altered joke in future, one can see death of this custom/ practice. Maybe we might joke about robots or neutral Gods – only over a transition phase, only over a transition phase.

It would invoke hell to ridicule or poke fun. Not even on the social media – the IP tracers remove anonymity, and so ask one to be responsible for one’s jokes. Who could defend his jokes, for all such attempts would fetch brashness and irresponsibly demeaning the attacked’s status/ identity lens views.

The powerful rich and clout holding politicians, knowing that any joke could snowball into a career threatening proportion, would nip in the bud by getting the joke prankster hauled up by police/ law.

Maybe we would finally be compelled to say, not that a Boaj was going, but that a Boaj was coming!

The Future of The Celebrity Status So and so Hollywood star commands a 50 million

charge for a movie. The baseball coach commands a 119 million 5 year contract. The football swashbuckler has been signed for 259 million 3 year contract by that famous club.

Seen this? Heard this?

More. This guy bills 16 million for a television commercial. That lady in gossamer clothes, has been appointed as a brand ambassador by that obscenely expensive Swiss watch manufacturer for an undisclosed high 7 figure sum.

Even more? This dame would be the judge on that reality show on the idiot box – the expected Television Rating Points would go through the roof. This famed (or ill-famed) interviewer is going to have this celebrity as a guest next Friday prime time.

We’re surrounded by celebrities galore – some domestic/ local, many international. They’ve glitz, fancy cars, leviathan mansions – unimaginably large number of twitter and instagram followerships – so that the world can get a privy look on their breakfast table or wardrobe or health status or romancing partners. For politicians, this translates to percentage voters aligned with them, indicating their chance at hustings. For media/ infotainment sectors, this shows viewership of movies and programs and road shows. For sportspeople, this again shows fan following translated into ticket revenues. For content stream star authors, this shows book sales.

And most of all, endorsement money, and merchandise sales are dependent on this hyped I-follow-You movement. With such a critical financial impact, no doubt this has become a science with elaborate measures to generate winning numbers. Huge “ancillary” industries flourish under the shadow of these celebrities.

With such highs, the socio-commercial lifespan of the celebrities is short, being limited to one flick case or few years, maxing at a decade, with few handful legends lasting longer. Apart from being talented in their chosen arena, multiple differentiation endeavours are tried, that at least a few click and skyrocket a nobody into a recognizable face. Talent alone ain’t count that much – invested

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But look at trends around you. One, there is an increasingly heightened sense of individualism.

A ramification is people are no more clubable in a few generic groups – a multifarious thousand times niche and hyperfine grouping bases have come up. Thus, it is well nigh impossible for a celebrity to appeal to a large membership group. Plus the overlaps of these niche segments as not on either-or basis, but on all-must-comply/conform basis, the memberships are exponentially reduced in size.

Now you cater to either OnlyRomanticNotAction, or RomanticCumComedy (Romedy), or RomanticCumAction (Romaction). The football player the youth idolize has to be one who belongs to Manchester United, is still eligible bachelor, is also vegetarian, and possibly notorious for drug usage. Whew! The asks of the followers have gone too complicated. The newspaper or blog platform they like has to be right-right-centre, in favour of no gun laws, not philanthropic, and not reprieving those on death row, yet contributing charity to LBGTs. Where do you find a celebrity personality proposition that appeals to multiple such a narrowly defined segments which cobbled up assume a significantly large group worth tailing/ inspiring – for in this number, and the fierceness of allegiance lie the computation of endorsements billing.

Two, celebrities are descendants of the kings and queens of medieval times. One could thereby get a tangiblized aspiration profile – power, material assets, fame, security, support help et al. There was a vicarious pleasure in yesterdays when the movie screen flashed ambience of the hero kissing

the lovely heroine. Now, with porous social norms, everyone has access to numerousity of opposite gender – you can kiss/ fondle/ share/ get close; what is the need of seeking a vicarious kick. You can flaunt a high end limousine while staying in the middle class economic bracket. Eating out is no longer an unaffordable splurge. Cloned fashion allow cheaper versions on ecommerce gateways.

Three, technology has brought down the access barriers. Visualise a person writing an article to the New York Times team for consideration of publishing. The editorial team would snootily process a handful every day from thousands queued up, which would make you recognized as an intellectual. Now, roving across facebook, blog and other fora – you can pour all your mental spewing, get high fives from your friend circle and online community – get your personalised website designed and running for the cost of a luncheon.

Why would you queue up for a “yes” from some faceless non-transparent autocratic editors? You can cut your own music albums and videos, and have a go at being a celebrity. The flavour can be genuine authenticity – non-masked by heavy makeups and frills; it works as much for success and glory.

No doubt, exceptionality would always be recognized – but the incentives to create out of the world outcomes would diminish – so much pleasure and stimulation and gratification available for free, legally or pirated. As large corporate are finding it impossible to churn quantum leap innovations, for the business models no longer permit a long period leveraging, same would characterise individual efforts. Passionate long term investments of time and resources are becoming more and more counter to expected returns. We are going to be beset with mediocrity as a rule, relying on wonderful Shakespearean creation based on statistical output of millions chattering on typewriters, cameras and canvases.

Be prepared for 7 billion or so celebrities, none commanding astronomical tabs – all miniCelebrities.

THINKERS

money and sustained support by interested sponsor/ godfather has huge play.

Just like a product brand, a human brand is governed by Kapferer and Aaker models.

These provide strategic direction, purpose and meaning for a brand, sculpt its brand identity, and positioning in the market place. The traits that tilt buyer decision in favour of a brand choice, aid the consumers to match the personality of the brands they buy with the projected personality.

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THE PRISMatic APPROACH TO

COMPETENCE

By Rizio Yohannan Raj

In this article, the author describes the significance of Zen wisdom in refining one’s sensory perceptions and aligning the flow of one’s physical energy with one’s thoughts, words and deeds both as a subject and as a team player/social being.

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This Zen story points to the need to develop a deep methodology of acquiring competence that goes beyond limited perspectives. It is not too much of work on site that a master does; he works offsite, in order to invest his task with competence. In an earlier article titled ‘Learning beyond Perspectives: Towards a Multi-dynamic Sense of Competence’ I had proposed a deperspectivised scheme of education across domains and briefly mentioned the importance of incorporating the prismatic aspects of life appreciation. The Zen master I introduced in the above article had pointed to a similar idea: that if one worked too hard, one would not achieve mastery. A systematic appreciation of multi-

dynamism leading to the generation and sustaining of one’s competence is essential for a sense of settlement and consequent happiness.

The PRISM methodology that I outline below in a tabular form draws from various Indic physiophilosophical traditions, yet freely and originally explores and reveals the interconnections between the individual and the cosmic. This correlation table condenses some of my more elaborate reflections elsewhere concerning how various centres and faculties of the human body act as a person’s physical points to connect with universal forces, thus making her human form a tangible part of a greater, universal continuum.

These unexpected linkages open up the possibility of an interdisciplinary discourse on an individual’s multi-dynamic connectivity with herself and with the universe. An extended exploration of these associations would reveal more stages beyond

The PRISM Human-Cosmos Correlation Chart1 Energy Centres along the Human Spine

Associated Senses and the Sense Organs

Focal Actions and the corresponding organs of action

The Five Elements

Colours in the light spectrum and their significance

Human Faculty Addressed

PRISM goal towards Competence

Distinctiveness Trajectory

The Root Chakra at the base of the spine

Smell – Nostrils; Instinctive knowing of what is adoptable

Cleansing - Organs of Excretion

Earth – Stability

Red with greater wavelength and thus more materiality

Physical –Selfconservation

Performativity of Self paradigmatically related to the changing seasons

Identification of individual distinctiveness with respect to one’s sensory faculties

The Sacral Chakra corresponding to the genitals

Taste- Tongue; Fine taste in using creativity

Creation Organs of Reproduction

Water – Flow

Orange reflecting the in between space of daily human ingenuity, connecting nature and visionary insight

Emotional - Sense of Community

Relevance of action

Acquiring Distinctiveness in a Community

The Solar Plexus Chakra

Vision- Tongue; foresight and visualisation

Movement in a particular direction- Feet

Fire – Inspiration

Yellow – the vision of life crossing the limits of the self

Intellectual – Individual genius contributing to the evolution of culture

Innovativeness for change

Employing one’s distinctiveness in societybuilding efforts

The Heart Chakra

Touch – Skin; the ability to empathise and connect

Hands - finding natural and vital connections

Air – Prana-Life breath

Green – the primary and natural linkages between one and the rest of the world and nature

Philosophical – Educational role towards training future generations

Sustainable Transformation

Helping others discover themselves with one’s distinctive abilities to connect

The Throat Chakra

Hearing- Ears; the ability to listen carefully

Speech - vocal cords- finding the right word and mode of articulation to connect

Ether- Sound, Communication

Blue – the colour of freedom of expression, as in the sky and the sea

Spiritual—the secret of inspirational storytelling

Multiple modes of expressing the message to ensure its spread

Creating a Governance connective linking various agents of transformation

1 The PRISM scheme is used in the design of programmes and workshops run by my organization LILA Foundation for Translocal Initiatives (www.lilafoundation.in)

THINKERS

One day, a monk asks a woodcutter, hacking away at a tree, “How many hours do you need to cut a tree?”

“Four hours,” replies the woodcutter. “And how do you cut a tree in four hours?” the monk persists. “I sharpen my axe for the first three hours and cutting the tree takes me only an hour.”

84 “By bringing focus back on own senses, one develops a keen awareness of what is happening in one’s surroundings at any given time.” communication, which cannot be discussed within the limits of this article. Attempting to translate the interlinks herein into a life practice for individuals and communities could provide a seminal shift in our governance thinking. That too demands a longer contemplation, which must be reserved for another time. For now, we shall focus on how a prismatic training subtly informed by these linkages can promise mastery at the individual level and sustainable competence at the organisational level.

Let us understand the PRISM correlations more closely here.

The PRISM Scheme for Sustainable Competence Performative Potential of the Individual: The first phase of the PRISM scheme for competence understands the body as the immediate and palpable reality of the participant. By bringing her focus back on her own senses, she develops a keen awareness of what is happening to her and her surroundings at any given time. This training to be in context helps her instinctively discern any other context from the very smell of it, and become responsive, rather than being reactive. But it first requires unclogging of one’s mind—shedding of old habits and fixed perspectives—and confronting the question: Who am I? It invites cleansing, invokes an individual’s potential to turn her mind into a tabula rasa at will.

A learner thus identifies her true distinctiveness and capacity for performativity through an intense engagement with her senses; she understands and begins to clear the habits and stereotypes that prevent her from effortlessly actualising her dream.

As the colour red and the element Earth suggest, this is a movement towards building a sense of security about one’s distinctive characteristics capable of unique creations.

Relevance of the Individual to a Community: With one’s senses in the right places, an individual is ready to enter the second phase of

the PRISM competence building. She ponders on how to contribute to her community with her distinctiveness. Through a non-linear yet profoundly associative understanding of ‘social responsibility’, the relationship between her individual creativity and her sense of community becomes clearer to her. She gradually develops a commitment to bring changes to her work in a way that benefits not only her, but also her environment.

The element Water allows the flow of creativity across and within the now-secure individual, and allows her creative blossoming. The colour orange associated with the sacral chakra, the second energy centre in the human body, represents human creativity—a hybrid colour reflecting the collaboration of various hues, an artistic site of fine taste relevant to all times. It must be noted that relevance has a culinary association. The French relevé (literally ‘to lift’) refers to ‘seasoning’—an act with elevates a dish. Jacques Derrida, in one of his reflections on translation, interprets seasoning as an act which elevates the dish, thereby strangely negating it, even as it preserves the memory of the original dish. Derrida holds that a translation becomes ‘relevant’ only if it achieves the curious triple end of elevating-negating-preserving an original. If we draw these ingredients of ‘relevance’ into the present discussion, we arrive at a need to evolve a method of at once elevating, negating and preserving the individual distinctiveness in order to relevantly and competently contribute to a community.

Innovative Dimensions of Team-Building: Innovative means ‘to introduce as new’ and not ‘create new’ as it is normally perceived. The third phase of the PRISM scheme of learning draws from the multi-faceted Indic tradition of dance to connect one’s particular vision (sight) with one’s movement (walk). Translating this into institutional terms, one finds that the vision that guides an organisation will determine the direction it takes through the movement created by a team of believers. The team feels ready to apply the principle of innovativeness in strengthening the team by capitalising on the distinctiveness of its members and working towards specific goals by converging various strengths. It learns the importance of co-operation, feedback, and guidance, and the members lose their defences and resistance to learn and work in a team to build

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Sustainability of Competence: The next phase of the PRISM scheme places empathy at the heart of the organisational/societal/governmental play of competence. Each participant understands that in order to take her distinctiveness and competence to a sustainable level, and to become an inspiration for others in her organisation, she needs to nurture genuine empathy as the core of her personality.

The sense of touch and the grip of the hand are the physical keys here to understanding the play element in work. The touch is what tests one’s tolerance—so if the work touches one as too exhausting and forced, it would never yield the desired competence. The physical, intellectual, psychological, and inspirational impacts of a certain recognisable touch on an individual’s/organisation’s initiatives are what will ultimately determine the sustainability of competence.

Multiplicity Management in a Translocal Context: The final phase of the PRISM training for competence concerns mastery in messaging. This is especially relevant in our times of communication revolution—no one contributes to this epoch without a keen understanding of the art, science and philosophy of communication. The organs of speech and hearing become the focal actors here, and a participant realises that the best way to contribute to the world, and to grow from being merely employed towards becoming institutionbuilders or nation founders or cultural leaders is to understand and appreciate the coexistence of multiplicities, and one’s own distinctiveness in relation to that of others. This demands a careful

review and rediscovery of one’s words employed in conceptualising, listening, articulating, writing – and being sensitive to plurality and differences. It is the interplay of personal morality and ethical public behaviour with respect to the concepts of justice and equity that will enable one’s individual competence to flower fully, and become instrumental in realising a transformative governance.

So, we enter the Zen wisdom: it will indeed take more time to gain mastery, if one is self-indulgent and perspective-stricken. The immediate result of understanding the deperspective associations available within the prismatic scheme for competence presented herein is that it would

“Seasoning as an act which elevates the dish, thereby strangely negating it, even as it preserves the memory of the original dish.” help one see the prime significance of refining one’s sensory perceptions and aligning the flow of one’s physical energy with one’s thoughts, words and deeds both as a subject and as a team player/social being. It allows the participants to discover their own practical ways and means to respond organically, relevantly and sustainably to life situations. The PRISM methodology allows ‘distinctiveness’ to be creatively used as a tool to enable settlement within the individual as well as the society with which she interacts. The detachmentattachment that this awareness provides will deperspectivise them, thus helping them work in non-linear ways and emerge as creative managers as well as happy and self-motivated human beings, willing to share with the world their refracting prism of competence, their Zen of sustainability.

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its competence. The element Fire and the colour yellow animate the sense of vision here, and the team finds competent ways to introduce various traditions as new by contemporarising its aesthetic, and using them effectively in the present times, even as it creates new methods.

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USING REFRAMING, DESIGN & BUSINESS MODEL THINKING TO LIFT THE

BOTTOM OF THE PYRAMID

By Maarten Koomans New business models can change everything, but are you prepared to leave your assumptions at the door? The author argues that by using the process of reframing, design thinking and the application business model canvas, we can flip our reality and create new realities. Fast.

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Everyday we can be amazed by developments that challenge how we look at our world. How we work (Wework), how we travel (AirBnB), how we pay (Square), how we move (Uber), listen to music (Spotify), measure our health (Proteus), how we learn (KhanAcademy). Change comes from all sides and all angles. It is no longer enough to think that we can easily ‘fix’ what we do, how we service our customers, in order just to keep doing what we are doing. When you have just recovered from the newest, latest innovation, that rocked your world, there is the next. So what do you do?

You want to disrupt too. Before you are disrupted.

Right? Well, good luck with that. Because however great that sounds, it is shortsighted and also impossible. The heart of change comes from developing the capability for real understanding of ‘what is’, the ability to see what is hidden, to reframe your vision and then move forward. More then often we disallow ourselves to use of different lenses to see multiple realities. Understood. Because our realities are complex and our vision often blurred or biased.

Understanding what drives the change.

Understanding changing contexts, i.e. markets, customers, technologies, will help you discover new priorities and interactions of your (potential) customers. Research shows that the future health consumer does not want to go to a hospital or clinic for a check-up or (minor) treatment, when it can be done at home and by themselves. So, why do we insist on maintaining our hospital infrastructure? In the 1990’s and 2000’s, when developing and emerging markets wanted everyone to be able to have access to phone services, did they put telephone lines in the ground? No! They went straight to mobile.

Instantaneous eradication of constraints and the creation of value! The disadvantage was flipped into an opportunity. Simply by reframing the challenge.

“The heart of change comes from developing the capability for real understanding of ‘what is’, the ability to see what is hidden, to reframe your vision and then move forward.”

Leaving constraints behind. It was fascinating to learn that Fortis Healthcare, in Delhi, India, delivers value to patients by providing access to highly specialized care in remote areas by deploying intensive care units with minimal personnel and maximum telemedicine remote support. By reframing the operational assumptions for providing optimal specialty care remotely. Could the average US- or European-based hospital adopt the same type of mindset? Difficult.

The story of Praxify, a Pune based startup gone Silicon Valley, was build around the notion of a patient-centered, cloud-based, integrated, menudriven, practice management and EMR system.

Driven by the need to cater vast volumes of patients, doctors needed to reduce patient facing time from 3 min to 1 min; it reframed how to look at patientdoctor-hospital relationships. And designed a, no typing, iPad/cloud-based system. Neglecting many –old-school based- constraints. And now it is seriously challenging incumbent EHR-software companies, changing the business model using technology to helps to organize around patients.

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New business models can change everything, but are you prepared to leave your assumptions at the door? The author argues that by using the process of reframing, design thinking and the application business model canvas, we can flip our reality and create new realities. Fast.

88 So, change (or disruption) starts with reframing. But how?

Design thinking is one of the ways that can help you reframe.

Its starting point is to focus on the expressed and latent need of your current customers and their dissatisfactions. Adopting new ways to see what is in front of you are often hard to develop.

It means that you have to start observing first, question your assumptions, simplify complex relationships and interactions and then create your opinion.

When you have limited options, combined with high levels of urgency, one way of reframing is considering a cost effective way of creating affordable products and services using limited resources ( jugaadinnovation.com).

From understanding the ‘what is?’ the possibility generating question of ‘what-if?’ should be described in simple terms or visual sketches. When you have devised a number of ‘what-if?’ possibilities, the proof of the pudding is asking your customers what ‘wows’ them. Thus narrowing down the number of possibilities to the few that matter. Focus.

Capturing the process and the value comes from seeing ‘what works’! By experiments, we cannot only start to get small-scale results, but also pivot towards real accepted and scalable businesses.

In that journey, Design tools can help. Designers believe that you have to show people, not tell them; tell a great and compelling story why change is needed, and create a vivid image of the future. We use different tools ranging from journey mapping to visualization to prototyping to assumption testing. The application can range from ideation to customer panels, and from crafting business strategy to implementation. One of the latest additions that can accelerate the thinking about, the conversation on and the pivoting of problems and solutions is the New Business Model thinking. It uses a canvas that combines unique elements that can help you reframe and

innovate. The business model thinking uses nine-boxes to craft your business model, is enriched with visualizations to guide conversations, and opens a whole new array of possibilities.

Unlocking the potential of understanding how the nine elements work together (the mechanics of the business model) can start new conversations on what works or what fails. To ensure the speed of acceptance and change we use visualization where we can: we call it “change through drawings”.

So, let’s draw your business model. Business models look at how businesses create, deliver and capture value. True. But first it is important to understand what the key design criteria are that we have to aspire to in designing a new business model. Three questions are key: Is there a need? Can we deliver?

Are they willing to pay?

In the developing countries low income and thus price points become major design criteria, as do access to services (geography) and number of customers to be served (volume). Let’s use these to start thinking about the nine building blocks.

Basically you can start anywhere, but most logical is to start describing or innovating the Value Proposition.

Aravind Hospitals created a model that stood out in offering cataract surgery McDonalds-style for free in remote villages with the lowest infection rates in the world. That’s their value proposition. Being able to help more people then anyone (volume), at a low price point (free) by cross subsidizing, and provide access in remote locations through the use of eye-camps.

With the help of the WHO they were able to keep the cost structure low by producing their own lenses. This business model gained strength to also involve a proposition for charity organizations that supported the hospital. Their revenue model

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Micro-finance and mobilizing communities have been drivers that led to great business models; access to rural markets for incumbent fast-movers, by creating income generating capabilities for underprivileged rural women (Hindustan Unilever). Reframing the view of the incumbent of what their proposition was, eg. not selling products, but access to income first, enabled their customers to buy their products later.

The design criteria for offering these sustainable propositions combine community based solutions with new ways of financing or changing the finance relationships.

Interestingly enough these same design criteria also apply to Unicorns like AirBnB (see figure) and Uber. Creating person-to-person community based relationships with direct 1:1 payments and effortless access is the foundation for both their business models. They both basically offer only the platform technology to make it happen and it happens because they understood the real and hidden need of their identified customer groups. They based their solution on three design criteria: volume, access and price.

This structured, creative and visual approach to shaping, analyzing or

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to attract funds was linked to the success of the hospital. Their grants to the hospital enabled free surgery, eye-camps and the setup of manufacturing of lenses.

By visualizing this model it also became apparent that the same value proposition could be applied to different customer groups, both paying and non-paying customers.

And how their respective roles reinforce the outcome for patients.

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innovating business helps fuel the conversation and creativity between stakeholders. It creates a shared language. One might ponder: Do we currently communicate based on the same mental model?

Probably not, but can we create insight into and leverage the different mental models to create a common future? Seen both from the developing and developed world perspective? Yes. Is the Aravind-model ideal? I do not know. The reframing question would be: What building block or combination thereof would you analyze first, to challenge or to innovate the model? For example: Can we define more distinct groups of patients with more specific needs? Or apply it to different disease areas!

off in lowering the need for healthcare in rural areas.

Can we again go straight to mobile? Leave our assumptions, and current framing behind?

How would you do that for healthcare? What assumptions would you challenge? What role do you see for the hospital of the future, compared to our health of the future? I would not build hospitals. Support self-management, community care; low cost, high technology intervention; separation of place and distance. Just to name a few design criteria. Creating new business models for healthcare begins with creating value propositions that make sense to patients with real outcomes that support them in their decision processes, in their life choices.

So now, what if?

What if we would develop new value propositions and business models that increase the outcome for patients by 50%, and lower the cost of healthcare by 50% where doctors and patients are in control? Can we first take the “channel-perspective’ (building block) and see how we can use the second or third digital revolution being caused by e-health (and mobile health) in combination with the current platform thinking to change the proposition in the healthcare value chain? Carve out specific customer groups with new health-revenue levels, and new cost structures? Let’s say an Uber for healthcare that focuses on health and not disease, an AirBnB for health, where customers choose low cost solutions when it fits their requirements? Or a business model aimed at water and sanitation that ultimately pays

To learn and progress from our mutual experiences we need to be able to reframe our view and the use of different design criteria and dare to ask “what if”. Let go of our assumptions. Start with one of the building blocks of the Canvas and start the conversation. That is where all good business models designs and innovations start.

And now? Action. I would engage in the design of experiments that will shape new business models that would question your assumptions and then push for implementation, aside all limitations that hold you back. Use the canvas to translate the insights from your reframing exercises to create unstoppable progress. Start reframing and designing your business model, and dare to pivot!

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PERSPECTIVE WHERE’S THE DIGNITY?

By Vibhav Kapoor

These photographs of the ‘Bottom of the Pyramid’ give a peek into the struggles and hardships of life here, and how everything is not hunky dory. Certainly, they indicate that economic and social development in India still has a long way to go.

93 photographer living in a developing country, I want to shoot images that show what this part of the world looks like outside of the hype and photo-ops usually seen. The people, infrastructure, emotions in these pictures are an all-pervasive reality around here.

r Fairest of Them All Gurgaon, India This picture is of Radha, a young girl in her dingy and cluttered house. Despite her harsh conditions, she is content and happy. She is a girl who lives in the suburbs, looks in the mirror and rides a bicycle like any other girl of her age.

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To capture a moment on camera is to immortalize the moment. To some I may seem as a person who just sees the world through a 50mm lens, but creating a provocative, astounding and reflective image through this device is empowering. As a

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r The “Haves” Have And The “Have Nots” Beg New Delhi, India This photograph depicts the stark disparity in India. More than 300 million people in India live below the poverty line. This is a scene at one of Delhi’s central areas, Connaught place.

v Where’s the Dignity? New Delhi, India The sanitation facilities are so poor that the people have to bathe on the streets in full public view.

Sensitizing people on the issue of sanitation is really important because it not only affects the individual, but the whole vicinity.

95 THINKERS

r Agony New Delhi, India The turmoil people have to go through everyday to survive. This picture leaves a lot to the imaginationâ&#x20AC;&#x201D; pain, suffering, desperation, lack of medical or senior care.

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Wired Up New Delhi, India r This picture of a complex cluster of wires was taken at Chandni Chowk, a landmark of Old Delhi. The so-called â&#x20AC;&#x153;Urbanisationâ&#x20AC;? of cities in India is a classic paradox.

v Construction Debris and Children Gurgaon, India In India, masons and construction workers build their homes at their work site. These dangerous sites are also locations of domestic households. Relieving poor children of child labour and providing them education are still fundamental issues penetrating the BoP.

97 THINKERS

Morning Ritual r New Delhi, India A man sitting on his cart, smoking a â&#x20AC;&#x2DC;beediâ&#x20AC;&#x2122; and reading the newspaper early in the morning.

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r Multi-purpose Pavement New Delhi, India A man washing clothes on the pavement.

Hungry for Food Gurgaon, India w Meet 10 year old Achilesh. 1 in 3 children in India is malnourished. Adolescents have stunted growth, due to improper nutrition. This is reflective of significant child healthcare challenges in the country.

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It's character that creates impact!

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100

TARGETING THE BASE OF THE PYRAMID AT SCALE: EASIER SAID THAN DONE!

By Filippo Veglio In this article, the author examines the scalability of ventures targeting the base of the pyramid (BOP), by expanding access to goods, services, and livelihoods in commercially viable ways and thereby evolving into inclusive business.

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From a business perspective, scale is a combination of reach, geographic footprint, and sales or procurement volume, depending on their industries and the nature of their inclusive business models targeting the base of the pyramid. Scale is also very much related to break-even and return on investment, as only commercially viable ventures would become truly scalable.

That being said, as many practitioners and analysts active in this space will readily acknowledge, relatively few of these ventures have achieved the potential for scale. This holds true even for models developed by large multinational corporations, which might have been considered the ideal vehicles given their vast resources, efficient systems, and global reach.

Thus, the word scale is often accompanied by references to words such as “barriers”, “roadblocks”, “challenges” – both internal (i.e., within a given business) and/or external (i.e., at the level of external market barriers). The barriers are numerous.

To date, most of the discussion has focused on external market barriers like insufficient market information, inadequate infrastructure, ineffective regulation, uneven cash flows, limited knowledge, skills, and access to finance in low-income markets.

Leading institutions like the International Finance Corporation (IFC) have dissected challenges (such as expanding reach, facilitating access to finance, changing mindsets and behaviors, designing appropriate products and services, pricing and payment) and laid out viable sets of solutions that companies are applying to overcome them.

However, companies also face a host of internal organizational barriers to scale that have so far been less commonly acknowledged or discussed. Yet from what emerges in discussions with World Business Council for Sustainable Development (WBCSD) members and other companies active in this domain, these internal barriers are just as, if not more, important across industry sectors. Moreover, they lie within direct control of the companies themselves.

WBCSD has worked with representatives of leading companies (CEMEX, Grundfos, Grupo Corona, ITC, Lafarge, Masisa, Nestlé, Novartis, Novozymes, SABMiller, Schneider Electric, The Coca-Cola Company, and Vodafone) and BOP experts toward dissecting one particular area: the internal barriers faced by large companies when they want to scale up inclusive business ventures. But we did not want to limit ourselves to highlighting problems; rather, we opted to couple each barrier to a set of proven solutions (a dozen in total) that leading companies in this space have adopted. While some of the examples featured are success stories, the majority are ongoing efforts of sets of ideas and practical strategies.

“When companies consider investing in starting or scaling inclusive business models, they compare the expected rates of return with those of alternative investments they could make.”

The end result of our analysis is the following table1 (next page), which also points to company examples being featured in our report. We came up with three clusters to classify the numerous and interdependent issues at play: First barrier: Opportunity cost of investment When companies consider investing in starting or scaling inclusive business models, they compare the expected rates of return with those of alternative investments they could make. Inclusive business investments may have lower expected rates of return because the cost or risk of doing business in base of the pyramid markets is high, anticipated margins are low, and/or a long time horizon is needed to break even. Base of the pyramid markets may also be so new and unfamiliar that expected rates of return cannot be calculated with enough certainty. Both of these circumstances make it difficult for corporate decision-makers to justify the opportunity cost of investing in starting or scaling inclusive business models when other investments with higher, more certain rates of return are available.

1 See the full picture by accessing http://www.inclusive-business.org/WBCSD_Internal_barriers_and_solutions_to_scaling_up_inclusive_business.pdf (WBCSD, 2013).

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There are numerous examples worldwide from companies of all sizes actively testing and rolling out inclusive business models. But as with any business solution targeting a specific sustainability challenge, the discussion quickly turns to the concept of scale.

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What are the solutions we identified to tackle this barrier around the opportunity cost of investment?

Adopt a portfolio approach Inclusive business opportunities can be found all along the risk-return spectrum. They can be segmented according to the size of the investment required, how long it will take to recoup, and what rate of return to expect. It helps to understand where an inclusive business opportunity falls, and how it fits in to the overall investment portfolio.

Companies can take a portfolio approach within the subset of inclusive business investments, balancing radical innovations with more incremental plays that are easier to implement – and yet can create considerable business value, learning, and confidence. A portfolio of business models that collectively target the “whole pyramid” can help to reduce risk.

Obtain senior leadership support Senior leadership support can help unlock investment in inclusive business opportunities.

Senior leaders and directors can be the only ones empowered to make longer-term strategic bets. They can also create the space for their reports – who might lack the authority, or be constrained by short-

term performance targets and incentives – to invest.

Senior leaders can also support the core business integration and mainstreaming necessary for longterm sustainability and scale.

Quantify total value created for the firm To make the case for inclusive business investments toward the far end of the risk-return spectrum, it can help to take non-financial benefits to the firm into account. These can include establishing brand awareness and loyalty, enhancing corporate reputation, building goodwill, developing key stakeholder relationships, lifting employee morale, and improving employee recruitment and retention.

Of course, these benefits do affect the bottom line – and it helps to quantify them wherever possible, making them more actionable for investment decision-makers and implementing managers alike.

However, it is important to recognize that while total non-financial value created for the firm may be large, it may also be too dispersed to affect individuals’ incentives or behaviors to the extent required.

Find outside investors When it is difficult to make the case for an inclusive business investment internally, a company can look for outside investors to share the cost and risk. Of

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Second barrier: Strategic and operational misalignment Like any other type of business, inclusive business is a matter of procuring, manufacturing, distributing, marketing, and selling products and services.

Inclusive business models cannot be run out of the public affairs department: key functional teams across the company need to be involved, especially to do it at scale. However, an inclusive business model may be so different from a company’s existing business model that existing operating structures and processes cannot easily be leveraged. Lower expected rates of return – and/or lack of clarity about the relative importance of commercial and social objectives of inclusive business models – can also cause strategic and operational misalignment.

Managers’ performance targets and incentives simply point their time and resources in other directions. Simple lack of internal communication and “not invented here” syndrome can also factor in.

Here is what we came up with in terms of solutions that can overcome the barrier around strategic and operational misalignment: Start with the business plan Companies report that it is easiest to avoid strategic and operational misalignment in the first place by understanding their country priorities and growth strategies and pursuing inclusive business initiatives that support them. If doing business with base of the pyramid suppliers, distributors, retailers, and/or consumers helps a company achieve existing goals, then it automatically aligns with existing operating structures, processes, performance targets and incentives set up to drive progress toward those goals.

Get out of the corporate greenhouse Many inclusive business models get started in protected environments of one form or another.

These “corporate greenhouses” may include

special innovation units and CSR or sustainability departments. The protection they offer can be essential for inclusive business models that are very experimental. But protection typically comes with limited resources, and models that show promise need to be integrated in order to scale.

Those that remain protected for too long risk growing disconnected from core business goals and strategies, falling prey to “not invented here” syndrome, or being pigeonholed as CSR. Adjust performance targets As companies begin to scale their inclusive business models and it becomes apparent where in the system incentives are misaligned, one approach is to change them. Some companies may wish to introduce impact related performance targets as part of the process of changing incentives. This solution has a very high degree of difficulty, since departments and staff ranging from procurement to manufacturing to distribution to sales and marketing may all be involved – and all have to be aligned. Organizational change of this magnitude requires senior leadership support from across the company.

Establish a separate company If strategic and operational misalignment is too great, a final option is to develop an inclusive business model through a separate company – such as a subsidiary or joint venture set up for that purpose. That company could eventually be spun off or sold. Alternatively, if the business model evolves and becomes closer to that of the parent, the company could be reintegrated.

Third barrier: Capability gaps Companies’ capabilities drive their performance.

The extent to which capabilities need to be adapted or built from scratch is a critical factor in companies’ ability to scale their inclusive business models. When inclusive business models are very different from existing business models, there will be gaps. These can include the ability to implement any of the solutions outlined below, from managing informal distribution channels to providing inventory on credit to processing hundreds of thousands of small transactions. It is often possible to acquire the capabilities necessary to pilot an inclusive business model successfully. But to scale, those capabilities need to be widespread.

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course, outside investors will also want to share the return. Donors and some development finance institutions can be attractive investors because they can accept lower financial rates of return in exchange for the socio-economic impact created.

Such concessions can make the financial rates of return for companies more competitive with alternative investments they have available.

104 “Partnering” can be as simple as contracting services on a fee basis or as complex as sharing costs, risks, and rewards on the basis of complementary objectives.”

These are the four solutions we identified to tackle the capabilities barrier: Utilize external partners Companies can fill capability gaps by partnering with organizations with complementary assets, resources, skills, and expertise. Those organizations can include other companies, civil society groups, donors, development finance institutions, and governments.

“Partnering” can be as simple as contracting services on a fee basis or as complex as sharing costs, risks, and rewards on the basis of complementary objectives.

Bring core capabilities in-house While external partnership can be a good way to fill capability gaps, it is critical to know when to bring some capabilities in-house. As an inclusive business model moves from start-up to scale, issues like efficiency, quality control, and competitive advantage become more important. Can these issues be addressed working through partners, or does the task of scaling require the company to internalize some core capabilities?

Support professional development When it is clear what core capabilities a company needs to build in order to bring an inclusive business model to scale – or when a company would like to encourage inclusive business solutions to emerge in other parts of the business or other parts of the world – one approach is to create professional development experiences for staff. “Learning-bydoing” experiences, like special stretch projects and immersion in base of the pyramid markets, may be preferred, though not many formal education or training programs exist as alternatives. How to make such experiences more widely available is an open question.

Establish centers of excellence Some companies grappling with the question of how to build capabilities more widely have opted to establish dedicated, central teams in charge of raising awareness, developing and sharing knowledge and tools, facilitating internal and external networking, and transferring technology.

These centers of excellence can serve both functional and regional units. They can provide support on a push basis when inclusive business is a relatively new or longer-term strategic proposition or on a pull basis when the return on a particular approach has been proven.

Looking ahead Inclusive business models will not scale without a solid understanding of what works and what doesn’t – and when it comes to addressing the internal barriers companies face, we are aware that our analysis above is just the beginning. We hope it frames and catalyzes greater and more open dialogue on these barriers, and on solutions companies can use to tackle them.

We also hope out analysis paints a picture of the intrapreneurial challenge facing managers working to start and scale inclusive business models within large companies. These individuals are playing vital roles in harnessing the resources, capabilities, skills, and sheer reach of their employers to develop profitable, scalable solutions to some of the world’s most pressing problems, from health to education to the environment. Yet their roles are all too often unsung and unsupported.

Outside inspiration and allies are also essential to start and scale inclusive business solutions. First, they are important sources of moral support and persuasive capacity for tackling the internal barriers described in this brief. And second, outside allies are critical when it comes to the more entrepreneurial challenge of aligning and strengthening the “ecosystems” of interconnected, interdependent players whose actions determine whether or not the company’s inclusive business model will succeed.

These players typically include other companies, governments, intermediaries, NGOs, public and private donors, the media, and others.

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106

CREATING AN INNOVATION ECOSYSTEM FOR

INCLUSIVE AND SUSTAINABLE BUSINESS

By Stuart L. Hart and Chiropriya Dasgupta

The authors contributed to a chapter in the book Base of the Pyramid 3.0: Sustainable Development through Innovation and Entrepreneurship. The book covers the state of the domain and acts as a sounding board for expert voices from the field. This excerpt from the authorsâ&#x20AC;&#x2122; chapter, articulates the systemic need for an innovation ecosystem.

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Book excerpt Over the past decade, most base-of-the-pyramid (BoP) ventures have either failed outright or dramatically under-performed against expectations.

There are many and varied reasons for this lessthan-stellar track record. Perhaps no cause for BoP failure, however, has been more ubiquitous than the mistaken belief that BoP ventures are no different from new ventures aimed at the developed markets at the top of the pyramid—the assumption that all that is required for venture success is an affordable product and an effective business model for production, marketing and distribution.

Unfortunately, when it comes to the BoP, “no man is an island”: In the under-served, informal and opaque settings at the bottom of the income pyramid, ventures must be embedded in larger ecosystems rather than stand-alone initiatives. To paraphrase Hillary Clinton, it “takes a village”—or an innovation ecosystem—to succeed with BoP enterprise.

The rise and fall of CleanStar Mozambique Nowhere can the importance of building base-of-thepyramid (BoP) business eco-systems be seen more clearly than in the domain of clean cook stoves for the poor. Indeed, despite the best of intentions, the past decade has seen scores of failed clean cookstove ventures relegated to the scrapheap of history. One initiative in this space, however, stands out from the crowd: CleanStar Mozambique. From its inception, the founders of this venture understood that cookstoves must be embedded in a larger ecosystem to succeed. That is, until their original vision and business model was tragically reversed.

Indeed, before clean cookstoves caught the attention of world leaders and became a global priority (the goal is to foster the adoption of clean cookstoves and fuels in 100 million households by 2020), a pair of young, visionary entrepreneurs, founders Greg Murray and Sagun Saxena, were thinking beyond the clean cook-stove silo: a vertically integrated business model that would address the challenges of charcoal-based deforestation and improve food security, health and income for smallholder farming communities living on subsistence agriculture.

For CleanStar Mozambique, the actual cookstoves were a small part of a much larger ecosystem of value, which included the upstream production of smallholder-farmer-based biofuel from cassava, along with an integrated agro-forestry model that generated additional income—and food—for the subsistence farmers who previously subsisted on cassava and made charcoal to sell for cooking in the urban areas, accelerating the problems of deforestation of climate change. Within five years

“To paraphrase Hillary Clinton, it “takes a village” — or an innovation ecosystem — to succeed with BoP enterprise.” of launch, more than 1,000 farmers adopted the integrated agro-forestry model, and a 2 millionliter/year ethanol-based cooking fuel production facility was built near Beira, Mozambique, to replace charcoal. Over $21 million was raised from strategic corporate and institutional partners and investors such as Danish biotech powerhouse Novozymes, biofuel plant builder ICM, and financiers Bank of America Merrill Lynch, the Soros Economic Development Fund and IFU, Investment Fund for Developing Countries, to grow and scale operations not just in Mozambique but across Africa. These partners also contributed technology, project management skills, connections, credibility and financial savvy to the venture. Here, it seemed, was a true triple-bottom-line BoP ecosystem that created sustainable value for all the stakeholders involved.

However by late 2013, the story took a dramatic turn. Driven, by a fresh round of investment capital, the decision was made to “focus” the business by

THINKERS

Introduction The BoP Global Network has come a long way since the groundwork lay 15 years ago. What started off as a Learning Lab at University of North Carolina, Chapel Hill in the year 2000, to animate the thought leadership articulated in The Fortune at the Bottom of the Pyramid (C.K. Prahalad, Stuart Hart), today is a strong network of twenty six Innovation Centers – all spawning/helping spawn new ventures that are economically competitive, environmentally sustainable, socially inclusive, and culturally embedded. However experience and experiments have shown that these ventures are sustainable and scalable only if they are embedded in a wider value proposition for all stakeholders and integrated into a larger innovation ecosystem.

108 suspending its agro-forestry and ethanol production.

The company also got a new name NewFire Africa, and was now focused on just the sale of clean cook stoves and fuel. Unfortunately, this move produced limited success and, by June 2014, a decision was made to voluntarily liquidate NewFire Africa to put an end to the continuing losses. “The company was not able to achieve the scale and retail penetration required to make this venture viable” (Novozymes 2014).

“Better to ‘think like a mountain’ by envisioning the holistic character of natural systems and all their intricate interconnections.”

Nearly a decade of research, business model innovation and funding, among other things, had gone into making a business case for clean technology at the base of the pyramid a reality. What went wrong? Was the business case for this venture flawed? Were there too many moving parts? Was greater focus indeed required? Could the execution have been different? Was patient capital really patient?

Thinking like a mountain In his 1949 classic book, A Sand County Almanac, Aldo Leopold coined a phrase that would reverberate through history: “thinking like a mountain” (Flader 1974). He was the first to observe that the extermination of wolves, while solving problems for ranchers, led to explosions in deer populations—and trouble for the eco-system as a whole. Focusing only on individual species in

isolation, he observed, led to bad outcomes when it came to the natural environment. Better to “think like a mountain” by envisioning the holistic character of natural systems and all their intricate interconnections. Little did he know at the time that his observations about the natural world would one day provide a key insight in the development of sustainable ventures and economies at the base of the world income pyramid in the 21st century.

Like Leopold’s single-minded wolf hunters, too many BoP ventures and initiatives have been “rifle shots”—business strategies premised on the design and sale of low-cost products to targeted lowincome end-users. The landscape is littered with the remains of failed BoP ventures focused on the sale of such things as low-cost water filters, solar lights, clean cookstoves and myriad other household goods. The reasons for failure: product misfire, low sales penetration, high selling and distribution costs, and inability to scale (Simanis 2012). As Khanna and Palepu at Harvard Business School observed many years ago in “Why Focused Strategies May Be Wrong for Emerging Markets” (1997), such an approach can work well in developed markets where infrastructure and institutions are well established. But in the developing world, such a “rifle shot” approach is a death sentence. That is why most successful corporations from the developing world are highly diversified “business houses”—they can supply the infrastructure and institutions (e.g. power, transport, distribution, education, healthcare) that are missing in the society itself. In short, they think (and act) like a mountain. It is now becoming increasingly clear that the same logic applies to individual BoP ventures and initiatives—success demands that BoP enterprises create wide and compelling value propositions.

109 THINKERS

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CONTRIBUTORS

Abhijit De Abhijit De is an architect and educator based in Pune, India.

Christian Sarkar Christian Sarkar is a consultant, author, and founder of the $300 House Project.

Filippo Veglio Filippo Veglio is Director, Social Impact, World Business Council for Sustainable Development (WBCSD).

Gurcharan Das Gurcharan Das is an author, commentator and former CEO of Procter & Gamble India. His latest book, India Grows at Night: A liberal case for a strong state, was on the FT’s best books for 2013.

Heather Esper Heather Esper is the Program Manager of Performance Measurement at the William Davidson Institute at the University of Michigan (WDI). Her work focuses on gaining a deeper understanding of the contributions of business ventures to poverty reduction.

Jacob Ravn Jacob Ravn heads the access2innovation secretariat.

He holds a PhD in network based business model innovation aimed at aid and relief work, an MA in International Politics from Centre Européen de Recherches Internationales et Stratégiques in Belgium as well as an MSc in Public Administration from Aalborg University in Denmark.

Jaideep Prabhu Jaideep Prabhu is the Jawaharlal Nehru Professor of Business and Enterprise at the Judge Business School at the University of Cambridge, England.

His most recent book Frugal Innovation: How to do more with less is co-authored with Navi Radjou.

111 Nicolas Chevrollier

John Gardner is vice president and chief sustainability officer at Novelis Inc the worldâ&#x20AC;&#x2122;s leading aluminium rolled products and aluminium recycling company.

Nicolas Chevrollier is the knowledge and innovation manager at the BoP Innovation Center, engaging companies to develop new services and products for low-income markets. He is also a visiting fellow at Nyenrode Business University.

Maarten Koomans Maarten Koomans is CEO ReframingHealthcare. com.

Maria Alejandra Pineda-Escobar Maria Alejandra Pineda-Escobar is a consultant and researcher in inclusive business and corporate social responsibility, working with the Center of Partnerships for Development (CAD) in Latin America. She is also associate professor at Politecnico Grancolombiano University, Colombia, where she lectures on sustainability, globalization and competitiveness in business.

Mark Kramer

Mark Kramer is co-founder and managing director of FSG, a nonprofit consulting firm established in 2000 and specializing in strategy, evaluation, and research.

Markus Dietrich Markus Dietrich is an inclusive business specialist with extensive experience in consulting, research and project development on base of the pyramid (BoP) and renewable energy based in the Philippines. He founded Asian Social Enterprise Incubator (ASEI) Inc. in 2009 to apply his broad knowledge on the nexus of business, policy and sustainable development to ASEIâ&#x20AC;&#x2122;s clients.

Navi Radjou Navi Radjou is an author and innovation and leadership strategist based in Silicon Valley.

He is also a Fellow at Judge Business School, University of Cambridge, and a World Economic Forum faculty member. His most recent book Frugal Innovation: How to do more with less is co-authored with Jaideep Prabhu.

Paul Barnett Paul Barnett is founder & CEO Strategic Management Forum, an organization that works towards advancing the professional practice of strategic management.

Priya Dasgupta Priya Dasgupta is the Director of Strategic Initiatives at Enterprise for a Sustainable World (ESW) and Emergent Institute, India.

Raja Choudhury Raja Choudhury is a conscious, pioneering, disruptive and multiple award-winning creator of documentary films, multimedia installations, webby honored websites and events. He has designed many successful digital brands and campaigns in the US, UK and India.

Riz Khan Riz Khan is an international journalist, television host, and author who has formerly been with BBC World, CNN International, and Al Jazeera English.

Rizio Yohannan Raj Rizio Yohannan Raj is executive director or LILA Foundation, a think tank engaged in multidisciplinary and intercultural knowledge production, dissemination and conservation.

Robert Johanson Robert Johanson is chairman and independent director, The Bendigo and Adelaide Bank Group. He is a director of Grant Samuel Group Pty Ltd (and subsidiaries) and a director of the Robert Salzer Foundation. Robert is also Deputy Chancellor of the

THINKERS

John Gardner

University of Melbourne and Chairman, Australia India Institute.

Sandeep Mann Sandeep Mann is a PolyMath with practices in talent search, mentoring, startups, academics and law firms.

Stuart L. Hart Stuart L. Hart is the Steven Grossman Endowed Chair in Sustainable Business, University of Vermont and president, Enterprise for a Sustainable World (ESW).

Sunil Kumar Sunil Kumar is a member, IC Centre for Governance and member, managing committee, Ramakrishna Mission. Formerly he was general manager, The PEC of India, founder trustee, SriSim, PGDBM Institute.

Urs J채ger Urs J채ger is associate professor at INCAE Business School (Costa Rica/Nicaragua), research director of VIVA, and associate professor (Privatdozent) at the

Centro Latinoamericano-Suizo de la Universidad de San Gallen (CLS-HSG: University of St. Gallen, Switzerland).

Vibhav Kapoor Vibhav Kapoor is an amateur photographer.

His expertise include street and portraiture photography. He is currently studying in the 12th grade.

Vijay Sathe Vijay Sathe is the C. S. & D. J. Davidson Chair and Professor of Management at the Peter F. Drucker & Masatoshi Ito Graduate School of Management at Claremont Graduate University in California. His latest book, with Urs J채ger as co-editor, is Strategy and Competitiveness in Latin American Markets: The Sustainability Frontier (Edward Elgar, 2014).

Yaquta Kanchwala Fatehi Yaquta is a Research Associate at the William Davidson Institute at the University of Michigan.

At WDI, she works on impact assessment projects, studying the impacts of BoP ventures on various stakeholders.

THE COLOSSAL DILEMMA OF INDIA

Photos courtesy Dhruv Kapoor

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