CHAPTER FIVE – In Depth: Enterprise For A Sustainable World

In the last chapter, we saw how Stuart Hart and his Enterprise for a Sustainable World (ESW) developed and employed the Base of the Pyramid Protocol. In this chapter, we’re going go in-depth to gain a deeper understanding of exactly what ESW is doing.

ESW’s approach to business co-creation and the outcomes that the protocol produces embody the concept of a social hybrid in three respects:

First, ESW configures various organizations into hybrid constellations. Enterprise for a Sustainable World becomes the nonprofit glue that binds together a for-profit corporation and a poor, distant community and affiliated nonprofit community-based organizations.

Second, its approach to business development is nothing if not pragmatic and eclectic. In ESW’s view, traditional approaches to business development resemble too much a scientific formula and not enough an art to be successfully used at the base of the pyramid. Thus, ESW borrows a healthy dose of anthropology and social science to mix in with the business fundamentals that form its core. In a similar spirit, it often “passes the business-creation stick” to community members, which shuffles the roles of corporation and consumers considerably.

Finally, the protocol produces outcomes that are intended to work despite precedents pointing in other directions. SC Johnson has always been a product company? Well, other companies sell services, so let SCJ try that in Kibera. But what about SC Johnson producing only products in household-sized containers and packages? Not a big deal: let them produce industrial-sized containers to better support the needs of local entrepreneurs.

Although the ESW/protocol approach to creating societal (or social) hybrids is different from what other organizations are doing to create them, there are important similarities, too. To understand the creation of societal hybrids in a broader context, let’s allow our view of ESW to go slightly out of focus. We’ll still see ESW, but we’ll see its broader contours rather than its finer details. This will provide a useful framework for us to look at other social hybrid organizations, which we do in Part 6 of the book.

Examining ESW and the protocol reveals the four key ideas we encountered in the last chapter.

  • Big Picture Design
  • Making It Appropriate
  • Making It Stick
  • Making It Bigger

Big Picture Design

Big Picture Design is key in creating societal hybrids. In serving the poor, especially overseas, nothing can be taken for granted. You want to sell a product? Fine. But you likely will need to design new relationships within the community to get the raw materials you need to make it. The way you manufacture can’t follow Western processes either, because the resources available to you are so different. But you can design manufacturing systems to take advantage of plentiful, inexpensive labor—or design training programs and industrial machinery that fit the local context. And how do you get products to customers? You can’t just take roads and transport for granted. Again, in the big picture, you must design everything.

Big Picture Design takes advantage of any means possible to succeed. Is someone else already doing something similar that works? Imitate it. Can you identify un- or under-utilized resources within the community? Take advantage of them. Can you look to indigenous and grassroots solutions? Big Picture Design not only considers the complete range of activities that must be given attention but looks broadly for ways to make them successful.

Steal shamelessly when you can, invent a new approach when you must.

Making It Appropriate

In every aspect of Big Picture Design, the emphasis must also be on Making It Appropriate. But what’s the “It” that we want to make Appropriate, and what does Appropriate mean? As in Big Picture Design, “It” covers everything. Making It “Appropriate” counts for everything—if you want to succeed.

Using the protocol, ESW tried to Make It Appropriate by opening wide the window of possibility in front of them. Through the light of this fully open window, ESW could deeply explore Kibera’s needs. ESW did not attempt to simply drum up demand for SC Johnson’s existing products. Nor did it do market research using typical Western techniques such as focus groups. Such approaches generally produce a shallow understanding of a vastly underserved community, giving power to the company that presents various alternative choices, and reducing the community’s role to reacting to business ideas rather than helping to create them.

In its code of conduct, the protocol says that it is necessary to suspend disbelief about the community you are entering, the people you will be dealing with, the resources at their disposal, and their wants and aspirations. Suspending disbelief rests on an attempt to drop your own model of the world and adopt another’s. Homestays, Participatory Rural Appraisal (PRA), Rapid Assessment Process (RAP), and a focus on building trusting relationships were key to the way ESW went about suspending disbelief and understanding the wants and needs of the community of Kibera.

Making It Appropriate requires paying great attention to context. When ESW began its work, it suspected it might be working on new ways to manufacture an antimalarial product from local crops. But in the broad planning context of business creation workshops, the idea of home cleaning and sanitation services emerged instead.

In actually bringing an idea to life, Making It Appropriate to the context can’t be emphasized enough. To begin with, the physical aspects of a product must conform to the community’s needs and customs. This may require adding features, toning them down, or combining features of different products. A product may need to be more durable, lighter weight, or less power-hungry than a comparable product in the West. For instance, computers used in schools in the developing world may require a crank for power and a hardened shell to withstand being dropped, but must still be light enough for children to carry. Ergonomic features, too, matter just as much at the base of the pyramid, though people in some parts of the world often interact quite differently with products than we do. (Millions of women carry containers with up to forty pounds of water on their head to meet their families’ basic needs for consumption and sanitation, something most of us cannot even fathom.)

The “softer” side of a product or service must obey context, too. Cultural, religious, and sexual norms can be strong influences. For instance, in Bangladesh, Nobel Prize winner Muhammad Yunus’s Grameen Telecom enables micro-entrepreneurs to obtain cell phones, which they then allow other rural villagers to use for a fee. But in that part of the world, women overwhelmingly prefer to use a phone owned and operated by another woman, whereas the opposite is true for men.

Making It Appropriate means ensuring that what is being offered is relevant and perceived as being relevant. When the large Indian company Hindustan Lever, Limited, wanted to bring soap to market for poor Indian consumers, it slammed into this problem like a brick wall. Yes, citizens often suffered from diarrhea, sometimes severely. But they didn’t believe that washing with soap could make any difference. They couldn’t see the “germs” that Hindustan Lever was talking about, and if they couldn’t see them, how could they be causing a problem? Hindustan Lever ultimately made people perceive that soap was relevant with a strong social marketing campaign. Among other tactics, it taught schoolchildren about the importance of killing germs (thus indirectly reaching their parents). Sometimes they covered the children’s hands with fine chalk, had them wash with water alone until their hands looked clean, and then used black lights to show them that their hands were still chalky.

The BoP Protcol’s guidelines helped SC Johnson Make It Appropriate in several ways. First, it helped the company consider a broad range of business opportunities and back away from the notion that Kibera should be involved in an improved means of manufacturing an antimalarial insecticide made from a local plant—the idea that had sparked SCJ’s interest in doing business in Kibera in the first place. Next, SC Johnson came to realize that, in the context of this African slum, any products it might sell would be too expensive for the intended audience, even if sold in small consumer-sized cans or packages. So it made a first-time-ever shift from selling a product to selling a service so that customers could obtain the use of small amounts of product, packaged in large, economical containers, when they hired the service. Through the protocol process, SC Johnson also came to understand that what was “appropriate” in Kibera was a service that could deliver improved sanitation and hygiene as well as protection from mosquitoes and other pests. Plus, to be even more “appropriate,” these services needed to be directed at common areas, such as community latrines. Finally, the protocol process took advantage of the fit between the unpleasant, unattractive work that this entailed and the entrepreneurial ambitions and capabilities of local youth groups who were already accustomed to sorting through garbage and trash.

Making It Stick

Big Picture Design and Making It Appropriate are an important start in establishing a base of the pyramid business, but they’re only a start. Everything can seem right, but you must still Make It Stick. A business foisted upon the community may be able to sell its products—temporarily. But without deeper connections, it is vulnerable to new competitors, especially if their products are cheaper or shinier.

To Make It Stick, a business should become deeply woven into the fabric of the local economy and the community. SC Johnson accomplished this by placing its service-delivery ecosystem on the backs of entrepreneurial youth group members who knew Kibera and had standing in the community. Good business for them was good business for Kibera and SC Johnson as well.

Embedding a business in the local community actually begins long before a new product or service is launched. The partnership between SC Johnson and various youth groups was part of a broader partnership involving Carolina for Kibera. Carolina for Kibera was instrumental in the very first efforts to encourage the community to accept outsiders who wanted to establish a business there. In developing social hybrid businesses, there is often a critical role for such partnering organizations to play—not only in Making It Stick but in Big Picture Design and Making It Appropriate.

Naturally, Making It Stick is impossible if you can’t even get your business started. Once going, a business might generate sufficient revenues to keep afloat. Before that, though, various approaches can be used to get the business launched, including charitable donations, government or corporate subsidies, or viewing the effort as part of corporate research and development and taking advantage of the R&D budget. These, too, can be essential to Make It Stick.

Making It Bigger

If all goes well, Big Picture Design has been all encompassing, taking into consideration any potential roadblock. Each important detail has been addressed in a contextually “appropriate” way. And the business has successfully “stuck” in the community. The next challenge, then, is to Make It Bigger.

Part of Making It Bigger means doing more within the community where the business began: increasing the base of customers, increasing the range of products or services offered, and producing more jobs. Making It Bigger can mean looking for a new balance between adopting local means of production and striving for greater efficiency. It can involve leaving behind improved infrastructure so that other businesses may follow in your footsteps, and even influencing new policies and regulations that assist in the creation of new enterprises. Ultimately, it means using the company’s success as a springboard to strike out into new locations and find success elsewhere.

Making It Bigger is not a matter of will or determination alone. To expand a company’s presence in the community means being attentive to the processes and outcomes of that business and making adjustments as necessary. Conducting “business tests” and obtaining feedback is important for any business. It is especially so for companies embarking upon a new business orientation, and more so still for companies hoping to achieve enormous business and societal gains by reaching a tipping point at the base of the pyramid.

SC Johnson is still in Kibera, where it has helped fund an eco-friendly medical clinic that provides affordable inpatient and outpatient services seven days a week. And it has expanded its operations to nine other Nairobi slums as well. Many of the lessons learned in Kibera made entering these new territories that much easier. The new businesses are all service business, rather than businesses created to sell products. Each business is led by a member of the Coalition of Youth Entrepreneurs (a “gang member”), who uses his knowledge to train and guide others to provide sanitation services in their own communities. For their efforts, Community Cleaning Service employees earn up to four times the minimum wage.

Where will all this lead? The more SC Johnson considers Big Picture Design in a continual quest to create a stronger business, the greater its effort to make all aspects of its business appropriate, and the more it emphasizes Making It Stick, the larger the opportunity.

SC Johnson’s efforts in Kenya have prepared it to undertake a new base of the pyramid activity in Rwanda. Rwanda is a source of pyrethrum, a key natural ingredient in insecticides that the company sells. SC Johnson is working with Rwandan farmers to produce more pyrethrum, of higher quality, and then to harvest it at the right time and dry it correctly so that it is most valuable to the company and most profitable for the farmers who grow and process it.

As SC Johnson’s efforts become bigger, so does its potential to learn by doing and to use that feedback as a cornerstone for doing base of the pyramid around the world.

Healthy, Wealthy, Wise, and Green

So what do we need to fix most in the world?

On a planet with 6.5 billion people spread across 195 countries on seven continents spanning 24 time zones, this is a big question. Big not only because of these numbers and the vast scale and reach of humanity that they represent, but big because this is a key question that helps us focus if we are concerned with social justice.

The question has been given much thought. The United Nations’ answer to this question is contained in the Millennium Development Goals, a framework for addressing the most severe problems in the world, signed by all U.N. member nations. This blueprint includes eight overarching goals to be achieved by 2015:

  1. Reducing child mortality
  2. Improving maternal health
  3. Combating HIV/AIDS, malaria, and other diseases
  4. Eradicating extreme poverty and hunger
  5. Achieving universal primary education
  6. Ensuring environmental sustainability
  7. Promoting gender equality and empowering women
  8. Developing a global partnership for development

Or, making the world Healthy (Goals 1–3), Wealthy (4), and Wise (5)—and Green (6).

The seventh goal in my list (which is a reordering of the U.N.’s list to show groupings of goals)—promoting gender equality and empowering women—is central to successful development efforts around the world, according to many experts. Women’s self-help groups, sometimes called solidarity groups, have been key in industries such as microfinance. Women’s social bonds are a vital means of mutual support and education, but the strength of these bonds also allows banks or other lending institutions to make loans, with no collateral, to groups of women who become jointly responsible for their repayment. Women are also more likely than men to pay attention to their children’s needs, even ahead of their own, making them key links in programs aimed at keeping children in school, providing them with vaccinations, and other activities requiring the cooperation of a parent. In these ways and more, support for women often accompanies efforts to support health, education, and poverty alleviation.

The last goal in the list, developing a global development partnership, offers a means of achieving the other goals.

The Millennium Development Goals define ambitions for the developing world, and though the West does not face malaria (as we once did), we certainly have problems in the areas of health care and wellness. Similarly, poverty may be different in the West than in India, but it remains powerful and pervasive here. Likewise for educational challenges. And we all share the same planet, so major problems such as climate change and global warming affect us all (even though the poorest are likely to bear the brunt of the problem).

So let’s consider the refrain of the next part of the book to be “Healthy, Wealthy, and Wise—and Green” as we look at how organizations other than ESW produce societal hybrids in each of these areas. Naturally, we will be viewing only a few examples. Still, from the organizations that we observe, we will once again see the importance of the same four principles:

  • Big Picture Design
  • Making It Appropriate
  • Making It Stick
  • Making It Bigger