Essilor International's Base of Pyramid (BoP) Innovation Lab develops new inclusive business models and acts as an incubator to test new approaches in partnership with NGOs, foundations and development funds. The BoP Innovation Lab works closely with Essilor’s 2.5 New Vision Generation (2.5 NVG) Division that is responsible for implementing and scaling up inclusive business models. It aims at providing vision care to underserved populations by building a taskforce of skilled primary vision care providers and micro-entrepreneurs in low-income communities.
Hello, Anurag, it’s good to have you. Please tell us a little bit about Essilor.
We are the leading ophthalmic optics player. We have existed in this industry as long as the industry has existed—170 years.
Wow, that's a long time.
We are quite blessed that we are in an industry where the day-to-day business—equipping people with better eyesight—creates a tangible social impact. Our mission is "improving lives by improving sight" and everything we do is guided by that.
About ten years or so ago, our leadership began challenging us to apply our mission of “improving lives by improving sight” to everybody on this planet, not just for consumers like you and me who live in developed countries and the top cities in the world. If I slice the world population, about 2 billion of the 7.5 billion people in the world are exposed to the industry of vision correction. But we found that 1/3 of the world's population, about 2.5 billion, are people who actually need some sort of vision correction but either don't have access or are not aware of their condition and the fact that a solution exists.
As a result, in addition to our mainline business which serves consumers in the developed markets, we set up a dedicated inclusive business team—2.5 New Vision Generation (2.5 NVG)—to be responsible for finding sustainable ways to serve these 2.5 billion people, 90% of whom live in underdeveloped contexts and countries. By serving both mainline and BoP consumers, we could achieve our ambition of eradicating poor vision from the world by 2050.
Can you tell us about the opportunities and the challenges of running a business model that is serving customers at the base of the pyramid (BoP)?
We are very clear about our motivations for pursuing BoP markets—it’s the responsibility we have as the market leader and also because it is a big business opportunity. We see these two motivations working in harmony and it is our belief business can act as a force for good.
It is an opportunity to help 1/3 of the world's population to see better and work better. It is proven that good vision has a direct effect on productivity. In fact, a World Health Organization (WHO) report estimated that vision impairment results in $272 billion in lost productivity globally each year. And also, not surprisingly, 70 to 80% of those people, whom we're helping to get spectacles, are first time wearers, meaning our inclusive BoP operations are also acting as the segue for new consumers to enter into the industry. We look at this as sort of a seeding mechanism for consumers of tomorrow.
In addition, because BoP markets present a big opportunity in terms of business potential, there is the opportunity to drive innovation. Getting into those markets presents a lot of challenges which require a fresh perspective to solve. So, there's a lot of innovation around business models, around the kind of products that these consumers will purchase, around how we structure partnerships and drive awareness and behaviour change.
Did Essilor always have the approach of being a business that can drive impact and innovation?
We are fortunate that the category itself—vision correction—creates a huge socio-economic impact, irrespective of the socio-economic classification of the consumer because we have a direct impact on the productivity of our consumers. For 170 years, we have been a highly innovation-driven company. But those innovations were around new technologies in the types of lenses we produced and how we screen people for refractive errors, for example.
For the last ten-odd years, we have also been looking at the underdeveloped markets as potential sources for innovation and business, both today and tomorrow. By reaching these BoP consumers, we can create socio-economic impact in those communities as well.
How are you recruiting and developing talent within your company for your business at the BoP?
There are two types of talents that we are looking at. The first is our own team at Essilor, which is responsible for creating inclusive business models at the BoP. But then there is another cohort of social entrepreneurs and community members that we end up training because often in these communities there are no technicians who can provide a simple eye exam for somebody to get a pair of spectacles.
For both of these sets of talents, it is definitely challenging because we believe that building a successful team in inclusive business and targeted at the BoP requires a unique combination of having solid business skills as well as the motivation and drive to help the underserved and create an impact. Usually these two backgrounds have not been very complementary. In addition, most of the time, the BoP contexts are new and unexplored. So, the ability to deal with ambiguity becomes a key trait. If I think about the top skills needed, it's basically the ability to learn and absorb quickly and the passion to solve problems and help a large number of people through sustainable models.
In the inclusive business domain, there is no set recruiting process as compared to how the mainline businesses work. As a result, a lot of our recruiting happens through referrals and our connections with impact-focused networks, academic institutions and subject-matter experts, rather than through standardised recruiting models.
Last year, we started an initiative specifically targeting the talent gap problem. We had seen a lot of interest from people, especially millennials, who want to pursue a conventional career, but also work in a context which has huge social impact. Having looked around, there was no such programme through which they could actually learn about the BoP or inclusive businesses before taking the plunge and committing to working in the BoP space. So, we started what we call the Essilor BoP Fellowship Program to give these young people an opportunity to work alongside our inclusive business teams on real-life projects.
We gain by learning from their fresh ideas and insights. In the process, it acts as a filtering exercise for us to identify full-time talent who can then join our team.
This sounds like an interesting programme. Tell me, do you feel like the issue of the talent gap is getting enough attention by other businesses and by the inclusive business community in general?
Absolutely not. I think it's an issue which needs attention. There is no systemised way to approach the challenge of bridging this talent gap, as you've rightly identified.
The other problem is that there are not enough best practices or case studies for hiring, which results in a lot of personal judgment involved in trying to evaluate the right fit for a candidate.
How would you envision a systematic approach?
The Essilor BoP Fellowship Program is basically our small first step at creating some sort of a structure around bridging this talent gap—we hope that in time, our fellow corporates, public, and non-profit sector organizations operating at the BoP will contribute towards and finetune this system. For starters, we believe that the systematic approach needs to help organizations identify (a) relevant experiences and (b) motivations. Because as I said, these two are very important. Talent should be entrepreneurial enough to run a conventional business and good enough to run the operations of a pure philanthropy because you're that driven by the impact you're making.
Is there any advice that you would like to give to other entrepreneurs who are starting their own business and struggling with the recruitment of employees. What can they do?
With the caveat that we are still learning, this is what we have seen: First, stripped-down versions of business models and products that work in cities like Paris, Singapore, New York and Mumbai do not work at the BoP. You must identify the actual, functional need which the BoP consumer wants to fulfil by using that product and design the product around it while taking into account lifestyle, style preferences, willingness to pay and all of that. Take, for example, the process of getting a pair of spectacles. Usually a consumer has to go to a technician for screening and then there is a wait before the consumer can collect the customised spectacles. In the BoP context, that's a difficult thing to do because consumers can’t necessarily afford to make multiple trips to the technician, as many of them rely on daily wages and each day they miss work, they lose money. To address this reality, we have come up with Ready to Clip™ eyewear, where customised spectacles can be delivered on the spot by fitting pre-cut lenses into a range of frames. This helps to overcome a big hurdle on the product and service delivery side.
Secondly, it is essential to create a business model which is truly inclusive. When we talk about inclusive business models at Essilor, we define them as commercially viable models that benefit these communities by including them in the solution. We believe that only if your business model is “co-created” by the community itself, can it be commercially viable, like our flagship Eye Mitra programme in India, which addresses the lack of primary vision care providers in communities. In this programme, we identify youth from low-income communities and train them with the skills needed to start their own microbusinesses which provide these primary vision care services. The success of Eye Mitra in India has led to its expansion and adaptation into other markets like Bangladesh, Kenya, Indonesia and China.
Thirdly, working with partners who have knowledge of those consumers and communities becomes very essential. Cooperation with partners also helps bring down the last mile delivery costs, which usually decides whether an inclusive business model is going to be sustainable or not. A great example is our recent partnership with Alibaba in China. Alibaba’s Rural Taobao outlets, where rural residents can digitally access the same selection of goods and services available to their urban counterparts on Alibaba, are being converted into vision care points for communities. Community members can get their eyes tested by optometrists who travel to them in mobile vans. Once residents have the prescription they need, they can buy their spectacles online via the rural Taobao shops.
Lastly and very importantly—in the BoP, the functional aspect of whatever need a consumer is trying to fulfil becomes more important than the product that they're buying. In rural markets, when consumers buy a pair of spectacles, they're not buying good eyesight. Instead, they are buying the ability to help their grandkids do homework. They are buying the ability to be as productive in the day-to-day tasks as they used to be. The ability to read the descriptions and directions on prescriptions and medicine boxes. Therefore, just pushing your existing products to BoP consumers will not work, because they are not interested in buying products. They are interested in buying functionalities which help them perform better and live more fulfilled lives.
That is a very smart take. Is there anything else you would like to add?
I can't stress enough that partnerships are the key in the BoP context. I think we can all agree with C. K. Prahalad and Stuart L. Hart when they wrote there is fortune at the bottom of the pyramid. I don't think that anybody will be able to reach that fortune if they go it alone.