8 NGOs assess themselves against 12 success factors for inclusive business

‘An eyeopener’. ‘We need to do this again after one year’. ‘Let’s apply this to our country offices as well’. Those were comments by NGO-staff after doing a self-assessment of their organization in a recent peer-to-peer learning workshop on inclusive business (IB). The event was organized by Endeva and BoP Innovation Center (BoPInc) to create a thriving environment for IB. This requires, among others, that NGO-stakeholders need a set of non-traditional business skills and know-how. How can this be achieved? To trigger a discussion among the NGOs, we invited eight of them to use an online tool, the NGO Capability Scan for Inclusive Agribusiness. What is this tool about? And more importantly, what does it take for NGOs to be successful in the IB space?

The IB scan
The tool used provides NGOs with insights about where they stand regarding partnering for IB in different sectors, not only agribusiness, and informs them which in-house capabilities to strengthen and how to become a strong partner of the private sector. E.g. by balancing in-house capacity for ‘development needs’ and ‘market driven’ approaches.

The scan[1] is developed by BoPInc as part of its pillar on IB Empowerment[2] and adapted for on-line use in collaboration with PPP Lab. The scan has a version for companies as well.  
It addresses twelve internal capabilities (see box), categorized under Values, Processes and Resources. Each building block includes statements about important aspects that determine an organisation’s capacity to engage in IB initiatives. One is asked to answer on a scale of 1-4 to what extent a person feels each aspect is embedded in the organization. Doing the scan is not an objective, academic exercise, but a – subjective - self-assessment that acts as a benchmark for either NGOs or businesses to trigger conversations, internal learning and actions, e.g. between different departments.  

Benchmark on strengths and challenges

The aggregated results presented in the workshop give an indication where pioneering NGOs stand. So what did we find?

 1. Pioneering people, frustrating systems

Looking at the three domains (Values, Processes and Resources), there is definitely a strong organisational interest for IB among the NGOs with change-oriented staff and assets more or less available, ‘ready’ to be applied. Examples of NGO-assets are a track record of working in relevant sectors, being a trusted deliverer of services to low income communities incl. small holders, having field offices and local networks, or access to internal incentive funds.
The scans show highest scores for the ‘people factor’: pioneering staff and motivated and supportive leadership. Besides, organizational Theories of Change, priority setting and decision making, more and more recognize the value of IB. Yet the number of IB-knowledgeable staff is relatively small. And most frustratingly, they have to deal with internal processes and approaches that often do not (yet) take non-traditional ways of working in cross-sector partnerships into consideration. The IB-unit of one NGO for example admitted they literally tried to move to another building in order to avoid internal admin systems that are built to administer grants to NGOs and cannot deal with in-kind contributions from companies or loans to SMEs. Of course, walls do not prevent IT systems from functioning, but any NGO worker can imagine the situation. Luckily staff of this particular NGO have access to an (envied) innovation fund which gives them the freedom to experiment outside strictly regulated project-based funding. 

Figure 1 visualizes the results of the scan in which the domains ‘Values’ and ‘Resources’ score fairly higher than ‘Processes’. Each color represents another NGO. On a scale of 0 – 4, the average scores of all NGOs on Values and Resources comes to 2,7. The average score on Processes comes to 1,8. 

2. Yet to prove the business case

NGOs gave the lowest average score for the topic ‘data collection and impact measurement’ (score 1,7) followed by ‘funding and partnerships’ and ‘organizational processes and systems’ (both 1,9). Most of the NGOs still have a limited track record of IB partnerships being formed, funded and managed. This will definitely be the reason for their ‘yet to emerge’ strong value propositions towards business and the absence of solid approaches for social impact measurement. This may become a vicious circle when NGOs have to prove ‘the business case’ for IB and the role of NGOs to internal and external stakeholders. It was not for nothing that these were some of the priority topics discussed in the workshop.

3. IB-capacity: from ad-hoc to integral

Key resources for NGOs are staff and local partners. In the context of IB partnerships, staff should be able to convince private sector parties to build on NGO assets and resources for successful IB projects. Yet, the low score on ‘learning systems and mechanisms’ (average 2,1) and the medium score on ‘staff competencies’ (average 2,5) indicates that understanding business and its operational processes and being able to speak beyond typical ‘development language’ is not yet standard. The capacity among NGOs to approach companies ‘business-wise’, beyond philanthropic reasons, is often confined to specific IB staff. This is even more the case with country offices and local NGO partners. Like in most change-processes, some IB-staff complained that they need to do a lot of internal lobbying. As one said: ”it is great to be here among peers, I don’ t have to explain or defend myself all the time”.

Want to know where you or your partner stand?

If you are interested in learning more about the scan, do the scan in your own organization or invite your partner (company or NGO) in IB to take a look at their internal capabilities, then please contact info@bopinc.org.  

We also invite feedback on the scan, as it supports further capacity development of NGOs and businesses in becoming successful in IB.

[1] The tool is based on the RPV Framework (2001) by Clayton M. Christensen, from Harvard Business School, an authority on disruptive innovation

[2] For some of the results of BoPInc, see http://bopreport.org/

This blog is a part of the October 2017 series on NGOs in inclusive business, in partnership with endeva.

Read the full series for insights on what kind of roles NGOs have carved out for themselves, either as partners of companies, as intermediaries, investors, or even as entrepreneurs and their lessons learnt in doing so.