Capacity requirements to evaluate inclusive business models

The idea of inclusive business models has been becoming popular in the last couple of years. While the concept of inclusiveness is quite elusive, and its definition very much depends on the background of the people who are discussing it, let it be educational or organizational background or experience with inclusive business models, what all agree on is that we all would like to contribute is that we want to make those business models more inclusive.

First step is obviously evaluating the current scenario to be able to identify gaps and develop appropriate strategy. This is where, as a trainer, I already face an enormous challenge. I often find trainees (mostly from the NGO environment) in my training programs, who lack the knowledge regarding how to evaluate any kind of business model. They do not know what the key questions are when one would want to evaluate whether a business model is feasible or financially viable. Furthermore, they are not even aware the fact how much they do not know. They tend to jump happily into the evaluation of the inclusiveness part, where they feel more comfortable, and generally they know what knowledge they miss, and they are ready to pick that up.

While the CIAT Link-methodology gives a very user-friendly approach to assess the inclusiveness of a business model, it does not build enough competencies, among others, in strategic thinking, marketing and financial management. It is clear that you need a combination of competencies in the aforementioned areas if you want to develop viable strategies to enhance the performance of the inclusive business model. It is hard to separate inclusiveness from profit-making. The questions, is whether you want to hire people with the missing competencies, or you want to develop them in-house. In case of multi-nationals or large domestic companies, at least the profit-making competencies can be found within the company. Adding competencies only in the area of inclusiveness generally suffices.

However, many NGOs opt for the second option, training their current personnel that often lack even basis business knowledge. That poses quite a challenging scenario: developing competencies of the trainees on 2 trajectories: evaluating business performance and evaluating the inclusiveness, then trying to combine the two. That is, of course, puts an enormous pressure on the training programme developers and implementers: how to set-up a capacity building program that, within the limited budget and time frame, can enhance the capacities of trainees in both trajectories to a level where, after the program ends, they are able to fulfil the position of an advisor on how to enhance performance of inclusive business models.

This blog is part of the July 2016 series from the Practitioner Hub and Seas of Change on Inclusive Agribusiness. Download the PDF for more insight, updates and opinion.